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How do 21st century
citistates cope with the multiple pressures they’re
under? What do the imperatives of the New Economy
mean for economic strategies, governmental authority,
growth, quality of life? We select this thought-provoking
piece from Bill Bishop of the Austin American-Statesman:
Austin’s new economy
outpacing its old government
By Bill Bishop
American-Statesman
Staff
February 26, 2000
Austin wants to
be Austin. But Austin doesn’t want to be Silicon
Valley.
So goes the familiar
chorus in this city’s otherwise constantly
changing anthem of growth.
Well, good luck.
An economic trajectory
is locked in, forcing Austin not only to look like
its older, bigger and richer California brother,
but to act like it, too. Silicon Valley, Austin
“for that matter, Minneapolis, Portland, San
Diego, Atlanta and Boulder” are cities running
on parallel tracks. Their economies are similar:
high-tech, global and growing. So are their problems.
Traffic is stiff as a frozen rope, buying a house
requires stock options, skilled workers are as scarce
as truffles. And nobody has figured out how to manage
these sprawling, banderoles fonts of wealth and
employment.
Austin is plop
in the middle of the new economy. Yet it is stuck
with a government from back-when, a musty hand-me-down
from the previous century. Austin the city and Austin
the economy don’t fit physically, economically
or socially. As Austin Mayor Kirk Watson put it,
“Austin is still playing with jurisdictional
boundaries which are irrelevant.”
The town isn’t
alone. Hundreds of other cities around the world
are struggling with governments rooted in history
and economies that float on a stream of constantly
changing networks, products and markets. “We
don’t have good ways to lead and govern these
regions,” said former Austin City Manager Camille
Barnett, now a consultant and writer. “It is
the governance issue of this century.”
A pattern is emerging
from this chaos. Governments are taking on the shape
of the businesses that are driving their cities.
The new economy relies on networks of suppliers,
producers, attorneys and financiers. The new government
is building networks of business and labor leaders,
small governments and nonprofit institutions. The
new government isn’t an organizational chart,
with descending boxes and arrows. It’s more
like a Web site, with multiple links and connections.
Moreover, these
new forms of public administration are responding
to what University of Chicago sociologist Terry
Nichols Clark and University of Michigan political
scientist Ronald Inglehart call a “new political
culture.” Government is changing because people’s
attitudes and expectations are changing. There is
a new economy and a new kind of politics.
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Where are we
headed?
A new government
and a new culture and a new economy — where
is all this “new” stuff headed?
There are no ends
in sight, only directions. Businesses are clustering
in cities, and cities are growing larger as a result.
Austin is one of 300 cities worldwide that have
more than 1 million people. Within 25 years, there
will be 600 cities of this size. All these cities
are growing geographically, spreading over the countryside.
People in advanced
economies are changing, too, according to 20 years
of opinion polling conducted by Inglehart. They
are less attached to existing institutions, whether
those institutions are political parties or mainline
churches. They don’t join the Kiwanis to tackle
social problems, but find new, more individualistic
ways to enter the fray. They are socially progressive
but fiscally conservative. These adherents of the
“new political culture” show a shift in
priorities, Inglehart writes, away “from an
overwhelming emphasis on economic and physical security
toward increasing emphasis on subjective well-being
and the quality of life.”
The confluence
of these trends leads to this: Cities are exploding,
causing problems with traffic, housing and the environment.
Local government is too small to handle most regional
problems. Cities, meanwhile, are filled with people
most interested in quality-of-life issues –
such as traffic, housing and the environment. But
these people don’t want much to do with traditional
institutions, especially government.
It all makes for
an interesting and, as yet, unsolved riddle.
The easiest solution
to governing a regional economy is the one least
likely to be adopted. “It’s pretty unlikely
that you are going to see the wholesale consolidation
of local governments,” said Ethan Seltzer,
director of the Institute of Portland Metropolitan
Studies at Portland State University.
“The whole
idea of trying to consolidate governments, there
is almost no interest in trying to do that,”
Barnett conceded. There is little interest in Austin
even for the regional governments that already exist.
West Lake Hills, Rollingwood, Cedar Park and, most
recently, Pflugerville have all dropped out of Capital
Metro, the entity given the duty of solving the
region’s transportation problems.
Metropolitan governments
don’t fit the new, or old, political cultures.
“That’s swimming upstream for most local
leaders,” Seltzer said of large, regional institutions.
“They are expected to be representing the needs
of the jurisdiction. It’s an unnatural act
to seek out regional solutions to a local problem.”
Even if it were
intuitive for government officials to merge into
larger institutions, like so many telecommunication
firms, that may not be enough. Growing cities are
like Blue Heeler puppies. They are boundless. Even
if a city limit could be drawn large enough to encompass
Austin, that line would soon be surpassed. And then
what?
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Knowing the
problem
The high-tech
high priests who gathered at the Austin 360.00 Summit
in late January know the problem. Their businesses
depend on attracting talented people. The key to
their ability to import good people is to offer
a high quality of life in Austin. Their businesses
are threatened because, as Michael Dell, founder
of Dell Computers, said, “Austin is on a collision
course between the city’s growth and development
of the infrastructure.”
Crowded streets,
polluted air, high housing costs – they are
all barriers to the importation of the new economy’s
raw material: skilled people. And so now these individualistic
high-tech business leaders have come to realize
that their business futures depend on collective
action.
City governments
have come full circle, says Randall Kempner, an
Austin-based economist with Monitor Group, an economic
development consulting firm. “In the beginning,
government was important because it created the
infrastructure under which businesses could form,”
Kempner said. Businesses needed to build factories
and transport goods. They demanded water and electric
power.
Companies now
depend upon a good quality of life for their employees.
“So we’re back where the infrastructure
issue has become critical,” Kempner said. “Once
again, it’s roads, transportation, housing,
quality of life and schools.” This time around,
however, the problems ooze beyond cities’ jurisdictional
boundaries.
The most common
way to tackle regional problems has been through
voluntary associations. Business leaders, nonprofit
groups, local governments agree to take on a problem.
They form a voluntary association to deal with a
distinct problem.
“In some
places, it’s the economy, in some places, it
is the environment,” Portland’s Seltzer
said of what drives these voluntary groups. “Whatever
it is, that’s where regions have to start,
where the issue is so evident and so apparent that
you can’t deny it.”
Barton Springs
is that kind of transcendent, undeniable issue in
Austin. And it has created its own unique set of
public/private organizations and accords.
Last year, the
Save Our Springs Alliance, the Real Estate Council
of Austin and the Greater Austin Chamber of Commerce
agreed privately on rules for developing land in
the Barton Springs portion of the Edwards Aquifer.
The settlement established limits on building over
the aquifer and even called for placing 50,000 acres
off-limits to development. The 17-page agreement
was negotiated in a downtown office building and
was only later adopted by the Austin City Council.
This is the pattern
for how public issues are being decided. The contents
change, but the form has been adopted over and over
again. In Silicon Valley, for example, a public/private
partnership has convinced local governments to adopt
the same building code.
This may be a
more efficient means of taking care of public business,
but is it democratic? The demands of the new economy
roll over this question. “The lines between
public and private investment blur,” wrote
Harvard Business School professor Michael Porter.
“Companies, no less than governments and universities,
have a stake in education. Universities have a stake
in the competitiveness of local businesses.”
What is public
and what is private? The boundary is neither clear
nor bright.
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“Follow
their passion”
To say these younger
business leaders should join established service
organizations or work through traditional government
channels misses the point of what’s happening
in the new economy and the new culture. The people
who attended the 360.00 Summit want to “follow
their passion” — a refrain of the day’s
discussion — and they want to do this individually.
The question of democracy, of who controls the new
government, is less of a concern than effectiveness
and immediacy.
The new form of
governance in high-tech regions creates the local
civic equivalent of the World Wide Web. Silicon
Valley economist Doug Henton believes these regions
are moving toward a “network governance model”
— a coalition of business, government and community
leaders, a “network of regional stewards.”
After the 360.00
Summit, Mayor Watson and Capital Metro board Chairman
Lee Walker hauled out a giant-sized “Declaration
of Interdependence,” a manifesto stating that
“our interdependence is based on linking our
new economy to our livable community.” And
a coalition of high-tech CEOs announced the formation
of an “Austin Network.”
Both the declaration
and plans for the network were drawn up with help
from Henton’s Silicon Valley firm, Collaborative
Economics. Austin joins other high-tech cities using
Henton’s model, which skillfully blends new
business models of venture capital and networking
with the job of solving public problems.
How will all this
work in Austin? One difference between Austin and
Silicon Valley is that the California high-tech
community has a longer history of community organization.
Joint Venture: Silicon Valley Network, a combination
of labor, business and government, formed in 1992.
The Austin Network, in comparison, is starting from
scratch. Members of the high-tech community, despite
world-class savvy in their business lives, are as
awkward as cotillion newcomers when it comes to
working on public issues.
But this is the
middle of the story, not the end. While the organizers
of the 360.00 Summit circulate ideas for how the
Austin Network will form and function, public life
grinds on:
Plans circulate
for the new Texas 130 highway.
The city will
vote this year on a multimillion-dollar light-rail
route.
The Austin schools
are deep into audits and fouled accounts and are
struggling to restore order to a chaotic system.
Austin Community
College is attempting to educate more students on
a limited budget.
And, while high-tech
firms search for employees, a fifth of Austin’s
working residents are stuck in jobs that pay less
than $7 an hour.
The 300 high-tech
CEOs who agreed to form the Austin Network talked
about the need to work on public problems just as
they work at their businesses, all on Internet time.
Given the range and complexity of the issues at
hand, the question is whether that will be fast
enough.
You may contact
Bill Bishop at bbishop@statesman.com or at 445-3634.
^Top
Last updated June
30, 2001
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