With Philanthropy and Business the Coaches, Motor City Aims to Play Again

In our many conversations about how to ensure that the United States retains its standing as the world’s most innovative and entrepreneurial nation, we have often looked to Detroit as a cautionary tale. In the 1950s, Detroit was like today’s Silicon Valley—a hotbed of entrepreneurial activity, booming with high-growth companies, and the heart of American innovation. But then Detroit lost its way. The epicenter of Detroit’s entrepreneurial ecosystem—the auto industry—went into decline. As a result, Detroit lost more than half of its population, and recently filed for bankruptcy. It lost its entrepreneurial mojo and became risk-adverse. And as its economy sputtered, its community struggled.
Can Detroit get that mojo back, and rise again?
We think the answer is yes. The challenges that face Detroit are significant. But we believe Detroit can also be an example of the spirit of American resilience, as other sectors—including business and philanthropy—are stepping in to help the city make a comeback.
We often talk about how innovation happens at the intersections—that is, when multiple sectors come together to roll up their sleeves and solve pressing challenges. Time and again, we’ve seen breakthroughs occurring when people make big bets, take risks, and let urgency conquer fear. And that’s exactly what we’re beginning to see happen in the Motor City. Thanks to a group of committed and courageous business and public sector leaders, investors, entrepreneurs, and philanthropists, there are bright spots emerging as the city fights its way back.
For example, Detroit’s entrepreneurial ecosystem is experiencing strong momentum—thanks in large part to the passionate efforts of leaders like Quicken Loans founder Dan Gilbert, who has made his own big bet through the creation of the “Opportunity Detroit” initiative, an effort to turn the downtown area into a high-tech hub, where entrepreneurs both work and live. In 2010, Gilbert joined forces with former ePrize CEO Josh Linkner to create Detroit Venture Partners, which at the time was only the second tech-focused venture fund in the city. Today, there are a dozen venture funds investing in Detroit-based companies. Nowhere is this momentum more evident than in the downtown-based incubator, M@dison, which is home to dozens of tech companies, from very young startups to more established companies like Twitter and Uber, which have taken up space in the now 100% occupied building. As Steve noted when he joined Josh Linkner onstage during last year’s Techonomy Detroit conference, cities like Detroit must take part in this entrepreneurial “rise of the rest” to ensure our country’s economic standing.
Philanthropy is also making a big bet—to the tune of an estimated $1 billion—in Detroit’s comeback. In a sector that can often be known for its hesitancy to create strong partnerships, a huge coalition, led by the Kresge Foundation and including the Ford, Kellogg, Mott, and Knight foundations, along with other private, corporate, and local foundations, is coming together to play a critical role in the rebuilding of Detroit.
No amount of philanthropic or civic investment can replace a robust economy and citizens at work. But philanthropy can play an important role in helping to lay the groundwork. And in Detroit, philanthropic organizations are also playing a role alongside the private and public sectors to boost entrepreneurship. Nearly six years ago, ten foundations, led by significant commitments from Ford, Kellogg, Kresge, and Knight, committed $100 million to create the New Economy Initiative (NEI), an eight-year effort to accelerate the transition of metro Detroit to an innovation economy—or as Rip Rapson of Kresge puts it, “dedicated to putting its energies and capital to creating a culture of entrepreneurialism in Detroit.” Amongst the Initiative’s many accomplishments are underwriting the capitalization of a pre-seed venture fund, furnishing space and capital for two small business incubators, establishing a medical device innovation center at a major local hospital, and enhancing the tech transfer operations of Wayne State University. The NEI’s investments in the entrepreneurial ecosystem, combined with the efforts of organizations and investors like Opportunity Detroit and Detroit Venture Partners, are collectively responsible for the growing revival of Detroit’s entrepreneurial spirit.
These philanthropic efforts aren’t happening in silos. Rather, philanthropy’s efforts in Detroit are making significant strides because they are creating true partnerships with the community, which includes the public and private sectors. For example, after what everybody admits was a long and bumpy journey, the M1 project, which will bring important public transportation infrastructure to Detroit’s economic epicenter, received final approval earlier this year. The ultimate success of the initiative required a significant financial commitment from all key stakeholders—local, state, and federal governments; philanthropy; and local businesses will all play a role in footing the bill.
There are many lessons we can learn for other cities from Detroit’s demise and its efforts to rebuild. Collaborative efforts between sectors shouldn’t wait for a city to fall into decline. Rather, we should adopt this fearless approach today. We applaud all of the players who are investing in Detroit with the sense of urgency it deserves—and we look forward to the day that we can point to Detroit as a true comeback story.
As Chrysler said in the hit pro-Detroit Super Bowl commercial they ran last year: “It’s halftime, America, and our second half is about to begin.”
Game on.
Steve Case and Jean Case created The Case Foundation in 1997. The Case Foundation is recognized for its innovative efforts to increase giving and catalyze civic and business participation, as well as promote innovation, collaboration, and leadership in the nonprofit sector. Jean Case is a speaker at the Sept. 17 Techonomy Detroit conference.