The Great Lakes Can Lead the World

Josh Hjartarson and Bruce Katz
Bruce Katz Founding Director of the Nowak Metro Finance Lab - Drexel University

June 17, 2011

The Great Recession ended two years ago this month, but many countries around the world are still reeling from its economic devastation. Moving forward, every country must fundamentally re-examine its economic growth model, and build a different kind of economy.

For the United States and Canada, this means transitioning to a “next economy” that is driven by exports, powered by low carbon energy sources and fueled by innovation. The Great Lakes region has everything it needs to be the engine of the next economy of the U.S. and Canada.

The two Canadian provinces and eight U.S. states in this region are home to over 105 million people. As a whole, the region generated $4.6 trillion in economic output in 2009, making it one of the largest economies in the world. More than $2 billion worth of goods and services cross the U.S.-Canada border every day, with $356 million traversing the Windsor-Detroit crossing alone. Despite the decline in North American manufacturing, the Great Lakes region produces nearly 75% of total Canadian manufacturing and 33% of total U.S. manufacturing.

The Great Lakes also possess significant innovation assets. Twenty of the top 100 research universities in the world are located in the region. Paired with corporate research labs located throughout the region, the Great Lakes could lead new technology development in emerging sectors.

The Great Lakes themselves provide a huge advantage, given the world’s insatiable demand for innovation in the supply and delivery of clean water.

So what must happen for this cross-border zone to realize its potential in the next economy?

Metropolitan leaders must be purposeful about their economies. Business, political and civic leaders in northeast Ohio are coming together to craft a smart business plan for their region with ideas to retool manufacturing firms and retrain industrial workers. All cities need to develop such plans.

Cities also need to be collaborative. As they develop plans, they should look to neighboring cities to see whether there are ways to seize common opportunities with potential partners on the other side of the border.

Federal, state and provincial leaders must also orient their investments and policies toward metropolitan area visions. Toronto and Chicago are transitioning to a green economy with robust, market-shaping renewable energy and sustainability policies and incentives. Milwaukee, Grand Rapids and Windsor have targeted water and clean energy technology sectors for investment and growth. Provincial, state and federal governments need to get behind the innovation strategies of their cities. Both countries need to support this kind of bottom-up federalism in a fiercely competitive world.

Finally, federal leaders must rebalance security and economic concerns. The U.S. and Canadian governments have to maintain a secure border, while also harmonizing regulations and investing in 21st-century infrastructure at the border.

The next economy could be a bright one for the communities in the Great Lakes region, but it will not just happen on its own. Both countries need to act with purpose. Creating the next economy will begin at home, in the metropolitan areas that drive our prosperity.