Industrial Advantage in the Lower Ninth Ward
Abstract:
The hurricane cluster development strategy in the Lower Ninth Ward takes an understanding of the urban landscape systems that are in play in the neighborhood and uses this in the development of an innovative and concrete proposal for redevelopment. The goal of this strategy is to develop a recovery plan which is affordable, sustainable, and achievable. The argument for this development strategy is founded upon the fact that a welfare community prevailed in the Lower Ninth Ward prior to hurricanes Katrina and Rita. Based upon extensive demographic analysis, this proposal calls for new employment opportunities within the community to attract former residents back and increase urban density. 
Inventory: Demographic Anomalies
Research and analysis focused heavily on the demographic character of the neighborhood prior to August 2005 and post hurricane Katrina. It became apparent that the Lower Ninth Ward, a microcosm of New Orleans, has anomalies when compared to other blighted cities including Baltimore, MD and Washington, D.C. Some of these unique statistics from the 2000 Census include:
o More than 50% of 18 to 64 year olds are not in the labor force
o There is a 36% rate of poverty
o Average household income is $27,500
o Only 6% have a college degree
o Over 50% of the population has lived in the same house for 30+ years
o 80% of the homes are older than 30 years old
o 59% own/occupy homes
Post Katrina statistics show an extremely slow return rate of 19% to the area due to a number of reasons. Some residents have been away more than three years resulting in a difficult relocation decision. The idea of uprooting yet again is too much to go through. Succession issues and property ownership prevent others from returning as well. A general mistrust in government prevented many from formally recording ownership to property, resulting in legal chaos and no proper way of knowing what belongs to whom. Another reason for many not returning is the current insurance status on many properties. As it exists today, the courts currently turn disaster aid into homeowner’s insurance subsidies because people could have purchased National Flood Insurance. As a result of not purchasing National Flood Insurance when it was available, homeowner’s insurance was not liable. In addition, obscured disadvantages (i.e. natural flood versus manmade flood, rising water versus falling water, wind damage versus water damage) created a formidable legal landscape pitting homeowner against insurer in which many homeowners simply could not afford to rebuild/repair on their own. (1) 
A Cluster in the Lower Ninth Ward
o Industry provides employment and builds housing
o There is already a network of Louisiana facilitators for business development and there are already stakeholders in the Ninth, which marks the beginning of an industrial grouping.
o A precedent to success is the Michoud business park sponsored by NASA which operates 3 miles from the Lower Ninth Ward.
o A regional hurricane market exists with 80% of businesses located in Florida. Geographically speaking, the Lower Ninth is centrally located in this market with access to rail and port facilities.
Economic developers throughout the country now recognize that businesses benefit from locating in clusters, where they can share a skilled workforce, suppliers, and customized support services (i.e., accountants and lawyers who know the industry). Clusters are most often defined as “a geographically bounded concentration of similar, related or complementary businesses, with active channels for business transactions, communications and dialogue, which share specialized infrastructure, labor markets and services, and that, are faced with common opportunities and threats.” (2) As a result, it benefits regions to focus on existing clusters – to take care of the needs of the companies within them– so the companies and clusters will grow.
Michael Porter, author of The Competitive Advantage of Nations, states three ways in which clusters operate. One way is by increasing the productivity of the companies in the cluster. Another way is by driving innovation in the field. The third way is by stimulating new business in the field. (3)
Examples of these types of clusters include the Silicon Valley in California with computer technology and the Napa Valley in California with wine production. Science parks harness the combined power of education, research, and private investment. The result is new jobs and new industries. They are sources of entrepreneurship, talent, and economic competitiveness and are key elements of the infrastructure supporting the growth of today’s global knowledge economy. They enhance the development, transfer, and commercialization of technology. (4)
Intuition and economic evidence of success strongly suggests that most entrepreneurs start companies where they happen to be located. On top of all the risks and stress of a start-up, few want or consider it necessary to relocate. Any attempt to form a cluster, rather than form organically, must either attract into the region people who will go on to form new companies, or encourage those already living locally to become entrepreneurs. Existing clusters are good at doing both. Experience suggests that successful clusters start themselves. (5) A key ingredient for any new cluster is the need for a few key individuals with successful track records as entrepreneurs (Brad Pitt?). These individuals also bring funding with them, either directly through their own funding or indirectly through their contacts with venture capitalists. A cluster also requires a link to a university (LSU, Tulane, UNO). Universities can provide increased flow of ideas and funding opportunities. Good infrastructure is also appealing (numerous repairs, but no new infrastructure required in the Lower Ninth Ward). Local networks that can share knowledge are at the core of a cluster’s success. These networks can form critical links between individuals and can provide something of a safety net and lobby for change where needed.
There is a market for hurricane resistant-housing and innovative technology to improve building methods. The Lower Ninth Ward can host a business cluster / science park and benefit by providing housing and employment opportunities. Millions of dollars are being poured into mitigation research. Just recently, with Gustav and Hanna, Florida International University, the University of Florida, and Clemson gauged the storm’s impact on structures and collected data on storm surge. Budgets were provided by grants from the National Science Foundation, the State of Florida, and the private sector in this case. The insurance industry has also backed research groups by funding research and testing centers. One recent example includes Florida International University’s International Hurricane Research Center. Another example is the Institute for Business and Home Safety, a research facility in Tampa that is primarily funded by insurers and reinsurers. The goal of the research is to provide materials and building practices that can reduce an owner’s losses. Mitigation research has been studied and proven to play a significant role in reducing losses. Insurers, regulators and lawmakers see wind mitigation as the best way to keep residents safe and home insurance costs affordable. State funding for research is done so in the state of Florida because less hurricane damage contributes to Florida’s long-term economic health. The Federal Alliance for Safe Homes (FLASH) is a nonprofit that started 10 years ago to build awareness about safety and mitigation for all types of disasters that can hit homeowners. Homeowners who fortify their homes are rewarded by their insurers. Florida state law requires insurance companies to offer hefty discounts of as much as 65% of premium for homes with shutters, impact-resistant windows, etc. The key element to all this research is developing products and techniques that are cost-effective so consumers and builders will use them. (6)
Two examples of Louisiana facilitators and programs to foster economic development include The Louisiana Business & Technology Center and Louisiana: Vision 2020.
The Louisiana Business & Technology Center (LBTC), an integral part of the E. J. Ourso College of Business at Louisiana State University, endeavors to enhance economic development in Louisiana through the support of existing small businesses and the development of new businesses. The LBTC, acting as a proving ground for technology applications and utilization, will serve to stimulate small business formation, growth, and survival. By fostering growth in the new business segment, diversification occurs, and jobs are created, further expanding Louisiana’s economic development. LBTC provides the following services:
o Small business incubation services
o Management assistance and small business counseling services
o Technology Transfer and Commercialization Assistance and SBIR/STTR assistance
o Financial analysis in preparation for access to capital
o Entrepreneurial educational training
o Referral to fee-based professional and advisor resources
The goal of Louisiana: Vision 2020 is to build a thriving economy driven by innovative, entrepreneurial, and globally competitive companies that make productive use of technology and the state’s human, educational, and natural resources.
For states like Louisiana, whose existing clusters are primarily in industries that are not expected to generate large numbers of new, quality jobs in the coming years, growth will be achieved by focusing on selecting emerging clusters for which the state has some private sector base as well as research assets to support growth. Louisiana must continue to target its investments in both the existing and emerging business clusters in order to see growth that can set the state apart regionally, nationally, and globally.
The Lower Ninth Ward shows characteristics of a cluster. It is an area where new building methods are being implemented by a plethora of non-profits and private funding. Key individuals are shaping the way the area is being developed. State programs for economic incubation are in place. University contributions to the area come from all over the world. 
Hurricane Cluster Development Strategy
o North of St. Claude becomes a hurricane methods testing ground or ‘cluster’.
§ Incentives for investment/building here are offered to supply and manufacturing companies.
§ A cluster enhances the development, transfer, and commercialization of storm resistant building technology.
§ Storm resistant building methods provide housing with low home insurance premiums.
§ Department of State Forestry maintains land tracts that provide raw materials for building industry.
o South of St. Claude remains historic with commerce potential.
§ Implement tax credits for remaining true to historic character of Holy Cross neighborhood.
§ Create tourism opportunities with historic neighborhood and river front.
§ Reinvest in the industrial dock area to activate commercial capability serving the greater port of New Orleans.
o Large tracts of land for industry and forestry.
§ Urban forestry becomes a productive landscape providing raw materials to industry in an area where it is not conducive to build homes.
o Commercial corridors for Caffin and St. Claude.
§ Caffin becomes a strong north to south corridor that links Kansas City Southern Rail and the Port of New Orleans.
§ Limit trucking routes to Caffin, St. Claude, and Florida.
o Residential growth is a direct result of industry and commerce.
§ Urban density increases where industry and commerce opportunities exist.
Cluster Beginnings on the Scale of Cottage Industry
o Domestic production of building goods and services already exists with a high demand.
o Opportunity exists with the Road Home program and Lot Next Door program to acquire property to operate.
The cottage industry was a method of industrial organization which was used before the Industrial Revolution. Work was carried out in the home of the worker. A merchant in a town or city would raise the capital needed for the venture. The merchant then proceeded into the countryside to buy wool. The raw materials were then distributed to a number of family farms where they were taken through the various stages of production until, at last, the merchant returned to the city (or town) to sell or export the final product.
A cottage industry includes many producers working from their home. Some industries which are usually operated from large centralized factories were cottage industries before the Industrial Revolution. Cottage industries were very common in the time when a large proportion of the population was engaged in agriculture, because the farmers (and their families) often had both the time and the desire to earn additional income during the part of the year (winter) when there was little farming work. (7)
Recently cottage industries have been encouraged by environmental groups to preserve areas of the rainforest by aiding the local tribes in a sustainable way for future generations.
Regional Technical Campus is located at Caffin and Galvez
Two sites worth exploring further include the intersection of Caffin and Galvez, and the southern end of Caffin as it meets the Mississippi River. One is the former site of the commercial hub for the neighborhood and the other is the site of former industry with prime port access.
The argument for industry located at Caffin and Galvez is the idea that the space was easily identified as the place for residents to eat, ‘make groceries’, and get a haircut. The space functioned as a neighborhood central market with commerce on the surface and social roots running deeper. This was the location where ‘everybody knew everybody’s business.’ And, as a resident, if you were short on cash and couldn’t fill your prescription at Walgreen’s, you went to H & W Drug Store where they put it on your tab. Other local entrepreneurs included: Russell’s Grocery, Melvin’s Barber Shop, Keith’s Grocery, Bailey’s Food, Pierre’s Cleaners, Caffin Theater, Caffin Ave. Food Store, Big Chief Dairy Queen, a pizza shop, a novelty shop, a fish market, and even a methadone clinic.
Since this site is a location where former entrepreneurs once operated, the cluster development strategy proposes a regional technical campus here. The technical school can provide residents with the skills to operate within the hurricane protection industry and has the potential to attract a regional population. Here, students produce homes from the campus workshop. Within this workshop, local cottage industry is encouraged to recruit and work in tandem with students, much like apprenticeships. Local stakeholders in the area are encouraged to do the same with the goal of attracting a major industrial player to relocate operations to the Lower Ninth Ward.
The argument for industry located at the end of Caffin is easy access to port facilities, rail, and existing industrial infrastructure. The operational scale at this end of Caffin is much larger than that near the technical campus. 
Precedents
Two precedents out of thousands are noteworthy: Dalton, GA and Grimsby, UK. Both have economic success and provide live-work communities, but they each have unique backgrounds.
Dalton became the ‘carpet capital’ organically. The current economic cluster form as it exists today began with an accretion of successful ventures. No doubt, infrastructure has grown as a result of industry versus industrial growth as a result of infrastructure. Geographically speaking, there is no reason why Dalton, GA enjoys the success of the carpet industry. It is not a port city, it is not a thriving metropolis with a limitless workforce, nor does it have a raw material base close at hand. What Dalton does have is state sponsored support in the form of infrastructure, educational training, and tax incentives that make it attractive and competitive within its market. The industry employs more than 30,000. Whitfield County is proud of the contribution the carpet industry has made to the community. However, carpet is not the only thriving business in Dalton. Plastics, chemicals, bakery products, denim jeans, and fiber products are also produced locally. (8)
Real estate for commercial business is plentiful along the handful of industrial parks for future economic growth.
The economic impact of major industries in Dalton brings subtle benefits to the area. Dalton has become a cultural melting pot because of the migration and influx of experts and entrepreneurs in the area’s industries. The success of the carpet industry and its people has helped Dalton attain a true quality of life.
The industrial areas are located near the main transportation veins, such as I-75, US Highway 76, and US Highway 41 and the major railways. The transportation lines, coupled with the ample building space and a booming industrial market, make Whitfield County the land of plenty for the opportunist. All of the transport services that any business might require for a plant site are easily accessible from Dalton and Whitfield County. (8)
Programs of continuing education, adult education and vocational education at Dalton College provide additional skills development for Dalton’s diversified labor force. In addition to training, realized through changes in the workplace, numerous opportunities for specialized training at Dalton College provide enhanced skills through the Quick Start program and the Technical Division. The major thrust of the Dalton-Whitfield Chamber is education. The vision of the Chamber is that before the turn of the century, every person in the area will have basic skills required to adapt to the changing workplace demands. Linking business, education and government resources, the Chamber works to forge a model community, including an attitude toward educational improvement that will yield a labor force of unique quality.(9)
Grimsby, on the other hand, is a geographically important city where industry grew based on its access to raw materials (fishing) and its processing of those materials. The live-work community as it exists today thrives on the fact that it is a port city. Grimsby has a large population resulting in a large workforce and has a raw material base close at hand. It is important to note the decline of industry within the city and the city’s efforts to reinvest itself by means of commercial ventures, tourism, and education enhancement opportunity (the Grimsby Institute of Further and Higher Education).
The port of Grimsby is located on the north-east coast of Lincolnshire where the Humber Estuary meets the North Sea. The town has a population of around 91,200. It is renowned as one of the UK’s great fishing ports, although this industry has had threats of extinction. (10)
Until recently Grimsby was one of the country’s major fishing ports but the industry has declined drastically. However in recent years the town’s industry has greatly diversified and it has now established itself as a food processing centre as well as being particularly strong in the pharmaceuticals and petrochemical sectors. Tourism is also a developing sector. Located on the South Bank of the country’s busiest trading estuary, Grimsby is a highly versatile port that is well placed to offer superb transport links and logistical services tailored to customers’ specific requirements. The port is also home to the UK’s most advanced fish market. The Grimsby Institute of Further and Higher Education is a general further education college offering full and part-time further education, a growing higher education provision, training for business, education in the community and commercial activities. (11)
When thinking about the Lower Ninth Ward as an economic engine, it falls somewhere between these two precedents. Comparing the area to Dalton, the hurricane protection and building methods industry forms a considerable market in the area. It is a matter of time and incentives before certain companies choose to locate operations here and success is yet to be determined. Industry can grow by accretion based on the success of pioneers who choose to locate here. The scale of production starts small and, depending on success and market demand, has opportunity to grow. The Lower Ninth Ward can also be compared to Grimsby, a location that is strategically located to export processed goods. The port of New Orleans provides the same strategic locale to export. The initial growth of New Orleans came as a result of location and investment efforts in the port. A centralized effort to reinvest in existing business, higher education, infrastructure, and new business will create live-work opportunities in New Orleans and can start in the Lower Ninth Ward.
Conclusion
The argument for this development strategy is founded upon the fact that a welfare community was prevalent in the Lower Ninth Ward prior to hurricanes Katrina and Rita. Based upon extensive demographic analysis, this proposal calls for new employment opportunities within the community to attract former residents back and increase urban density. If industry is the step to create job opportunities, the hurricane protection and building methods industry is the only industry that has potential to succeed based on current market demands and the location of the Lower Ninth Ward. The Lower Ninth Ward shows characteristics of a cluster. It is an area where new building methods are being implemented by a plethora of non-profits and private funding. Key individuals are shaping the way the area is being developed. State programs for economic incubation are in place. University contributions to the area come from all over the world. The hurricane cluster development strategy is affordable, sustainable, and achievable. 
Works Cited
1 Mowbray, Rebecca, “In the hard fought battle…,” The Times-Picayune, August 27, 2008.
2 “A Governor’s Guide to Cluster-Based Economic Development”, National Governor’s Association, 2002
3 Porter, Michael “The Competitive Advantage of Nations”, Free Press, 1990, 1998.
4 http://en.wikipedia.org/wiki/Science_park
5 Webb, William, “Can Regional Clusters be Engineered?”, Igenia, Issue 34: 43-46. March 2008.
6 Garcia, Beatrice E., “Researchers aim for Hurricane-Resistant Housing”, Miami Herald, September 8, 2008.
7 http://en.wikipedia.org/wiki/Cottage_industry#Cottage_industry
8 http://en.wikipedia.org/wiki/Dalton_(GA)
9 http://www.northga.net/whitfield/
10 “Local Economic Development – Case Studies: Municipality of Grimsby, Humberside, England” http:// web.worldbank.org
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