Season 1, Episode 3 - With guest, WSU Economic Development VP Ned Staebler - Today@Wayne podcast
WSU VP Ned Staebler joins the Today@Wayne Podcast to discuss the 10th anniversary of the Office of Economic Development and investment in Detroit post-pandemic.
Ned Staebler, WSU Vice President for Economic Development, joins the Today@Wayne Podcast to discuss the university's continued investment in Detroit, the city's push for economic recovery in the wake of the coronavirus pandemic and why Detroit remains the economic engine of the state.
Ned Staebler serves as Vice President for Economic Development at Wayne State University and as President and CEO of TechTown, Detroit's most established business incubator and accelerator. He leads both organizations' efforts to strengthen the Detroit region's neighborhoods, businesses and leaders, overseeing a range of activities around innovation and entrepreneurship, business development and attraction, talent retention, transit and mobility, and placemaking. Ned previously served as the Vice President for Entrepreneurial and Capital Services at the Michigan Economic Development Corporation. In this role, he was responsible for the oversight of the Michigan Strategic Fund Board and the 21st Century Jobs Fund, a $2 billion, 10-year initiative to transform Michigan's economy. Ned also spent nearly a decade in the private sector, working in both startup and Fortune 150 environments in the U.S. and London.
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Darell Dawsey: I'm Darrell Dawsey, and welcome to the Today@Wayne podcast. We have with us today Vice President of Economic Development at Wayne State University Ned Staebler. Ned's going to be here talking with us a little bit about the economic development that Wayne State has been involved in with regard to the city and the region over the course of the last 10 years. His office is celebrating its 10th anniversary this year. They were formed in the wake of the Great Recession and have been instrumental in providing a great deal of both funding and moral support, as well as advice and counseling to the city and to businesses in the city.
The Office of Economic Development has been a real catalyst for growth here in the city of Detroit. We are, looking at this 10th year, looking at a $2.4 billion annual economic impact that Wayne State is estimated to have here in the region. We've got some great numbers in terms of our alumni: We're looking at about 75% of nearly 274,000 alumni who live in Michigan and contribute to our state's economy. The Office of Economic Development has been a huge player in that. It's also been involved in the development and growth of TechTown, which has been instrumental in the development and support of entrepreneurs — particularly entrepreneurs of color — throughout Detroit in the metropolitan region. We just want to say thank you and welcome Ned for joining us.
Ned Staebler: Well, Darrell, thanks for having me. I'm not sure you need me — You've got all the data. You've got all the numbers already.
Dawsey: I just got what they put in front of me. I just got what you guys do.
Staebler: Fair enough. Fair enough.
Dawsey: You guys make the news — I talk a little bit about it. First of all, happy anniversary; this being the 10th year of the office, just wondering, do you guys have anything planned to acknowledge this decade-long anniversary or [are you] just going about business as usual?
Staebler: We do. We do. We're excited about it. We sit down every year to talk about what our plans are for the coming year and at the beginning of 2021, obviously, I was very focused on COVID and the recovery that we're trying to help spark there. Someone on our team said, "This is our 10th year as an office. We should probably do a little something about that." My head spun for a minute, like, "Really? 10? No, can't be 10 years." Sure enough, time flies when you're having fun and you're in the midst of a global pandemic.
Dawsey: There you go.
Staebler: Yeah, we're going to do a little bit of retrospective and talk about the impact that Wayne [State] has had, not only just in the last 10 years, but also prior to that, which led to our creation, because the reality is, you gave us a lot of credit in your opening for having led to this impact. The reality is, Wayne [State] is always had a tremendous economic impact, and there are parts all over the institution that are doing wonderful things for the community and in the community. Our goal was really to help coordinate them, to help magnify them, to help better connect them to other folks that are doing things, and to tell the story of Wayne [State]'s economic impact. We got a lot of things planned for this year to try and highlight all the different ways that Wayne [State] is a catalyst for growth in Detroit.
Dawsey: OK. OK. Is there anything big that you've got planned that you might want to share with us now?
Staebler: Oh, I can't — I don't want to. I don't want to spoil any surprises there. A lot of media is all about if you want, that earned me those free clicks. I can't let the cat out of the bag, so to speak.
Dawsey: We try to break news here on the Today@Wayne podcast whenever we can.
Staebler: We'll make sure Today@Wayne knows. We'll get to you guys first.
Dawsey: Well, just talk to us a little bit about — catch us up on the last 10 years: What have been some of the big victories? What have been some of the big challenges that you've surmounted? How [have] things changed for the better in the city as a result of these last 10 years and the offices involved?
Staebler: That's a great question. I like the way you framed it, "changed for the better," because there's been a lot of change, but we still have a ton of problems. I like to say we have a little bit higher-class problems now than we did 10 years ago. You go back even 20 years and Midtown — well, the densest part of Detroit was still pretty empty. You look at residential occupancy rates that were 70% and 80%. It had its advantages. You could get a cheap apartment. On the other hand, there wasn't a place to buy ice cream or a cup of coffee, or all the amenities you expect.
Things that we started right away and even that were initiated slightly before I got here were things like the Live Midtown program that helped thousands of people move into Midtown. A lot of Wayne State's faculty and staff took advantage of that, and are now able to walk to work and save the trees and the carbon emissions. Also, you now have occupancy rates around 100% in Midtown and they built a ton more, so you've got more vibrancy. You got more people walking around, you got more restaurants and coffee shops, hundreds of new businesses in the neighborhood, which has caused new problems. Now it's expensive to live in Midtown relative to other places. Now there's a little more traffic, a little harder to find a parking spot. Again, these are a higher class of problems. We still got to worry about that, making sure we're inclusive and that everyone can afford to live here and that we can find a place to park and all that, but things have really changed. The outlook for Midtown has changed.
Dawsey: What role has the city and the state, have they played in working with the university to try and help revitalize Midtown and other areas?
Staebler: I think that's one of the areas where our office has been really helpful, in that 10 years ago and even more, I think the city was in a really bad place financially, but also from a leadership perspective. I think it was really struggling to focus its resources. Wayne State, I think, really had to go to it alone a little bit. We were left on our own to do things, but we've been able to forge some really good partnerships, not only with the city and state, but also with philanthropy, to leverage resources a lot better. For example, my office started 10 years ago. It was me and another half of an FTE, so really small. Today when you include TechTown, there are 65 or 70 running around with a $10 or $12 million budget, depending on the year, but almost none of that comes from the university.
I think last year, the university kicked into that $10 million, $400,000. The whole rest of that is coming from city or state or philanthropic sources that we've been able to go out and partner with and said, "Hey, we have these assets at the university. We've got a faculty that's second to none. We've got a student base that's great. We have this geography and this location. We have academic expertise, research expertise. Fund us to help leverage that to be a catalyst for growth and for economic inclusion here in the city." We managed to do it on the cheap because we've been doing it together in partnership with other folks.
Dawsey: OK. How has this helped business here in the area? I know that we have been, just as a university, we're obviously a pipeline for a lot of great talent, for a lot of the local businesses, but I'm just wondering specifically with regard to some of the projects you've been involved in, how have they boosted business here in the metro [area]?
Staebler: Lots of different ways; for a while, we had really basic things, like we had a coupon book. Try to tell people on campus that, "Hey, there are businesses off campus." That was one of the first things I heard from people when I did my get-to-know-you tour, going around and talking to students and faculty and staff across the university. I said, "Do you use the neighborhood? Do you go out to the restaurants?" Most of the folks, honestly, they didn't; they drove down from the suburbs. They got out of their car. They went to class. They got back in their car, and they drove away. We started doing walking tours and coupon books, which turned into a mobile app. Then we expanded the Show Your OneCard and Save program — those kinds of things — just to let people know what was around them.
That was one way, but then businesses — at one point, we had a dozen different ways we could help a small business, help them publicizing their opening, getting them staff, maybe the students who needed jobs, giving them coupons and things like that, taking them over to TechTown where they could get really concrete business advice, maybe help them get funding. Lots of different ways to help businesses, because every business needs something different, depending on where they are in their development and their growth and what they do.
Business is a huge part of it because we know. We call business and we think of it as this, it's about money, and this and that. It's also about amenities in our neighborhood. We want to live in a place where you can get the things you want and have good quality of life. It's also about jobs and opportunity. [It would] be nice to be able to walk to a job in your neighborhood, as opposed to having to get on the bus or drive somewhere. Really, it's about holistic — how do we create Midtown? How do we make sure Midtown is one of those places where you can get to everything: live, work, and play and study in a 15-minute walkable neighborhood?
Dawsey: OK. Now, we know that 2020 brought whole new challenges — once-in-a-generation challenges, in some instances.
Staebler: I hope it's once in generation. I hope it's once in three generations.
Dawsey: Let's leave that as far behind as we can. We're in the midst of it, we're struggling a little bit. Michigan has seen an uptick — has seen a surge in COVID cases. Certainly we know that [in] 2020, the economy was wrecked largely by COVID. I'm just wondering, we talked about this recovery that Detroit is undergoing: How badly has the city been hit by COVID, and what do you think it's going to take for Detroit to be able to bounce back economically?
Staebler: The city has been hit pretty hard, and it's really a shame because we have this momentum going into the end of 2019. We were really looking to 2020 as when we're going to build off this platform and start expanding our successes in Midtown, out into other neighborhoods along Livernois Corridor, Grand River Corridor, into southwest Detroit. We were really excited about that. Instead, it's been much more of a rearguard effort trying to protect the gains. COVID really hit the global economy and the U.S. economy hard in a two-pronged way, in that folks at the top, it was bad for a couple of months, but then they very quickly rebounded; in fact, in the U.S. right now, folks at the higher income levels, when you start talking about over $100,000, folks with college degrees and plus, they're actually back at a higher level of employment than they were before COVID. At the bottom level — so folks making $30,000 and under — you're looking at numbers in Michigan, employment is still down over 20% in that category.
When you look at Detroit, let's just be honest: The people who live in Detroit have lower incomes. Household incomes are half the state's average here and in lower education levels, generally. We've been hit in the types of jobs that Detroiters tend to have, really badly. I've seen estimates that show about 30% to 40% of small businesses across the city are not open now. It's not to say they've permanently closed, but that they're not open now because they're waiting for the case numbers to go down so that their customers will feel comfortable going back out to shop again.
We spent a lot of the last year trying to keep those folks in business and keep them alive and giving them strategies to get them through to the other side. Hopefully, we've been doing it in a way that when the other side comes, they'll have a new book of business. Maybe they're selling online now or doing delivery or takeout — things they weren't doing before COVID — so that the revenues, which were ... they're really low again. We think of businesses as these big things. 85% of the businesses in Detroit are one employee. They're small businesses. 85% are under five employees. The majority of those are just one person. They have incomes and revenues of less than $50,000, so we're not talking about Google; we're talking about somebody who's perhaps even working out of their house catering or cutting hair or something like that. These people are struggling right now, and it's our job to try to help them.
Dawsey: OK. Now you talked about having on the table plans to move out into other areas of the city, which is something that a lot of folks have talked about. There's been a lot of concern about what people call the rise of two Detroits. You've got these well-to-do pockets and then [you are] surrounded by neighborhoods that are financially, economically, socially challenged. It's good to see that we're talking about creating these spokes into some of these communities. Can you give me some idea of what we're talking about doing outside of Midtown? And even if that's something that's been bogged down a little bit by COVID, hopefully it'll pick up again a little bit later. I'm just wondering, what are some of the ideas that are out there for other areas of the city?
Staebler: It has. It has gotten bogged down, unfortunately, but when COVID passes, we'll get back to it. We developed over the course of a couple of years plans with a set of partners, local community development corporations, CDCs that we're already partnering with on the east side and west side, the northwest side and southwest Detroit. We're already working with these folks because we've been working with their businesses for the last eight or nine years. One of the things that they've said to us over the years is, "We wish we had a physical place like TechTown in our neighborhood because we know Detroit transit is a hard thing." Buses can take hours to get various places. The routes aren't necessarily optimized. We've had some struggles with the service over the years.
We said, "OK." We spent two years building out a model that would allow us to create — you called it "spokes," and [I'll] go with that analogy — little hubs and spokes in these neighborhoods where we could provide services for folks at a more convenient location, plus they'd know it was for them. Sometimes there [are] folks like, "I don't know, Midtown, Wayne State, TechTown, that sounds like it's not for me. I don't have a college degree. I don't go over to Midtown very much." That, we thought, was important. We actually raised about $1.5 million to start building out the first couple of these. We were supposed to start construction on one in May of 2020. We didn't do that, unfortunately, but I still have the money in the bank.
Hopefully in fall 2021 or early 2022, we'll get that project back up and going. I will say, in the meantime, we didn't give up on the notion of removing barriers to access for people. We took the technology that we were using and everybody went to Zoom and all of that. We said, "OK, well, there are some advantages there. You don't have to come over here and rely on the bus." Now there's digital divide issues, and so we had spent a lot of time working on those, and that's our next big project as well, but I'm really proud at how we've managed to, in 2020 even, expand our programming to Detroiters that typically aren't able to access it. Three, four years ago, if you looked at our tech program — not our neighborhood stuff, but our tech programming — only about 18% of the participants in those programming were people of color, which I'll tell you this: At the national level, we're the best.
Nationally, 1% of venture capital money goes into Black-owned businesses. At 18%, we're already crushing it, but in a city that's 82% Black, that's not very good. Even with COVID last year, we managed to get it up over close to 65% last year. We've more than tripled where we are. We're getting [really] close. If you look across all of our programming, it was, let's see, 86% non-white. We're right there in terms of the demographics for our city. Are we done? No, there's a lot more we can do — it's an incredible focus for us. We really feel like we're not going to have a success unless everybody succeeds.
Dawsey: Yeah. We'll put the money where our mouth is. I see that; in fact, I just saw a story about Black entrepreneurship and startups and TechTown devoting money. Can you talk a little bit about that, just what that investment's all about?
Staebler: Absolutely. The TechTown startup fund, which we've launched this year, is really to bridge this gap in tech company funding. 80% of funding for that first round usually comes from, we call friends, families, and fools, and founders, right? You put it on your credit card. You're asking Mom, "Hey, can I borrow some money to start my business, especially in my tech business?" If you look at the net worth of your average Black family in America, it's about $17,000. For your average white family, it's $170,000, so 10 times more. It's 10 times easier for a white entrepreneur to go to Mom or Grandpa or their rich uncle and say, "Hey, can I borrow $20,000 to start my business?" Or $10,000, whatever it is. Whereas it's much harder for people of color.
We created this fund to try and be that first round. Here's that $5,000, $10,000 that you need to start proving concept, to talk to some customers, to build a prototype, to do those basic things that no one's going to invest in you yet because you don't have anything. We're raising money to do that because it's so important and really getting people up on the ladder of financial success.
Dawsey: I think that it's important for the state, too; not just our immediate region, but Detroit is the economic engine for all of Michigan. Unfortunately, you've got some folks who don't necessarily recognize that. We've got people in politics and other arenas who maybe think that it's OK to not invest the money that they should in Wayne State and higher education here in Detroit. What do you say to those folks? What do you say to the people on the west side of the state, the people in the UP, about why Wayne State is [investing] and why Detroit and investment in Wayne State and Detroit is so important?
Staebler: I have a lot of reasons why. I can certainly give a whole bunch of the moral reasons why we should be doing that. I can give the historical reasons why, and we can talk about institutional racism, et cetera. I'm just going to say [that] economically, we're missing out. The state is missing out because it's got all this hidden talent and all this hidden potential that it's not investing in. There's a professor at Michigan State — sorry — named Lisa Cook who's an economics professor there, who's done a lot of work on the cost to our economy of racism — of "political violence," as she describes it. She estimates that our GDP would be 1% to 1.5% higher if we didn't have the same amount of racism that we have, and institutional — well, really, if Black entrepreneurs had the same access as white entrepreneurs and gave them some of the same historical background. We're talking trillions of dollars if we just stop being racist. I know that's hard for people and that people don't want to do it, but for trillions of dollars, I guess it's OK.
Detroit's a great place to invest. It works for the entire state. I've never totally understood that argument. Somebody once said, "If you don't understand race in America, a lot of things don't necessarily make sense," but I think that we are [an] engine that makes the state car go, and I would hope folks would be a little more cognizant of that. Detroit — metro Detroit — is almost half the population, and it's 70% of the GDP. This is what makes it go. This is the game, baby. Unfortunately, it's only 30% of the political power.
Dawsey: We're working on that. We're working on it. Well, Ned, we're close to wrapping up. I want to give you an opportunity to talk about anything else that maybe I have missed or something that you especially want our listeners to focus on: Is there anything like that?
Staebler: Oh, man. It's hard: We're talking about 10 years. We're talking about inclusive economic development. We're talking about revitalization after COVID. What I'll say is this: You brought it up as Detroit — as being the economic engine. I would argue that that Detroit and Wayne State is more than that. It's not just economics: It's cultural, social — it's humanitarian. We really are the heart and soul of this state, and not the only important part. You need other things in a body, but Detroit really is the heart and soul of the state of Michigan, and Wayne State is situated right at the middle of it — educating thousands of Detroit residents, but Michigan residents. You mentioned earlier [that] 75% of our 175,000 [alumni] are right here in metro Detroit. More doctors — if you saw a doctor in Michigan in the last 20, 30, 40 years, odds are, they're a graduate of Wayne State medical school.
Our Law School has got the highest bar passage rate and the most Super Lawyers. Our social work school is outworking everywhere. Our education school is turning out the teachers. We really are an engine by of and for Michiganders. Some of these other schools, they're great schools — I don't want to throw anything out or say anything bad about them — but their grads, they run off to New York or Chicago or LA when they're done, whereas we're talking about the people that are here from Michigan and are going to be in Michigan. It's why I love working at Wayne State, why I wake up every day excited about it, knowing that I'm doing my part to revitalize the biggest city in the best state in the country.
Dawsey: All right. Well, I think that's a sentiment we both share, Ned. Thank you so much. I just want to say, thanks again. Ned Staebler, the VP of economic development at Wayne State University. We really appreciate you coming on, and I hope to get you back on again soon.
Staebler: Loved it — love to be here. Thanks a lot, Darrell.
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