Ah, the long Memorial Day weekend — the unofficial start to summer, and, the official start to hockey’s Stanley Cup finals, which begin Monday and will extend into June.
Our temperatures are forecast to go north of 90 degrees this weekend, but in Boston and St. Louis fans of the Bruins and the Blues will be sitting around sheets of ice. Try not to think too much about the length of the modern sports season. Instead, let’s think about the economies of the two cities involved.
The St. Louis Blues provide an inspiration even for non-sports fans: As late as January, the team was in last place. Now the Blues have a chance to bring the Cup home to Missouri for the first time ever. Both cities, though, provide an inspiration — and a cautionary tale — for communities across this part of Virginia for another reason. Here are two lessons on how to build a new economy (but also how difficult it can be).
Boston and St. Louis provide something of a tale of two cities. In 1910, St. Louis was the fourth-largest city in the United States, Boston the fifth-largest. Both were economic capitals of the industrial age. Since then, both cities have fallen, and both have been economically reborn, but one of them has done it much more successfully than the other.
Today, Boston constitutes the 10th-biggest metro area in the country, while St. Louis barely makes the 20th spot.
Here’s the more important comparison: In terms of gross domestic product, Boston has the nation’s 9th biggest economy, while St. Louis has the 22nd biggest.
The gap between the two is also widening. From 2012 to 2017 (the last figures available), Boston’s economy grew by 23 percent, while St. Louis grew by 13 percent.
There are other measures, too. The San Francisco non-profit StartUp Genome issues annual rankings of the best cities in the world for technology start-ups. In the latest rankings, Boston ranks as the third best in the country (behind only Silicon Valley and New York) and the fifth best in the world (London and Beijing elbow in ahead of the Bean City). St. Louis isn’t on the Top 30. Nor is it on the list of cities rated as having a chance to break into the Top 30.
In 1910, the two cities were basically equal. If anything, St. Louis had a slight advantage. Today, they’re only in the same league in sports, but not the economy. What happened? Why has Boston been so much more successful in transitioning from the industrial age to the information age? This is a question that ought to be of interest to lots of places.
The answer is actually pretty easy: Boston has more natural resources than St. Louis, at least natural resources as the technological era defines them. At one time, those resources meant Boston’s harbor and St. Louis’s location at the confluence of the Missouri River and the Mississippi River. Those geographic features still exist, they just don’t matter as much. Instead, this does: Boston has more and better universities than St. Louis. They really are the economic engines of the information age, which is why we in this part of Virginia we should be very grateful that in 1862 Congress passed an act to set up land grant colleges and in 1872 the General Assembly used its federal funding to buy out a financially troubled school in Blacksburg. It’s also why those in the state’s southwestern corner should be grateful that in 1954 people in Wise County raised money to open a two-year junior college. At the time, the state’s commitment was so tentative that Clinch Valley College was opened only on a trial basis. Today the University of Virginia’s College at Wise is a four-year college that remains a branch of its mothership Charlottesville but constitutes a linchpin of that region’s hopes to create a post-coal economy.
In 2016, General Electric moved its headquarters from Connecticut to Boston with this explanation from then-chairman Jeff Immelt: “Greater Boston is home to 55 colleges and universities. Massachusetts spends more on research & development than any other region in the world, and Boston attracts a diverse, technologically-fluent workforce focused on solving challenges for the world.” Immelt is long gone from GE but his description of Boston remains spot on. St. Louis has universities, too, of course, and is working to leverage those, just as we’re working to leverage ours. But, as we said, they’re in different leagues.
To be fair, St. Louis is hardly failing; it’s just not succeeding at the same rate. All things are relative: A 2018 study by the Brookings Institute found that St. Louis was actually doing better than most other former industrial cities in building a new economy. It ranked St. Louis in the “strong” category, while rating Lynchburg in the second-best “emerging” category.
Curiously, it put Roanoke in the last-place “vulnerable” category based on its economic performance from 2000 to 2016. Roanoke got low marks for two reasons — the loss of headquarters jobs associated with the railroad, and too many people living below the poverty line. The loss of high-paying headquarters jobs hurts Roanoke’s statistics this way: “Inflation-adjusted median household income in Roanoke today is still about 9% lower than in 1989,” the report says. The report said there’s a lot of hope in Roanoke that the Virginia Tech Carilion Academic Health Center will drive economic growth. However, Brookings didn’t put much stock on hope: “These efforts have not yet transformed the whole of Roanoke’s economy (as our analysis shows), nor is it yet clear whether and how they will materially benefit the historically black communities that lie just north of the city’s downtown.”
Whether you agree with the Brookings assessment or find it too pessimistic, ideally we can all agree that there are lessons to be learned from Boston and St. Louis.
We often talk after the end of the industrial age, but the reality is it’s just changed. Boston once was a manufacturing hub. It still is; just in different ways. The city is now rated as the second-best in the world for advanced manufacturing and robotics (Silicon Valley is first). It’s also rated second in the world (again, behind only Silicon Valley) for life sciences.
Significantly, the former is a sector in which the New River Valley has a foothold (think Torc Robotics) and the latter is a sector in which the Roanoke Valley hopes to make a claim with spin-offs from the Fralin Biomedical Institute. Those probably aren’t the things you’re thinking of as the Stanley Cup finals get underway, but perhaps someone should.