Wednesday, September 30, 2009

How G-20 Pittsburgh Plays In Providence

The Wall Street Journal moves in on the Forbes gig and lists the top-10 "Next Youth-Magnet Cities". Don't go there and expect to find Pittsburgh in this group. The Pittsburgh Summit did a world of good for the city's image, but don't expect college graduates to flock there quite yet. However, I see some indication that such a migration is in the works:

It is clear that, like it or not, our economy is necessarily moving in new directions. This week’s G-20 summit is being held in Pittsburgh, in part to highlight the city’s attempt at reinventing itself. Pittsburgh is developing many new “green” initiatives as part of a broader effort to move beyond its outdated, Rust Belt economy. Their unemployment rate is below both the state and national averages.

Our country needs the human capital that college education creates to revitalize the economy through innovations like those on display in Pittsburgh.

Hook, line and sinker.

That passage is from an article in The Brown Daily Herald. The author is a student at the university and is listed as hailing from Atlanta, GA (just in case you suspected the Yinzerati). Pittsburgh couldn't ask for better resonance of its rebranding effort.

The first step to any substantial in-migration is to get on the mental maps of the most geographically fickle. Mission accomplished. As for the WSJ list, it doesn't read like a projection: More like yesterday's news recycled for today's publication.

Tuesday, September 29, 2009

Geopolitics Of Exporting Talent

Via Richard Florida's "twog", I clicked through to Parag Khanna’s TED talk. The idea of mitigating border conflict with infrastructure across those lines doesn't strike me as a novel approach to an old problem. However, the context of globalization makes for some compelling storytelling. That comes out in the part about the China strategy and the country's aggressive attempts to integrate the region under Chinese economic dominance.

The entire bit about China is worth your time, but the part that grabbed my attention is at the 7:55 mark with the map that details the demographic flows outward to other East Asian countries. This is China's talent export strategy. You want an economic link with a city? Send your best and brightest there.

As far as I know, China is the only place that funnels brain drain for purposes of economic development and geopolitical gain. India seems intrigued with this approach and now sees its talent as a trade asset. The labor mobility pact between India and Denmark is a good example. Denmark is aging and desperate for immigration. I'd like to know how India plans to cash in on such arrangements. Denmark strikes me more as a willing partner than a particularly advantageous one.

Brain Drain Report: Calgary

Relative to the rest of Canada, Alberta is booming. Jobs attract people and the Canadian province continues to grow:

Alberta has attracted new residents for years as the province boasted the country's strongest economic expansion and job creation. The trend continued in the second quarter of this year, even as the province's economy slowed.

I've noticed that no matter how good the numbers look, residents still fret about brain drain:

As a University of Calgary student set to graduate in the next year, I will be soon faced with the same predicament that has faced so many of my colleagues before me: to stay in Calgary, or to move elsewhere.

Over the past several years, I have noted a high rate of migration among recent post-secondary graduates to cities like Vancouver, Toronto and Montreal. The reason for their departure is generally the same: recent graduates are looking for the exciting cultural scene and vibrant urbanity these cities offer.

As a large number of baby boomers approach retirement age, we face the threat of losing this demographic to cities that can offer more amenable living conditions as well. As Calgary's extended winter season can sometimes provide a less-than-ideal context to retire in, creating a vibrant and highly livable city must be a high priority.

How many graduates from universities in Vancouver, Toronto and Montreal move to Calgary? When local young talent leaves, the automatic response is that something is wrong. The same anxiety plagues growing and shrinking places alike. I've blogged about Vancouver's brain drain complaints. You might know about Montreal's struggles with retaining talent, particularly Anglophones. But Calgary takes the cake.

Given the ubiquity of the complaint, why is brain drain at the heart of so much workforce development policy?

Monday, September 28, 2009

Burgh Energy Report

The environmental safety of drilling for natural gas in shale is in the news again. Digging a bit more on the subject yielded this article about water contamination, which links to "The Shale Series" at National Public Radio. The first story highlights the importance of the shale gas discovery and its impact on the industry. Water fracturing, which is the source of the environmental concern, is instrumental in making these reserves commercially viable. So, there is a lot riding on keeping local watershed free of contamination.

The second report looks at the interest of big oil, namely Exxon, in the Marcellus Shale play. Small businesses dominate the natural gas industry, but shale drilling could change that. To date, major global energy companies are watching from the sidelines. That the drilling in the Marcellus the attention of the likes of Exxon indicates how operations could quickly scale and transform the regional economy. Shale gas is still in the process of developing into an important component of the country's energy portfolio.

Related to the latent energy boom in Southwestern PA is the disorganized political efforts of the natural gas lobby:

Soon after Waxman-Markey passed, leaders of the natural gas industry met at an annual conference in Denver — where former Sen. Tim Wirth chewed them out.

Wirth used to represent Colorado and has long been an advocate of natural gas. Since 1998, he has been president of the United Nations Foundation, a nonprofit organization that works on climate change.

Wirth told the industry leaders that on Waxman-Markey, they blew it. "Every industry was deeply engaged, except one: Yours," he said. "The natural gas industry, the industry with the most to gain and the most to offer, was not at the bargaining table."

It's an especially harsh verdict because the Waxman-Markey bill was drafted only after high-profile negotiations with proponents of coal, nuclear, oil, wind, solar and other energy sources.

I suspect the natural gas industry will get its act together. Even if it doesn't, Exxon could step in and throw its considerable weight around Washington, DC. Much of what I have read on the subject indicates that a policy shift is already occurring and is the harbinger of bigger things to come. The signals coming out of Pittsburgh are unequivocal. Energy will dominate the local economic landscape.

Saturday, September 26, 2009

Cold Shower After Pittsburgh Bash

The publicity was great. The Rust Belt is back. Well, not yet:

The two Atlanta sports leaders knew that attendance at the College Football Hall of Fame in South Bend, Ind., had not met expectations.

The stadium-shaped hall opened in 1995 to promises of 200,000 annual visitors, but attendance dwindled to about 60,000 a year over the past decade.

So Stokan, president of the Chick-fil-A Bowl, and Morris, a college football hall of famer himself, made a quiet pitch to the hall’s leadership, the National Football Foundation: If you ever decide to leave South Bend, Atlanta would do the hall right.

On Thursday, Stokan announced that Atlanta beat out Dallas to be the new home of the hall in the fall of 2012.

Can the albatross of legacy costs be far behind?

Burgh Boomerang Tales

An AP story about a Pittsburgh native who left home and then returned is making the rounds. I put it in the back of the blog queue until I finished digesting all the G-20 hype. The narrative is rich with a number of important themes, but the most actionable is the following:

Twenty years passed. Then I realized, as so many Pittsburghers do, that I had unfinished business to transact. What I didn't realize was how many people felt the same way. Everywhere you go in Pittsburgh these days - in bars, in stores, at ballgames - you hear refrains of the same tale: I grew up here. I left. I never thought I'd come back. But I did.

I'd bet that the boomerang trend is bigger than most people realize. There seems to be a homing instinct among Gen X Rust Belt refugees. I think this energy should be tapped for economic redevelopment.

Instead of fumbling around in the dark in hopes of keeping young talent from leaving, enlist motivated expatriates. How to do this? I've grappled with this question over the last year. My focus on those currently dislocated was a step in the wrong direction. At least, it put the cart before the horse.

Easier, and more effective, is networking the locals who have returned. This idea occurred to me while reading about the renaissance in Scranton:

There's a distinctly white-collar movement behind Scranton's comeback. A return of college-educated natives from cities like New York and Philadelphia is fueling a population rise and a civic makeover. Bringing them back are the very small-town qualities many once wanted to escape: the likelihood of meeting acquaintances and relatives on the streets. The embrace here of modest ambition. The deeply held belief -- only heightened by ridicule from the outside world -- that Scranton matters. ...

... Precisely how many natives have heeded the call isn't known. But many returnees seem to orbit in a large circle of other returnees, as the case of Ms. Dempsey illustrates. At her firm she employs an architect who moved back to Scranton from New York City, and a designer who moved here with his boyfriend -- a Scranton native who has started a wine bar in town. One of Ms. Dempsey's siblings, a fashion designer, quit a job at Burberry Group PLC in New York City to join a Scranton-area technology firm, while a brother-in-law left a Wall Street investment bank for a Scranton software startup.

This is textbook chain migration and it could be enhanced with the resources currently getting flushed down the brain drain. In Youngstown, we're formulating just such an initiative. We've studied what is going on in Scranton and other places seeking to entice expatriates to come home. We've identified the missing pieces and devised the best brain gain practice out there. Our territory includes the entire Tech Belt, so the effort concerns Cleveland and Pittsburgh. I look forward to reading more stories like the one from the Associated Press.

Friday, September 25, 2009

Escape Pittsburgh

A bit of shame that this post will get lost in the slow Friday blog cycle. Of course, writing while everyone else is enjoying happy hour doesn't help. Just the same, here is a juicy quote that needs a bit more attention:

"It's a wonderful story of redemption, renewal and renaissance," said David M. Shribman, executive editor of the Pittsburgh Post-Gazette.

It's also a story of pitfalls and stereotypes and of a city still facing serious economic challenges.

"There's still litter on the streets, you can't fly anywhere from our airport, and it's still hard to keep our young people here," Shribman added. "Having said that, there may not be a better place to live in the United States."

That's not all:

"We educate some of the brightest young people in the world," said Shribman, who once was a reporter for The Buffalo News and who won a Pulitzer Prize for distinguished beat reporting when he was based in Washington for the Boston Globe. "If only we could keep them, even 5 percent of them."

That's some model for brain drain Connecticut to follow. In fairness, some see the demography in a different light:

In the 1980s, young people didn't see much of a future in Pittsburgh. Working-age families fled the city in droves. Now, though, Pittsburgh's unemployment rate is lower than the rest of the country's. And more and more young people are deciding to stay.

"I think people have recognized, over the last decade especially, that it's a valuable place to be," said teacher Kate Benson.

I might take Ms. Benson more seriously if she won a Pulitzer Prize. There's a narrative war going on and the trump card seems to be the population numbers:

However, what Briem failed to mention is during this purge of steel mills, Pittsburgh's population went from 680,000 in 1950 to 330,000 in 2000. Between 1970 and 1990, that city lost 158,000 manufacturing jobs and more than 300,000 residents. Most of the net exodus was young families: people lost their jobs, their homes and were forced to move away (some even committed suicide).

Truth be told, Hamilton has done a great job negotiating the downturn and minimizing the impact, and we should fear the day we follow Pittsburgh's radical example.

If Pittsburgh is so great, then why is everyone leaving (or killing themselves)?

Thursday, September 24, 2009

Why Pittsburgh?

Too funny not to share:

One would think that holding the G20 in Pittsburgh would be the best way to keep the protesters away. It's a nice, quiet, conservative city that, as Sienna Miller once reminded us, doesn't exactly top the list of popular destinations.

I didn't realize that Sienna Miller is a consultant for high-profile international gatherings. Who would go to Shittsburgh to protest?

Pittsburgh Taxi Driver

You want to know about a city? Interview a taxi driver:

Pittsburgh Plugs Brain Drain

Sorting through the early media returns, I expect the G-20 publicity to provide Pittsburgh with quite a boost. My eye tends to wander to the reports outside of the grand narrative packaged for the world's consumption. I'm still looking for an unusual critique, but the cranks are only interested in recycling the same venting pieces they have aired before. Even the more balanced approaches are beginning to blur together. But get a load of this gem from Connecticut:

Not so long ago, Pittsburgh was a place young people were fleeing, a city with a once proud manufacturing history saddled with an aging population. Does this sound like Connecticut? We are learning -- again -- this week that we are one of the oldest states in the nation.

We are a place where young people leave, where newly retired wealthy residents can't wait to get out, where we are left with an older population that has few options -- except to remain.

Gov. Rell and the legislature don't get what a serious crisis this is. They don't understand that we must be investing in the industries of the future -- medical technology, biomedical research and public education -- if we want to a place where young people stay and where business wants to expand.

Can you picture me rubbing my hands together as I read this? The author promises more:

My column tomorrow looks at what awaits us if we don't do something about the disasterous loss of young people.

Tomorrow can't come fast enough. Putting my feet back on the ground of today, I don't think I've ever seen or heard Pittsburgh held up as a model for plugging the brain drain. However, I do think that Pittsburgh is a model of how brain drain can be an indicator of a region heading in the right direction. (Warning! Gratuitous "hell with the lid off" reference if you click on the link.)

I argue that the exodus of young adults in the 1980s is the Pittsburgh success story. Go ahead and invest in human capital like Pittsburgh did, Connecticut. Just understand that the brain drain will get worse before it gets better. Furthermore, talent that leaves is not lost to the region forever:

Those demographics have Pittsburgh struggling to fill positions in fast-expanding industries, said Bill Flanagan, head of the Allegheny Conference, an economic development group.

"We still don't have enough restaurants or bars to attract young people," he said. "We've got 30,500 open jobs and we can't fill them."

Flanagan hopes the "boomerang effect" -- where the children of families who left Pittsburgh decades ago come back -- will bolster the workforce.

Flanagan needn't turn to the Burgh Diaspora to fill those positions. Connecticut has Pittsburgh covered. Given the G-20 coverage there, every young adult now knows where to go when she or he graduates from one of the many colleges and universities in the state. That's how Pittsburgh will "plug" the brain drain.

Wednesday, September 23, 2009

Pittsburgh: An Appalachian Success Story

Easily my favorite story thus far about G-20 Pittsburgh:

Pittsburghers probably don’t think of their city as an Appalachian one – even though the landscape is one of the hilliest outside San Francisco. But the city’s historic connection to the Appalachian region – and its long record of exploiting Appalachia’s natural resources – make Pittsburgh the veritable capital of Appalachia.

One can only hope that the towns and cities of Appalachia can experience the sort of renaissance that Pittsburgh did. Some have shown great promise. Chattanooga, Tennessee has emerged as a great tourist destination – especially for weekend getaways from Atlanta, Nashville, Birmingham and Knoxville. Asheville, North Carolina has become one of the prime retirement centers in America. Knoxville finally cleaned up its downtown in recent years and is now growing in population. But many other old Appalachian industrial towns struggle. Johnson City and Morristown, Tennessee, for example have yet to transform themselves. Much of southern West Virginia and eastern Kentucky is locked in a battle between mountaintop removal-supporting coal companies and communities who see a future based in green energy or tourism. And outside of Pittsburgh western Pennsylvania still hemorrhages population.

Some people put Pittsburgh in the Midwest. More think of it in the context of the Northeast or the Mid Atlantic region. To me, Pittsburgh will always be Appalachia's greatest city.

Financial Times Hearts Pittsburgh

The Financial Times has published a bunch of articles special for the G-20 Summit. Pittsburgh is one of the stars of the spread. Both Mike Madison and Prof Briem are quoted. The list of articles:

Nothing new, but all of it is worth reading. Passage that stood out for me:

Barrie Athol, who oversees the post-merger integration, says the high-level academic institutions, lower cost of living and the company’s scale in the region will ensure Pittsburgh remains a key centre for the company.

“Why would I want to have a fund accountant in midtown Manhattan when I can have it here?” he says. “We do have other options around the country but the difference is that in Pittsburgh we have scale.”

Still, not every corporate leader is an unabashed Pittsburgh-lover. One executive dismisses the city as “having New York’s attitude and hassles without the amenities”.

I like the contrast. One sees Pittsburgh as Manhattan without all the costs. The other thinks the city is Manhattan without any of the benefits. Either way, Pittsburgh should be flattered.

The Most Geographically Mobile

Related to yesterday's post that touched on the rural brain drain problem, a speech about a possible way forward for this part of the country (hat tip Brian Kelsey):

My son is a poster child for this new mentality. He has his masters degree and had a great job teaching at a community college in Santa Fe, New Mexico. He was well established there and things were going very well. So, I was more than a little surprised when he called me one night about 10 years ago and told me he was moving to Estes Park, Colorado in just a few days. I am of the old school and my first question was: “Wow, what new opportunity came up in Estes Park?”. I nearly had apoplexy when I heard his response which was: “Oh, I don’t have a job or anything like that……but I was driving through Estes Park recently and it looked like a really nice place to live. I will figure out what to do when I get here.” And, you know what: he has done exactly that. He is a telecommuter who works from his cabin, editing a journal and writing about his alpine climbing adventures for various magazines.

Often missing from the dominant brain drain narrative is this kind of migration. Ironically, demanding that there must be jobs before a region attracts and retains talent misses the point. The people you want in your town are those who will do anything to live there. They are highly intrinsically motivated. They start businesses. Often, they are foreign-born. They are risk-takers and the lifeblood of any thriving area.

The above describes the prototypical boomerang migrant that Rust Belt cities should court. These are the people who can and will leverage the opportunities available in shrinking cities. Forget initiatives that purport to keep talent from leaving. Instead, focus on the demographic that will do whatever it takes to succeed where they most want to live. These are the natives most likely to leave and they are the most important to replace.

What's your region's plan to replace them?

Pittsburgh Technology Council

Sometimes talented people get the recognition they deserve:

Google Inc. CEO Eric Schmidt said Wednesday that Pittsburgh has "the most effective tech council in all of America," and the region's drive to create new industries, dating back to the Mellons and Carnegies, has served it well in the 21st century.

Schmidt was the featured guest at the Pittsburgh Technology Council's Pre-G-20 Forum, held Wednesday morning at Heinz Field. Tech Council president Audrey Russo held a question-and-answer style talk with Schmidt on topics ranging from company culture to Pittsburgh's role in a technology-driven economy.

That's high praise coming from Google. Pop City lists five things that could dramatically shape Pittsburgh's future. Conspicuously absent are the people such as Audrey Russo, Mike Madison and Eve Picker. These outsiders are the new insiders and absolutely vital to the success of the region as Pittsburgh moves boldly into the future.

Tuesday, September 22, 2009

Brain Drain Report: Retention Rationale

There is too much meaty news not to issue a premature Brain Drain Report. As Detroit looks for any chute to slow down its economic free fall, talent migration is a popular topic of conversation. From the overlooking the obvious file:

"They didn't understand people coming here who aren't from here," said his wife Lauren, also a lawyer, over dinner one night at the couple's home in the upscale suburb of Bloomfield. Basically, no one moves to Detroit unless they have family ties in the area, she said. ...

... "We can't just create new entrepreneurs and then let them leave," said Mariam Noland, president of the Community Foundation for Southeast Michigan. "We need to do all the things that are going to attract new talent and make this a desirable place to live in, or to come to. We have to make it so people want to stay."

To that end, Noland raised $100 million in grant money from various foundations, money that is now being used to build the business and cultural institutions that can bring this city back.

There goes $100 million down the brain drain. I understand the desperation. Consider the cost estimates of talent leaving a region, in this case Saskatoon. But that's no reason to ignore the in-migration that is already moving along an established pathway, as if the trailing spouse wasn't as good as the young graduate who left looking for some Beantown Chic.

Tracking the efforts of such well-intentioned and very smart people focused on plugging the brain drain is a bizarre pastime. The mobility paradox is clear (must read article in The Chronicle of Higher Education):

Our year and a half spent interviewing the more than 200 young people who had attended the town's high school in the late 1980s and early 1990s led us to categorize our young Iowans according to the defining traits of where their lives had taken them by their 20s and 30s. The largest group, approximately 40 percent, consisted of the working-class "stayers," struggling in the region's dying agro-industrial economy; about one in five became the collegebound "achievers," who often left for good; just 10 percent included the "seekers" who join the military to see what the world beyond offers; and the rest were the "returners," who eventually circled back to their hometowns, only a small number of whom were professionals we call "high fliers." What surprised us most was that adults in the community were playing a pivotal part in the town's decline by pushing the best and brightest young people to leave, and by underinvesting in those who chose to stay, even though it was the latter that were the towns' best chance for a future.

I don't see why anyone should be surprised at the push factors for the brightest. On a family level, you want the best for your children. Leaving home is, without a doubt, very advantageous for the individual. But for the community, it is a suicidal practice. We are, only now, coming to terms with these structurally divided interests.

In an attempt to reconcile these opposing forces, sociologists Patrick J. Carr and Maria J. Kefalas make some good recommendations. But they overlook the individual/community tension. From the framework of aligning these two actors, effective policy could be sculpted. And $100 million would be put to much better use than making it so people want to stay.

Geography Of High-Speed Rail: Urban Pairs

The America 2050 report is making quite a splash in the blogosphere. I got wind of it via Richard Florida's blog. There is an interesting pattern in the list of the Top 25 City Pairs for high-speed rail:

19. Columbus-Washington
20. Cleveland-Washington
21. New York-Pittsburgh

Above is the highest Pittsburgh pairing. My first thought was about the prospects for Washington-Pittsburgh. Upon further review, both Columbus-Washington and Cleveland-Washington speak to that important transportation corridor. Any connectivity to DC for those two Ohio cities will surely depend upon the Pittsburgh link.

In fact, Pittsburgh would be the HSR rail hub between the Midwest and the urban Northeast. Being the biggest city in the middle of nowhere ensures this designation. As the new economic geography of the United States begins to take shape, Pittsburgh will emerge (again) as a major center between the two mega-regions.

Monday, September 21, 2009

Burgh Energy Report: Natural Gas Market

I'm trying to make sense of the low prices for natural gas but the increased drilling in the Marcellus Shale region. Understanding this is key for evaluating the prospects of Pittsburgh becoming the US energy hub. That is "the" energy hub, not "a" energy hub. Surprisingly, the competition for this distinction is Detroit and Chicago. I would have guessed Houston and Denver, maybe Charlotte (where Westinghouse almost ended up).

First, one has to look at the cost of production. On this score, the Marcellus Shale play is a perfect storm:

With the costs of drilling and labor shrinking as other companies pull back, it is cheaper to drill now than it was in 2007, when CHK first started its horizontal program here. The company has 17 drilling rigs in the play now and will more than double the number by 2011.

Why does this make sense? Even if the gas market continues to be unprofitable for many, the finding and drilling costs here for Chesapeake are wickedly cheap - in most cases, less than $1 for an MCF of gas that sells for $3 in the markets. And with the help of asset sales to partners like Statoil, those fall to 50 cents or less across some of the nearly 2 million acres of leases the companies share over the Marcellus.

More important, the Marcellus gas is closer to where the most folks in America use it - the East Coast. Natural gas is the heating fuel of choice for large population centers like Washington, D.C., and New York City. Less miles by pipeline means less expense in getting it to market and a higher price than you would get for the same gas if it were out west.

Throw on the preponderance of the chemical industry and oil refining in the east, and you have a healthy mix of customers for what's being pulled out of the ground by Chesapeake and a gaggle of others here.

This is why experts are so bullish on the Marcellus and resulting economic impact for states such as Pennsylvania. Furthermore, there would seem to be price increases on the horizon and natural gas drilling companies can expect bigger profits. Everything is pointing towards a big boom with Pittsburgh at the center of all the action.

The second factor to consider is the shift in drilling operations. Colorado is expecting jobs to move to Pennsylvania and Louisiana. Thus, some are calling for a reduction in regulation and taxes. That's something to track considering Pennsylvania's recent deliberations on the subject. There is going to be tremendous pressure on the Marcellus states to allow as much drilling as possible.

As far as I can ascertain (I'm not an energy analyst expert) natural gas supplies are in the midst of transitioning from conventional to unconventional because the price to extract shale gas is so much lower. According to the Calgary Herald, the result could be a short-term price spike:

The billion dollar question for 2010 is whether or not unconventional gas production in now-legendary plays like the Barnett, Haynesville, Fayetteville, Woodford, Marcellus and even Canada's Montney, to name a few, will be able to collectively respond fast enough to offset estimated conventional declines in 2010 of 5.0 Bcf/d in the US, plus another 1.0 Bcf/d in Canada. Theoretically it's possible, but nobody likes to talk theory at a party. Indeed, there are many practical constraints to boosting near term production including thin cash flows, stretched balance sheets, impatient bankers, tightened service industry capacity, and the strained logistics of mobilizing oilfield equipment once the price signals are convincing enough for E&P companies to spend money again.

In the long term, beyond 2010, shale gas and other large-scale unconventional gas plays will be increasingly dominant and able to offset conventional production declines. But that's the long term. Next year, it's quite possible that only half of the expected 6.0 Bcf/d of conventional losses in North America will be replenished. It's a scenario that speaks to benchmark continental prices rising above $US 6.00/MMBtu again, all else being equal.

This coming winter will be interesting. A mild combination of a colder-than-average temperatures, a gradual recovery in industrial demand and the gravitational pull of declining conventional production have a very good chance of collectively tightening up the oversupply that the natural gas industry has been living with for over a year. I give this near-term scenario at least even odds, and in part that's why natural gas prices have been rallying recently. After all, nobody wants to miss the party.

If the above scenario comes to pass, then you might imagine the scramble to drill that will engulf the Marcellus Shale region in just a few months time. Bump up the in-migration watch level to critical mass. Pittsburgh is the next Calgary. If you aren't sure what that means, consider a post I wrote about one-year ago about Alberta poaching frustrated H-1B talent here in the United States.

Saturday, September 19, 2009

Brain Drain Report: Diaspora Networking

The Emigrant Advice Network blog is providing extensive coverage of the Global Irish Economic Forum. I'm following the reports out of Dublin because of the implications for economic development policy regarding rethinking of the brain drain problem. As Ireland grapples with another exodus of talent, it explores novel approaches to managing the increasing geographic mobility of labor:

More and more national governments are introducing diaspora strategies and recognising the role that key members of the diaspora can play in developing their home economies without having to return home permanently. Brain drain can become brain gain and brain exchange. Israel, India, China and Taiwan have led the way with innovative programmes all based on reaching out, identifying and engaging with their global populations.

Ironically, economic turmoil seems to be the best time to introduce new ideas. With no jobs to entice young professionals to stay, going with the flow is the only viable option. Enter The Ireland Funds, founded in Pittsburgh, with its "Comparative Review of International Diaspora Strategies":

Considering the diaspora as a national asset is certainly not a new phenomenon, nor is it unique to Ireland. Governments around the world are beginning to think about engaging their overseas populations in innovative ways. Rather than viewing expatriate business, cultural, scientific and policy actors as ‘lost’ to their countries of origin, active efforts are now being made to identify and link highly skilled offshore citizens to national economic development projects through initiatives such as formal mentoring programmes, international advisory boards, and investment programmes, with the support of home institutions.

Global economic development discourse has moved strongly away from retention strategies. Geographic mobility is something to be encouraged. As I've argued before, initiatives designed to plug the brain drain are relics of a time when manufacturing dominated the national economic geography. The best example of this disconnect are all the dysfunctional municipal pension programs in Rust Belt cities. And now Columbus looks to be joining the party. Brain drain hysteria is sure to follow. Enter EasyColumbus:

Alarmed community leaders realized that there wasn't any organization or plan to help retain those students, said Dan Rosenthal, co-chairman of EasyColumbus and formerly of NetJets. "The key is connecting with them while they're in school. Unfortunately, we're not succeeding at that right now."

That's the key? This common myth supports some of the most egregious brain drain boondoggles. I'd like to see where this strategy has worked. Provide one example. Retention is futile.

That doesn't mean attraction strategies are a panacea. The Urbanophile takes Cincinnati to task:

@_miller pointed me at this article in the Cincinnati Business Courier about talent attraction. A consultant hired by the city says that "affordability" is the city's biggest asset and that "Tri-State’s message should be that the region has big-city amenities, and young people can afford to live here."


This misses the mark badly. Yes, affordability is part of the equation for cities in Cincy's size class. But you can't hang your hat on that. Riddle me this, how does affordability convince someone to pick Cincinnati over Louisville, Indy, Columbus, St. Louis, Milwaukee, Nashville, Charlotte, Austin, Kansas City, etc., etc., etc. all of whom can offer the exact same value proposition of "big city amenities at low cost". If Cincinnati were the only low cost city in America, this might work, but it is merely one among a huge number.

Aaron Renn didn't provide a link to the article in question. I found it here. The consultant is none other than Rebecca Ryan from Next Generation Consulting. I should have guessed.

The Dallas area has always been an affordable office market, and with a commercial real estate shakeout looming, more bargains abound.

In a midyear comparison of average office rents, real estate service firm Jones Lang LaSalle ranked Dallas 24th in office rents among the 31 cities it compared.

Some of the few cities cheaper than Dallas are Detroit, Cleveland and Pittsburgh. Let's hope that low-cost office space is all we have in common with the Rust Belt capitals.

Land-rich boomtowns, like Dallas, can offer the same kind of value proposition that Cincinnati can bring to the table. Read a little Ed Glaeser or Joel Kotkin and you will get the gist of the comparative advantage. The assets of shrinking cities are a bit more complicated. I recommend saving a few dollars and watching Anthony Bourdain's "No Reservations". First city to embrace Rust Belt Chic as a branding campaign wins.

Friday, September 18, 2009

Resurrecting Tom Murphy

While everyone in Pittsburgh is rushing to the fore to take credit for the celebrated turnaround, one of the architects of the transformation tours the country and describes how to pull a Pittsburgh:

Murphy, who still makes his home in Pittsburgh, praised Baltimore leaders for taking the initiative to encourage new approaches. “Cities that have been doing okay don’t have the same imperative to try different things,” he said. “I think to Baltimore’s credit, the Inner Harbor and development associated with it has been fairly successful. But I think what they’re saying is, it could get stale.”

He cited the example of Pittsburgh’s South Side Works, a $300 million project that transformed an abandoned steel mill into a shopping center, as an example of the type of project he has tried to nurture.

“The whole idea of public-private partnerships and the public underwriting the debt, in places like Pittsburgh they’ve been really essential,” he said.

Former Pittsburgh Mayor Tom Murphy will be writing an economic development vision plan for Baltimore. I appreciate what Murphy's critics have to say, but I can't dismiss all the interest in his advice. Why are so many cities actively seeking his expertise?

Urban leaders are keen to replicate Pittsburgh's success. I figure that over the next decade people will talk about the city with the same reverence lavished upon Chicago in the 90s and Murphy will get a lot of the credit. Not that I begrudge him the recognition, but I'm inclined to think that the proximity to Washington, DC is mostly responsible for the escape from economic malaise.

The Partnership for Public Service this month released a report indicating that the federal government will need to hire 270,000 workers to replace retirees and staff expanded programs over the next three years. That's going to translate into roughly 120,000 new jobs here in the D.C. area alone.

This steady economic activity and job creation translates into the nation's greatest concentration of wealth -- at least among young workers, if a new Nielsen study is to be believed. This metro area now contains an incredible 16 of the top 50 counties for 25-to-34 year-olds making $100,000 or more.

It's easier to get into most area restaurants than it was two years ago. But two years from now, it's going to be a lot harder scoring a good table around here than it will be just about anywhere else in the country.

As those restaurant queues get longer, the push factors for migration will get stronger. DC will become one of the country's biggest engines of talent churn. Pittsburgh will benefit as it already has in terms of the G-20 Summit. The concentration of wealth in the DC area has helped to pull up Southwestern PA.

The agent, or catalyst, for the spillover is the Burgh Diaspora. The power of a diaspora to spur economic development is on full display right now at the Global Irish Forum in Dublin:

On the first night about 50 of us were packed into a bus and brought to the residence of the U.S. Ambassador Dan Rooney. What followed was a wonderful warm welcome by an inspiring host who, of course, knows all about celebration from his time with the Pittsburgh Steelers.

Frankie Gavin and the new De Danann played a rousing concert and the lead female singer looked a dead ringer for former De Dannan diva Maura O'Connell; even better she sang like her too. It was a great opening to the forum.

Craig Barrett former Chairman of Intel was there, as were John Hartnett and John Gilmore of the Irish Technology Leadership Group.The ITLG is in the process of raising $100 million to fund start-up ventures in Ireland. So far they have about $40 million of that raised and venture capitalists striving to jump on board.

The ITLG may well be the engine that helps recovery in Ireland more than any other single group. The idea is simple - make Ireland an incubator like Silicon Valley of innovative technology and creative thinking. Provide the funding and allow the Irish group to utilize an American base in San Jose where the ITLG is located. Then using best American business practices and Irish innovation create a successful start-up.

All new companies need money, contacts and luck, The last cannot be guaranteed but the other two certainly look like they will be provided by the ITLG folk who are truly blazing a trail.

One of these days, I hope to see a Global Pittsburgh Forum and a similar kind of diaspora network. In an ad hoc manner, the Burgh Diaspora in DC is already doing what I envision. This suggests that the East Coast Connected model would work well in the Tech Belt. Just as Atlantic Canada actively plugged into the global city of Toronto, so could Cleveburgh take advantage of the amassing of wealth in DC.

Thursday, September 17, 2009

The Pittsburgh Allure

The Economist is back singing the praises of Pittsburgh. There's a fresh salvo of regional highlights, the city as a draw to both business and talent. To me, it reads more like what Pittsburgh hopes to be and the newspaper is only too happy to help get the word out to its readership. If you are wondering why you should consider moving to Pittsburgh, then do give the article a read.

Will the media blitz result in Southwestern Pennsylvania becoming a hot destination? Politics and Place points to a line of comments gushing about Pittsburgh in the Washington Post. The boomerang migration rush from DC seems to be in full swing. All those expatriates might bring along a few outsiders for the ride.

I would guess that this relocation pattern has been in place for at least a few years. A lot of the changes in Pittsburgh tend to get buried by the poor population numbers. The Steel City is shrinking. John Craig serves up some provocative data nuggets in the fall issue of Pittsburgh Quarterly:

[Adults] (age 25 to 64) with a college degree or higher total 24 percent of the population, putting Pittsburgh in the bottom third of the nation's regions. When only Pittsburghers between 25 and 34 are considered, the percentage with a college degree or higher greater (41.9 percent) and tops all but eight U.S. regions. When the same calculation is limited to post-graduate degrees, only Boston, Washington, D.C. and San Francisco have a higher percentage than Pittsburgh.

Because of the dramatic out-migration during the first half of the 1980s, Pittsburgh is one of oldest (demographically speaking) regions in the country. That tends to overwhelm the human capital metrics often used when looking at educational attainment. In reality, Pittsburgh is a big college town with an impressive concentration of brains. As Craig's numbers demonstrate, a smart and youthful region is lurking below the legacy of manufacturing's collapse. In this regard, the Economist celebrating the reinvention of Pittsburgh rings true.

Wednesday, September 16, 2009

As Steelers Go, So Goes The Vote

Via Economix, researching the links between sports fanaticism and voting behavior:

We explore whether emotional reactions unrelated to incumbent performance affect voting behavior by assessing the electoral impact of local college football games, events that government has nothing to do with and for which no government response would be expected. On average, a win before Election Day causes the incumbent to receive about one percentage point more of the vote, with the effect being larger for teams with stronger fan support. We corroborate these aggregate-level results with a survey conducted during the 2009 NCAA Men's College Basketball Tournament, where we find that sports-induced emotional change affects approval of President Obama and assessments of the health of the country. Voters' decisions and attitudes are thus shown to depend considerably on events that affect their personal level of happiness even when those events are entirely disconnected from government activity. Our results provide new evidence on the significant limitations of the electorate's capacity to hold elected officials accountable for their actions.

Looking for a change in the next election? You best hope that the Steelers lose. Wait a second. What is the bye week factor?

Tuesday, September 15, 2009

Pittsburgh Stereotypes Die Hard

For all the fawning over Pittsburgh (The Christian Science Monitor with the latest example), some myths persist:

Later, visiting Pittsburgh, another part of the U.S. industrial heartland hit hard by economic woes, Obama pitched his plan to extend health coverage to the uninsured before a raucous crowd at the AFL-CIO labor federation's convention.

Rochester, NY and Akron, OH are two other cities that might surprise the Reuters writer.

Great Recession Pittsburgh

Will the real Pittsburgh please stand up? Our first contestant is Hype Pittsburgh. This is the city hosting the G-20. The latest bit of positive press:

Pittsburgh, the site of the G-20 meetings on September 24 and 25, 2009, ranks among the U.S. metropolitan areas least affected by the recession.

That's for the time period of the second quarter of 2008 to the second quarter of 2009. Of course, that's the Pittsburgh the local leadership want the world to see. But our second contestant, Depressed Pittsburgh, tells a radically different story:

As far as gatherings go, the starkest contrast in Pittsburgh during the G-20 Summit week will be between the glamour and glitz of the summit; the primped and polished downtown hotels where world leaders and finance ministers will stay on the one hand, and on the other, the Hill--about a mile away from the G-20 Summit convention—where those protesting unemployment will be sleeping in a tent city.

There is no denying the struggling neighborhoods so close to downtown. In fact, Pittsburgh's latest renaissance is highly concentrated. Most of the region is acutely economically depressed, at least as far as the indicators are concerned. The Brookings report linked above celebrates Pittsburgh but also reveals that some of the greatest metro pain in the entire US can be found right across the state border in Ohio.

There aren't enough resources to go around. Pittsburgh's "renaissance" today celebrates the effect of the resources that have been put to work. But there are those communities that go without. At times, the conflict between New and Old (or Traditional and Corporate, City and Suburb) masks the deeper problem that some (many?) former steel communities, and some neighborhoods in the City of Pittsburgh itself, are sliding more deeply and inexorably into ineradicable poverty.

Whatever Pittsburgh you see, there is plenty of evidence to support your perspective. I tend to think that one can find Depressed Pittsburgh in any US city. But Hype Pittsburgh isn't common, particularly within the Rust Belt. And as the region moves forward in the wake of the G-20 summit, the Hype Pittsburgh narrative will become increasingly dominant.

The "deeper problem" that Mike describes is macroeconomic, not the result of local dysfunction. There is enough variance in political geography that we can conclude that the primary issue is the transition from a manufacturing focus. However, I'm struggling to determine the local influence on the good face that Pittsburgh is presenting.

Could another city replicate Hype Pittsburgh? I'm not so sure.

Monday, September 14, 2009

Burgh Energy Report

Three things are affecting the economic impact of the Marcellus Shale play. Short term, domestic political squabbles pit established coal interests against the allegedly greener gas reserves. Buying votes in the US Senate for the so-called "climate-change bill" might kill any grand initiative proposing to switch from coal fueled electricity to natural gas. Ironically, key states such as Ohio and West Virginia might benefit dramatically from a growing natural gas industry given their proximity to the Marcellus.

One big concern about extracting this gas is all the wastewater created. Interestingly, a solution may be in the offing:

Meanwhile, a Canadian firm, Wescorp Energy, has developed a technology called H2OMaxx, which uses microscopic gas bubbles to separate residual oil from water. The company reports that the technology can also be used to remove petroleum from hydraulic fracturing fluids, which are used to break up rock surrounding oil and gas deposits.

The system also reduces the need for expensive “well workovers,” because less residual petroleum is pumped back into disposal wells, according to Dave Lemoine, Wescorp’s vice president for business development. “It’s like removing grease from water before pouring it down the kitchen sink,” he said.

Mr. Lemoine sees particular promise for Wescorp’s aeration technology in the gas-rich Marcellus Shale, which underlies large portions of Pennsylvania, West Virginia and New York.

“The difficult process for permitting of disposal wells combined with the huge volumes of water trapped in the Marcellus gives us a competitive advantage there,” Mr. Lemoine said. “Our system is portable, has a smaller footprint and removes more hydrocarbons.

Not to be left out, Pitt’s Swanson School of Engineering landed a $1 million grant from the US Department of Energy to figure out how best to deal with the water problem. Forgive the pun, but development on a massive scale would already seem to be in the pipeline.

Canada's recession is over and the country will lead all G-7 peers in economic growth next year, paced by Alberta's strong energy sector, said Benjamin Tal, senior economist with CIBC World Markets Inc. ...

... "Nobody will be able to convince me that China is dead. Nobody will be able to convince me that India is dead. This is just the beginning, not the end, of China, and the emerging markets rising," said Tal. "And with China and the emerging markets rising and to an extent blessing the western world in terms of the engine of global economic growth, you will see commodity prices rising. Maybe not this year. Maybe even not next year. But over the next five years you will see oil prices and commodity prices remaining elevated. That's very good news for Western Canada."

He predicted natural gas prices will also rise in the next two years. If commodity prices continue to gain in the coming years, Tal said he sees Alberta enjoying another wave of growth.

"I'm not talking about double-digit growth. I'm not talking about the situation like two years ago when you guys basically were doubling the value of your real estate during the course of breakfast," he said. "I'm talking about better-than-average increases in house prices. I see another wave of in-migration into Alberta."

If Tal is right, then I expect to see strong in-migration to Southwestern Pennsylvania. Given the preceding decades of a moribund economy, what is coming will seem like a real estate bonanza. Of course, that depends upon how well the above three stars align.

Saturday, September 12, 2009

Global Protest Pittsburgh

Chris Briem (Null Space) scratches the surface of the anxiety about hosting the G-20. Could Pittsburgh turn into another Battle in Seattle? The referenced Wall Street Journal article offers speculation:

"Given we had a short three-month window to prepare, I believe we've done all we can to be sure everyone will be safe -- both visitors and residents of Pittsburgh," said Mayor Luke Ravenstahl.

Seattle had a year to prepare when it hosted a meeting of the World Trade Organization in 1999. Still, it was caught off guard when 50,000 protestors showed up, far more than the expected few hundred.

Claiming that Seattle was naive is a fair assessment. But I've seen nothing in the press coverage of the upcoming G-20 security concerns that properly explains what went wrong in Seattle during the WTO Ministerial. I was there and I will tell you what I think happened.

As a graduate student at the University of Colorado, I was researching global civil society. The WTO Ministerial in Seattle provided me with an opportunity to study it firsthand. I was primarily interested in the dialog between nongovernmental organizations and nation-state representatives. I wasn't prepared for the kind of political space that developed on the chaotic streets outside of the convention center.

To give you an idea of the disorganization of the hosting committee, I was able to acquire NGO credentials for the ministerial upon arriving in Seattle. This would allow me to move back and forth across police lines, even when the riot was in full swing. I was able to see the protest from both sides and observe the information exchange as people struggled to grasp the gravity of the situation.

I arrived early in downtown Seattle for the first day of the meetings. Protesters were setting up camp at key intersections in front of the convention center. Oddly, there were no police around. A veteran of the no nukes movement was very concerned. He predicted violence as the police struggled to regain control of the streets. Events would unfold almost exactly as he foretold.

The main problem was that the trade delegates had to journey from their hotel rooms and wade through the rabble in order to get to the convention center. Exacerbating the situation was all the area residents trying to get to work. Anyone in a suit was a target, representative of the oppressive world order. Furthermore, the pell-mell actions of the police enveloped more than a few innocent bystanders.

The police were holding their own until an organized labor march reached downtown, flooding the streets with anti-WTO protesters. At that point, word was going around that the police had lost control of the situation. This further emboldened the crowd. At that point I realized that something historical was going on right in front of my eyes. The atmosphere was electric. But the old-hand peaceniks were terrified. They knew what was coming.

Late to the show were the soon-to-be infamous anarchists. Since "state power" was concentrated at the convention center, they started tearing up McDonald's, Starbucks and Nike Town: Spaces of globalization. Local anti-WTO protesters were furious about the senseless trashing of their home. That moment inspired the theme of my thesis, which would explore the divisions within global civil society. Labor and environmentalists made for strange bedfellows and I was sure the coalition wouldn't last as alternative visions for the world were better articulated.

The role of the anarchists in the Battle in Seattle is too often overstated, the destruction they wrought sensationalized. Nonetheless, the mayor had lost his city and he would call in the national guard. That was the real nightmare. Until the big guns arrived, some very interesting interactions took place. I vividly remember a few protesters talking civilly with a French trade delegate who decided to engage the angry crowd. She wasn't the monster they imagined and she was genuinely shocked at the misunderstanding about what the ministerial was trying to accomplish. The World Trade Organization was far from the monolith of global governance it was portrayed to be.

The supposed worst case scenario wasn't as bad as many people think. Much of the chaos could have been prevented. Furthermore, downtown Pittsburgh is much more easily controlled than downtown Seattle. As much as they might like to fantasize, anarchists aren't going to overwhelm G-20 security. And don't expect Yinzers to stand idly by while outsiders trash their city. This isn't Seattle.

Friday, September 11, 2009

Pittsburgh Expatriate Survey

Friday is a bad day to offer some blog publicity. Perhaps I'll post again on Monday. For any Burgh expat:

Please help us find out more about the people who moved out of--and sometimes back to--Pittsburgh PA with this brief research survey. Check back to this blog for results in October.

This link will take you to the survey. Thanks for your help.

I'm not affiliated with Pittsburgh Research in any way. The survey is a good idea and I hope you'll help spread the word.

Panic In Florida

Update: The Urbanophile points to an article that nicely illustrates the point about the changing landscape of Florida and the prospect of new greenfields outside of the state.

Is there such a phenomenon as a migration panic? If there is, then Florida is the model head case. A lot of Florida's fiscal health is dependent upon robust in-migration. Lately, the books don't look so good. So much for the state's much ballyhooed tax regime.

The supposed connection between economic policy and net out-migration is dubious. California is held up as an example as badly managed state that pushed people out to relative tax havens. Meanwhile, libertarians conveniently ignore Florida save the contention that everything will get back to normal once the national economy picks up pace.

American greenfields are subsidized by its brownfield communities. Like a freshly minted suburb, the Sun Belt provided an escape from the legacy costs of the Rust Belt. The tables are now turning:

More important, though, Pittsburgh is seen as a city with a clear sense of place and a population that takes pride in its accomplishments. An article in the Pittsburgh Tribune-Review notes that the city lives in the present but loves the past. There is an inherent commitment to making home the very best it can be.

That, it seems, is where Florida is missing out. Too many people who live here treat it as a temporary residence, even if they intend to stay for the rest of their lives. It is considered simply a playground, one to be used and enjoyed without any thought to reinvestment so that it will be here for future generations of sun seekers.

Florida deserves better. It deserves people who are committed to making it the best it can be. It deserves residents who say, "I'm from Florida," even if they grew up and raised their families in another locale. They should be willing to invest their tax dollars in education and recreation and preservation, and they should be willing to donate their time and treasure to those in need.

You read that right. Florida is afflicted with Pittsburgh envy. If you ever wondered if the media love fest is for real, you now have your proof. When Florida grows up, it wants to be Southwestern Pennsylvania.

Thursday, September 10, 2009

Encyclopedia Destructica

Just something really cool I'd like to share:

Liminal Economics

Yesterday, I posted about how new forms of media could change our understanding of community. Stemming from a reconceptualization of home is a new economy. It will underpin what I have termed Globalization III. A reduced appetite for risk will introduce some mountains on the Flat World map. For example:

Farouk Shami, a Palestinian-born hairdresser who built a $1 billion manufacturing company around a popular line of hair irons, is moving all of his production of hand-held appliances from China to a sprawling new factory here.

The move flies in the face of conventional wisdom, which says gadgets like this are best made in a low-cost country. But, he says, outsourcing has led to a loss of control over manufacturing and distribution.

"We'll make more money this way -- because we'll have better quality and a better image," says the 66-year-old, who says his company, Farouk Systems Inc., spends about $500,000 a month fighting counterfeits, most of which he says originate in China. The company collects the fake products and tracks the source, and then brings action in China to shut down illegal producers.

Mr. Shami figures having production under his nose will help him control quality and inventory, and also fight the fakes, since imported irons will automatically be suspect. He sells in 104 countries, but the U.S. represents over 60% of the company's sales.

"I think you're starting to see more manufacturers rethinking outsourcing," says Daniel Meckstroth, an economist at the Manufacturers Alliance/MAPI, a public policy and research group based in Arlington, Va., calling a June speech by General Electric Co. CEO Jeffrey Immelt, where he said that overseas outsourcing had gone too far and that U.S. companies needed to expand domestic production, a "bellwether of what's happening in manufacturing."

Among consumers there is an increasing interest in the intimate knowledge about the place of production. The collapse of global finance has catalyzed the trend and resulted in a clamor for a new landscape for doing business. All markets, including venture capital, are undergoing a traumatic restructuring. Where are the Blue Oceans of Globalization III?

Chinatown. I'll explain tomorrow after the Burgh Energy Report.

Free The Talent

Fretting over local talent leaving and resisting the in-migration of foreign born brains are cut from the same xenophobic cloth. Hat tip Growthology, Michigan might better spend its money on backing the Founder's Visa:

By definition these 10,000 founders wouldn't be taking jobs from Americans: it could be part of the terms of the visa that they couldn't work for existing companies, only new ones they'd founded. In fact they'd cause there to be more jobs for Americans, because the companies they started would hire more employees as they grew.

What's the argument against such a policy proposal?

Brain Drain Report: College Destinations Index

Michigan is spending a lot of money to stop brain drain. The latest news concerns $1.2 million from the W.K. Kellogg Foundation to help bolster an internship initiative:

The conventional wisdom is that college students who intern are more likely to stay in the region where the internship is located. It often serves as a portal for the first job for Michigan's youngest and brightest talent.

Conventional wisdom is that graduates from community colleges are more likely to stay in the region than those from a private liberal arts school. Stopping out-migration and reversing the population decline is not an end in and of itself. If the depth of the talent pool is the issue, then take a sober look at migration data. An anecdote representative of what you will discover can be found in a Wall Street Journal article about the demise of the Big Ten college football conference:

Even top-level recruiting is solid within the region. When the North produces an elite prospect, such as Ohio State quarterback Terrelle Pryor of Jeannette, Pa., those players still tend to remain near home.

The main problem seems to be rooted in the population growth of the South and West, and the greater zeal for high-school football in those regions. Historically, Pennsylvania and Ohio rank third and fourth all-time in terms of the number of NFL players born within their borders. Florida is fifth. But today, Florida has nearly twice as many active players as Ohio and more than three times as many as Pennsylvania. The South and West continue to benefit because of the national population trend: 47 of the 50 fastest-growing metropolitan areas between 2007 and 2008 were in those regions, according to the Census Bureau. Playing football also is just not as important to Northerners. In the last school year, more high schoolers in Georgia played football than in Pennsylvania, according to data from the National Federation of State High School Associations, even though Pennsylvania has nearly three million more residents.

The apple doesn't tend to fall far from the tree and traditional football states such as Pennsylvania aren't producing enough great apples. Much of the talent grown in Southeastern Michigan stays in the Rust Belt. A good place to look for workers is at the public universities in neighboring states. Throwing a lot of money to keep a University of Michigan engineering graduate from employment at a solar panel production plant in Toledo, Ohio doesn't make a lot of sense.

That brings me to the College Destination Index. Those rankings are popping up in the news cycle this week. From an Albany paper:

The Albany metro area was recently ranked the 15th-best small metropolitan area to attend college, according to the American Institute for Economic Research. We scored higher than Portland, Maine, and below top-ranked Boulder, Colo., among 20 cities in that category.

The rankings are based on the number of students as a percentage of the area's population, diversity, cost of living, cultural activities and the area's earning potential. Also considered are research capacity, city accessibility and whether the area has brain drain or gain.

How is brain drain measured? From Ithaca:

In the professional opportunity area, Ithaca's brain drain, measured as a year-over-year ratio of the population with a bachelor's of arts living in the area, was 0.995.

I think that number means a slight decrease in the percentage of smartypants living in the region. Too many Cornell graduates heading to New York City? I don't understand the fuss. Not all inter-regional talent churn is equal. Keeping someone from leaving is a difficult task and likely detrimental to that person's earning power.

I don't expect a small business in Ithaca to attract an employee who went to school at Emory. But someone from Penn State or Bucknell or the University of Buffalo would seem like an easy mark. Shouldn't this demographic be the target of the internship program? Functionally, the brain gain is the same. But only one approach goes with the flow.

Wednesday, September 09, 2009

Geography Of Home

Update: Justin Kownacki offers a detailed critique of the book "Socialnomics". (The embedded video below is promoting the book.)

There is an important link between media technological innovation and geographies of trust. The sense of community undergoes a rapid transformation, unleashing new economies of scale. Via Brewed Fresh Daily, a compelling video about the social media revolution:

The trouble with understanding new social media is discovering evidence of how the landscape is changing. Since we are in the midst of the transformation, identifying the shifts is difficult, perhaps impossible. Thus the problems newspapers have with their reinvention.

I would argue that migration patterns are a leading indicator of the social media revolution. For example, check out this blog post about how one person is blaming Facebook for Irish brain drain. This more of a tale of two homes and how they could be connected.

In a symbolic shift, Dell moved operations to Lodz from Limerick in Ireland. Ireland has protested the 52.7 million euros in subsidies that Dell got from the Polish government, but Dell cited the skilled work force in Lodz and proximity to growing markets as the reasons for its move.

The Irish boom, now possibly the worst bust in Europe, attracted many Poles, who worked with Dell there and are now finding their way home.

“We even have some workers in Lodz who have come from our Limerick, Ireland, factory and who are very happy to have come back to help set up this one,” Mr. Dell said at the opening in January.

Tomasz Rybinski, 30, was among those Poles who left the country after it joined the European Union in 2004. He found work in then-booming Britain, where he spent three years mixing salads, moving boxes in a warehouse and then, finally, working in a factory that made industrial refrigerators.

Rumors this year that layoffs were in the works were enough to convince Mr. Rybinski that the new possibilities in his native Lodz trumped what had by then become a shattered British economy.

The relationship between Limerick and Lodz is fascinating. The talent network informed the migration of Dell from Ireland to Poland. The imagined economy (to play on "Imagined Communities") is between the two cities. I might call this liminal news and traditional media outlets don't know quite what to make of it.

Where is the news for connected communities? Tomorrow, how this ties into the new geography of globalization.

Tuesday, September 08, 2009

The Talent Equation

I want to banish the word "retention" from workforce development discourse. The concept is at the root of many misguided (and ineffective) policies aimed at addressing brain drain. There's a good example of the pitfalls in last Sunday's Pittsburgh Post-Gazette:

Today, the industrial economy that once created work opportunities for immigrants provides little draw. What does bring newcomers to Pittsburgh are its universities. It is here where one finds the petri dishes of fresh ideas. It is here where the incubators of innovation begin. And, unfortunately, it is here where great ideas often die due to a lack of funding, management experience or vision. As a result, it is from here that major talent escapes to other, more inviting places.

I believe Pittsburgh can be a great city again, a G-20- class city. But we must stop this exodus because with it goes the future of our community. The only way to do this is to escape the legacy of top-down controls that dampen creativity and to fund the innovation that creates job opportunities for "immigrants" (both domestic and foreign) who have the expertise to market and expand "smart" and "clean" technologies through the wide-open channels that the Internet offers us.

There is nothing wrong with the overall message of the op-ed piece. I appreciate the call for more openness in the decisionmaking and trying to make the city more attractive to global talent. But the lament about the college graduates who get away to "more inviting places" is the same kind of old-school thinking in Pittsburgh that the author admonishes. This, too, will hold the region back.

Pittsburgh needs to think of how it will entice the brains coming out of Stanford and MIT to move to there. Imagine Nanette Lepore doing whatever it takes to succeed in the big city of Southwestern PA:

IT seems like yesterday that we moved to New York City from Youngstown, Ohio. One of us came here to attend the Fashion Institute of Technology, and the other wanted to jump into the art world. We waited tables to make ends meet. With $5,000 in hand, we eventually opened a small office in New York City’s Garment Center and began making Nanette Lepore clothing — designed by one of us, marketed by the other, sold by both.

Lepore cites the special zoning laws of the Garment Center as instrumental to her success. The fashion cluster in the Big Apple demands that you leave Youngstown and set up shop where the action is located. It doesn't matter if you graduate from FIT or RISD. There are only so many places to go and ply your trade.

New York City is a perennial domestic migration loser, a brain drain casualty. The position as a major immigrant gateway tends to make that a moot point. I've noted the anxiety about out-migration in the Greater Denver area. That seems absurd because the Front Range sucks up graduates from so many other out-of-state colleges and universities.

The region shouldn't worry about where Pitt and CMU graduates go. The game should be how to lure the best and brightest outsiders to Pittsburgh. Harvesting local talent is a bad habit and a top-down approach to filling various skill gaps. At some point, as Japan and the European Union know all too well, you'll have to find help beyond the pale.

Geographic Mobility Assets

Working through the logistics to promote boomerang migration, the collapse of the real estate market is a big drag on relocation as a labor mobility strategy. The economic downturn in general is disrupting relocation patterns and New Jersey is reporting an abatement of brain drain. Short of people walking away from underwater mortgages and rejoining the ranks of renters, homeowners could exploit the Rust Belt as a way of "deleveraging":

This fall, about the time the house is done, just a few blocks away they will be finishing the streetscape project and opening The Capitol Theater, a historic, 1921-movie theater, which was renovated by the Detroit Shoreway CDO and will be managed by a local theater company.

My mortgage payment will be $355 per month (and the reason I share that is simply to demonstrate how far your money will go in Cleveland and I’d be lying if I said this didn’t factor pretty heavily into my decision).

There is a pretty active block club in my neighborhood and their slogan goes like this: “Every time you spend a dollar, you are casting a vote for the kind of world you want.”

The Detroit Shoreway community sounds like an ideal place for a diaspora relocation initiative. Active residents can help facilitate the boomerang migration. This will activate a network that will attract more scattered talent looking for such an opportunity.

Each city could have a diaspora neighborhood that caters to the needs and interests of this demographic. These would be hubs of geographic mobility and could dramatically improve local schools. This would entail a different kind of city planning, but one that would better integrate into the global economy.

Monday, September 07, 2009

Youngstown Brain Network

Since the beginning of last May, I've been working on a diaspora networking project for Youngstown. We're currently preparing to launch the second stage of the effort. I've been thinking about what kind of approaches are most effective and reviewed the number of initiatives I've blogged about here. I've learned that China used its diaspora better than India did. The GlobalScot model is still the best practice. One emerging effort I've been tracking is East Coast Connected:

About 70 per cent of the organization’s members live in Toronto, while 30 per cent live in the Atlantic region. A recent survey showed that membership in East Coast Connected is split evenly between men and women. The majority of its members are between 20 and 45 and are university or college educated.

East Coast Connected keeps its members engaged with Atlantic Canadian news, politics and culture, and provides networking opportunities for Atlantic Canadians living in Toronto. Atlantic businesses can promote their companies in Toronto and highlight job opportunities for people who want to move back home.

Since East Coast Connected burst onto the scene, I've noticed a growth in boomerang migration programs in the United States. However, there is little to no discussion about what works and what doesn't. Regions appear to be flying blind concerning this talent flow. Part of the problem is the obsession with brain drain and outdated approaches to workforce development.

After some discussion with the Youngstown Business Incubator and the Youngstown/Warren Regional Chamber, I think we are on the cusp of addressing this policy shortcoming. Youngstown's willingness to embrace new ideas provides a fertile environment for the rapid development of civic innovation. At this juncture, I would characterize the networking plans as building on East Coast Connected's success and leveraging the unique opportunities found in the Mahoning Valley.

Hopefully, more to come soon.