Detroit — Innovation City?

I'm writing this on the plane, returning home to San Francisco from Michigan where I gave the keynote speech at the D Brand Summit, yes, "D" as in Detroit. I had been looking forward to the event with anticipation, although folks in the office reminded me that I had written in Innovation Nation that America risked becoming "the Detroit of nations." Some suggested that I bring a catcher's mask to deflect any stray flying objects in the lecture hall. I was not deterred.

My previous visit to Detroit occurred in the late 1980s when I zipped into town for some meetings at GM, which I remember as being quaintly situated in a downtown that looked like a case study in urban redevelopment via neutron bomb. Like many of us who don't hail from Detroit, my view of that city has been formed by a montage of images: inner city blight, white flight, talent flight, muscle cars, GM's famous 10th floor. So what was this about the Detroit brand?

Turns out that there is a lot to like about what is going on Detroit, although in my view the jury is out on whether the city can pull off a profound transformation to being a 21st century competitor. Certainly, if human capital is a lynchpin of the innovation economy, then Detroit has that box checked off. I found the people in Detroit to be as nice and concerned a group of citizens as you'd want to meet. But if you're looking for dismal facts, 70% of the youth of Detroit do not think a college education matters. Why? Well, because they think they can get a job in the automobile industry like their parents. And then there's the not so minor detail of a 50% literacy rate in the inner city.

Don't forget, though, that Detroit gained its preeminence in the 20th century by being very good at the prevailing industrial business model. As a country, we used to be productive in making things to an almost unfathomable degree. Now you can feel the hum of this 20th century American skill with a visit to the Henry Ford Museum, where my hosts staged a dinner right in the middle of an astonishing collection of steam engines and vintage aircraft. It turns out that the original Mr. Ford was a latterday Charles Foster Kane when it came to artifacts of innovation. His museum, covering 12 acres, starts with a full-sized replica of Independence Hall in Philadelphia and carries through a faithful reproduction of Thomas Edison's original Menlo Park research lab. Throw in a DC-3, Rosa Parks' bus, Bucky Fuller's original Dymaxion House and, of course, cars, cars, cars (not to mention those steam engines) and you get a sense of the collection. It is a vast treasure trove of what made America great in the past — a set of capabilities that has since flowed across the Pacific Ocean to the lands of cheap labor.

Yet the conversation at dinner was all about transformation, not the past. For example, how to repurpose the capabilities that go into making the contemporary car, competencies that have been honed to a razor's edge such as the engineering of the propulsion system, the materials that go into its construction, the digital network and software that now reside in the latest car, to say nothing of manufacturing efficiencies and logistics, supply chains and marketing prowess. Detroit houses a vast treasure trove of knowledge that awaits repurposing to other sunrise businesses. That this concentration of talent, technology and know-how is considered valuable is validated by non other than the competition. Toyota — the world's biggest corporate R&D spender — has a large research laboratory right in the middle of the Detroit scene.

I also met the leaders of the alternative energy movement in Detroit, people with new non-manufacturing business models. Representatives of Detroit Renaissance, a business group involved the city's transformation. The town even has its own e-business poster child — ePrize — which recently announced to much civic pride that it was locating right in the downtown area.

So I began to see Detroit as a microcosm of sorts for what is happening in the US as a whole — nice people, noble legacy, BIG innovator's dilemma — now pausing to consider where the future sources of value are coming from, how to be global, how to overcome highly dysfunctional attitudes towards education, pondering how to create a vibrant hub for talent — in short, trying to figure out how to be an innovation city.

Predictably Detroit has a number of initiatives to look at the future of the city that are as yet somewhat scattered. The city needs a strategy, it needs a vision of how it can turn itself into a 21st century city, attractive to talent, with a critical mass of R&D and a revitalized approach to education, fresh thinking. It needs to go for the brass ring — incremental innovation will not save it — nor will the four casinos and other tourist amenities that have been put in to make the city a tourist destination. Only a fresh re-thinking of the strategy, the sources of future wealth and the willingness to make the investment of time, treasury and effort will see the city through.

And herein lies the full drama. If Detroit can effect its transformation, then there is hope for the rest of us. I see three scenarios — continued decline, middle of the road via tourism and entertainment, or the high road — nurturing the roots of a true Detroit Renaissance. Much food for thought.