Seattle's achilles heel: Retaining human capital

A new book by Michael Luis takes a deep look into Seattle's potential to maintain its role as a global city.
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Michael Luis' Century 21 City

A new book by Michael Luis takes a deep look into Seattle's potential to maintain its role as a global city.

Will the Seattle area continue to be one of those global cities where the economic, social, environmental and geographic elements combine to create a vibrant economic base filled with strong companies, smart workers and an attractive quality of life?

That’s the question Michael Luis’ new book on the Seattle region, Century 21 City, sets out to answer. Luis looks at the history of the region, focuses in on Seattle’s “50-year journey from world’s fair to world stage” and places that journey in the context of the rise of regional hubs around the world. Why and how Seattle has risen to become one of those centers of technology, innovation, risk taking and success is an interesting tale, full of twists and turns.

Luis also places the story of the Seattle region’s rise within the larger question of how metro areas turn themselves into regional metropolitan centers, why they survive and what’s needed to keep them vibrant into the future. By the end of the book, you feel like you have been sitting in the classroom at a top university, listening to a case study on the ins and outs of regional development.

For anyone who has been in the Seattle area for a while, Luis takes you breezily through a familiar history — early settlers, the role of forests and fish, WWII growth, the “Boeing Bust,” the importance of world trade, the shift to technology and so forth.

Luis does pull out some interesting statistics though. The supposed “Boeing Bust” of the late 1960s wasn't such a bust after all. Boeing cut about 60,000 jobs, tough on the Boeing workers to be sure, but the regional economy did not suffer as much as job multipliers would imply. Most of the job loss was concentrated in manufacturing and construction. Other industries lost a total of only 16,000 jobs over the period of the bust. Net out-migration was significant — 85,000 over a four-year period from 1970 to 1974 — but Luis notes that, over a 10-year period from 1965 to 1974, the region gained about 140,000. And many of the engineers and skilled workers who came here before the bust apparently stayed, setting the stage for Seattle’s growth spurt to come.

We also meet Fred Haley of Brown and Haley, makers of Almond Roca candies, and his stark assessment of the regional economy in 1957:  “Ours is essentially a colonial economy,” Haley said, exporting natural resource products in raw or semi-finished form and importing the finished and capital goods. That was a fair assessment of the economy then, based mostly on timber, fish and agricultural products.

Luis traces the growth of the Seattle economy away from that dependence on natural resources to its emergence in the 1980s as a knowledge center, driven by companies such as Microsoft, Boeing, Aldus and others. It reminded me of the quip that the region’s most significant economic development strategy was to have Bill Gates born here.

Luis is himself a third-generation resident of the Seattle area, living in Medina where he is a councilmember and mayor. For many years he was at the Seattle Metropolitan Chamber of Commerce as a vice president, giving him a ring-side view of many of the region's major changes. He is also a public policy consultant, closely associated with many of the economic strategies of the region.

All of this experience lends itself to the comprehensive nature of his book, which looks at, among other things,

  • Current thinking about how cities and metropolitan areas work.
  • An overview of the Seattle area economy and some of the metrics and indicators showing that the region is, on balance, economically successful.
  • A chronology of Seattle’s economic story from the beginnings in the 1850s and the various boom and bust cycles that have been typical of the economy here.
  • Drivers of the economy and how they have evolved over the past 50 years.
  • Major industries that underpin the economy and how they have evolved, including aerospace, the ports, software and life sciences.
  • Local government’s contribution to economic success has never been entirely clear, and “it becomes more difficult with the diffusion of industries and population across the metropolitan area,” according to Luis.

One of the main themes is the importance of geography. “Seattle’s history is built around the challenge of creating a vital and growing economy in a remote part of the country,” Luis writes. “Not too long ago we got used to hearing confident predictions of the diminishing role of place and the death of distance." 

He continues: 

"While transportation and communications have certainly speeded up, Seattle remains a unique place, with a unique set of opportunities and challenges, as does every other metropolitan region around the world. . . . I hope you will see how the region’s location both in the upper-left-hand-corner of the U.S. map and in a key spot on the Pacific Ocean have shaped its history. I hope you will think about how trees, fish, rain, mountains and water have contributed to the trajectory of Seattle’s evolution from a resource-based economy to a diversified technology and commercial center.

And I hope you will think about why so many people have become rooted here, through good times and bad.”

What are Luis’ conclusions on the region as a Century 21 City?  We’ve made it so far, despite the fact that the Seattle area is one of those mid-sized metro areas vulnerable to outside change. We have the spirit, the resources, the workers, the enlightened corporate leadership, government and a global outlook that will make the region work well into the future.

No guarantees, of course, but the region has the ingredients it needs. One in particular Luis cites is innovation, which he writes will be key to the future for any region that fancies itself a global leader. The University of Washington and other important research institutions will keep the region competitive.

Another is the region’s ability to attract smart, highly talented people. Luis says much needs to be done in this area.

“If the economic development establishment finds out that a business is thinking of bringing a factory to the region, the alarm is sounded and it’s all hands on deck,” he writes. “But if a bunch of big brains are thinking of moving here, we generally have no idea about their intention and few tools with which to recruit them. We understand how to attract physical capital but not how to recruit intellectual capital.”

Luis looks also at some issues that could affect growth. One is climate change and his take is unusual – the West Coast has the “most climate friendly weather patterns” in the country and could begin to absorb a larger share of national growth.  The folks in the Lesser Seattle, anti-growth camp will not like that idea.

Luis ends his book interestingly. He is sitting at the Tully’s Coffee shop in Lincoln Square in Downtown Bellevue. Above him are Microsoft offices and the corporate headquarters of Eddie Bauer. Next door at the Hyatt is Brooks Sports. If he broke through the back wall he’d be at the headquarters of Paccar. Nearby is Expedia. Down the street is the Bellevue library with a statue of Mohandas Gandhi, a gift from the Indian government in recognition of the Eastside’s large Indian population.

“The things that count about the twenty-first century city are all around,” he writes.  And placing his ending in Bellevue (he acknowledges it could be many other local places) makes the point that it is the region that is successful, not its individual parts.

Something for all of us to remember.


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About the Authors & Contributors

Stephen H. Dunphy

Stephen H. Dunphy

Stephen H. Dunphy writes on business and economic issues for Crosscut. He was a business editor and columnist for a number of years at The Seattle Times.