By Bruce Katz and Jessica Lee | The New Localism
Turns out a global pandemic can be a good time for a metropolis to plan for its future.
In 2020, amidst an unprecedented year of national crisis and racial reckoning, business and civic leaders in the St. Louis metro began the hard work of devising a new approach to economic growth in the region. Against a backdrop of decades-long economic underperformance, population stagnation and racial division, these leaders commissioned New Localism Associates to craft a 10-year plan that combined growth in quality jobs and heightened global relevance with a steadfast and broad-based commitment to inclusive growth and racial equity. They also convinced Mark Wrighton, the former Chancellor of Washington University, to lead a local team of diverse, reflective stakeholders to ensure that the work was fully grounded in local knowledge.
The resulting STL 2030 Jobs Plan maps out a suite of mutually reinforcing actions to grow quality jobs (defined as those paying at least 80% of the national median wage) and reduce racial disparities in household income, health outcomes and wealth building across the St. Louis metro. It attends to the broader dynamics at work in the metro economy, including rising interest in onshoring supply chains, the post-pandemic challenges facing Main Street businesses, the trend toward remote work and globally distinctive clusters, and the broader push for racial equity in the workplace.
The St. Louis metro is unusually rich in assets. It has a deep financial services sector and a globally significant bioscience cluster. It has a thriving startup ecosystem, as evidenced by plant science innovator Benson Hill’s plans to go public later this year (one of several tech “unicorns” the metro has produced over the past half-year). It has some exceptional and sophisticated practitioners, including cluster intermediary BioSTL, Arch Grants for entrepreneurs, tech training from LaunchCode and community development leader Invest STL. It has innovative corporations such as Boeing, Enterprise Holdings, Pfizer and Square, among many others. It has major institutions—Washington University in St. Louis, Saint Louis University, Harris-Stowe State University, Scott Air Force Base, the National Geospatial-Intelligence Agency headquarters, the University of Missouri—St. Louis to name just a few—that provide a solid platform for economy-shaping action powered by area anchors. Its residents and leaders alike are fiercely committed to their community and eager to improve on the status quo.
And yet, despite this strong platform, the St. Louis metro economy consistently underperformed in the years before COVID-19. Between 2008 and 2018, metro GDP grew by only 5.2%, lagging older industrial economies like Baltimore, Cincinnati and Pittsburgh, Heartland growth centers like Denver, Minneapolis and Nashville, and the nation as a whole, which saw nearly 20% GDP growth during the same period. This laggard performance made it harder for companies to attract talent, for entrepreneurs to start businesses, and for households to build wealth.
What explains this underperformance? Our research revealed three factors that held the metro economy back:
Decentralization. Over the past fifty years, employment in the metro became radically decentralized. Like Detroit, the St. Louis metro resembles a 1970s-era exit-ramp economy, with many major companies located on isolated suburban or even exurban campuses set away from a declining and increasingly depopulated urban core. The renewed interest in city life in recent years that increased population growth and commercial activity in urban areas throughout the U.S. largely sidestepped St. Louis. The resulting contrast with the national average is stark: The metro would have an additional 130,000 jobs in its greater downtown if it had the same level of employment concentration as the average U.S. metro.
The interplay of race and space. Systemic racism and residential segregation have had a devastating effect on the region. St. Louis is characterized by extraordinarily large areas of low-density, low-income Black communities that have long been disinvested and underserved. These concentrations of poverty in North St. Louis City, North St. Louis County, East St. Louis and elsewhere have hampered the virtuous cycle of development, business growth, job creation and wealth building that has increased economic mobility elsewhere in the metro.
Fragmentation. In the St. Louis metro, fragmentation has been elevated to an art form. A splintered governmental landscape, artificially drawn racial boundaries and dismal economic performance have created a culture of scarcity where growth is perceived as a zero-sum game that rewards only a few at the expense of all others. A plethora of organizations, programs and initiatives have sprung up to address key challenges such as educational attainment, entrenched poverty and entrepreneurial success, each with its own mission and activities. Though many deliver effective individual solutions, lack of coordination means that they don’t add up to a cohesive whole. Of course, fragmentation is quite common in U.S. metros. But older industrial cities like Pittsburgh and emerging tech hubs like Austin have created generative economies and cultures of collaboration where 2 + 2 = 5 (in the evocative phrase of Henry Cisneros). St. Louis, by contrast, has long been less than the sum of its parts, a place where 2 + 2 = 3.
Business and civic leaders understood they needed a new approach to economic development that was capable of producing growth and inclusion. Working with Michelle Tucker at the United Way of Greater St. Louis, Dara Eskridge at Invest STL and the team at Center for Civic Research and Innovation, we created a definition of inclusive growth unique to the St. Louis metro to guide our work.
…broad-based economic growth that enables all stakeholders in the St. Louis metropolitan area (including residents, workers, entrepreneurs, companies and communities) to realize their full potential. Such growth enables the widest range of people and places to both contribute to and benefit from economic success.
Its purpose is to achieve more prosperity alongside greater equity in opportunities and outcomes by substantially increasing the number of quality jobs while radically reducing racial and spatial disparities in income, health and wealth that have undermined metropolitan performance for decades.
With this definition as our North Star, we set about identifying the actions needed to make this vision of inclusive growth a reality.
Central to the STL 2030 Jobs Plan is a recognition that anchor employers have the ability to strengthen the metro economies in which they operate. The proposed STL Pledge aims to unlock this latent economy-shaping power by organizing area anchors to buy local, hire local, invest local and/or locate a portion of new jobs in the city’s core. Ideally, anchors that sign onto the STL Pledge will make specific commitments on purchasing, hiring, investment and location decisions. United under the STL Pledge umbrella, these commitments will bring the power of anchors to bear on inclusive growth in the metro economy.
A key function of the STL Pledge is to encourage anchors to prioritize large-scale inclusive economic impact when making business decisions. The economy-shaping commitments that pledge members make — to buy local, hire local, invest local and/or locate a portion of new jobs in the city’s core — will change behavior by affirming the value of investing in the people of Metro St. Louis. By taking deliberate steps to maximize their local impact, the metro’s employers will help build a stronger, healthier, and more purpose-driven metro economy.
Key elements of the STL 2030 Jobs Plan hinge on commitments outlined in the STL Pledge. For example:
As we began work on this project, we soon learned that memories of past planning efforts that failed to produce meaningful change made St. Louisans rightfully suspicious. We designed the STL 2030 Jobs Plan as an action plan for this very reason. It includes detailed strategies tailored to the St. Louis metro and was written with an eye toward implementation.
In addition to these practical concerns, the plan also highlights the critical need for a culture change in the metro’s approach to economic development. It makes clear that success will only be possible if leaders and organizations choose to work differently than they have in the past. Learning together, modeling new behavior, collaborating to achieve common goals, coordinating activities and embracing what Forward Through Ferguson has described as “a culture of trying”—all will be essential if this plan is to succeed.
The overwhelming message we heard from metro residents was one of hope, unwavering commitment and genuine excitement about the possibilities for and potential of Metro St. Louis. St. Louisans expressed a determination to pursue a radically different path and an eagerness to act.
The strongest evidence that this time is different? Stakeholders in the metro are already organizing in new, more collaborative ways to implement a number of the plan’s recommended actions. The development of the STL 2030 Jobs Plan dovetailed with the formation of Greater STL, Inc., a new business and civic leadership organization created through the fusion of five existing groups (including Civic Progress, which commissioned the STL 2030 Jobs Plan in the first place). The merger process was purposeful and deliberate, building on lessons learned from successes like the Central Indiana Corporate Partnership. It has engaged serious business leaders in the region, including Andy Taylor of Enterprise Holdings, Jim McKelvey of Square, David Steward of World Wide Technology (WWT) and Penny Pennington of Edward Jones as well as the heads of major anchor institutions, such as Andrew Martin of Washington University, Rich Liekweg of Barnes Jewish Hospital and Kristin Sobolik of University of Missouri—St. Louis.
Greater STL, Inc. is now responsible for shepherding implementation of the STL 2030 Jobs Plan. As a business-led intermediary, Greater St. Louis, Inc. will organize industry councils and work closely with other key stakeholders in the broader business community to catalyze inclusive growth and create opportunities for co-creation, trust-building, and shared implementation beyond the private sector. It will provide leadership and stewardship to keep stakeholders focused on the STL 2030 Jobs Plan’s larger vision and goals. In a metro defined by its fragmentation, this organization will provide a new center of gravity for collaborative business and civic efforts to advance to inclusive economic development.
In forming Greater St. Louis, Inc., metro leaders aim to reverse decades-long economic trends by following a tried-and-tested recipe for healthy metro economies. Successful metros collaborate across jurisdictions and sectors in order to compete with other metros, spending time and money on research and development, workforce development, infrastructure, entrepreneurial support and other building blocks of vibrant economies. They believe in the potential of all their residents and work to remedy longstanding inequities. They invest local civic and corporate wealth in local ventures and build partnership organizations with the capacity, capital and community standing to deliver transformative change. They construct entrepreneur support ecosystems that routinely connect enterprises with the talent, capital, customers, services and expertise they need to grow.
Major changes are underway in the public-sector leadership class as well. The elections of Ferguson Mayor Ella Jones in June 2020, Rep. Cori Bush in November 2020 and St. Louis Mayor Tishaura Jones in April 2021 marked a new era in the metro’s political leadership. We believe that the expertise and experience that these three women bring to the table will open up new opportunities for collaboration across the public, private, civic, nonprofit and philanthropic sectors. Already national groups like Accelerator for America and Mastercard’s Center for Inclusive Growth are actively engaging.
These tectonic shifts in the St. Louis metro comes at an unprecedented moment of federal investment. The enactment of the $1.9 trillion American Rescue Plan and the potential passage of the U.S. Innovation and Competition Act, the American Jobs Plan and American Families Plan mean that a select number of actions recommended in the STL 2030 Jobs Plan can move from concept to reality quickly by securing largescale federal backing:
We are convinced that Metro St. Louis has the potential to transform itself into a 21st-century powerhouse, propelled by strong industry clusters, ambitious entrepreneurs, skilled workers, inclusive workplaces and a healthy urban core. The energy unleashed in St. Louis over this past year reminds us of the quintessentially American penchant for reinvention. During disruptive times, places that are organized can reinvent themselves and leap frog ahead of others. This is one of those times and the St. Louis metro can be one of those places.
Bruce Katz is Founding Director of the Nowak Metro Finance Lab at Drexel University. Jessica A. Lee is an independent scholar who spent five years as an associate fellow at the Brookings Metropolitan Policy Program.