In the spirit of energy conservation, I'll summarize this post up-front for you: Living closely to one another saves a lot of money (and a lot more than money).
 
There's been much talk in Pennsylvania about the uncapping of our electricity rates. In late 2006, Team PA Foundation joined with Carnegie Mellon University to develop a comprehensive report on this issue to give legislators and policy leaders the knowledge and numbers they need to make a prudent decision. With decisions still pending, the only thing we do know is that electricity rates will soon go up significantly.
 
The important point to remember from this latest pricing peak before the economic slowdown is that energy pricing is increasingly volatile and on an upward trend. As China brings on three to four new coal fired power plants online EACH WEEK, and millions of Indians and Chinese are gaining the wealth to buy their first car, American energy users are finding themselves in an ever more crowded and hungry global marketplace.
 
Apart from the sheer dollars and sense of the issue, the upward trend of energy consumption has proven to be unsustainable for our environment. Pick your environmental crisis du jour, and our hungry energy appetite most likely drives it. Research is showing us that the increase in ocean acidity and the subsequent breaking of the food chain may beat out global warming as the most urgent environmental degradation trend caused by increases in carbon in the atmosphere from the burning of fossil fuels.
 
So what do small towns and cities have to do with this? The traditional way of small-town way of life that defined Pennsylvania since its founding did so due to its great market efficiency. Walkable mixed-use core communities are not relics of our past--they are models of socioeconomic efficiency (including energy efficiency). Buyers near sellers, employees near employers, students near schools, politicians near their constituents, ratepayers near services, families near parks/theatres/restaurants, and people near other kinds of people.
 
Dense population centers allow for innumerable ways to reduce costs and environmental impact while increasing quality: Centers of employment develop near to centers of population meaning shorter commutes and better pools of workers to choose from, goods/services are more efficiently provided to dense centers of consumption (reducing cost and increasing profitability), niche businesses can thrive due to diversity and size of customer base (more consumer options), and smaller homes and fuel bills keep more money in family pockets.
 
Adaptive reuse of existing structures and brownfield redevelopments act as super-sized recycling programs, helping conserve BOTH construction materials and land! All of these measures taken together equate to significant demand reduction, which drives prices down for all of us, not only because of supply/demand but also because of the locational marginal pricing model of our current electricity market. It's estimated that merely a 5 percent reduction in demand would save Pennsylvania consumers $190 billion in annual energy costs.
 
As energy costs continue their march upward, it's in the interest of all Pennsylvanians and Pennsylvania-based businesses to reinvest in our traditional core communities.

The other day, I was perusing through some old books at an antique store when I came across "The Pennsylvania Citizen," Copyright 1895. Under its time-worn cover, I discovered a primer defining the history and practice of all levels of government in Pennsylvania--and how a person can best "exercise citizenship."

I plunked down a couple of dollars for it, and promptly spent the better part of my morning flipping through its century-old pages. Two things immediately stood out to me: 1) surprisingly little has changed in our form of governance since 1895, and 2) this little book defined the solution to a problem in our society that I have yet to hear any pundit or news anchor talk about--the lack of true citizenship. I'm not talking about the current hype of challenging everyone's true patriotism, but something much deeper and more integral to the workings of our democracy.

The preface opens with this rather profound text: "Much is said about teaching patriotism in the schools, and laudable efforts are made to inculcate patriotic sentiment in the minds of the pupils: flags float from the tops of our school-houses, patriotic songs resound from within their walls... But much of all this is mere sentiment, which alone will not suffice... boys and girls should be trained in the art of American citizenship... the exercise of citizenship--like charity--begins at home. It is illogical and impractical to train a (student) in the duties of a President or Congressman and not in the duties of a voter, juryman, and local officer."

It goes on to say in no uncertain terms that love of country and of your fellow citizens can only start at home as we learn to become engaged in actively supporting our immediate community--and more than that, we owe our local governments a kind of devotion. Devotion for the education they provide our children, the protection they give our families and our homes, for the order its laws make possible, for its property, and public benefits.

It continues: "We should be so public-spirited that, when we see a big stone in the road or banana peel on the sidewalk, we remove it for the safety of others... We should take part in everything pertaining to (our town's) welfare; for its welfare is our welfare... In this way by practicing the art of government in a small sphere within our reach, we become true patriots. We learn to love order and fairness, and to demand our rights from others and to recognize our duties toward them. To know all this and to practice it is patriotism in its highest sense."

This concept is something that I have appreciated greatly about living in a small city. It is nearly impossible to not know your neighbor, or care for the wellbeing of your immediate neighborhood. When you live closely with so many people, you can't help but think about your impact on their lives. Small talk on the porch stoop, neighborhood clean-ups and block parties all lend to the "we're in this together" spirit that pervades most small-town and city neighborhoods. These connections lend people to become invested in their community and involved in local politics not only for their own welfare, but for the welfare of their friends and neighbors.

If only we as citizens could replicate nationally this concept that plays out so well in small towns and cities across Pennsylvania, our country--and our political system--would be better off.

Remember that bridge in Minneapolis that collapsed last year, turning a normal Wednesday morning commute into a national tragedy? And the pictures of the steam pipe explosion in midtown Manhattan? These were glimpses into a growing challenge that all communities face in the U.S.--our aging infrastructure.

The average age of the US water infrastructure is around 50 years, and many sewer pipes are more than 100 years old. A recent report found that more than 25 percent of our nation's bridges are "structurally deficient" or functionally obsolete. In Pennsylvania, 44 percent of our bridges are deficient, and more than 35 percent of New Jersey's bridges are deficient. And it's not only water and roads; it's also our telecommunications and electric infrastructure that are woefully lacking investment in many areas of the country.

It's gotten so bad that voters in Pennsylvania on November 4th will be faced with the choice of whether or not to authorize $400 million in bond financing to pay for just the beginning of what is needed, since it has been estimated it would cost nearly $140 billion (yes, with a "b") to repair or replace all Pennsylvania's bridges. Oh, that we could all just tar our wagons and ford the river--doesn't work so well in a Honda.

So what do cities and small towns have to do with this? Americans have been living beyond their means in more ways than one; we've been outspending our income, and our outward sprawl patterns have been out-pacing our infrastructure investment. Despite being woefully in need of more funding, 2004 was a record year with more than $312 billion in public spending on U.S. water and transportation infrastructure. It seems money will alone not be enough to solve this problem--we need to think creatively.

The trend of people moving back to traditional, walkable core communities will significantly reduce the new investment needed for infrastructure to feed new development and free up that funding to improve our existing infrastructure. More dense centers of both population AND employment will also decrease wear on existing infrastructure by people living, working and shopping locally, decreasing vehicle miles traveled and increasing efficiencies in commercial trucking and delivery traffic. It will make it possible to have less linear feet of roads, pipes, wires, and fiber-optics per person, plain and simple. The more people in a given square mile, the more tax base and customer base you have to pay for upkeep of infrastructure.

Simple math, but not so simple public policy. Since the Highway Trust Fund is nearly entirely funded by gas taxes, if people drive less (like what happened in April 2008) it only serves to widen the infrastructure funding deficit. Pennsylvania needs enforce a strong "Fix it First" policy that mandates existing infrastructure be adequately maintained before new infrastructure is built, and we need to invest in enhanced materials-science and engineering by utilizing our academic institutions to develop new construction and maintenance technologies that will reduce long-term maintenance costs. This is once again is a great opportunity for Pennsylvania to continue its heritage of leadership in transportation policy and advanced material innovation.

Three out of Four people privately employed in Pennsylvania work in the service sector (meaning they no longer make stuff); they sell their ideas and abilities. The drivers of this economy are now talent, innovation and technology--smart people thinking smartly about fulfilling the needs of their customers in a way that is either cheaper or better than their global competitors. This is especially true for the high-wage jobs in finance, engineering, IT, life sciences, and creative industries.

So why are small towns and cities important to this? Just as last century's mill had to be located near a rail line or river, so too these new economy industries develop near locations dense with talent and innovation--and the higher this density, the more these businesses thrive.

In Cities and the Creative Class, Richard Florida makes the case that wealth-generating industries prosper in areas that have high concentrations of what he calls the 3 T's: Talent, Technology, and Tolerance, and that "companies cluster in order to draw from concentrations of talented people who power innovation and economic growth… Such a concentration of people is a tremendous source of competitive advantage for companies in our time-driven and horizontal economy."

This economic concept is also called agglomeration, meaning industries do better when they are geographically near to one another. As economic agglomeration occurs, so does cultural and educational agglomeration: the more people you have in an area, the more fertile the area becomes for amenities, arts and culture, and educational opportunities.

Small towns and cities lie squarely at the intersection of economic and cultural agglomeration, and that makes them the most fertile ground for industrial innovation, entrepreneurship, and the foundations of our new economy.

Fortunately, Pennsylvania has a wealth of these core communities that are exceptional places to live, and nearly all have cultural amenities and academic institutions that are magnets for smart people. Across the Commonwealth, cities and towns are becoming hubs of innovation and new economic growth, attracting more smart people and entrepreneurs in a virtuous circle of economic development. Small cities like Bethlehem and Harrisburg are surging forward as economic engines for their respective regions, and communities like Lancaster and Pittsburgh's Southside have become cultural and arts centers attracting large numbers of young talented creative people who are spurring on all kinds of new economic activity.  Traditional manufacturing towns like Erie are capitalizing on both their academic institutions and the influx of young educated people and are seeing exceptional new employment growth from high-tech industries.

This trend is being encouraged by the development of the Keystone Innovation Zones (KIZs), which work by creating a geographically specific support infrastructure around academic institutions that act as a virtual business incubator. This not only helps commercialize research, but it also helps provide job opportunities for young talented students--helping them develop roots in their community and giving them a reason to stick around.

Pennsylvania has the nation's third largest number of colleges and universities--nearly all of them located in a traditional small town or city. With more than 700,000 students in Pennsylvania (one out of four international or from out of state), Pennsylvania stands ready to continue its heritage of being a leading economic engine for the world. In the coming years, our decisions to reinvest and revitalize our small towns and cities will play a key role in how and where these centers of innovation and economic activity will develop.

These days, the news seems most often to be a compilation of the latest tit-for-tat political jabs, chicken-little style economic predictions, and for a little spice they throw in some bizarre criminal act to keep your attention: "Man dressed as a banana robs bank!"

I doubt that many of us think this lowest common denominator media enlightens us to any of the real problems faced by our nation or our communities, but nevertheless we're hit from all angles in a seemingly endless marquee of ripped-from-The Onion inane BREAKING NEWS!

I spend what is probably too much time thinking about how we overcome the real challenges we have as a nation--challenges that are often the same at all levels of government and life. Since Lisa and I moved into Harrisburg city about five years ago, I've been thinking a lot about how aspects of living in an innocuous little city or small town like this have the potential to solve many if not all of the problems of our society. Quite a fanatical claim, I know. So here goes my shot at not looking like I am to urban living what Tom Cruise is to Scientology.

So what problems are we talking about here? Not having a good Thai restaurant nearby? No, I'm talking about the real underpinning issues of our nation: our faltering economy, fractured political system, dilapidated and decaying infrastructure, and the skyrocketing costs of energy and healthcare. These are the issues that present the biggest challenges, and in their solutions the greatest potential for our nation--and for Pennsylvania.

Demographics, transportation costs, and a host of other reasons are driving our society to reverse the trend of suburban sprawl and migrate toward reinvestment in our older core communities. And my belief is that we as a society and a state should encourage this trend, not only for the benefit of those communities but also for the benefit of all of us.

Over the next few days I'm going to look at how each of these problems are positively influenced by the growing trend of people migrating back to the to core communities of our Commonwealth. I'd love to get your feedback and incorporate your thoughts into the discussion, so feel free to leave a comment.