US-based urban policy expert and author Bruce Katz is a passionate advocate for the potential of cities and metropolitan areas to fix broken politics and damaged economies.
The MJ caught up with him in London to ask him what he thinks the UK can learn from what he has called the US's ‘manufacturing moment', and whether he believes the UK's levelling up agenda is heading in the right direction.
In the US there are big geopolitical dynamics at play, he said – and ‘the reshoring of manufacturing in the US right now is mostly because of national security issues'. While the UK economy flatlined in February (Office for National Statistics), the US is seeing real GDP growth of a couple of per cent – an annual rate of 2.6% in the fourth quarter of 2022, down from a rate of 3.2% in the third quarter (Bureau of Economic Analysis).
He said President Biden has ‘done a remarkable job in corralling what is a very thin majority towards really a nation-building exercise'.
He added: ‘We've never really seen this funding in infrastructure, in innovation, and now climate, and with a very keen focus on manufacturing, since probably the 1950s. This is extraordinary. Individual states across the US are also supplementing these allocations with their own funds.'
In the US the Federal Government is ‘almost like a passive investor – it is providing trillions in some respects, but that is presuming the country will self-organise at the state level, the local level, and across sectors'.
The role of the local is to try to bring in a level of co-ordination and planning. ‘Everyone is receiving funding but they are getting it in disjointed and compartmentalised ways. So what happens at the local level is to try to organise it – organise order out of chaos.'
Mr Katz is clear this quintessential American orientation to self-organising is a great competitive advantage. He added: ‘There's an old quote from Dolly Parton which is probably the best way to describe local economic development: "Figure out who you are and do it on purpose." And that's literally what most American cities and metropolitan areas do.'
He is the director of the Nowak Metro Finance Lab at Drexel University in Philadelphia. He is also a former vice president at perhaps the US's most prestigious public policy think-tank, the Brookings Institution.
He was in the UK to give a lecture at the LSE, where he has long been a visiting professor in practice at the Centre for Analysis of Social Exclusion. And he was also here in his role as one of a number of experts leading the UK Urban Futures Commission, working alongside two co-chairs – the chief executive of the RSA, Andy Haldane, and Mayor of Bristol and chair of Core Cities, Marvin Rees.
The journey that turned him into a deep thinker about the potential of cities to solve societies' problems started early. He began working for New York City Council while still technically a high school student.
New York City public schools had a programme ‘where you did not need to go to school for the last six months, you could work – and I got hooked on all things cities'.
He did ‘almost an urban history major' while in college, while he was running political campaigns, thinking that he would run for office. But then he went to law school and to Washington to practice law. That led him to the Senate Committee on Banking, Housing, and Urban Affairs.
He became chief of staff to the minister of housing during the Clinton years, then headed to Brookings to start an urban think-tank.
After Donald Trump was elected Mr Katz and his friend Jeremy Nowak wrote a book on localism – looking at how cities can thrive in the age of populism. Mr Nowak died, and Drexel honoured his legacy by creating the Nowak Metro Finance Lab to look at ways of financing the inclusive city.
Mr Katz added: ‘The whole thesis of the book I wrote with Jeremy is that cities are not Governments. These are networks.'
Those networks are key in the US, because ‘if you go into any city you may spend time alone, and then together with the Mayor, but also the head of the philanthropy, the university, the business leadership group, the chief executives from major companies, community groups, environmentalists, the labour groups – they're all in it. They're all collaborating to compete against other cities in the US and beyond.'
The UK is getting some things wrong, in his view. He is firm that if Brexit had not happened it would have been ‘very poised to have a manufacturing renaissance like us – because you do have many advanced industries. Some of it is military related and some of it is advanced energy related.'
He is clear that Whitehall must let go of its tendency towards control. ‘Here I think to some extent the central Government has infantilised the local. It has basically said: "Come to Whitehall and ask for permission". It's almost a cultural difference. In the US, everyone is in charge and no-one's in charge. Which in some respects is really good.'
In the US, it is not necessarily the case that large amounts of money are always being handed out to local places. The Build Back Better Regional Challenge is worth $1bn – ‘not a lot of money', but ‘it is being very cleverly given out and it was meant to basically get the muscle memory back, because we haven't had industrial policy for a while'.
He added: ‘It was a case of "let's get everyone to compete".
‘There were initial winners. They went from 529 applicants to 60, and then there were 20 final winners. Most of the coaching we were doing was about "what does it mean to have a network – how do you start it, how do you steward it?" I kept saying, this is not a grant application. You are applying for money. This is a market strategy. If you have a good strategy, you'll ultimately be able to stand up your initiative.'
Birmingham, Alabama, while not getting beyond the last 60, had what he called a ‘brilliant idea' to apply genomics in medicine to low income neighbourhoods to reduce racial disparities. They lost, and went to the Governor to raise $45m and the Mayor to raise $25m – then sold a building and raised additional resources.
His message to the UK is not a simplistic one of stating all the ways in which the levelling up agenda is falling short. For example, he highlighted Transport for London's strategy of ‘becoming like a real estate property developer, which is brilliant'.
He said: ‘That's really smart, and that's what many of our public agents could do. It could happen all across the UK.'
He also believes the US can learn from emerging approaches to climate change mitigation in the UK: ‘The other thing you are doing on the climate side is your cities are coming together to routinise certain kinds of climate projects and then routinise the financing of those projects.
‘We [in the states] could clearly benefit from that, because right now there is just tons of money without any clarity about what is the common template on design, on financing, on delivery.'
But for the UK one crucial issue is appreciating that national economies contain local economies that are players on a world field: ‘The question is what is the real game, because these cities and metropolitan areas, particularly the large ones like Manchester, are global players.
‘So, recognising this and seeing that true devolution is in the service of national prosperity and competitiveness is a big shift. You ultimately are completely dependent on these other layers of government functioning. It's not like three people in Whitehall deciding what to do that is going to make something happen.
‘I think that's a mental shift. The central Government has a role to play, but it's not in micro-management', he concluded. Those international lessons in local economic development are not one-way.
