U.S. Lessons Good and Bad
The U.S. Rust Belt, known for heavy industry such as steel, has endured industrial collapse, job losses and—in some cases—rejuvenation. The state of California has shown how smart policy can help transition to low-carbon, services-based economic growth.
Success Built on R&D
Toledo has rebuilt its economy, which contracted when auto and glass manufacturing collapsed in the 1970s, by investing in R&D around solar PV and attracting a cluster of firms related to the solar supply chain.
Solutions: Focused R&D spending at the University of Toledo in solar PV, a field that allowed new industry to leverage existing industry and physical manufacturing infrastructure, helped catalyze a new industry and attract firms related to the solar supply chain.
Successes: The University of Toledo spawned a solar cluster around existing industry expertise in the glass industry
Mistakes: The local government was slow to recognize the need to foster new industry, and spent significant time and resources trying unsuccessfully to retain the city’s largest employers in declining manufacturing industries.
Stats: The population has grown to 650,000 from 644,000 in 1970, and the GDP today is $24 billion, or $37,000 per capita.
From Autos to Medical Services
Cleveland’s economy shrank when auto manufacturing collapsed in the 1970s, but smart investment and the city’s research universities and medial institutions helped it develop into a regional medical cluster.
Solutions: The city built on the strength of institutions that existed before the downturn to develop a health care cluster similar to the high-tech cluster of Silicon Valley.
Successes: R&D at the Cleveland Clinic and Case Western Reserve University fostered a medical cluster
Mistakes: The city invested in a number of expensive, high-profile projects in a misguided attempt to revitalize downtown.
Stats: The population has declined from 2.3 million in 1970 to 2.1 million in 2015, but the GDP, $134 billion annually, is $62,000 per capita.
Public-Private Partnership and New Industry
The city failed to act when the steel industry started to collapse, but collaboration between the city government and the private sector and R&D investment helped spawn new computer science, robotics and health-care industries.
Solutions: Focused R&D spending at major research institutions helped create new high-tech clusters, as legislation at the state and federal level pushed the region to clean up pollution.
Successes: R&D spending at Carnegie Mellon University and University of Pittsburgh helped fuel medical and IT clusters.
Mistakes: The local government clung to the steel industry until it was in crisis, failing to encourage new industry.
Stats: The population has declined to 2.4 million in 2015 from 2.8 million in 1970. GDP is $113 billion, or $47,000 per capita.
From Good Policy to Innovation
The state is still the most polluted in the country, in large part due to heavy reliance on automobiles, but policies adjusting the energy structure and encouraging a shift away from fossil fuels have made it the leader in renewable energy and led to innovation, boosting the economy.
Solutions: Aggressive policies reduced vehicle emissions and promoted renewable energy, leading more recently to emissions trading for carbon dioxide and promotion of energy storage and vehicle electrification
Success: California has integrated policies on carbon, renewable energy, energy efficiency and low-energy vehicles
Mistakes: California has done a great job in making its industries and consumers more efficient, but its land use policies still tend to favor automobile traffic over other, cleaner options.
Stats: The population has jumped from 20 million in 1970 to 39 million today, and the state’s GDP is $2.2 trillion (13% of overall U.S. GDP), or $39,000 per capita.