Regionalism and the new world economy: the No. 1 message for Southeast Michigan is that metropolitan regions--not cities, counties or states--define the natural market areas in the 21st century global economy.

For most of the 20th century the global economy was split into two trading blocs--the Free World and the Communist Bloc--with competing ideologies and a focus on the nation-state.

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A change of seismic proportions began to unfold in 1990 with the collapse of the Soviet Union, an event which sparked a revolution of even greater magnitude than the Industrial Revolution in the middle of the 19th century. As a result, continental trading blocs--multi-nation groups functionally connected by free trade agreements and shared surface transportation networks--form the primary divisions of the world economy.

Within trading blocs, metro regions act as the basic units of economic activity and hubs in the global network. These metro regions--not political units such as cities, counties or states--define the natural market areas of the new world economy. Southeast Michigan is one of these regions, and it must think and act accordingly if it is to successfully compete in the global economy.

The Detroit Region--Genesee, Lapeer, Lenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw and Wayne counties in the United States and Essex County in Canada--acts as a single competitive unit within the global economy. As a large and important industrial center, it competes with comparable regions for economic activity, and its corporations, businesses and institutions are competitive with others on the same global basis. While it is a single market area in the global economy, the Detroit Region extends into two countries, 11 counties and a myriad of local municipal units, which makes coordination of public investment extremely difficult.

Transportation Hubs 

An integrated global transportation network has evolved as the Communist Bloc and the Free World have begun to merge over the past several years. Though the Free World network was more highly developed than that of the Communist Bloc, it had neither the necessary internal configuration nor the capacity to handle the flows of passengers and goods generated by a global economy. The combined effect of a global economy and e-commerce, which has made global sourcing a common reality, is overwhelming the traditional network in the Free World. These forces are also driving the development of massive infrastructure projects in former Communist Bloc countries like China. The strain placed on the existing global network is encouraging metro regions to serve as highly efficient transfer points in the global network.

Those metro regions that secure their hub position during the period of transition prosper, while those that do not lose economy activity. The necessity for a metro region to become a hub with transportation, logistics and communications infrastructure has significantly increased during this transition, with each region becoming an independent competitor in the global economy.

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The size, location and economic activity of the Detroit Region position it to become a hub in the global network. The integration of the continental transportation grid has altered the Detroit Region's locational geometry, giving it an important place along the industrial axis of North America instead of merely on the northern edge of the United States. Detroit is already the No. 1 trading region for Canada and No. 3 trading partner with Mexico. The depth of its international business experience and access to foreign markets make it a key location for companies doing business in the global marketplace.

RELATED ARTICLE: The Creative Approach

Twentieth century methods of planning are becoming less effective in the 21st century as metropolitan regions become part of the new economic geography and compete within a new world economy. Responding to the new opportunities and challenges of the 21st century involves the use of creative approaches:

Understanding the Forces Creating Change

Responding to change requires an understanding of the social, political and economic transformations taking place across the world and the new technologies and scientific advancements that are reshaping the global network and the world marketplace.

Recognizing the New Global Patterns

Responding to change requires recognition of the 21st century patterns of trade, geography and economy formed by an integrated global network, a new economic geography and a new economy that are significantly different from the traditional patterns of the 20th century.

Capturing the Opportunity

Responding to change requires development of a strategy based on an identification of the new opportunities and challenges that have been created by the forces and new patterns emerging in a period of global change. History has shown that businesses, governments and institutions that have recognized and understood the changing world and strategically responded to it have typically prospered. These that did not were left behind.

Source: Michael Gallis & Associates

RELATED ARTICLE: Coming Up: Public Policy Forums

The Detroit Regional Chamber will hold a series of public policy forums this year based on priority issues determined by participants at our 2006 Mackinac Policy Conference.

March

Topic: Regionalism 

Further details to be announced.

Contact Wendy Nodge at [phone] or e-mail: [e-mail]

April 24

Topic: Health Care

In conjunction with Federal Reserve Bank of Chicago-Detroit Branch

Contact: Ed Wolking at [phone] or e-mail: [e-mail]

April

Topic: Entrepreneurship and Innovation

Further details to be announced.

Contact: Jon Kreger at [phone] or e-mail: [e-mail]

An additional forum on education was in the planning stages at press time. For updated information on these forums, visit our Website at www.detroitchamber.com.

About the Author

Michael Galls, founder of Michael Galls & Associates in Charlotte, N.C. is widely considered America's leading expert in large-scale metropolitan regional development strategies. This article was excepted from a study Gallis prepared for the Chamber's Transportation Hub initiative titled "Detroit Region: Global Transportation Hub." He will be the keynote speaker at the Chamber's March public policy forum on regionalism