Detroit as a Prototype

Editor’s Note: This blog is part of an ongoing series of contributions from participants in The German Marshall Fund’s flagship leadership development program, The Marshall Memorial Fellowship (MMF).

Can a city be led out of poverty by applying an entrepreneurial approach and technology used in the start-up world? 

The level of awareness regarding entrepreneurial activities, as well as the number of specialized start-up hubs located across the United States, exceeds European countries by far. A transfer of knowledge gained in the buzzy, rapidly scaling start-up sector, which have been used to re-imagine Detroit, is worth a closer look. Working in the field myself, I strongly believe in the power of taking entrepreneurial action to actively drive change, while being well aware of the challenges.

A prototype describes the first version of a product following the goal to evaluate, test, and improve it. Thought leaders like Fast Company, Lean Start Up and the like encourage entrepreneurs to prototype and fail fast, be creative, not strive for perfection, while answering the questions: what is the issue that we need to solve and for whom? And more importantly, can we build a sustainable business model around it?

At first glance, Detroit seems to be the perfect playground for entrepreneurship. After facing economic recession, leading to high unemployment rates, a shrinking population, racial segregation and resulting problems, there are plenty of challenges up for grabs in Detroit. A clear need for the development of a financially viable model after the city declared bankruptcy in 2013 creates an urgency and market need. It is a blank canvas providing tons of opportunities for creatives, courageous pioneers, and change makers. With hardly any competition up to this point, affordable living costs, and a small but growing start-up community combined with the for new solutions and social innovation, Detroit´s do-it-yourself atmosphere invites creative people to stay.

Taking a closer look, striving start-up hubs include even more success factors into the equation. One of the most important is a supportive ecosystem. The cozy vibe of Midtown´s hipster coffees and restaurants catering to the various tastes of foodies, as well as the community feeling one gets when joining the monthly Slow Row bike ride through the neighborhoods of Detroit, certainly help — but are not necessarily what makes a start-up scale its business and impact. A functioning start-up ecosystem involves the presence and collaboration of multiple stakeholders: academia, public authorities, nongovernmental organizations, visibility in the media, and access to capital (philanthropic, investment, grants) go hand in hand. Currently a huge amount of philanthropic capital is deployed in big structural areas such urban development (construction of the river walk or railroads connecting downtown area with the suburbs), land use, education, and health. Private investors follow their own agenda working on massive real-estate projects, while public authorities and the 100+ “cities” in the region of Detroit are caught in turf wars, lacking a common strategic plan. Nongovernmental organizations are busy taking on important work, fighting against the consequences of drug abuse, and media is focusing more on “ruin porn” than creating an entrepreneurial narrative, and portraying new role models.

Detroit as a prototype. Detroiters step up for their interests, take initiative, and try to apply an entrepreneurial approach to address to current societal issues. People are testing new models for community engagement, work on solutions for safe neighborhoods, and provide urban farming facilities to increase food literacy and strengthen justice and equality.

Fast prototyping and a “the-leaner-the-better” mentality works in a start-up context. The complexity of Detroit´s current conditions has emerged over the past decades — a quick fix won´t do the trick. Deeply embodied frameworks and behavioral patterns of racial, social, and economic discrimination take time to overcome.

There is need for inclusive leadership bringing all relevant stakeholders together, guiding the city toward sustainable development, and enabling organic growth going beyond state-of-the-art business modeling. Citizens being personally affected by the lack of leadership have realized that “we are the ones we have been waiting for.” But they are not alone. Aside from entrepreneurship, I believe in the power of collaboration and mutual learning. Through activating transatlantic connections and exchange on a city level Detroit can regain its identity and charm.

A couple of years down the road, Detroit has the potential to move out of a prototyping, testing and trying stage and step up as a model for other cities in transition — and new models for economy might be the outcome.

Christine Spernbauer, Program Director at Impact Hub Vienna, is a Fall 2016 European Marshall Memorial Fellow.