This Spring I traveled up the Intracoastal Waterway from Savannah, Georgia to Maine, passing through twelve of the original thirteen states and stopping in several dozen coastal towns or cities. All of the places we visited trace their history to colonial times, and most thrived at some point in their history. Today, some struggle for economic viability, some are vibrant 21st century cities and some have found a comfortable niche in between. These diverse outcomes offer lessons for cities and their business communities aiming to maintain prosperity.
Fortune plays a role, and smart people build on good fortune. Norfolk, Virginia hums with energy. It is the home of the U.S. Navy, and the Navy is everywhere: the world’s largest naval base, shipyards overhauling naval ships lined up along Norfolk’s riverfront, the nearby Newport News shipyard which builds aircraft carriers, and numerous supporting installations. Norfolk has benefitted from naval base consolidation, which moved activity to the major bases, and outsourcing of naval repair work, which moved it from navy shipyards in multiple cities to private shipyards, many of them in Norfolk. It has built on that base with large, modern container-handling and coal export facilities. As we left Norfolk, we had to duck around the stern of 1,200 foot “post-Panamax” container ship arriving at the container port. Newport is a nautical city with a strong sense of purpose that has built on enduring strengths.
Several towns have sailed the winds of demography, appealing to different groups of retirees. Charleston, SC, with a lovely setting between two rivers and a balmy climate, is a magnet for affluent people. It boasts beautiful shops and restaurants, graceful homes, and plentiful activities. Myrtle Beach, SC, seems to be a resort and retirement community for middle class people. The waterway there is lined with comfortable beach-house and commercial developments. Sixty miles of beach offer numerous amusements. And it boasts dozens of “celebrity-designed” golf courses.
Newport, RI, was a major commercial port in colonial times: in the early 1800s the U.S. Army built Fort Adams, the largest cannon-armed granite fort in the U.S., to protect Newport harbor. 19th century industrialization passed Newport by, however. It became a summer playground for New York’s business elite: the New York Yacht Club has a Newport “outpost” that could easily be mistaken for a mansion. Newport has run with that fair wind and become a world-class, high-end yachting center and tourist destination.
Annapolis, Maryland is a similar story to Newport, with the added luck of having the U.S. Naval Academy and the Maryland state capital as economic sustainers. An hour’s run across the Chesapeake Bay from Annapolis lie towns like Oxford and St. Michaels, MD. Industry is scarce there and fishing declines in importance, but these lovely, peaceful towns make a comfortable living as summer and retirement destinations for people from Washington, DC and the Philadelphia area.
Savannah, Georgia, combines a handsome, genteel, riverfront city and nearby resort islands such as Hilton Head with a thriving industrial base: a busy container port and the main site of Gulfstream Aerospace, world-leading producer of advanced business jets. It has both developed its resort/retirement potential and ridden the 21st century trends of global trade and global business.
Georgetown, SC and Elizabeth City, NC lie at the other end of the outcomes spectrum. Georgetown, the oldest city in South Carolina, had a paper mill, now closed, and a steel mill that has closed several times. Today the city focuses on heritage tourism and attracting retirees. From 2010 to 2017 Georgetown's population declined slightly while South Carolina's grew 8.4%. Both cities have done a nice job making their waterfronts attractive for passing boats, but a quick walk further into town or a trip to the grocery store introduces you to a sample of residents, many of whom have clearly been left behind. One remarked to me that Elizabeth City has been depressed since the auto plant closed. She was talking about a plant 50 miles away, which was the best job opportunity in the area.
These are the lessons I see for other communities and their business leaders.
- Cities that saw the direction of change early and positioned to benefit from it did well. Charleston and Newport embraced the growth of the leisure segment of their economies and became among the best at what they do.
- Areas can differentiate their offering by appealing to market segments. Newport is at the high end of the leisure market and Myrtle Beach is in the middle of the spectrum. Charleston is more of a city experience; Myrtle is all about the golf courses and the beach. Towns like Wrightsville Beach and Beaufort in NC make a living as lovely, old fashioned resort towns catering to a regional clientele.
- An area can have both industrial vitality and charm: Savannah is a strong example.
- Holding on to failing, marginal industries, like Georgetown's steel mill, is often a false hope.
- Luck matters, as with most things in life. Some areas seem to have little to work with in the modern economy and need a major break, like a new facility from a successful global company, to build momentum.
Seeing a generally vibrant economy in the oldest part of the U.S. gives me confidence that the strength of our economy is broader and deeper than I sometimes hear argued. But cities and their businesses always need to be ready for change.
