Last week’s conviction of former New Orleans Mayor Ray Nagin on 20 charges of bribery and fraud marks the end of a tumultuous era in the city’s history, and perhaps also the beginning of a new era in American urban politics. Perhaps most remarkable was the almost total lack of protest in New Orleans over the downfall of Nagin, who had relied heavily on polarizing racial politics in his last five years in office.

This is among the many hopeful signs in the Crescent City and its environs. Over the past year as I’ve put together a report on the future of New Orleans, I have seen a city once described by Joel Garreau in his Nine Nations of North America (1981)as a “marvelous collection of sleaziness and peeling paint,” clean up its politics, restart and diversify its economy, and begin the slow process of reducing its deep-seated crime problem.

In the past, the “pay to play” politics and corruption epitomized by Nagin and former congressman William Jefferson were widely winked at in New Orleans as if it were just local color. “We like our politics like our rice — dirty,” a Katrina evacuee in Houston once told me with a knowing smile.

Katrina changed that. The natural disaster was made far worse by the corruption and incompetence of virtually every key institution, starting with police and the levee boards. With the city largely underwater and much of its population forced to flee, some urban experts, such as Harvard’s Ed Glaeser, wondered if we would be better off to encourage people to leave the area permanently, perhaps with vouchers, to seek a better life elsewhere.

Yet it is here that the real turnaround began. Business leaders, who had seen Nagin as an ally during his first term, realized he was not up to the extraordinary challenges posed by the disaster. The man who some called “Ray Reagan” for his business-friendly policies was morphing into the worst kind of racial demagogue, a kind of bayou version of Coleman Young or Sharpe James. His appeal to keep New Orleans a “chocolate city” and his now well-documented graft frustrated those who wanted to revive the city and its surrounding region.

“When Nagin came in, he was seen as a reformer,” recalls Greg Rusovich, former chairman of the New Orleans Business Council, which includes 70 of the Crescent City’s largest businesses. “But after Katrina he really turned into a racial politician and surrounded himself with incompetents.”

This incompetence, Rusovich suggests, slowed New Orleans’ recovery as Nagin proved unable to help direct the massive federal aid, and the many private donations, that came into the city. Eventually, voters tired of poor public services and began to demand a more competent regime.

The current mayor, Mitch Landrieu, first elected in 2010 and easily re-electedwith strong black support this month, has brought a climate of technocratic competence to the city. With the active backing of business leaders, the city has attracted large-scale corporate investment, including a 300-person General Electric software development center, as well as a surge of videogame and entertainment companies.

This growth was in large part sparked by a steady movement of young, educated people into the city. For decades, New Orleans’ “best and brightest” tended to move elsewhere; now the flows for the Crescent City have turned positive, including from the West Coast and the Northeast. By last year, theAtlantic Cities, the leading mouthpiece for “hip” urbanism, proclaimed New Orleans potentially the nation’s “next great innovation hub.”

Yet for all the hoopla surrounding the growth in the information sector, it is unlikely to be enough to sustain the New Orleans region’s recovery. Not only are the total numbers of such jobs still small, in the realm of 2,600 for entertainment, STEM employment is lower than a decade ago due to cutbacks at the NASA facilities at Michoud as well as in aerospace. More important, the growth of tech and entertainment jobs will likely be insufficient to address the fundamental issues of race and poverty that have bedeviled the city throughout much of its history.

Today, in part due to the return of evacuees, the poverty rate for the metro area stands at 19%, close to the pre-Katrina level and well above the national average of 15%. The differential between white and black incomes is some $6,000 per household above the national average and some observers, including many African-Americans, fear that the gentrification of parts of the city is reinforcing the class and racial divides that existed before the flood.

Many African-Americans, notes city employee Lydia Cutrer, have “trust issues after many broken promises, and feel like outsiders are taking over.” Or, as Sherby Guillory, a health care worker who now lives in Houston, described the recovery efforts: “They want to build a shining city on a hill, but without the people.”

Ultimately, to deal with these concerns, New Orleans needs to focus on the industries that drove its economy for much of its history: energy and trade. These are the primary providers of high-wage jobs, many of which are blue collar. The New Orleans area lost energy jobs from 2007-12, in part due to the Gulf drilling moratorium in the wake of the BP disaster, but activity is rising again and low natural gas prices have prompted a surge in chemical and refinery investment in south Louisiana.

A recent report by the Greater New Orleans Community Data Center concluded that over 10,000 energy, petrochemical and related advanced manufacturing jobs could be added in the region by 2020; in contrast the digital media sector was projected to expand by roughly 2,200 positions. Finding ways to accelerate this development, while using new revenues to shore up the fragile ecosystem, needs to become the primary focus of new development efforts.

This vision for post-Katrina New Orleans will no doubt meet opposition from those who would like the city to evolve into a humid, southern version of San Francisco. Yet this makes little sense for a place whose history, location and ethnic heritage suggest a more economically diverse future. Having survived Katrina and Ray Nagin, the next task should be to see how to make sure that the recovery reaches into those neighborhoods that have historically been left behind. Rather than stand only as a charming artifact of its past, New Orleans can become a role model in showing how cities can not only survive, but create a prosperous future.

This piece originally appeared at Forbes.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

New Orleans photo courtesy of Jon Sullivan.

