Is Atlanta “the Next Miami?”
For the metropolitan Atlanta area, becoming "the next Miami" doesn't involve beautiful, sandy beaches, cool ocean breezes or palm trees in winter. What it does entail is the possibility that a multitude of factors, from globalization to the price of a home in the suburbs of Duluth, are converging to give Atlanta a stellar opportunity to become a center of trading and economic activity for the Americas and a hub for international business.
For the metropolitan Atlanta area, becoming “the next Miami” doesn’t involve beautiful, sandy beaches, cool ocean breezes or palm trees in winter. What it does entail is the possibility that a multitude of factors, from globalization to the price of a home in the suburbs of Duluth, are converging to give Atlanta a stellar opportunity to become a center of trading and economic activity for the Americas and a hub for international business.
Over the past 200 years, the world’s trade and investment streams have flowed east-west, either above the equator or below, with very little crossover. This meant that developed countries, which were mainly located in the northern hemisphere, traded mostly with other developed nations and
didn’t attempt any significant degree of economic integration with less-developed countries. But due to the rapid pace of globalization and the fact that most economically advanced nations are faced with aging populations and plateauing markets, a transition is taking place as mature economies seek out vibrant trading partners with young populations, unmet needs and untapped resources.
This reorienting of trading patterns based on opportunities in emerging markets, coupled with the efficiency and practicality of geographical closeness, now favors a situation where developed nations are looking toward the equator and beyond for market opportunities and future growth. The same also applies to the less-developed countries, which are beginning to shake off their well-earned distrust of “trade” as it was practiced by the colonial powers. After watching the powerful rise of such former closed economies as China and India, these nations are now looking at trade and economic development as the fastest and most long-lasting way to alleviate poverty and raise the overall standard of living.
As a result, the world is now essentially organizing into regional trading blocs that are oriented on a “north-south” axis. This is the subject of a book I recently co-authored with Dr. Rajendra Sisodia, Tectonic Shift: The Geoeconomic Realignment of Globalizing Markets (Sage Publications, 2006). In Tectonic Shift, we identify three large, geographically focused trading zones that have their foundations in the European Union, the North American Free Trade Agreement (NAFTA) and, more recently, a coalescence of countries in Asia that are overcoming a history of mutual mistrust and hatred to develop trading relationships. Over the next few decades, these blocs will expand and represent a dominant share of international trade.
One of the earliest manifestations of this regional integration was the formation of the European Union (EU). The initial core was a group of six western European countries that shared a vision of an overarching intergovernmental organization and a single-market economy. After agreements were negotiated between the various governments to reduce quotas and tariffs, trade between these countries began to flow more freely, and a rush of cross-border business investment and trans-regional corporate growth soon followed. Over time, the resulting liberalization of trade between European countries, and an expansion of the EU to include virtually all of western Europe and many of the eastern European countries, created the world’s single-largest trading bloc ($1.5 trillion and growing). Although there will most likely be a limit to the extent of political integration, the edges of the trading bloc continue to spread, and there are now close trading ties with the remaining eastern European countries and the component countries of the former Soviet Union, including Russia. The EU will also have a substantial degree of success in leveraging its traditional ties to Africa and the Middle East in order to bring them into this trading bloc.
In response to the European Union, the U.S. began to form its own regional trading bloc, joining with Canada and Mexico in NAFTA, which took effect in 1994. Since then, trade among the three countries has grown to over $900 billion. Although it has recently suffered setbacks, and will most likely be implemented in stages, the Free Trade Area of the Americas (FTAA) will eventually bring together the countries of North America and South America into one large regional trading bloc.
The third trading bloc will be centered on the Asian countries and Australia. Because of lingering mistrust and open hostility among many of the Asian nations, regional trade has not been as widespread or robust as it has been among EU and NAFTA countries. However, despite the sometimes noisy and hostile pronouncements coming from politicians, the promise of economic prosperity is quietly winning out and we are seeing a strong move toward trade integration between Japan, China, South Korea, Australia and the 10 nations of the Association of Southeast Asian Nations (ASEAN), which has been the largest trading bloc in Asia to this point.
There will be individual exceptions to these regional trading blocs, most notably the U.S., China and India. They will be a central part of their trading blocs, but the sheer size of their current or projected economies will make them magnets for cross-regional trading. Brazil and Russia may also be included in this group. In addition to the trading magnets, there will also be inter-regional trading between the blocs.
So how does this fit into Atlanta becoming “the next Miami”? Well, as trading patterns shift from an east-west architecture to a more north-south and regional orientation, there will be a commensurate shift in the cities that will be dominant trading and business centers. Some cities, such as New York, London and Hong Kong, will maintain their status as global business hubs. Others, such as Chicago, will plateau as the focal points of trade are recalibrated to more centrally located destinations. Shanghai, Singapore and Dubai — cities whose recent economic histories have revolved around domestic economies — are already reaping the benefits of this transformation. These cities not only will be regional centers of economic activity, but also will become the new global business hubs and rivals to New York, London and Hong Kong.
In the U.S., the likely beneficiaries of this growth in regional trade will be Miami — which has already established itself as a gateway to Latin America — Houston and, yes, Atlanta. Just as Miami grew by being strategically located, we are now looking at Atlanta as having that same advantage.
A large part of Atlanta’s success as a local, then regional, then national, and now international business center has revolved around its geographical location. Building on this location advantage, and with a fair amount of good luck and civic boosterism, the city became a center of transportation and business activity.
In fact, Atlanta was a transportation hub even before it was a city. In 1837, the Georgia legislature decided to locate the terminus of the state-financed Western & Atlantic Railroad — which was built to provide a much-needed connection between Georgia and the cities of the North and Midwest — at the present-day location of the Georgia World Congress Center. “Terminus,” as the new city was called, soon became a connecting point for other rail lines from inside and outside the state.
The second stage of Atlanta’s development as a transportation crossroads began on September 15, 1926, when the first airmail flight in the U.S. landed at Candler Field, a former race track located south of the city. From this auspicious beginning, the airport became a regional transportation hub and is now Hartsfield-Jackson Atlanta International Airport, the busiest in the world in terms of number of passengers traveling through and number of takeoffs and landings. It is also a major hub for air freight transportation. Once again, Atlanta’s strategic location paid off.
But being a strategic location in a world of realigning trade patterns is not the only reason Atlanta has the potential to become “the next Miami.” There are other key factors that make it appealing as a place to live and do business:
Atlanta is a very affordable and livable city. Relative to other major U.S. cities, metro Atlanta has a moderate cost of living, which has helped it attract companies that are seeking less expensive places to move or establish businesses, and people who are looking to relocate for jobs or a better quality of life. Its wealth of housing stock and wide variety of housing options are especially appealing. The large number of suburban and exurban enclaves is a major draw for families, who are also fond of the plethora of diverse and nearby activities, from urban standouts like the Georgia Aquarium and the Atlanta Braves, to outdoor destinations like Lake Lanier and the north Georgia mountains. Two other natural assets that have a tremendous appeal to visitors and residents are the area’s moderate climate and its abundance of tree cover, which has earned Atlanta the nickname of “the city among the trees.” In addition to being family friendly, the city is also one of the top destinations for college graduates, artists and musicians, gays and lesbians, and other groups that make up what is termed “the creative.” Combined with a large number of people who are tired of time-consuming commutes and retirees who are giving up their lawns and home upkeep for a less-complicated lifestyle, the city is experiencing a boom in revitalized historic neighborhoods and high-rise condominiums.
Atlanta has an excellent higher education system. The Atlanta area has three world-class universities — Georgia Tech, Emory and the University of Georgia — that provide the innovative thinking, R&D capabilities and capable employees to attract corporations and entrepreneurs looking to compete in a global economy. Georgia State University, which has just begun a $1 billion building program that includes a top-notch research facility, is on the path to joining Tech, Emory and UGA in the top ranks of U.S. schools. In addition to these four, there are a number of other area universities, including Morehouse, Spelman, Kennesaw State and Oglethorpe, that are keeping home-grown students in state and drawing others from around the country and the globe.
Atlanta has excellent infrastructure. Atlanta has an abundance of infrastructure, including the world’s busiest passenger airport, as noted before. The airport, combined with major highways and rail lines, make it a favored place for transporting goods throughout the region and the nation. For example, Peachtree City, just south of Atlanta, is now the home to manufacturing and distribution operations for a number of Japanese companies, including Hoshizaki-America, Panasonic and TDK. Atlanta also has an excellent technology infrastructure that appeals to established and startup companies in the IT industry. Its information infrastructure is also top class, as evidenced by such international icons as CNN and the Turner Broadcasting companies.
Atlanta has a very welcoming and inclusive culture. Many visitors to Atlanta are surprised at how little remains of the structures, food, music and other commonly envisioned elements of the “old South.” And it is increasingly common that neither you nor your next-door neighbor is even a native Southerner. Despite that, the region’s traditional politeness and hospitality have survived and remain ingrained in the modern Southern culture of Atlanta. A recent survey even found that Atlanta drivers were among the most considerate in the nation! Atlanta is also welcoming to immigrants and other international residents, who are attracted to the quality of life and opportunities for success. As a result, people from India, Mexico, China, Korea, Cambodia, the Caribbean, eastern European countries such as Russia and Bulgaria, and almost every other nation on Earth now call Atlanta home. While concentrated communities of immigrants and international residents can be found in Chamblee, Norcross, Decatur and other parts of the city, the true measure of Atlanta’s welcoming attitude is how widespread their integration has been in neighborhoods and businesses across the metro area. This diversity contributes to the city’s cosmopolitan feel and adds to the comfort level for international companies looking to expand their operations in the U.S.
Atlanta has a “safe” location. Atlanta’s location not only makes it desirable in terms of regional and national access, but also makes it less vulnerable to natural disasters. Being an inland city, it is not directly affected by such catastrophic forces of nature as hurricanes and tidal waves. River and stream flooding is usually localized, and earthquakes are rare and minor when compared to the West Coast. For these reasons, Atlanta is considered, for example, a “safe” location in which to base relief organizations and emergency relief efforts. In light of recent devastation caused by hurricanes that have hit the Gulf of Mexico and Atlantic coasts and forecasts that this pattern will continue for the next few decades, corporations are also taking Atlanta’s “safe” location into account when looking for places to set up business.
Atlanta is a business-oriented city. One of the most crucial periods of Atlanta’s history was the late 1950s and early 1960s, when Atlanta was the center of the African-American civil rights movement and home to the charismatic and determined leader of the struggle for equality, Dr. Martin Luther King, Jr. While Atlanta saw its share of arrests, protests and ugly reprisals during this period of social change, it was nowhere to the degree that was seen in other Southern cities such as Birmingham and Jackson, Mississippi. There were two unique elements that made the difference in Atlanta. One was the role that churches, social organizations, businesses and other institutions in the Auburn Avenue area and the colleges and universities of the Atlanta University Center played in developing the civil rights movement leadership. The other was the eventual decision by Atlanta’s political establishment, after intense pressure from many of the city’s most prominent business leaders, that economic interests were more important than resisting change. When contrasted with the rest of the South, Atlanta appeared to be a progressive, pro-business city, and in true Atlanta style began promoting itself as “the city too busy to hate.”
The attitude that “what’s good for business is good for Atlanta” is a driving vision for the metro area. This vision has been supported by politicians and the general public and is a key factor in Atlanta developing into a vibrant and supportive place for corporations and entrepreneurs. The business community has contributed tremendously in turn, providing financial support for major public initiatives and achieving overarching solutions to the area’s challenges.
Atlanta’s pro-business reputation, combined with its geographic and quality-of-life amenities, have made it a popular location for corporate headquarters. This includes homegrown Fortune 500 companies such as The Home Depot and Coca-Cola, a vast array of small and medium-sized companies, and U.S. or North American headquarters of international companies such as Philips and Siemens. Atlanta is third in the nation in terms of Fortune 500 headquarters, having now surpassed Chicago. In spite of such well-publicized buyouts as BellSouth, Scientific Atlanta and Georgia-Pacific, Atlanta will continue to be a growth city for corporate headquarters and for businesses in general. As new companies form and established ones move or expand to react to the shift in trade patterns, they will continue to look to put Atlanta on their short list of possible locations.
It is obvious from its rapid growth in population, its large number of corporate headquarters and its rise to international stature, that Atlanta is a success story. It is also true that the city’s location and quality of life make it a leading candidate to join the next wave of regional and global economic centers. However, these qualities alone will not guarantee future success. A fractious and non-cooperative governance system, a half-hearted commitment to solving the area’s transportation woes and their accompanying health and productivity issues, an overall lackluster standing of public schools, a substandard level of parks and cultural institutions, and the possibility that growth will outstrip the available water supply, are all issues that could derail Atlanta’s potential.
Just as the business community was instrumental in guiding the city through the civil rights era, and more recently helped the city raise its international standing by playing a key role in Atlanta’s winning bid for the Olympics, it must once again occupy a central role in developing a vision that rises above a patchwork quilt of political fiefdoms and an often apathetic public. It must agitate for improvement and participate actively in the planning and execution of the new vision. It will require a lot of effort and a lot of creativity, but the rewards of becoming “the next Miami” will be well worth it.