Growth: Do we even know what we want to achieve?
by Knute Berger
Seattle from the Space Needle: Not enough growth? Credit: FraserElliot/Flickr
Does Seattle know how to grow?
You’d think so, with all those construction cranes back and so many mega-projects underway. We’re about to get expanded light rail, a new waterfront, a massive downtown tunnel, a super-sized 520 bridge, and a Mercer Mess that has been tidied up after 50 years of complaining. Growth would seem to be the least of our problems.
But there are some who think these endeavors are not enough. We could do more, do it bigger, do it better and, they believe, we had better get to it because we’re facing big economic challenges. Boeing, for example, has become a constant worry. The company is doing a slow retreat from Puget Sound, and keeping key parts of Boeing’s work here is getting increasingly expensive for taxpayers. Some $9 billion in new tax breaks have been offered to keep 777X work here. Even so, without a major transportation package and with major union concessions just voted down, Boeing is looking for a better deal elsewhere.
Another foundation of our economy is showing signs of change, and age. Microsoft has reached maturity and experienced enough marketplace failures (Vista, Zune, Surface) that a major management shift is underway. We’ve grown accustomed to Redmond being a perennial powerhouse and millionaire-generator in the Gates-Ballmer era, but will that roll continue?
Seattle sees itself as a special incubator of the next big commercial success — and the new Bezos family-funded “Center for Innovation” at the Museum of History and Industry that opened this fall is a shrine to this self-image. We’ve scored with Starbucks, Nordstrom, Costco and Amazon, for example. But in the tech sector there’s some thought that we haven’t reached our silicon potential, that we’re over-due for a new major success a la Google or Facebook.
Sure, we’re a pretty good place for start-ups, but Seattle tech booster Chris DeVore recently wrote that while Seattle is pretty good at launching companies, “It’s been a long time since a new Seattle-based company produced a huge windfall.” He means a company, like Microsoft or Amazon, that lifted employees and investors by generating lots of wealth. “If I had to put my finger on the one thing we could do to improve our weak ‘startup rate,’ it would be to produce more explosive wins in Seattle…” he wrote. That would benefit start-ups and companies all up and down the food chain and generate money to invest in new ventures. Apparently, the tech sector needs a new blockbuster.
Another voice encouraging Seattle and Washington to take it to the next level is Microsoft executive vice president and general counsel Brad Smith. In October, he addressed the Greater Seattle Chamber of Commerce’s annual Leadership Conference, an appropriate place for business leaders to inspire the team with a growth-oriented Gipper speech. I also had a chance to talk with him afterwards. In his speech, he said “[I]f there is a moment in time when we can come together and focus on raising our ambition, I think that moment is now.” With the state recovering economically, with greater global competition ahead (China, Brazil, South Carolina…), and with so much potential here, we need to get going, and set our sights higher.
To that end, his Gipper — or maybe “Skipper” — speech cited a nautical example. It was inspirational achievement of the University of Washington rowing crew who beat the odds to win a gold medal in 1936. These were local boys who had to raise their own money during the Depression to go to Germany, who had to race under rules that favored Hitler’s rowing team, and who took on the task of making America proud at the Nazi’s infamous Olympic Games. “It’s a reminder of what nine young men from humble background could achieve when they reached beyond themselves and worked as a team,” he said.
In this era of city-states competing globally, of a national government tackling less and local governments having to fill the gaps, the pressure is on us to find a way forward. Can we perform in the global marketplace like the heroes of Montlake?
Smith’s vision involves attracting more Fortune 500 companies to the region — we have too few Nintendos, he told me. We could, for example, focus on attracting more major companies from Asia, and we must do a better job of retaining successful companies, which can move, fail big or morph (think Boeing, WaMu and McCaw). He also says we need to up our game in education. Each year we produce 6,500 too few college graduates to meet local demand. That’s roughly equivalent to an entire University of Washington senior class. We need to take more advantage of our increasing diversity and our proximity to Asia, becoming a modern gateway where East and West can combine in economically powerful ways.
The Pacific orientation isn’t a new vision. Our connections to Asia and the Pacific and their potential have been a recognized opportunity since the days of the fur trade and Thomas Jefferson. But Smith worries that we’re too distracted by “big” projects that don’t take us far enough. The re-do of the SR-520 floating bridge, for example, is still only partially funded and slowed by problems. Expensive and big though it might be, and as much as Smith and Microsoft pushed for it, it isn’t a game-changer in the way the Lake Washington ship canal was when it was built a century ago, an example Smith evoked in his talk. That link connected the resource economy (coal, timber, iron ore) with the Pacific, opened markets, put Seattle on the map as a major maritime center and boosted industrial capacity. It was an ambitious, transformative project.
His is naturally a business-centric vision. Left out are the kinds of things that Chambers of Commerce can’t control: the kind of unmanageable, fertile environments that produce creative booms, like Grunge of the ‘90s or the Northwest Mystic artists of the 1940s and ’50s. Also, there are some contradictions in Smith’s message. Microsoft has pushed for improving higher ed, but also has also fought to preserve tax breaks that keep it from paying taxes that might very well help pay for it. The cost of keeping the big boys like Boeing and Microsoft happy can preserve jobs here, but it can also erode our capabilities to solve problems and it puts pressure on the people who can least afford it in our regressive tax system. If we’re like the old Husky crew of yore, our “underdog” status is partly self-inflicted.
And there is another impediment, and that is gridlock in Olympia. Even where one would expect consensus, say on transportation, the squabbling continues. Smith argues that we need more boldness of vision, less incrementalism and that the people won’t pay for needed things unless they can see it as part of an investment in a bigger vision, one that excites people. One that generates enthusiasm for a collective effort.
Smith says that Washington’s growing racial and ethnic diversity is a strength we have yet to tap. We have a talented work force that needs to be retained, and expanded. We have projects underway that might begin to spark people’s interest as they take shape, whether it’s following 520’s huge pontoons via webcams or brainstorming the possibilities for a remade Seattle waterfront. But can we lift ourselves a little taller? He wonders if we can take a cue from hotel-man Eddie Carlson’s doodle that led to the Space Needle and all that it represented? One thing that embodied, Smith reminds, is a public-private partnership. Bold thinking doesn’t just come from the public sector but from the private sector, and the two working together, the world’s fair being a case in point. “People,” he says, “don’t get excited by goals that feel too small.” The question is, can business and political leadership shake the habit of doing business as usual?
Citizens might be ready for change, at least at the social engineering level. Bellevue’s ambitions are ramped high and a new city council seems poised to take the city to the next level as an urban center. Gay marriage and pot legalization are increasing personal freedom as well as likely to prove good for entrepreneurs and business generally. The $15 minimum wage is a hook for those sliding behind, offering hope in a region that has affordability issues. Still, a region-wide, unifying vision has yet to materialize, nor the reforms to pay for it. Can it be put together as part of a compelling package?
Smith sees the vessel used by the 1936 crew that hangs in the UW’s Conibear Shell House — the Husky Clipper — as the symbol for a newly competitive, invigorated Seattle. Referring back to Montlake’s miracle crew, he says, “It’s our boat now. It’s up to us to move it forward.”
But we need to know which race we’re trying to win.