Seattle’s Next Big Thing?

The big problem with trying to envision–let alone shape–Seattle’s economic future is that we cannot see into the future. And history shows that the people who say they can, mostly can’t.

Here’s an example more than a century old. At the end of World War I, Seattle opinion leaders were imagining the city’s future in world trade. And the market they selected as the most promising for Seattle was… Siberia.

I’m not kidding. Siberia was It. The politicians said so. The Chamber of Commerce said so. The Seattle Times said so.

You could see it on a map. Siberia is 7.7 times the size of Alaska, the territory that had made Seattle rich — and Siberia was stuffed, its promoters said, with timber, minerals, fish and animals with pelts worth millions on the Seattle Fur Exchange. Siberia was crying out for American capital and know-how. Siberia would be the next Alaska. But it wasn’t, and a century later, it still isn’t.

In 1997, George Russell spoke to the Seattle Rotary Club about his recent tour by investment managers of China and Russia. Which of the two big countries had the brightest future? “My bet is on Russia,” he said. 

George Russell was no fool; as CEO of the Frank Russell Company, he was the most highly regarded investment guy in Washington. But he didn’t know the future of trade.

Consider the future of industry. Back again to 1918: on November 23 of that year, two weeks after the end of World War I, a Seattle daily newspaper had an interview with Edgar N. Gott, vice president of the Boeing Airplane Company. The company was barely three years old. It had 250 employees working at the Red Barn on wood-and-canvas biplanes for the U.S. Army. And the war had just ended. So what was the next big thing?

Gott knew: Airplanes! The beginning of air mail was right around the corner, he said. Soon, airplanes would be carrying express packages formerly carried by railroad. “Following the successful demonstration of these lines — and they cannot fail of success,” Gott declared, we would have “passenger air routes.” Once companies like Boeing had more powerful engines to put in aircraft, they could offer “gigantic plane forms, capable of carrying enormous loads,” Gott said. “In the not remote future, we will see air freighters and passengers of immense size rush across city and state, continent and ocean.”

The interview with Edgar Gott might have been the most important economic story of that year, but it was in the old Seattle Star, a sad excuse for a newspaper. The Times and the Post-Intelligencer paid no attention to it. Seattle’s civic leaders had their attention on shipbuilding, an industry with 140 times the jobs provided by Boeing. World War I had brought Seattle 35,000 shipbuilding jobs. The government said the work would continue. Local opinion was firm: It had to continue. It was too important to the city for it not to continue. Except that it didn’t. Within a few years, all the shipyards were closed.

Sometimes people get the future partly right. In the 1980s, Seattle investors had an infectious enthusiasm for biotechnology and computer software. They were right about software, which was as big as Bill Gates said it was. About biotech, not so much. Biotech became one of Seattle’s industries, but not the giant originally imagined. Drug development has a hog’s appetite for investor money, sometimes for little result. And when the scientists do hit a billion-dollar jackpot — and several Seattle companies did — the stockholders have taken the profit and run. The industry calls this “strip mining.” The drug survives; the companies don’t. Some of the people who created the companies — scientists, managers, investors — set up new ones, using what they’ve already learned. Forty years on, the company names are different, but the industry is still here.

Whatever Seattle’s industrial future is, history suggests it will not be a revival of industries that have fled to Asia, Mexico or some other place. It will be something new — something more like drug development and software than milling lumber or assembling iPhones. An industry that is profitable enough to pay high wages. Maybe it will be artificial intelligence. We have two of the big players, Microsoft and Amazon Web Services. AI might be a good bet — but we don’t know.

Think back to the Eighties, when everyone just knew our future was “high tech.” And they were not entirely wrong. But if someone had said, “Actually, the next big thing for Seattle-area industry will be the emergence of world-famous retail chains.  One will offer a 21st century version of the Sears, Roebuck mail-order catalog and make its founder one of the richest men on the planet. Another will open warehouse stores selling TVs, clothing, groceries, toilet paper and roast chickens on one floor — and this retailer will sell only to dues-paying members. A third company will cover the globe with shops selling $5 cups of coffee. 

Would we have believed it? A few visionaries did, even if the rest of us did not. It’s best to admit that we don’t know the future. The best we can do is to get ready for it, and not block it.