A bit of context
So the inevitable has happened – Detroit has filed for bankruptcy. After decades of constant decline, the birth town of the modern automobile has put its hands up and has formally declared itself bankrupt, admitting to a state of affairs that everyone was already more or less aware of. With more than $18 billion of debt, the city’s economy has been brought to its knees by one financial crisis after another, racial bitterness, corruption, and bad management. More than a quarter of the population had fled the city in the past 10 years, chased away by poverty and crime, heading to other places that can offer them a job and a safe home. What’s left in Detroit are thousands of abandoned houses, empty streets, degrading public spaces, and - occasionally - clusters of life struggling to hold on.
To most Detroiters however, bankruptcy is just another term for ‘we’re still doing bad’, which in fact doesn’t really change anything in the day-to-day reality of the city. Probably the only question left to ask is ‘Any chance we can do better?’
One more thing
The social, economical and political effects of this Greek tragedy, as one Washington Post author ironically calls it, are obviously severe and have been widely analysed by the media over the last few days. But beyond all of Detroit’s scarcities, I think it’s important to also look at what Detroit still has. And that is a powerful brand. In fact, it’s not a stretch to say that Detroit still has one of the strongest city brands in the US. Besides its role in the rise of the automotive industry and the creation of the American middle class (Ford, GM, Chrysler), Detroit has also had a huge influence in creating the American pop culture: from Marvin Gaye’s Motown to Eminem’s 8 Mile, from Jimmy Hoffa’s unions to Clint Eastwood’s Gran Torino, from Hockeytown to the Tigers, from graffiti to Detroit Institute of Arts. This city is so iconic – for both its glory and its decay - and so strongly tied to the American dream, that it has somehow become a larger than life global legend. Detroit’s brand is by far the strongest asset the city has at this point.
From Motown to Startuptown
In the last years Detroit has started to show signs of change: new start-ups, young entrepreneurs, social enterprises, and a growing number of graduates. Quicken Loans, Challenge Detroit, Made in Detroit, Detroit Future City, and BrandCamp University are just few of the many initiatives meant to help stir up change and inspire action in downtown Detroit. A young community of innovators and doers is taking shape, putting the foundations for a new kind of Detroit: smaller and more concentrated, but active, creative, technology-driven. Their ambition (paired probably with low rent levels, cheap workforce and tax incentives) is attracting an increasing number of large companies to come and set up shop here. Among them are Twitter, Plante Moran, Ex-Im Bank, and even Whole Foods Market. This little creative-entrepreneurial revolution comes to reinforce the regenerative power of the creative industry, which has been seen many times before. Bilbao is one of the more famous examples. Barcelona is another one. Berlin is a slightly controversial one, but a benchmark nonetheless. In London, at a smaller lever, Shoreditch has gone through a similar experience. In US New Orleans is one of the most recent regenerations in which the creative industry has had a big contribution.
Half full or half empty?
Taking a look at bankruptcy’s effects on Detroit’s brand, I think there’s both bad news and good news.
The bad news is hardly a surprise: one of the worst effects on a brand in this situation is mistrust. A bankrupt city will make people reluctant about living and working there, will slow down (if not stop) direct investment, will have a big negative impact on the people depending on public money, and internally will result in de-motivation and lack of citizen engagement.
But however difficult it might be to see it, there’s also a bright side: global exposure. The world has its eyes on Detroit: newspapers, analysts, policymakers, businessmen and creatives - everyone is trying to understand the situation, analyse the possibilities and come up with ideas to rescue the city. All this scrutiny is actually a fantastic opportunity for the people or organisations that are trying (and have been for a while now) to revitalise the city. Start-ups, social enterprises, entrepreneurs and local artists will now have a better chance to make their voices heard and get awareness and support for their projects. And it’s a tide Detroiters need to ride, as it might be the last.
Detroit hasn’t got much left, but its brand is still standing up, its people are still ambitious, and there is still a lot of goodwill towards it – in the US and in the world. The newly declared state of bankruptcy will not kill its spirit. On the contrary, it will act as a catalyst: the determined ones, the ones that until today have made a difference, will stay and continue trying to revive it, maybe even more energetically than before. It is the right time for reinvention and there’s a lot of opportunity, but in order to come out on the other side the city needs to tick a few boxes:
- Having a clear idea of what it wants to be - people will go further and push harder if they have a purpose;
- Building on what it is already doing well;
- Supporting the entrepreneurial environment;
- Concentrating on a smaller area to revive, rather than on the whole city, and then allowing the transformation to grow organically from inside out;
- Harnessing the power of the creative industry.
Start-ups and tech companies will create jobs, will bring investment and will fuel the revival of the community. A healthy entrepreneurial culture will nurture innovation and education, and will attract new talent to work and live in Detroit. The creative industry will aggregate communities and neighbourhoods, while acting as Detroit’s voice to the outside world. Undoubtedly Detroit will find a new sense of its own identity. Its heart is in the right place. Its brand is in the right place.
*Detroit's motto “Speramus meliora. Resurget cineribus”, written in 1805 by Father Gabriel Richard, means "We hope for better things. It will arise from the ashes".
Image courtesy of The Heidelberg Project