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How New Orleans Pulled Off an Economic Miracle How New Orleans Pulled Off an Economic Miracle

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The Next Economy | America 360

How New Orleans Pulled Off an Economic Miracle

A conversation with Mayor Mitch Landrieu on why his city is now a magnet for traditional businesses and startups alike.

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New Orleans Mayor Mitch Landrieu(Gerald Herbert)

This article is the first in a weeklong America360 series on New Orleans. 

NEW ORLEANS—Things are looking up for this city. Partly, that’s because anything is an improvement over the post-Katrina hellscape. But from tragedy arose opportunity: New Orleans has used the hurricane recovery effort to confront some of its longtime political, economic, and social pathologies—the problems that seemed to leave it on the bottom of those worst-in-the-country lists.

 

In some cases, the city started from scratch: After laying off every single public school teacher, the city charterized 88 percent of the school system, and has won impressive (if early) results. In other cases, New Orleans is benefitting from groundwork laid before the storm. Thanks to a state tax credit launched in 2002, movie studios are spending more in the city every year as crew members relocate and natives acquire production skills. 

Yet another change has come from reversing the brain drain that for so long deprived New Orleans of homegrown talent. Spirited young do-gooders are flocking to town, opening service organizations and startups. New Orleans has the feel of Silicon Valley in the early 1990s. Unemployment is only 5.9 percent here compared with 7.8 for the nation. The municipal government is hoping to capitalize on, and reinforce, the trend by developing a $2 billion state-of-the-art medical research center and attracting top-flight scientists to run labs in two new research hospitals. It wants the “knowledge economy,” as the mayor puts it, to take hold.

They city’s mayor also represents a break from the recent past. Mitch Landrieu is the first white incumbent since his father left that office in 1978. And while the Landrieus may be a political dynasty in Louisiana (the mayor's sister, Mary, is a three-term U.S. Senator), these are tough times for political machines in New Orleans. Thanks to Landrieu’s broad-based, multiracial political coalition (he began his first term in 2009), he has been able to slough off patronage awardees from city posts and contracts, inching closer to a meritocratic administration and rehabilitating the city government in the process. Meanwhile, “hospitality”—ever the economic anchor here—is almost back to pre-Katrina heights. National Journal's Adam Kushner--a New Orleans native--chatted with Landrieu about how the city’s economy is changing, and how to make it last. Edited excerpts follow.

 

There’s a sense of optimism I don’t remember from growing up here.

Anybody who comes to New Orleans right now feels a palpable spirit of energy and hopefulness. They see physical manifestations of that transformation taking place in front of their eyes. You can see the medical complex going up, designed not just to take care of people’s health-care needs or train doctors or do research, but also as a fairly aggressive step toward an information and economic development. You take the smart thing coming out of the research and turn it into a product; we’re going to take the technology and transform it into a industry sector. The second thing is that we now have a working system of schools. We’ve redesigned the governing mechanism, and consequently you’ve seen the scores--which are what counts--begin to grow exponentially from the inner city. The achievement gap between kids here and in the state is closing rapidly. Graduation rates are now better than national average, and that’s a structural change.

The people in New Orleans are not just deciding to build the city back the way it was. They’re accepting responsibility to build it the way they always wanted it to be. It’s amazing how many young people we have from around the country who are starting to create stuff.

How do you build a knowledge economy? And how does it serve upwardly-mobile New Orleanians who don’t have elite educations?

 

Generally we’ve been a place with a lot of raw material and talent and intellectual capital, and we’ve extracted it and exported it. Think of Wynton Marsalis at Lincoln Center. So if you want to have a knowledge-based economy, you’ve got to create the kind of jobs. GE Capital [which recently opened an office in the city] basically said, “I like what you’re doing down there.” They put 300 jobs downtown. GameLoft [which develops smartphone games] did the same. Pre- and post-production film work is happening here now. All of a sudden, you’re attracting these industries, and then you’ve got to supply them with workers. Kids are coming to New Orleans and don’t want to live in the suburbs, they want to live downtown, so we have a construction boom, restaurants opening up.

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