GO
Loading...

Detroit: From Urban Blight to Tech Might

Wednesday, 30 May 2012 | 1:00 AM ET

Can technological might reduce urban blight?

Business and civic leaders in Detroit certainly hope so.

Michael Westhoff | E+ | Getty Images

The city’s troubles are well documented. The auto industry’s decline highlighted a population and brain drain that made Detroit one of the lasting symbols of the Great Recession.

In July of 2009, unemployment in the city touched 18-percent.

Now?

A stubborn 10.5 percent. But a whole lot better, and one reason for the positive trend: Technology jobs.

“The energy in the city, what’s happening, the things that are taking place, it feels like it’s not a tipping point. It feels past it,” said 38-year old Scott Aberle, who left San Francisco and Silicon Valley to work at Detroit-based Quicken Loans. “We’re really in the midst of a Renaissance.”

That’s right. He said Renaissance.

It might be laying it on a little thick … or maybe not.

Detroit native and chairman of Quicken Loans, Dan Gilbert, has been buying up just about all the viable commercial real estate he can find. And when he’s not remodeling what his company has purchased, Gilbert’s using his venture capital firm, Detroit Venture Partners, to seed a mini-boom in start-up technology companies.

“Technology as a whole can create value and wealth a whole lot quicker,” Gilbert said. “With manufacturing, it takes five to seven years from conception to building a plant.

“In the tech business, the time frame is shorter and the investment of capital is smaller.”

For example, the firm they simply call DVP recently took an old theatre’s office building and retrofitted it to be an avant garde space for early stage start-ups. It is named “M@dison”, and ironically, the homage must have worked because Twitter just took up some space there.

The building is unique beyond its name. The venture capital firms sit right alongside the companies in which they’ve invested. The space is open, with only industrial-sized steel beams splitting the rooms. Walls are white boards, and app ideas are spread everywhere, on everything from post-it notes to window panes.

One key tenant is the app “UpTo”. Michigan native Greg Schwartz left New York City and moved to Detroit to start it just last year. It’s already on the iPhone with Android and iPad to follow. Schwartz considers UpTo the next phase in the Facebook-Twitter progression. It’s a social media app that allows certain people view the calendars of others, generating communication on what’s ahead. If you need to catch up with a friend who’s in your network, you can check his or her schedule and ask if he or she can squeeze a coffee in between meetings.

The way it’s been characterized within the new-era communication matrix: Facebook chronicles the past. Twitter takes care of the present. UpTo wants to own the future.

It’s an apt metaphor when it comes to the city because Schwartz and his handful of colleagues are all-in for the future of Detroit.

“It wasn’t until we actually moved our office into Detroit that I realized this isn’t just hype,” Schwartz said. “It’s entrepreneurial energy. It’s restaurants opening, new ones every day.

“It sometimes takes getting out of the shell of our office and the immediate radius to see all the cool things happening around here.”

Of course, the story isn’t all sunshine and daisies.

Yes, there’s a lot more energy downtown than there was four years ago. However, much of greater Detroit remains in rough shape, and the city still has not found a way to right-size itself so it can thrive as a unit.

For perspective, Detroit had about two million people sixty years ago. Today, it’s closer to 700,000.

But even that is being spun positively with the M@dison crew.

“I think the thing about Detroit is that it’s a blank canvas,” said Dan Ward, co-founder of Detroit Labs, an app developer also housed there … and also funded by DVP. “An individual person can have an impact on a city going through its rebuilding, and they can positively affect an outcome.”

Dan Gilbert calls it “Detroit 2.0”.

Silicon Valley might not be shaking in its high-tech boots, but Gilbert et al don’t really care.

“People have called us from Philadelphia, New York, Chicago, California,” Gilbert says. “They say they want to be a part of what’s happening in Detroit.”

There isn’t enough Kool Aid for all of them to drink, so there’s definitely something to it. Only time will tell if it’s enough to reinvent this once dominant industrial city.

“This building sells itself,” said Detroit Labs’ Dan Ward. “Detroit sells itself.”

Now, there’s something you never would have heard from a 28-year old Gen-Y techie a few years ago.

You can follow Brian A. Shactman on Twitter @bshactman

  Price   Change %Change
FB
---

Featured

Contact Asia News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Asia Video