If there’s one theme that’s prevalent in the city of Detroit, it’s change. With its dichotomy of warm summers and harsh winters, the Motor City is no stranger to transformation. And nothing encapsulates this theme better than the Detroit auto industry.
Take a look back at the early 20th century, where the city’s growth was only just beginning. With the “Big Three” auto manufacturers taking charge, Detroit became a place of attractive job security, with the Ford Motor Company helping to standardize the 40-hour work week in 1926, revolutionizing the modern employment landscape. And, by the year 1950, the city’s total population hit 1.85 million.
But it was so much more than an economy. Detroit had its own culture. There was its unique music, with the Motown sound creating iconic chart-toppers from natives such as The Supremes and Smokey Robinson. The city also hosted iconic art, such as Diego Rivera’s Detroit Industry murals, which included thought-provoking scenes of the manufacturing plants the city was known for.
However, despite its foundational economy and culture, cracks began to appear. The flagship industry of the city was challenged by fuel-efficient foreign automobiles, a sign of the 1970s gas crisis. The sudden damage to the economy was evidenced by the dwindling population, as, from 1950 to 2000, the number of residents was roughly cut in half. The Great Recession exacerbated the situation, with unemployment reaching 28.4% in June of 2009.
However, lately this American underdog is showing signs of a comeback. The needle is pointing upward on the city’s economy, where unemployment is down to 10.2%, and the tech community has grown substantially within the city – with technology-centered startups and established companies accounting for 171,000 jobs in 2013.
Furthermore, despite its historical troubles, there is an overwhelming sense of pride in the city. As notorious Motor City resident Eminem penned in his song “Letter To Detroit,” “There is a resilience that rises from somewhere deep within your streets.” This resilience has echoed throughout the city, one that has seen economic problems, racial tensions, and doubts of the American Dream.
In this feature, we’re showcasing some of the companies that reflect the bright future of Detroit. And, while the Motor City may never be known as the Modem City, the Detroit tech industry has clearly helped the city gain new ground in its battle for a better tomorrow.
Entrepreneurs Give Boost to Detroit’s Resurgence
Detroit’s North End neighborhood is a community on the rise. New developments, job centers, and an engaged community are all a part of the upswing. But it has something else, too: a three-acre farm.
The North End is positioning agriculture at the center of its resurgence. It’s home to the first Sustainable Urban “Agrihood” – an alternative neighborhood that’s built around the farm-to-table model featured mainly in rural and suburban settings.
The agrihood project is a result of a partnership between the Michigan Urban Farming Initiative, BASF, and Sustainable Brands. Tyson Gersh, founder of the Michigan Urban Farming Initiative (MUFI), first hatched the idea for an urban farm as a student at the University of Michigan.
Gersh and co-founder Darin McLeskey developed the idea through an innovation challenge at the University of Michigan. MUFI took home the top prize, and was awarded seed funding to kick start the summer 2012 harvest season.
“The role of MUFI is not simply to use vacant land to feed food-insecure individuals, but rather to position itself as a driving force in rethinking how urban spaces are developed and to model the many ways that urban agriculture adds value to modern urban spaces,” Gersh said in an interview with Crain’s Detroit Business.
Since then, the initiative has brought together thousands of volunteers from all over the world who have given upwards of 50,000 working hours and harvested 50,000 pounds of organic produce. The produce is then provided to the neighborhood, churches, food pantries, and more.
University startups are a national trend . At Michigan, preparing students for entrepreneurial success has been part of the fabric of the university since the nation’s first small business management course hit the books at the Ross School of Business in 1927. Since then, the university has seen an expansion of entrepreneurial offerings, with the most explosive growth occurring in the past few years.
Tyson Gersh isn’t the only University of Michigan student partnering with Detroit on innovative new initiatives. Detroit residents who need a lift to and from the grocery store at a reasonable price can now take advantage of a new ride service.
Offered by Cart, a University of Michigan startup that connects people to healthy, fresh groceries, the service will offer $10 round trip rides via Lyft. The startup is partnering with a large regional grocery chain, which is donating the other $10 it costs per ride, said Cart CEO Stacey Matlen, who graduated from U-M with a master’s degree in public health last year.
“Cart’s goal is to connect individuals who do not have ready access to transportation with a safe, timely and low-priced round trip ride to a grocery store,” Matlen said. “Customers who spread the word about Cart to family and friends will be eligible to earn free trips to the store during the pilot.”
Matlen founded Cart with partner Mikaela Rodkin during one of U-M’s twelve innovation and entrepreneurship competitions. “There are so many different opportunities available at the University of Michigan; different competitions, different races-to-the-finish on finding a solution for something. I really admire this program and that it allows people to come to a conclusion or solution after many months of searching for it,” said Rodkin.
Cart’s future plans include exploring more supermarket partnerships and launching not just a mobile app, but also a call center or SMS technology to better accommodate their customers.
Startup founders like Matlen, Rodkin and Gersh are among hundreds at the University of Michigan aiming to make an impact in Detroit and beyond. They are enabled by the university’s 15 centers and programs related to entrepreneurship, focusing on different aspects of entrepreneurship education, student challenges, and community events.
With greater support for startups at universities across the U.S., more innovations will make it into the hands of potential customers. And if U-M’s experience is anything to go by, the universities will measure their impact not just in degrees but also in new local jobs.
The Electric and Autonomous Motor City
It happens like clockwork each January in Detroit: automotive journalists from all over grumble at settling into the Motor City’s cold climate for a few days for the North American International Auto Show (NAIAS). The show in Detroit marks the beginning of “auto show season,” when the calendar is filled with auto shows across the U.S. – from sunny Los Angeles to Chicago or New York City.
At least one media trip in January has been guaranteed for journalists, but now there are two on the docket. The Consumer Electronics Show in Las Vegas has typically fallen a week before NAIAS and has become a must-attend convention for tech and automotive journalists alike. More and more automakers are presenting the latest in innovation at CES – including applications that lend themselves to rapidly developing autonomous-driving technology.
All that said, one might think that the focus in automotive ingenuity would be moving away from its native Detroit. For instance, Ford did open a new laboratory in Palo Alto to recruit Silicon Valley talent to develop forward-thinking tech, and Tesla, eschewing Detroit completely, set up shop in San Francisco. However, as automotive technology continues to develop outside of Detroit, manufacturers and suppliers in Metro Detroit and Michigan have started doubling down on innovation within the state.
Detroit Mayor Mike Duggan, for example, recently took the first step in allowing autonomous vehicles to be tested on public roads in the city. Miles outside Detroit, the University of Michigan built “Mcity,” a 32 acre faux cityscape with roads, storefronts, street signs, and traffic signals where autonomous vehicles have been tested since 2015. Allowing autonomous vehicles practice in real situations – among real people – is a major initiative for the city, Duggan told a crowd at NAIAS this year.
“Given the speed that autonomous cars are coming, how do you plan a city for growth?” Duggan asks, noting that the city has partnered with General Motors and Lyft, the ride-sharing car service, in the endeavor. “We’re trying to compete to be the center of autonomous development in the country.”
However, given its recent economic troubles, one can’t help but wonder why Detroit is suddenly becoming a hotbed of new automotive tech. Well, the city and its home state offer several advantages to autonomous technological development. For example, aside from its dense concentration of American automotive industry leaders, Michigan is an all-weather state, so some technologies – braking, for instance – can be tested in snowy, icy, or wet conditions.
“One of the issues of autonomous technology is overcoming challenges in winter climates,
so we’ve centered [on] Metro Detroit for winter climate development technology,” says Kevin Kelly, senior manager of global advanced technology communications for GM.
General Motors is doing most of its autonomous testing in the Chevrolet Bolt EV, which goes on sale to customers this year. It is built at the automaker’s Orion Township assembly plant in suburban Detroit. GM chose the Bolt for autonomous testing because there are “a lot less mechanical components” to an electric vehicle than a typical gas-powered vehicle, Kelly says. “Plus, the way that the technology is architected requires a lot of energy to run it. Mating the technology with an electronic vehicle – there are a lot of controllers on board, such as small linear actuators so it makes perfect sense.”
Another exciting sign for Detroit is the NAIAS announcement made by Continental, a major automotive supplier based in Germany but with several American operations in Michigan. Continental’s focus has been on brake sensors, dynamic motion control, and steering. Continental has just indicated a joint venture with Nexteer Automotive to advance motion control systems for autonomous driving. Such partnerships are becoming the norm, especially among suppliers operating in close proximity to one another.
“When we all come down to our bottom line, I think we’re all on the same tee,” says Ibro Muharemovic, head of advanced engineering for Continental. “You never know what can happen, but I think we all have the same goal.”
There are small advantages to having multiple bases of operation in Michigan for Continental, with the Muharemovic citing the obvious: “Rather than having a phone conference or a video meeting, we can just drive,” Muharemovic says.
A further source of aid for the motor city’s auto tech sector, and possibly the biggest one, has come from Michigan legislation in favor of manufacturers and suppliers. Last year, Michigan Gov. Rick Snyder passed what is colloquially known as the “SAVE laws,” a collection of laws that will not only let the public purchase self-driving vehicles in the state when they inevitably hit the market, but will also loosen restrictions on the public road testing of autonomous vehicles.
All this future-friendly positioning in the automotive world, along with renewed tech interest in general, may give Detroit the push it needs to beat back the doubters and resume its spot on the industry leaderboard.
Local Manufacturing Spotlight: Reverie
Metro Detroit-based Reverie is a sleep technology company contributing to the renaissance of innovation and U.S. manufacturing in Detroit with a decidedly non-automotive product: customized sleep systems (i.e., customized mattress + adjustable power base).
Since it moved headquarters to Michigan in 2012, the office has grown from five people to 50+ as it has led the fastest-growing segment of the bedding industry: adjustable power bases. Founded in 2003, Reverie’s second office is in Buffalo, New York, and it has manufacturing facilities and warehouses across the country.
“Everyone thinks ‘auto’ when they think of Detroit, but there is so much more to offer here,” says Reverie CEO and co-founder Martin Rawls-Meehan. “There is an energy and grit here that fuels innovation, plus a legacy of US manufacturing that provides inspiration as we build out our own domestic supply chain for sleep system manufacturing.”
Reverie has tapped into the local scene, developing a deep network for hiring and collaboration with local universities and companies. “We sponsor University of Michigan engineering school projects that lead to product breakthroughs and great hires,” Rawls-Meehan continues. “We are in the final stages of a sleep study with the sleep lab at Michigan State. We’re planning our 3rd annual Innovation Summit this June, designed to celebrate innovation across industries through collaboration with Detroit Innovators like Quicken and Shinola.”
And Reverie really does celebrate innovation – and sleep – with the vigor of the well-rested. Pedigreed R&D engineers and product designers and knowledgeable sleep specialists with headsets zip around the office on hover boards. The marketing team expends creative energy while lounging in a zero gravity position on the sleep systems positioned throughout the office. This company is a perfect representation of the reawakening of Detroit.
The Tech Bounty in Oakland County
The global surge of new technology has been matched by a surge of new jobs, with the number of tech occupations in the U.S. exceeding 6.7 million. And, while this trend is spread throughout the country, it’s very apparent in Oakland County, Michigan. The area, located in the metropolitan area of Detroit, is now home to 2,000 tech-focused businesses. These firms, which specialize in everything from software development to digital media and cybersecurity, range from younger tech companies to gigantic corporations.
Oakland County has bounced back significantly since the recession that began in 2008. In July of 2009, unemployment rates were as high as 15%, but have decreased dramatically since then, dropping to less than 4% by the end of 2016. In fact, just seven years after unemployment hit 15%, Oakland County reached its highest rate of employment since 2001. This has mirrored the success of the local tech industry as of late, considering the 42,000 jobs in the county’s tech community.
Over the past six years alone, Oakland County has attracted over 95 more tech companies, leading to over 9,400 additional jobs created. These companies include such major names as AT&T, IBM, and Microsoft – part of a large group of companies that has invested over $560 million during the rapid growth of the area.
Some of this growth can be attributed to the initiative known as Tech 248. Created by Oakland County executive L. Brooks Patterson, Tech 248 acts as a supportive network for the rapidly growing tech community in the area. In addition to offering resources such as assistance with workforce recruiting and marketing, they also offer funding with the intention of creating more jobs in the state. As a result, Oakland County now represents the majority of the technological influence in the area, as it plays host to 58% of Metro Detroit’s IT and technology companies.
While it hasn’t always been easy for Oakland County, it looks as though this area is on the rise. Due to the large growth of the local tech community, as well as the strong support offered by Tech 248, Oakland County has created a welcome spot for software, data, and even connected car-related businesses. And, considering they’ve been able to attract many large companies over the past few years, it looks like Michigan’s own version of Silicon Valley isn’t slowing down any time soon.
Featured Image Courtesy Of Pixabay