There has been some significant attention and research focused lately on a classification of cities termed "Smaller Industrial Cities." There are 151 such cities in the United States; Covington and Newport (which, along with their neighbors Ludlow, Dayton and Bellevue comprise Northern Kentucky's urban core) are two of them. Our urban cities have earned this distinction by virtue of being old (had a population of 5,000 by 1880), small (15,000–150,000 residents), and poor (median household income of less than $35,000).

Such cities obviously face significant challenges as many residents live in neighborhoods lacking access to good jobs, quality schools and quality housing. In Northern Kentucky, these once thriving urban cities began a steep decline starting in the 1960s as suburbanization took a significant amount of their jobs and residents. That was until the mid 1980s when, led by the RiverCenter complex in Covington, an impressive wave of development occurred along the Ohio River, attracting corporate headquarters, full service hotels and luxury living spaces. We could rest on these laurels and congratulate ourselves on a job well done in attracting economic development to our urban core. But the economic progress so visible on the Riverfront has been somewhat slow to spread into our urban neighborhoods. Although some of these neighborhoods struggle with poverty and blight, they also contain huge potential to complete Northern Kentucky's urban renaissance and establish these "Smaller Industrial Cities" as the centerpiece for a world-class, economically vibrant region.

Why do I think our "Smaller Industrial Cities" in Northern Kentucky have so much potential and why do I think it's so important for our region to target significant resources to their revitalization? First of all, basic real estate fundamentals support investing in the urban renaissance. Formerly considered "non traditional" households, singles, childless couples, and other non-family households will represent over two-thirds of the growth in housing demand through 2025. These types of homebuyers have demonstrated demand and preference for "walkable" mixed use urban neighborhoods. Additionally, according to the Urban Land Institute, "energy prices and road congestion accelerate the move back to metropolitan area interiors as more people crave greater convenience in their lives. They want to live closer to shopping and work without the hassle of car dependence. Apartment and townhouse living looks more attractive, especially to singles and empty nesters – high utility bills, gasoline expenses, car payments, and rising property taxes make suburban-edge 'McMansions' decidedly less economical."

Second, and probably even more important, our region's economic competitiveness will be determined in large part by our ability to attract and retain the knowledgeable workers that our excellent local universities are working so hard to prepare for New Economy jobs. This is because the rules of economic development have changed due to globalization and the requirements of New Economy jobs. In the past, economic development efforts focused on attracting industry by marketing a region as a good "production place" with cheap land, willing workers, raw materials, low taxes, etc. Today, industry sectors with the most job growth potential in the United States are those relating to knowledge-based jobs and the fastest growing segment of the economy involves high-tech products, high-tech services, and service that integrates knowledge and technology.

Therefore, a region's economic competitiveness depends increasingly on the availability of talented, creative and knowledge-based workers who are mobile, not tied to production places, and have wide choices of where to live and work. As a result, New Economy growth companies are more conscious about culture, amenities, community and the types of assets our urban cities have the potential to provide, and less interested in cost and tax savings. It is well documented that regions with vibrant downtowns have a far better chance of recruiting the "creative class" of workers that are key to economic growth and that purely car-dominated metropolitan areas are at a competitive disadvantage. This anecdote is highly indicative of this trend: "When the strategy for downtown Albuquerque was being crafted, a senior executive from Sandia National Laboratory spent many hours volunteering in the process. However, the laboratory, employing 5,000 scientists, engineers and professional managers is located five miles from downtown. When asked why he spent so much time on the downtown strategy, he replied, 'If Albuquerque does not have a vibrant, hip downtown, I do not have a chance of recruiting or retaining the twenty-something software engineers that are the lifeblood of the laboratory.' "

Our Northern Kentucky "Smaller Industrial Cities" are worthy of focused regional economic development and revitalization efforts to continue the progress and investment made thus far on the Riverfront. There are many, many assets hidden away in the neighborhoods beyond the floodwall – historic districts, hillsides and river views, unique living and working spaces, walkable street grids, and untapped human capital - all assets that cannot be replicated in new communities. In crafting our economic development strategy for the new decade, let's not overlook these jewels and miss the opportunity these cities provide to create an image and a sense of place for the world-class region we aspire to be. After all, as so aptly stated by former Cincinnati Councilman Nick Vehr, "Nobody wants to be a suburb of nowhere."

Jeanne Schroer is Executive Director of The Catalytic Fund, a private sector, not for profit revitalization plan implementer. It provides financial assistance for residential and commercial real estate projects in Northern Kentucky's urban core cities through facilitating site control, financial analysis and packaging, recruiting qualified developers and investing patient capital. Its mission is to accelerate Northern Kentucky's urban renaissance through targeted investments in catalytic real estate development projects in urban neighborhoods.