The Magic City Is Trying to Do It Again
Birmingham became the “Magic City” because the ingredients of an industrial revolution happened to exist in one extraordinary place. More than a century later, a completely different collection of ingredients is beginning to converge—and Birmingham may be attempting its second great reinvention.
Birmingham’s original rise was almost improbable. Coal, iron ore and limestone—the essential ingredients of steelmaking—could all be found unusually close together. Industry followed the geology, railroads followed the industry, and workers followed the jobs. The city grew so rapidly that Birmingham earned a nickname that has survived long after the furnaces stopped defining its economy: the Magic City.
More than a century later, Birmingham may be approaching another inflection point, although this one looks nothing like the first.
UAB has developed into one of America’s major academic medical institutions. Southern Research is expanding its biotechnology capabilities. Birmingham has been federally designated as a biotechnology Tech Hub focused on using artificial intelligence to accelerate drug discovery and precision medicine. At the same time, major employers and institutions are making new commitments to the region, including Fannie Mae’s expansion and additional Navy training activity. Costco is making a roughly $100 million investment, the enormous former Carraway hospital site is being redeveloped, data-center capital is entering the market, and hundreds of acres of Birmingham’s former steelmaking landscape are being positioned for another generation of industry.
None of these developments alone creates the next Birmingham. The much more interesting story is that they are beginning to occur together.
Birmingham Has New Raw Materials
The ingredients of Birmingham’s first economy came from beneath the ground. The ingredients of its next one may be medicine, data, engineering and research.
UAB already gives Birmingham something most aspiring biotechnology cities would spend decades trying to create: a massive concentration of physicians, researchers, patients, clinical expertise and medical data. Southern Research adds another layer through drug discovery and biotechnology research, including its new biotechnology center, which substantially increased its laboratory capacity.
The challenge has historically been turning more of that scientific activity into companies that actually remain and grow in Birmingham.
That is why Station 41 may ultimately prove more important than its size suggests. The biotechnology incubator provides commercial wet-lab space where young companies can continue developing discoveries without immediately leaving Alabama in search of specialized facilities elsewhere. Its initial laboratory space filled quickly enough to trigger expansion plans.
That is a small detail with potentially large implications. Birmingham doesn’t need to prove that it can produce biomedical research; it has already done that. It needs to prove that research can become intellectual property, intellectual property can become a company, and that company can grow from five scientists into a major Birmingham employer.
If that cycle begins repeating, Birmingham stops being simply a city where medical research happens and starts becoming a place where a biotechnology industry compounds.
Artificial Intelligence Could Accelerate the Shift
Birmingham’s Tech Hub strategy is particularly interesting because it isn’t simply about biotechnology. Its focus is the intersection of biotechnology and artificial intelligence.
AI can analyze enormous quantities of genomic and clinical information, identify possible drug targets, improve diagnostics and potentially accelerate the process of determining which therapies work for particular patients. Birmingham already possesses much of the medical ecosystem necessary to apply those technologies in the real world.
That gives the city a more credible technology proposition than simply attempting to become another generic startup hub.
Birmingham doesn’t need to compete with San Francisco for every software company. Its opportunity is to become unusually good at something much harder to reproduce: combining artificial intelligence with a major clinical, biomedical and research ecosystem.
The researchers and algorithms can exist almost anywhere. The hospitals, patients, laboratories, physicians and decades of accumulated medical expertise cannot be created nearly as quickly.
The Investment Story Is Becoming Broader Than Biotechnology
At the same time, Birmingham is attracting capital that has little to do with medicine.
Fannie Mae’s expansion adds sophisticated professional employment. The Navy’s expanding training activity adds another institutional commitment. Costco’s roughly $100 million investment represents a very different kind of vote of confidence: a national company making a large physical bet based on what its own models tell it about the Birmingham market and its future customer base.
Data-center investment introduces another capital-intensive industry with substantial requirements for electricity, fiber and physical infrastructure. Meanwhile, major redevelopment is beginning to reclaim some of the city’s largest stranded properties.
The most visible example may be the former Carraway hospital.
For years, Carraway was an enormous reminder of something Birmingham had lost. Its redevelopment as The Star at Uptown is turning that same property into a new mixed-use district immediately adjacent to one of the city’s strongest growth areas.
There is a larger lesson in that transformation. Birmingham possesses enormous amounts of infrastructure created for earlier versions of the city. The opportunity isn’t necessarily to erase that history and start again. It is to find new economic uses for assets that already exist.
The Old Industrial City May Have Another Job to Do
That becomes even clearer west of downtown, where Birmingham is beginning to plan for the redevelopment of roughly 500 acres associated with the former U.S. Steel Ensley Works and the broader Western Corridor.
Five hundred contiguous industrial acres inside an established metropolitan area is a significant economic-development asset. Combine that land with Birmingport, freight rail, interstate access, utilities and an airport strengthening its ability to accommodate heavy cargo, and Birmingham has the beginnings of something every state wants but relatively few cities can offer: a credible landing place for a future megaproject.
There is no giant corporate logo attached to that land yet. That is precisely why it deserves attention now.
A future advanced manufacturer, electrical-equipment producer, logistics operation or other large industrial user will require land and infrastructure long before a governor can stand behind a podium and announce the company’s name. Birmingham is beginning to create that capacity in advance.
The historical symmetry is remarkable. Land once central to Birmingham’s steel economy could eventually host industries that barely existed when those steel facilities were operating.
Birmingham Doesn’t Need to Become Austin
This may be the most important strategic distinction.
Birmingham does not need to transform itself into a Southern version of Silicon Valley or Austin. Those cities succeeded because they developed economic systems suited to their own strengths.
Birmingham already has its own unusually powerful ingredients: one of the country’s major healthcare and research ecosystems, deep engineering and industrial knowledge, relatively affordable real estate, substantial legacy infrastructure, major transportation connections and a long history of actually building difficult physical things.
The opportunity is to connect those advantages rather than replace them.
Medical research can become biotechnology companies. Artificial intelligence can accelerate medical discovery. Industrial land can accommodate advanced manufacturing. Data centers can justify new electrical and fiber infrastructure. Major employers can deepen the professional workforce. Large redevelopment projects can reconnect neglected areas with expanding employment centers.
That begins looking less like a collection of unrelated projects and more like the early architecture of a diversified metropolitan economy.
The Second Magic City
There is an important reason not to overstate what is happening. Birmingham has not yet experienced the population growth associated with America’s most obvious boomtowns, and some of the city’s most ambitious economic-development initiatives remain plans rather than outcomes.
But that may also be why this moment is interesting.
Economic transformations rarely begin with population growth. Infrastructure and institutional investment generally arrive first. Companies follow. Specialized employment expands. Workers respond to those opportunities, and only then do housing, retail and population statistics begin reflecting the underlying change.
The Birmingham of 2035 will not be built from coal, iron ore and limestone.
Its raw materials could be biology, data, electricity, engineering and an extraordinary amount of physical infrastructure inherited from the city that came before it.
Birmingham became the Magic City once because the ingredients of an economic revolution happened to exist in the same place.
The ingredients are different now.
But the underlying idea feels strangely familiar.