Wednesday, November 18, 2009

Talent Dividend Ohio

CEOs for Cities is in Columbus, Ohio to talk to the leadership there about the Talent Dividend. The policy recommendation is useful. Regions benefit economically from a greater concentration of brains. However, how to achieve that goal remains shrouded in mystery and myth:

ColumbusChamber CEO Ty Marsh, a participant in Wednesday’s discussions, said the importance of boosting the region’s talent pool stems from a growing desire among companies to set up shop in areas that can continue to produce viable job prospects.

“One of Columbus’ great assets has been the quality of its work force, but one of the opportunities and challenges of the new century is, ‘How do you attract them and how do you keep them?’ ” Marsh said.

Columbus would begin the effort, Marsh said, on strong footing with an internship pipeline with the state’s colleges and a better-than-average share of residents with four-year degrees.

The latest rage in fighting brain drain is a more effective (and well-funded) internship program. Allegedly, that's the reason for the Philadelphia Miracle. I took a snarky look at this talent retention strategy. Today, I'll take a more measured approach to revealing the folly.

Recent reports published by various entities including the Greater Boston Chamber of Commerce and the Federal Reserve Bank of Boston show an alarming trend: The Greater Boston area is losing recent college graduates at a startling rate. The ability of an economic region to grow and thrive is largely due to these knowledge workers. The recent reports shed light on three distinct questions: Why are students engaged in Greater Boston higher education fleeing the state after graduation, where are they going, and what can be done to increase the retention rate within the region. This report seeks to provide answers to these questions.

Intern Bridge is the company behind this analysis. Surprisingly, there is cause for concern in Boston:

A separate analysis by William H. Frey, a Brookings Institution demographer, found that Dallas and Houston were attracting less-educated migrants and identified large brain drains from Detroit, St. Louis, Cleveland and, to a lesser extent, New York, Los Angeles, Miami, Chicago and Boston.

Meanwhile, Atlanta; Seattle; Austin, Tex.; San Francisco; and Raleigh and Charlotte, N.C., were magnets for better-educated people who were relocating.

Furthermore, the Federal Reserve Bank of Boston has suggested that internship programs could be an effective talent retention policy:

Still, contrary to the usual reasons offered to explain why individuals leave the Bay State, recent college graduates appear to be moving primarily to seek the best job opportunities. That suggests that states can take tangible steps to retain more recent college graduates.

One potential solution is to build stronger ties between colleges and local employers, to help graduates, particularly non-natives, learn about local job opportunities and form networks in the region. For example, the Colleges of Worcester Consortium in Massachusetts has expanded internship opportunities through an online regional database that students can tap into from any of the consortium’s 15 member institutions. Internships create a win-win-win situation, because they allow students to try out a job or firm, lower recruiting costs for employers, and enhance the reputation of a college or university.

There are a number of reasons why investing in internship programs is a good idea. But can it generate a talent dividend? I've been reading about the same line of thinking in Detroit at Generation Y Michigan. Michigan is engaged in its own internship efforts. Demographer Ken Darga brings some numbers to the discussion:

But Darga insists the problem is exaggerated. He says every state thinks it has a brain drain, but ignores the fact that migration rates for young people tend to be much higher than any other age group. Besides, he argues, the number of recent college graduates leaving has leveled out, and it’s a tiny percent of the total state population.

Greater Boston or Columbus or Detroit would have to retain a lot more college graduate to generate a 1% gain in the number of residents with a degree. Brain gain cities such as Atlanta; Seattle; Austin, Tex.; San Francisco; and Raleigh and Charlotte, N.C. aren't succeeding because they do a better job of keeping talent close to home.

Rust Belt cities are content to fight for table scraps. Columbus isn't talking about how to become a talent magnet. The primary initiative is to build a better dam. Thus, the brain gain game is over before it even gets started. I would add that no city or state is thinking about leveraging the migration trends that Darga describes. The only discussion I see is how to stop it.

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