Detroit: Building an Economy on Ruins

Topics: Detroit, Detroit River, Metro Detroit Pages: 11 (4747 words) Published: February 3, 2013
Wayne Titus
Professor TenHaken
Management Seminar
Detroit: Building An Economy On Ruins
In America, overcoming a challenge is something that we take pride in. The American spirit is fueled by individuals working hard to make it on their own, booming business, and a unique sense of community backed by this “One nation, under God”. We do not like to stare failure in the face, and we have a hard time taking “no” for an answer. For many, the roots of our country’s prideful spirit began in 1620 with the arrival of The Mayflower in what is now Massachusetts. From there, spanning hundreds of years, American cities have formed across the nation, many of which have become the centers for international business, the arts, sports, and other areas that bring people to America from all around the world. In New York, the financial industry is prevalent, and right around the corner lays Times Square, which is sometimes called “The Crossroads of the world”. In Chicago we see a fusion of culture, one of the world’s largest transportation hubs, and a pivot point for international trade and commerce, not to mention the “Miracle Mile”, an awesome destination for any shopping fiend. There are many other cities in the U.S. that are recognized internationally as what some might call “hotspots”, and people flock to these cities to live, work, vacation, and explore. With this attitude, surely our largest cities would continue to grow and thrive right? For the city of Detroit, however, the answers are not so easy. What was at one time one of the most thriving cities in the country has become an industrial wasteland filled with crime, poverty, prejudice, and an economy that is less than admirable. In 1929, Detroit was right up on the list of the nation’s largest and most prevalent cities alongside New York, Los Angeles, and Chicago. However, Detroit’s fortune has not been so great since that time, and according to Mayor Dave Bing, “We are at a critical and pivotal time like none in Detroit’s history” (Lepeska). Therefore, economists are laying some of the weight of Detroit’s burdens on their backs and attempting to formulate the best ways to revitalize the potential of the city. Many theories for the economic development of Detroit exist, but cluster development through entrepreneurship, attracting young people, re-generative wealth creation and building community from within is the best way to spur Detroit’s economy in the long run compared other popular theories like an anchor-led approach, or governmental incentive programs in the city. History

So what happened to this city that was once a thriving metropolis filled with energetic citizens who were willing to live, work, and give back to the city of Detroit because of the opportunities it gave them? How is such a large collapse within a local economy possible? Let us begin the story with what originally built Detroit up…

The economy of Detroit really began to grow with the opening of the Erie Canal in 1825. This opened up countless trade possibilities in the eastern lakes region, including copper, ore, coal, and lumber. With these raw materials passing through the region, Detroit being settled right on the Detroit River was a key factor for the initial growth of the city. By the turn of the century, the city’s population was near 300,000, and competition in the auto industry really heated up. Ford, Buick, Packard, and Olds were all battling it out in Detroit, which in and of itself increased the demand for manual labor in production factories, bringing in a slew of uneducated labor to the city. When 1914 hit, Detroit was producing more than half of the country’s automobiles. 15 short years later, Detroit had become the fourth largest city in the country, with a population of about 1.6 million. Things were looking good for Detroit.

However, with so many unskilled laborers concentrated in one city all working under similar inhumane conditions,...
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