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Changing Gears is all about the reinvention of the Industrial Midwest. As you’re relaxing over the Thanksgiving holiday, check out three big topics that we looked at this fall. 

EMPTY PLACES: From factories to city blocks, our region has thousands of empty places, but people are coming up with ideas to fill them. Kate Davidson explored blotting – neighbors taking over vacant lots next door to spruce up the neighborhood. Niala Boodhoo looked a former meatpacking plant that’s now an indoor farm. Meanwhile, contributor Dustin Dwyer tried to measure the social and economic cost of emptiness.

Memorabilia from the now defunct AutoWorld in Flint

MAGIC BULLETS: Communities across the Midwest are search for Magic Bullets — big ideas that can rescue a town or an industry. Davidson offered a look back at magic bullets over the years. Some people think batteries could create thousands of jobs, but Dwyer found there’s skepticism. Many places would like to copy Cleveland’s success in health care, which Bobkoff says could be tough. Boodhoo explored the contribution small business can make to the economy (answer: it’s small).

MANUFACTURING: Movies and TV have painted a bleak picture of factory life. We found just the opposite. Think there are no jobs in manufacturing? There are plenty, for temporary workers, Davidson found. What are they talking about, when they talk about advanced manufacturing? Bobkoff explained. He also talked to Ron Bloom, the man who led the auto industry bailout. How do ideas become reality? Boodhoo profiled Battelle, an influential but little-known Ohio company.

 


History is filled with searches for Magic Bullets.

Economically speaking, those are quick-fix endeavors that promise to fix sour economies, provide jobs and bring prosperity to communities and regions. Changing Gears reporter Kate Davidson wrote earlier this week that, “Some have soared; many have backfired.”

Communities across the Midwest are employing a new round of Magic Bullets in attempts to rescue themselves from the Great Recession. All sound promising, but which ones stand up under further scrutiny?

Here’s a look back at Changing Gears coverage from the past week:

Sunday: A very brief history of the Midwest Magic Bullet

From failures like AutoWorld in Flint, Mich. and Chicago’s failed bid for the 2016 Summer Olympics to the (historic) success of Detroit’s auto industry, Kate Davidson offers a look back at Midwestern Magic Bullets over the years and slots them into four categories: The one-industry town, the “if you build it, they will come” big public projects, the great event and, most complex, urban renewal.

Monday, October 17:  Obama, Werewolves and Silver … Err … Magic Bullets

What exactly is a Magic Bullet? Depending on who you speak with, it’s a matter of semantics. Some people, including President Obama, seamlessly substitute the phrase “Silver Bullet.” As Kate Davidson found out in a visit to an Ann Arbor comic book store, the terms are definitely not interchangeable.

Tuesday, October 18: Can battery plants charge up Midwest jobs?

Western Michigan has become a hub for lithium ion battery plants. Estimates say the battery plants and their suppliers could create 10,000 jobs by 2020 in the region. Not everybody, Changing Gears contributor Dustin Dwyer learned, is on board with those projections.

Wednesday, October 19: Can healthcare fix our ailing cities?

Cleveland’s hospitals have been growing for nearly a century. In the past decade, health care has become the epicenter for economic development plans in the city. Other cities in the Midwest are trying to learn from Cleveland and become medical destinations. But Dan Bobkoff reports that Cleveland could prove tough to copy.

Thursday, October 20: Can small businesses rebuild our economy?

Politicians from both sides of the aisle have hailed small-business growth as a core requirement for fixing America’s economy. Niala Boodhoo spoke with a University of Chicago professor who researched the impact of small businesses on the economy. Do they contribute to job growth? “No,” he said.


All week, our Magic Bullets series has focused on big ideas that political leaders say can boost the economy. One you hear mentioned often is small business. But can small businesses really grow enough to help the overall economy? That’s what I set out to find out.

The way politicians tell it, small business IS the backbone of the economy. President Obama has said this many, many times – especially the idea that small business is “the key for us to be able to put a lot of folks back to work”.

It’s not just Obama. Warm feelings about small business come at all levels of governance, and on both sides of the aisle. Michigan’s Republican Gov. Rick Synder is the darling of the state small business community. Earlier this summer, at the Small Business Association of Michigan’s annual meeting, he urged members to “Talk about the jobs you’re creating, even if it’s one”, because, he  that would be the “backbone of the reinvention of Michigan”.

This is more than just political talk. In addition to the landmark federal Small Business Job Act of 2010, Midwestern cities and states have created their own policies. Michigan exempted most small business from its 6 percent corporate tax rate earlier this year. Cleveland’s Cuyahoga County is shifting its economic development strategy to help small-to-medium-sized businesses, saying that focusing on the “big project” doesn’t make as much sense anymore.

University of Chicago's Erik Hurst (Niala Boodhoo)

All of this prompted University of Chicago economist Erik Hurst to explore whether if small businesses do contribute to job growth. Hurst, who teaches at the Booth School of Business, has a pretty simple answer: “No”.

“I think when people talk about small businesses they think about the business that starts small and gets really big, like Google or Wal-Mart,” Hurst said. “They start in someone’s basement, or with one store, and they eventually grow to something quite sizeable. But most small businesses don’t do that.”

Hurst just published research based on an analysis of federal government and foundation data about small businesses.

The Small Business Administration defines small businesses differently according to the type of company. For example, in the case of manufacturing, the SBA thinks a small business is anything with less than 500 workers.

Hurst uses a definition of small businesses of having one to 19 employees, according to his research, what 90 percent of the businesses in this country are.

In Illinois, three-quarters of the 1.1 million small businesses are made up of just one person – people who are self-employed.

“Most small businesses are closer to your normal dentist than they are to Groupon or Google,” he said. “Most small businesses are dentists, plumbers, a small doctor’s practice.”

More importantly, Hurst’s research also looked at intentions of small business owners. This was his big finding: most of them don’t want to grow.

“The vast majority of small businesses are in a very few categories and most of them never grow. Their desire is to be a couple of employees and stay that size into the foreseeable future,” he said.

Dr. Mark Gamalinda (Niala Boodhoo)

When Dr. Mark Gamalinda began his Chicago dental practice almost 25 years, it was just “me, myself and I,” he told me.

“For the first year, I was just just slowly growing the practice,” said Gamalinda, who runs his practice from the North side neighborhood of Andersonville.

Dr. Gamalinda seems like the perfect dentist for nervous patients. He’s quiet, his office an oasis of warm, golden walls. Quotes from people like Emily Dickinson are painted inside patient rooms.

Over the years, his practice has grown. He now has a patient base up to almost 4,000, and three assistants, a hygeneist and a receptionist.

He buy supplies for the office at Costco. He supports small, local business too, sending out some work to a lab, and using another company that makes crowns and other dental prostheses he can’t make himself.

Now that he’s 50, he’s thinking about adding one final worker – another dentist who can eventually take over his practice.

Dr. Gamalinda told me he’s proud of his practice, and how it has helped support his family over the past few years. He does believe he’s part of not just the economic fabric of his neighborhood, but of Chicago, and the broader economy.

Andersonville's Farmers Market (Micki Maynard)

The few blocks that make up the business area of Andersonville are 93 percent locally owned like Dr. Gamalinda’s, according to the Andersonville Chamber of Commerce.

Ellen Shepard is its executive director. She disagrees with Hurt’s findings – and said that she thinks small businesses, independent businesses, are vital to the economy.

“When we think about the model for economic growth, I think we have to think less of the growth of the wealth of the economy and more towards the growth of self sufficiency, internally, within communities,” she said.

It’s clear those big companies – those Googles, and Groupons – and yes, Wal-Marts still are the biggest drivers of the economy, and of job creation. But Shepard said that doesn’t mean we should count out even the one-man business – because maybe a healthy combination of both is what the new economy should be.

What do you think?


Cleveland Clinic

The Cleveland Clinic helps set Cleveland apart as a medical city.

Detroit is the latest metro area vying to become a medical destination. The hope is that its hospital systems can draw patients from outside its region, helping the local economy. In short, Detroit wants to be more like Cleveland. But Cleveland could be tough to copy.

In 1975, a young cardiologist arrived in Cleveland.

“I came here in a rented truck with a Vega on the back end because it was too sick to pull,” Toby Cosgrove said. Jump ahead 36 years and that newbie with a beater of a car is now CEO of the Cleveland Clinic. Cosgrove presides over a medical empire vastly larger than when he came to town hoping to get better at heart surgery.

“We were about 140-150 doctors. We’ve grown a bit since that time. We’re now about 3000,” he said.

Dan Bobkoff

Toby Cosgrove, the Cleveland Clinic's CEO, in his office.

The Clinic has become a centerpiece of an industry that employs roughly 70,000. That includes places like University Hospitals\ next door, and Summa Health in Akron.

Growth has been rapid. University Hospitals alone has added 4000 workers in the last few years. And, expansions have been pegged at about $3 billion in construction spending.

George Rouse is a nurse who made his own transition before the rest of the region.

“My friends were like: are you crazy? Are you nuts?” he recounts.

About 15 years ago, Rouse was working in IT for a manufacturing company.

“I had a very good living with that company but I’m like: what if this would ever end? What would I do next?” Rouse said.

His premonition was right. His former employer closed up shop a few years ago. No one thinks he’s crazy now.

“When I’m driving to work, the last two years, for all of us, you know, our houses have dwindled down to nothing, our 401ks have shrunk down,” he said. “I mean, all these pieces are crumbling.”

Dan Bobkoff

Nurse George Rouse prepares a patient for a pacemaker operation.

While it worked for Rouse, healthcare is no replacement for manufacturing. Health jobs make up about 11 percent of the workforce. In its heyday—say the 50s and 60s—manufacturing jobs employed 40 percent of Clevelanders.

“Healthcare became the big generator of jobs by accident,” said Chris Seper, founder of MedCityNews.

Cleveland’s hospitals have been growing for nearly a century. It’s only been in the last decade that healthcare has become the center of economic development.

“The healthcare system here and the life sciences industry here does as much as it possibly can. But there’s a limit to what they can do,” Seper said.

Cleveland never really set out to become a healthcare capital. Cleveland Clinic CEO Toby Cosgrove says it’s not like some politician stood at a podium many years ago.

“No, nobody raised their hand and said they’re going to push this organization to the front,” Cosgrove said.

The Clinic’s international reputation can be traced back to advances in heart care in the 50s and 60s. Now, patients arrive from around the country and world for heart procedures. Foreign patients often pay cash. Bringing patients in is the holy grail for cities like Detroit that want to be like Cleveland. But even at the Clinic, only one percent of its patients are international. Paul Ginsburg is president of the Center for Studying Health System Change.

“But when you really look at the numbers of some places that are really strong in medical tourism, it’s not that large a part,” Ginsburg said, adding that there are other reasons why healthcare may not be a good economic driver for regions.

For one, building more hospitals often means people consume more care, which means we all pay more in taxes and insurance. Whether any city can sustain this much expansion is a big question.

And, the industry is changing, shifting more to home care and so-called telemedicine. Already, smaller hospitals are outsourcing difficult diagnoses to places like the Cleveland Clinic. Chris Seper of MedCityNews says that will make it even harder for cities trying to embrace healthcare as their future.

“I think if you’re building healthcare systems and hospitals as an idea that they’re going to be your jobs growth engine, it’s a lose-lose situation,” Seper said.

Cosgrove of the Clinic says we may end up with nationwide chains, the way banks have consolidated over the years. So, if you’re trying to copy Cleveland, good luck.


From Changing Gears contributor Dustin Dwyer.

GRAND RAPIDS — Three years ago, the advanced battery industry in the United States existed only in the imagination. Plenty of people believed electric cars would be the next big thing. and they would be powered by lithium ion batteries – the same kind of batteries that are in cell phones and laptops. But in 2008, almost all of the lithium ion batteries in the world were made in Asia.

The electric Nissan Leaf

Randy Thelan, who heads the economic development office in Holland, Mich., a small town on the shores of Lake Michigan, thought that could change. Thelan had heard one his local companies, Johnson Controls might be getting into the battery business.

“It wasn’t like we were making a direct pitch that we knew they were building a factory,” he said. “It was just sort of planting the seed, and suggesting to their leadership, keep Holland in mind as you guys are looking to invest and add to their capacity.”

While Thelan was working his angle for Holland, the state of Michigan was about to make a big commitment to the new future in batteries.

In December 2008, former Mich. Gov. Jennifer Granholm signed a new law to offer up to $335 million in tax incentives for battery companies in Michigan. Within a year, Holland landed that Johnson Controls battery plant.

The next year it landed another one for LG Chem. And now, just down the road in Muskegon, Michigan, another lithium ion battery plant is going up. Thelan estimates these companies and their suppliers will have created about 750 jobs by the end of the year.

“But ultimately, by 2020, we believe this is a 10,000 job, $2 billion opportunity for West Michigan and we’re well on our way,” he said.

Not everyone is on board with those job projections.

“In terms of direct jobs, I would think there’d be something closer to the neighborhood of four to five thousand jobs,” said Dave Hurst, an analyst for Pike Research. He tracks the electric vehicle industry. And, when he says he expects to see 4,000 to 5,000 jobs, he means nationwide.

In his view, the jobs numbers in Holland and elsewhere are being oversold. But, he adds, ” I think the importance of the industry is not being oversold. I definitely think this is a critical industry to both Michigan and the upper Midwest.”

The bad news: if you’re sitting in a town in the Midwest and you haven’t heard about a new battery plant in the works, you probably won’t. The industry that didn’t even exist three years ago is now firmly set. It’s in Holland. It’s in Detroit. And it’s in Indianapolis, around the EnerDel plant. But that doesn’t mean everyone else is just giving up.

In Northeast Ohio, the economic development office called Nortech has developed a roadmap for tapping into the new advanced battery industry. Batteries for electric cars play only a small role in the roadmap.

Wind turbine in downtown Cleveland

Instead, officials are focused on much larger batteries that can store excess power created by wind turbines and solar panels. Nortech estimates $49 million has already been invested in the region.

And Illinois is playing a key role in battery research. The federal government’s Argonne national labs, along with universities in Illinois, has developed much of the technology that goes into lithium ion batteries.

Matthew Summy of the Illinois Science and Technology Coalition says he doesn’t mind if most of the jobs from that research have gone to other Midwestern states.

Says Summy: “We need all parts of this region to function and to outperform so that we’re producing the kind of innovation that just 50 years ago, or even 25 years ago, the Midwest was known for.”

Are you involved in the advanced battery industry? How do you feel about its outlook?


Next week, Changing Gears reporters will tackle a subject that’s long been a part of the Midwest mind frame: magic bullets.

By magic bullets, we mean the big ideas and big projects that politicians and government officials say their cities and states must embrace, in order to boost the economy. But what is their track record? Should we really be shooting for the stars, or trying to create jobs one at a time?

Kate Davidson kicks things off Monday with a look at the history of magic bullets (remember AutoWorld in Flint? How about the Chicago Olympic bid?)

Later in the week, Niala Boodhoo tackles small business, and whether big programs actually help companies grow. Dan Bobkoff looks at a subject dear to Cleveland’s heart: health care.

Contributor Dustin Dwyer will examine the race to build battery plants and whether that fledgling industry is actually creating the jobs that mayors and governors hope.

Find our reports on Michigan Radio, WBEZ Chicago and ideastream Cleveland. And check back here for special features related to our Magic Bullets series.

Contribute to our coverage: What are past magic bullet ideas that fell flat?


Next week, Changing Gears reporters will tackle a subject that’s long been a part of the Midwest mindframe: magic bullets.

By magic bullets, we mean the big ideas and big projects that politicians and government officials say their cities and states must embrace, in order to boost the economy. But what is their track record? Should we really be shooting for the stars, or trying to create jobs one at a time?

Kate Davidson kicks things off Monday with a look at the history of magic bullets (remember AutoWorld in Flint?) Later in the week, Niala Boodhoo tackles small business, and whether big programs actually help companies grow. Dan Bobkoff looks at a subject dear to Cleveland’s heart: health care.

We’ll also look at whether the race to build casinos and battery plants is actually having the economic impact that mayors and governors hope.

Find our reports on Michigan Radio, WBEZ Chicago and ideastream Cleveland. And check back here for special features related to our Magic Bullets series.

Contribute to our coverage: What are past magic bullet ideas that fell flat?