Fair Trade is vital to our nation's economic future.Trade can create new jobs in exporting industries, but trade can destroy jobs when imports replace the output of domestic firms. Because current trade policy has accelerated the trade deficit, eliminated manufacturing jobs, and stagnated wages, more jobs have been displaced by imports than created by exports. The United States has lost more than 3 million manufacturing jobs since 2000 – that's one in six good paying jobs.Trade deals like NAFTA, CAFTA and China PNTR were written and negotiated by multinational corporations and lack protections for workers, the environment, and food and product safety.
Monday, November 30, 2009
I've got a bunch of articles about brain drain and a Burgh Energy Report update. I'll get to those, and more, later this week. Today's the last day of my blog homage to Richard Herman's new book, "Immigrant, Inc." I'll remind you that the book launch party is next Monday. I wish I could be there. Also, Richard would appreciate your vote for his book (takes just 30 seconds to do).
During November, I think I've focused more on the globalization theme than international migration. For a variety of reasons, I've got globalization on the brain. Today is the 10th-year anniversary of the shutdown of the WTO Ministerial in Seattle. There are a lot of stories in the press commemorating the event and I had a hard time finding one that could serve as a good sounding board for my own reflections. I settled on this celebration of US Senator Sherrod Brown because both of us were there during the riots and both us are working to address brain drain concerns in Ohio:
Those are Brown's words. He was part of the union march against the WTO and he has seen how globalization can ravage a community. In 1999, I shared the same sentiments. I was about two years removed from a lobbyist internship with Amnesty International in Washington, DC. A friend of mine from my stint at the University of Vermont was a staffer for "Socialist Congressman" Bernie Sanders. You can get a sense of his pro-labor activism here. He made enough of an impression upon me that I tried to push Amnesty International to back the anti-globalization movement. Ironically, AI would eventually join the cause and I've come to think that the expansion of their mission was a mistake. That's another story for another time.
As a graduate trainee in the Globalization and Democratization program at the University of Colorado, I intended to go to Seattle to study international civil society. My impressions of economic globalization were beginning to moderate, but I was mainly interested in how citizens could engage in the debate about global policy. Globalization from below resonated with me and my experience in DC. I felt that people had a great deal of power to influence governments. The conversation about trade was too exclusive, all the way up to developing countries such as India. I understood how the United States was dictating the terms (see hegemonic stability theory or Washington Consensus). The political forum of the WTO struck me as grossly unfair.
Whatever romantic view I had of the anti-globalization movement, the Battle in Seattle dispelled them. I went over completely to the dark side. As I'm sure my more regular readers can tell, I'm pro-globalization.
Like Senator Brown, I'm from a community run over by globalization: Erie, PA. My father managed to stay employed as an engineer for General Electric until retirement (albeit a premature one), but we couldn't stay in our hometown. Erie is one of the many communities that globalization has left behind. But I'm not nostalgic for the way of life that was razed. I merely regret that most of the warriors equipped to benefit from globalization had left the Rust Belt.
That perspective was forged in Seattle. I looked at and analyzed all the documents various protest groups and NGOs had published. There wasn't any coherent narrative. Instead, the world views were highly polarized. The only thing these strange bedfellows (e.g. labor and environmentalists) had in common was an enemy: The World Trade Organization. Take away the object of all the anger and international civil society would quickly Balkanize. At least, that was the conclusion of my research.
Few people I interviewed had any idea how to define globalization or knew what the WTO was charged to do. There was a dramatic democratic deficit (something the India-based NGOs barked unheeded). The opaque bureaucracy fueled wild conspiracy theories. I started to think about the glaring need for global civics education and a better understanding of geopolitics and international political economy. That became my crusade once I returned to university and resumed teaching.
Ultimately, that proved to be unsatisfying. As much as I enjoy lecturing about globalization, my students didn't need my help. I started thinking about more disadvantaged populations such as those still trapped inside of the Rust Belt. I did get a chance to get in front of community college students and teach my unique take on world regional geography. I loved it.
Thus, I'm greatly encouraged by Richard Longworth, the blogger and the work of the Global Midwest Initiative. Through that lens, we might begin to better grapple with Fair Trade policy and how to best revive Ohio. Along those lines, I would suggest the model developed by a University of Michigan undergraduate exploring the brain drain problem in that state. The latest guest essay blew me away with its frank discussion of workforce development issues. (More about that tomorrow) I can easily ascertain the information and knowledge gaps while taking note of some innovative thinking that could attract more talent to Rust Belt communities.
In other words, the shortcomings of various policy options on the table are obvious and open to more people for debate. I'm hoping that Richard Longworth's baby is the kind of political space that was so obviously lacking during the Battle in Seattle. If we can learn anything from the riots, I hope it is the need for an inclusive forum concerning globalization which I consider to be the great debate of our time.
Sunday, November 29, 2009
New Jersey is debating the wisdom of financial incentives that keep the brightest high school student in the state. Our model for workforce development is broken. The investment in local talent is paying big dividends in Texas and Colorado, but not in New Jersey. There has to be a better way. There is:
Indo-US ties have for decades been driven by individuals and corporations, rather than governments. During the Cold War, India's governmental relations were warm with the USSR and cool with the US. But a million Indians migrated to the US while none went to the USSR. Indians galore went to US universities, enjoyed American books and music, and got jobs in US firms. They got on well with Americans, but had no such affinity with Russians. Thus, person-to-person relations strengthened Indo-US ties even when the two governments bickered. With the end of the Cold War, the relationship grew: The two governments caught up with the people. They still had strong differences (Pokharan II, the Iraq war) but found natural affinities too.Indian migration to the US was once castigated as a brain drain. More recently, it has been rechristened brain circulation, with many migrants returning to India. Economist Deena Khatkhate (see his book Money, Finance, Political Economy) was among the earliest to contest the brain drain thesis. He saw the exodus as a safety valve for educated Indians unable to find enough jobs in India's licence-permit raj. He also highlighted the way the Indian Diaspora catalysed changes in social, political and economic attitudes in India, paving the way for economic reform.It now seems that the Diaspora played an even bigger role: It changed US attitudes. The brain drain steadily increased the number of influential Indians in the US. Indo-US economic relations and the size and clout of the Diaspora grew fast together, most prominently in Silicon Valley.
The relationship between India and its Diaspora has been rocky. Those who emigrated to the United States were characterized as abandoning their country, their culture. The result is a large population caught between two nations, belonging to neither the place of birth nor the current place of residence. These people inhabit a liminal, global space; the New Argonauts at the frontier of globalization.
In this regard, India and New Jersey could be similar. Instead of luring native talent to state colleges and universities, spend that money on cultivating a global network. Better yet, subsidize the export of the best high school graduates to important centers of innovation. These ambassadors can remake New Jersey's image while connecting the state to new business opportunities. Those who go the furthest away from home will make the best entrepreneurs. They will always remember who gave them a leg up, providing New Jersey with an avenue to recoup its investment in human capital that was going to leave anyhow.
Friday, November 27, 2009
I'm still trying to get Blogger to unlock my Youngstown blog. While I navigate the bureaucracy, I'll post some of queue content here. Youngstown is my archetype for Rust Belt economic redevelopment. It has strong urban frontier assets, much like what you used to find in the Sun Belt. The Mahoning Valley still has substantial legacy costs, to be sure. But there is also ample space to realize just about any vision you might have.
I recognize that the Youngstown value proposition is still a vague concept. Perhaps the story of Vandergrift, PA can provide some clarity:
Imagine: It's 1895. A steel baron hires New York's Central Park designer Frederick Law Olmsted to build a town in western Pennsylvania where mill workers can live, work and play. By the turn of the century, Vandergrift's rounded buildings and roads flow along the contours of the Kiskiminetas River.Reality: Pretty much all that's left of that town is in the imagination.So 114 years later, Vandergrift residents — from baby boomers who grew up during the town's heyday to students as young as their grandchildren — are reviving Olmsted's vision and making the community environmentally sustainable for the 21st century and beyond.Their goal is to attract people to live or shop in the boutiques of the quaint town of just 5,000 people — which lost residents, jobs and allure along with steel.From bringing back green spaces paved-over for parking to seeking how to harness electrical energy for the town from the fast-flowing river, Vandergrift is investing millions toward environmentally sustainable revitalization — a concept gaining popularity in Rust Belt towns that have few viable options for renewal."This community is such a wonderful template for demonstrating (sustainability) not just for themselves, but, I think, way outside of Vandergrift," said University of Pittsburgh professor Lisa Mauck Weiland, looking over the skeletal wooden remains of what was once a JCPenney. The building is now the object of a "green" renovation with the input of students from Pitt and a local high school.
Vandergrift isn't a totally blank canvas (neither is Youngstown, by the way). There is an impressive foundation, great bones on which to build another wonderful city. The Rust Belt is full of such opportunities, but the local political climate isn't always conducive to embracing the radical makeover. Buffalo might be a good example of this drag on civic innovation. Then again, it might offer another example of the trend.
Ironically, what differentiates one Rust Belt opportunity from another is the thoroughness of economic devastation. The key part of the passage about Vandergrift is the sense of desperation. What else can the community do?
"This community is such a wonderful template for demonstrating (sustainability) not just for themselves, but, I think, way outside of Vandergrift," said University of Pittsburgh professor Lisa Mauck Weiland, looking over the skeletal wooden remains of what was once a JCPenney. The building is now the object of a "green" renovation with the input of students from Pitt and a local high school.While many communities are embracing sustainable revitalization, Vandergrift's strategy is all-encompassing: to create an energy independent, ecologically low-impact, economically viable town from the ashes of its postindustrial wasteland. It aims to renovate buildings with sustainable materials, from carpet textiles to solar roof panels. A farmers market has been expanded. Trees are being planted and green spaces recovered.Perhaps the most ambitious is the river energy project. With Weiland's guidance and a grant from the National Science Foundation, University of Pittsburgh students are seeking to exploit the hydrokinetic forces of the Kiski River to offset energy costs downtown, without building dams or coal-burning electrical facilities.
There is still something missing. What's the strategy for attracting newcomers? I think I've discovered a new policy muse.
A recent World Bank economic development report, "Reshaping Economic Geography" begins with the US Thanksgiving story. 35 million people get into cars or hop on planes in order to make the journey home. This annual boomerang migration is used as an indicator of economic prosperity. The dramatic brain drain is good for the nation. The World Bank then lays out some policy prescriptions that would allow developing countries to foster increasing geographic mobility within their borders.
Internationally, brain drain is also good ... for the entire world. The global economy grows faster with more talent migration. This pattern scales well, from the local on up. In the United Kingdom, we have one story and two headlines:
See if you can match the article passage quote with the headline:
For those leaving the country, Australia, Poland, Germany, Spain and France had been the most popular countries to head to in 2008, the ONS said.That year saw the highest number of people emigrate since 1991, the first year with comparable records.The ONS said there had been a large increase in the number of people emigrating for work-related reasons, particularly those with a fixed job to go to.
The number of non-Britons leaving the country has risen by 50% from 169,000 in 2007 to 255,000 last year.Home Office minister Phil Woolas said the figures showed immigrants were coming to the UK to work and then returning home.
I'll give you a hint. Which passage (and headline) sounds more nativist? I see the same slant in the States concerning brain drain. Highlighting the out-migration makes for the more sensational headline. The obsession of the people leaving often glosses over all the people who are coming. Massage the numbers to suit your preferred narrative. Submit your policy recommendation.
I'm guilty of the same deception. Akin to the World Bank, I take the perspective that brain drain offers an opportunity and that it should be encouraged. In the UK story, I see workers returning home to Poland, bringing back experience and a more global network. Polish prosperity is sure to follow.
Happy Boomerang Day!
Wednesday, November 25, 2009
Over the past year, I've had the opportunity to learn a little about the world of economic development. How professionals become practitioners is a post for another time. Today, I want to explore the social media frontier:
The survey results clearly indicate that social media is still a "new thing" for economic developers. While 57 percent of respondents use social media in their organization's communications efforts, most of this use has only begun in the past year. In fact, of those using social media, only 37 percent of respondents have used social media for longer than one year. As DCI President and Chief Creative Officer Andy Levine noted, "Economic development groups are just getting their feet wet with social media. We're in the very early days of this work." ...... The survey results suggest that social media is going to be a core part of future communication programs for economic developers, and this shift will require a new mindset. As Levine notes, "Social media requires a quick response, and moving quickly means some loss of control. Some economic developers are uncomfortable with this shift." He expects that social media will play an especially important role in crisis response. To date, no economic development group has faced a major public relations crisis akin to that facing corporations such as JetBlue's flight delays in winter 2007 or Wall Street's financial firms responding to criticisms of exorbitant pay packages. But, if an organization does face a major crisis, social media will have to be part of an effective crisis control effort.Finally, Levine expects to see a lot of innovations in the use of social media. For example, he envisions that communities could create "digital ambassadors" to discuss the benefits of living and working in a certain region or community. These ambassadors, people who have many Facebook followers or LinkedIn connections, would serve as a very credible advocate for local economic development efforts. He expects to see lots of experimentation and new approaches over the next several years.
I wouldn't characterize myself as an expert in either of the fields of economic development and social media. However, I do consider myself to be one of the pioneers at the intersection of the two trades with a bit more experience with the social media community:
Rust Belt BloggersThe meet and greet was Friday (7/11) at the BrewErie. It was a good icebreaker to hang out over fine craft beverages with Dale Hannah, Jim Russell, Chris Briem, Michael Mahler, Locobone and Justin. Saturday was the main event and in addition to the Friday night crew, we were joined by Phil Kidd, Janko and Hunter Morrison (Center for Urban and Regional Studies at Youngstown State University) from Youngstown and our Pittsburgh blogger in podcamp crime, Cindy. Most of the meeting was giving our introductions and a brief overview of who we are, our backgrounds and what we’re looking to accomplish. I was hoping that Erie would have had more of a presence since they played host but I also understand people were called away for the weekend. eh, it’s the first one, they have time to redeemThe surprise of the summit for me was the pitch thrown out by Youngstown. Yeah I know, you’re thinking “wtf, Youngstown? Isn’t that a haven for mobsters“. That was my thinking also until I talked to these guys. I was 100% sold that I need to get up there and check things out. The youth movement (40 and under) have taken over the city and it’s now a hot bed of untapped resources to make a viable force. Did I mention they’re opening a new brewery too Listening to how passionate they are about Y-town I was ready to go that day. Again, that is saying A LOT for me!Overall I think this was a great starting point for those of us in the Rust Belt to get moving forward (and… DRINK). The key item is that it doesn’t turn into another “yeah, we had this idea once” and then bask in the gloriousness of that weekend. It did show me that I have an interest in redevelopment, just a matter of finding out how to use my skills to be effective.
The Rust Belt Bloggers Summit was a humble yet inspiring experience. My interest shifted from Pittsburgh to Youngstown, the hotbed for social media informed economic development. Social media initiatives are a dime a dozen. In Youngstown, it made (is making) a big difference.
The Reuters Great Recession Tour is winding down with Youngstown being the second to last stop before terminating in Evansville, Indiana. The Youngstown Business Incubator gets its due, but the economic redevelopment narrative starts here:
For years the city spent time casting around for the next big company to come and save it, hoping that it could regain its former glory.But new leaders like Mayor Williams have decided on a new way forward, with a strategy called Plan 2010.“We have accepted that this is a smaller city and have embraced that,” said James Cossler, CEO of the Youngstown Business Incubator, which has focused on bringing in business-to-business software companies and currently has 28 firms in its portfolio.Crossley said that the incubator has already encouraged many younger former residents, who have been leaving for decades to look for work, to come home again.The new plan also involves painful decisions for a city that has some 4,500 vacant homes and neighborhoods that have been coming apart at the seams for years. With limited resources to cover fewer residents, the city’s leadership and other have come to the conclusion that some neighborhoods simply don’t have enough people left to remain viable.“We are aiming to focus on the neighborhoods that can be saved,” said Phil Kidd, a community organizer at the nonprofit group Mahoning Valley Organizing Collaborative. “But we have to accept the fact that we are going to have to wind down some neighborhoods gracefully.”The MVOC is trying to organize residents to form into groups and drive much of the change themselves because the city cannot afford to do everything itself.“We’re all in this together, so we’re going to have fix our problems together,” Kidd said.
I highlighted the part of the passage where I come in ("Cossler" not "Crossley"). But the focus should be on Phil Kidd and the Defend Youngstown crew. While I'm late to the party, I know a good thing when I see it.
There is a great deal of interest in channeling the social media revolution towards productive ends. If you want to see what that future looks like, then go to Youngstown and look up Phil Kidd. There are other people who should be celebrated, but Phil is the face of the movement. Not to take anything away from Cossler, Mayor Jay Williams, and Congressman Tim Ryan; Phil is the spoon that stirs the cauldron of innovation that is the Mahoning Valley.
Youngstown is the most exciting place I've visited this side of Berlin. I believe in what they are doing there. Time for the American Planning Association to figure out what is going on in the Yo.
Saturday, November 21, 2009
Chris Briem (Null Space) sees an evolution of the Pittsburgh global brand in a Christian Science Monitor article. Again, Pittsburgh is shown in a positive light and the preferred myth celebrated in during the G-20 hype has taken root. Reinvented Pittsburgh is now a cliché. Solely my own speculation, but the groundwork is in place for substantially more in-migration. I still think there is a talent rush in the pipeline.
Actually, something else in the CSM piece about the urban archetypes of the "new economy" piqued my interest:
Demographics will drive change, too. Cities that have expensive housing may find themselves at a disadvantage in attracting young people. “We’re going to be facing what I call the third civil war – it’s going to be a war between cities and metro areas over where young people will settle, because we’re going to have to fill a lot of jobs,” says Barry Bluestone, an economist at Northeastern University in Boston.Many of these young workers will be going to places where they sense a think-outside-the-box culture. “It’s hard to be a dynamic economy if you’re a culture that does not tolerate risk,” says Susannah Malarkey, who heads a trade group, the Technology Alliance, in Seattle.
First thing you should notice is that there is no mention of retaining young people. Cities that spend any bandwidth on plugging the brain drain will be on the losing side of the war for talent. It's a futile effort with very little (if any) upside.
The second point is the looming talent shortage. Everyone sees it coming, but the suggested coping strategies come up woefully short. I've yet to see any outside-the-box thinking when it concerning talent attraction. The usual suspects are recycling the same tired material and cities continue to eat it up.
Lastly, moving far away to an unfamiliar place is part of the risk culture. This talent will be the greatest prize, not the graduates who stay close to home. A relatively inert population will not be able to compete in the new economy. Attract brains or fail.
Friday, November 20, 2009
And you thought the brain drain was bad in Michigan:
Investing in our universities is investing in our future.The development of more Tier One universities in Texas will give our brightest high school graduates more top-level choices for college educations in their home state, easing a brain drain of Texas young people to prestigious schools elsewhere.
If low taxes, small government and robust job creation won't keep talent from leaving, then what will? I recommend an internship program. That should plug the brain drain.
Concerning brain drain from OECD countries, New Zealand stands head and shoulders above the rest. The primary destination is Australia, where Kiwis can earn a greater return on their education. The home country is getting serious about luring these expatriates back:
Last night, the economic think tank the Centre for Independent Studies (CIS) held a forum in Sydney called ''Flight of the Kiwi to Australia'' to discuss ways of reversing the trans-Tasman brain drain. The former Fairfax chief executive and All Black captain David Kirk, CIS policy analyst Luke Malpass, business broadcaster Andrew Patterson, and Dr Don Turkington from the New Zealand Government's regulatory responsibility taskforce, canvassed issues such as wage disparity, tax structures, streamlining Anzac business, career prospects and social and cultural changes.
The CIS exploits the wounded pride, laying the talent exodus at the feet of lousy economic policy. People wouldn't leave if the homeland prospects were relatively brighter. Tapping brain drain anxiety for political gain is a classic ruse. For another example, see the Empire State Exodus report.
Plugging the brain drain is a snipe hunt. However, catalyzing boomerang migration could work. Trying to attract talent is an even better idea. Some policy innovation from Detroit:
Monika Johnson is 20 and the Midwest Coordinator for the Roosevelt Institute. It's a student-run policy organization that put together a two-day event called Midwest Version 2.0. ...... "Detroit has so many great opportunities and potential for change," Johnson said. "In fifty years, this could be a great city. It could rival Chicago. I would consider staying in Michigan if I had an opportunity to participate in Detroit's revitalization."
Detroit is New Zealand and Chicago is Australia. The money is in Chicago, but Detroit offers a unique opportunity. Detroit shouldn't try to catch up with Chicago. Instead, offer a viable alternative experience. Call home all Rust Belt refugees to rebuild the region, starting with Detroit. Ironically, the CIS sets the stage with the following snarky comment:
Maybe New Zealand suffers from the supposed generation Y complex—we want it all, we want it now, and we want it at no cost.
That describes the frontier mentality. The urban pioneer lifestyle appeals to this demographic. Chasing Chicago is foolish. That ship has sailed. But Chicago can't be all things to all people, either.
Thursday, November 19, 2009
I'm locked out of my other blog while Blogger assesses whether or not I'm a spambot. I've become accustomed to posting twice-a-day and I have the itch to write. I'll circle back to Pittsburgh and how its coping with the Great Recession:
To form our list, we ranked the 100 largest Metropolitan Statistical Areas--geographic entities that the U.S. Office of Management and Budget defines and uses in collecting statistics--in five categories: unemployment rate, GMP (a measure of the size of a city's economy), foreclosures, home prices and sales rates.We ranked September unemployment rates (the most recent available by metro) using data from the Bureau of Labor Statistics; the percentage of a metro's homes in foreclosure with September data provided by RealtyTrac; and the change in GMP between the first and second quarter of 2009 from the Brookings Institution's MetroMonitor. We also included the second-quarter 2009 year-over-year change in Freddie Mac's ( FRE - news - people ) Conventional Mortgage Home Price Index--a measure of housing price inflation--and the average days on the market for properties currently on sale (to measure sales rates), using data from Zillow.com. We then averaged the scores for each measure to arrive at an overall ranking.While there is no foolproof method for resisting recession, a common thread in thriving cities is an economy fed by multiple industries. Former Northeastern industrial hubs like Pittsburgh, and Rochester, N.Y., while they may not seem the likeliest models of economic health, have been able to supplement industrial sector decline with a boost from public-sector jobs that have pumped up the economy even as the private sector declined. They land in the fourth and seventh spot on our list, respectively.
The emerging theme is one of resilience, as opposed to the latest boomtown infatuation. Sustainable Pittsburgh is a great place to raise a family. Don't worry about bubbles popping or the other shoe dropping. What you see is what you get.
The humility grabbing a hold of the United States would seem to suit Pittsburgh, the economic tortoise outlasting the hare in Charlotte. Stranger for me is the pattern of recovery. The region of my youth (Appalachian Rust Belt) is, relatively speaking, thriving. This is the non-Midwestern part of America's manufacturing heartland.
Keep that in mind while reading Richard Longworth's challenge concerning Midwest studies:
I know that, all across the Midwest, good people are worrying about the same issues. They need help in thinking about these issues and where they fit into the Midwestern reality. If Midwesterners who are paid to think don't do this thinking, then it won't get done.
How might we rethink geographic regions in terms of globalization? Regions are dynamic, not static. Throw out the boundaries that no longer serve a purpose. Economic backwaters are easily defined. The Midwest has defied definition because of the heterogeneity. The migration from the rural South to the industrial North transformed both landscapes.
Regional studies is more anthropology than sociology. We're obsessing artifacts of a great civilization in decline. That's the definition of "Southern studies". Midwestern studies is yesterday's news.
Migration can be both a lagging and leading economic indicator. A lagging example is the continued arrival of newcomers to recession ravaged cities such as Charlotte (NC) and Portland (OR). International migration tends to be more sensitive to shifting fortunes with the most geographically mobile riding the bow wave:
USAToday reports that more Americans are seeking work abroad than in the past. Although “the trend reverses a longtime pattern of far more foreign workers seeking jobs in the U.S.” sounds like an overstatement, there are signs that Americans are more willing to consider working abroad. The country’s largest staffing company, Manpower, says it has 500 clients seeking overseas work, compared a few dozen six months ago. And a recent survey of executives in the U.S. revealed that 54 percent would be likely to take a job in another country, compared to 37 percent in 2005. The top prospects? India, China, Brazil, Dubai, and Singapore.
That trend stood out to me as indicative of a globalization reset, but the entire Brookings narrative seems to be pushing the same conclusion. I doubt the abatement of the usual immigration patterns will last. I expect the expatriate community to continue to grow.
The best talent will be attracted to the core of globalization, which is shifting from the United States to the countries listed above. Concern about brain drain from America would be novel. This might further exacerbate the populist mood swing and result in a larger drag on what is sure to be slow growth. The impressive domestic geographic mobility will be increasingly global.
Wednesday, November 18, 2009
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.
Tuesday, November 17, 2009
Regions invest considerable resources into human capital. That communities do little to nothing to reap some returns from talent that moves somewhere else is bizarre. On an international scale (hat tip Richard Herman), the opposite is true:
More than ever, diasporas — the "scattered seeds" most governments previously ignored and in some cases even maligned — are increasingly seen as agents of development.Aware of this potential, some developing countries have established institutions to more systematically facilitate ties with their diasporas, defined here as emigrants and their descendants who have maintained strong sentimental and material links with their countries of origin.
Perhaps American sub-national governments are just behind the curve. That's still no excuse for ignoring best practices. Developing countries have already assumed most of the risk associated with a novel initiative. We needn't remake the wheel.
For communities heavily dependent upon eds and meds (such as Pittsburgh), a rethinking of out-migration is critical. Talent churn will only increase. The lack of policy innovation on this front is glaring, particularly for shrinking cities. A tuition tax? That's myopic. Pittsburgh can and should do better.
Monday, November 16, 2009
I'm breaking with my November theme because I couldn't sit on this until December:
Rick Desrochers is leaving. And he's not coming back.He and his wife are moving in with her parents in Michigan after the couple lost their jobs, their Hunter's Creek home to foreclosure, and everything else to bankruptcy. The trauma of going broke in the Sunshine State has convinced them that when the good times return to Orlando, they won't."I've talked to a lot of people who say they aren't coming back," said Desrochers, 39, who moved to Orlando nine years ago from Hilton Head, S.C.Later this month, Rick and Connie Desrochers will join a migration out of Florida that began before the housing market collapsed and the recession kicked in. In 2009, more than 500,000 people like them will leave. And for the first time since World War II, Florida's population will actually shrink -- by about 60,000 residents, state demographers estimate.
Florida (a tax darling state for libertarians) is shrinking. The situation is so dire that some are moving to Michigan. Actually, the article isn't all doom and gloom. Experts predict that the trend will soon reverse itself.
I'm not so sure. Reading what the optimists are claiming, the state seems ready to repeat many of the mistakes made in the Rust Belt. A better quality of life in Florida, compared to Michigan, isn't a given. Prepare yourself for the return of the carpetbagger.
Sunday, November 15, 2009
Late Friday afternoon, I was on the phone with fellow "Youngstown" blogger Janko. He points me towards a lot of useful content and one of his suggestions during our conversation was a Charlie Rose interview with Lee Kuan Yew. The former Prime Minister of Singapore comes across as one of the foremost experts on the subject of globalization. Among other things, Yew spoke about China's boomerang migration initiative. You can read more about this talent search in a Newsweek article:
For nearly 15 years, china has been trying to engineer a "brain gain" by luring top scientific and technical talent home from the United States, and it's working. One major success story is the National Institute for Biological Sciences, created in 2003 with several advantages. Freed from the fundraising pressures of the U.S.—and from the often mindless red tape of traditional state-run Chinese institutions—researchers there say their lab environment, financed by the Chinese government, trumps what they could expect in America. They know from experience, since all 23 were educated in the U.S. In 2005 Dr. Feng Shao, 37, left Harvard Medical School to return to China after receiving a more generous deal from NIBS, where he now studies bacterial pathogens in a top-class lab, with a $300,000 annual budget. He says that in the U.S., "I might have a lab with just a few students and technicians. Here I have 16 or 17." The bottom line, says Shao, is that while his team has published six scientific papers since 2005, "elsewhere I might have done just two."
If you believe Yew, the jury is still out on whether or not China is successful in its call for brains to return home. In fact, Yew is skeptical that it will work at all. He does offer a few recommendations, but the prognosis is that this program is insufficient and unsustainable. China, like Japan, must eventually turn to immigration if it wants to compete globally in terms of GDP per capita.
Concerning the United States, Yew contends that this country's primary advantage is its ability to attract the world's most "adventurous minds". Richard Herman recently sent to me a link to an article that should be cause for considerable concern in light of Yew's analysis:
America’s best friend and oldest trading partner—that’s Canada. Happy member of the world’s largest free trading zone? Sure. But when it comes to the global competition for talent, well, friendship only goes so far. When immigration managers at Canada’s consulate in Los Angeles were asked last year to provide a snapshot of the immigration situation in their region, their tone sounded downright predatory. “Significant numbers of high quality economic class immigrants are being gleaned from this territory,” they wrote in a report obtained by Maclean’s. Most of the workers have been educated at U.S. universities, the document went on, obtaining degrees in valued ﬁelds like biomedical research or software engineering. With such talent in short supply in Canada, the pencil pushers in L.A. boasted, “this office regularly engages in promotion and recruitment efforts to exploit this talent.”
In terms of domestic migration, this should shed some light on how to best address brain drain. Attempts to keep people from leaving are useless. Boomerang initiatives are better, but don't provide a substitution for attracting outsiders. Few are looking at the benefits from the intentional export of talent, but I doubt the economic development community is ready to entertain that prospect. I still think that's the policy leap shrinking cities (such as Pittsburgh) should make.
As Yew might say, the Rust Belt is failing to surf the geopolitical waves and make itself useful to the world. How might we change that? Look at what Canada is doing.
Saturday, November 14, 2009
I have more than a passing interest in critical media theory. Of course, I take the geographic perspective and think mostly about the boundaries of community. So, this map of contemporary public spheres stood out in the historical review of media technologies:
Click on the image for a larger version.
The lecture makes an important point. There is no easy answer to the current woes. I don't intend my critique (forthcoming) to be a "silver bullet". We're in the midst of a major technological transition and the future couldn't be more opaque. I respect the analysis. I don't know which business model might work.
That said, more geographers should join the conversation. The nested scales (local, national, global, etc ...) misrepresents the publics in play. In other words, the map is inaccurate.
The issued-based public might capture the diaspora communities I study. It doesn't address how the boundaries of local, national and even global are changing. The location variable is a given. Static. Frozen in time. Thus, the suggestion to "get your local community to fund local reporting" is troublesome.
How we consume local, national or global media is more akin to an issue-based public than it is defined by some contiguous territory. The political geographic legacy is still important (e.g. local spins on globalization) but there is little recognition of emerging geographies.
I'm sensitive to the displacement going on given the object of my blogging affection: Pittsburgh. I wasn't born there and I currently live in Colorado. How many Rust Belt bloggers don't live in the Rust Belt? There are communities slipping in between the media cracks. Our sense of geography hasn't caught up with our media technologies.
The building of a national community took many innovations that would allow a people to imagine themselves as sharing the same fate as a bunch of other people living far away, folks they would never meet. In a sense, this explains the troubles in Detroit. The geography of Greater Detroit doesn't exist. Yet local newspapers pretend that it does. More apropos is a world city understanding. One central business district looks like all the others. There are wealthy, cosmopolitan neighborhoods; and poor, isolated ones. We haven't even begun to think about how we might weave these disconnected places together.
Instead, we suggest the local is trending towards the hyperlocal or that the middle (national) scale between local and global is disappearing. Whatever your poison, most media innovation involves greater ties between information and place. The premium is on knowledge and utility.
I like to think of knowledge as information plus social capital (trust). It's the difference between a jobs listing aggregator and how to get the job posted that you want. The network has value, but the information is free. However, people won't value networks they don't trust.
Using today's social media for yesterday's geography is a blind alley. What new geographies are possible thanks to these innovations? The current line of inquiry seems to me to be way off the mark.
Friday, November 13, 2009
Thursday, November 12, 2009
Via Rust Wire, I see that Richard Longworth is now blogging. If Longworth's name doesn't ring a bell, it should. I highly recommend two of his books on the subject of globalization. I haven't read "Global Chicago", but not out of indifference. (However, no excuse for not reading the report of the same name) Longworth helps his readers to understand globalization and how it impacts lives, particularly in the Midwest. I gather he will continue to bring this dynamic economic landscape to light. More importantly, Longworth aims to facilitate a dialog about the common problems we face:
But even this cooperation goes on in silos. Community colleges from around the Midwest have met here at the Chicago Council. Farm extension directors from the land grant colleges are meeting and thinking. The Midwest Governors Association, a notoriously drowsy outfit, has stirred itself recently to strike deals on the energy economy and high-speed rail. But nobody is putting this all together in ways that could generate an economic revival that will recharge the region.For starters, we need to talk to each other. Midwestern newspapers, under huge economic pressures of their own, have become too small and too local to do this job. In their places, bloggers are seizing the new technology to set up virtual roundtables. There are rust belt blogs and rural blogs and urban blogs -- all manner of blogs, many of them listed on this site. I hope that they will see this addition to their ranks as a place where all these issues can be hashed out.
I've had a change of heart about the lack of communication. Parochial barriers still exist, but there are conversations crossing borders. At the grassroots level, bloggers are well aware of each other. The prolific ideation doesn't affect much change. There is a disconnect between the concerns raised in blogs and the articulation of economic policy. The intersection of vanguard and establishment is a rare occurrence.
In essence, there are two parallel initiatives dealing with the forces of globalization in the Midwest. How do we mashup? Perhaps that is what Longworth hopes to accomplish with his blog. I see an opportunity for the social media community to enter into the policy discussion. Bloggers are a frustrated lot. We need to re-imagine the civic sphere, which is a much tougher task than breaking down the silos.
Wednesday, November 11, 2009
The Financial Times extends the theme:
Mr Vaswani said Wipro was finding that it could increase its utilisation rate – the proportion of staff busy on projects against those sitting idle waiting for new contracts – by better managing its global workforce. In the Egyptian case, the company had to provide a software package service to a client in India but found it did not have the resources available locally. So it flipped the job over to a few hundred Egyptian employees who were at that point under-utilised.“Even if I had a high-cost resource sitting on the bench in the US, I might as well use him for executing the project in India rather than hiring someone in India because then I’d be paying for two people,” Mr Vaswani said, though he conceded this was an “extreme” example.
It doesn't get more Flat World than that. Time is running out on Richard Florida's Creative Class and Spiky World.
Tuesday, November 10, 2009
Instead of the breakdown of the global supply chain, what if we are witnessing the death of manufacturing? The supposed rise of localization might be missing the big picture. Enter the global innovation chain:
Research and development is increasingly going global, according to a new report by Duke's Offshoring Research Network [ORN]. More than half of U.S. companies now have corporatewide initiatives to outsource innovation activities, up from 22% in 2005, according to the ORN, which has been tracking the growth of outsourcing since 2004. And of those companies already offshoring development, 60% intend to do so more aggressively.
This helps me to see globalization in a different light and brings me back to thinking about distance-trust technologies. Sharing knowledge across international borders is difficult and various forces encourage the clustering of talent in dense city centers, where face-to-face interaction and serendipity can thrive. But there is a lot of money invested in the development of virtual global networks that can generate great value via knowledge production.
It could be the brave new world for journalism and new media. Conventional forms (e.g. newspapers) essentially serve a manufacturing economy, which is dying. The emerging knowledge economy would seem to be a good match for diaspora communities. The recent Global Irish Economic Forum strikes me as a good map of this shift in thinking.
It's a Flat World, after all.
Monday, November 09, 2009
I'm a planning and zoning commissioner for the City of Longmont. I like to think I bring a global perspective to local economic development issues. I try to imagine how the commission's deliberations will interface with the forces of globalization. Defining a parochial geography of globalization is harder than I imagined. Luckily, I don't have to all the heavy lifting in isolation:
The book deals largely with Spartanburg as a center of foreign investment, examining why Spartanburg had such a large growth in investment, particularly from European countries, during the period mentioned in the title. What interested me most though, was that in the process of describing how this investment came to Spartanburg, Maunula goes a long way in explaining why those businesses were attracted here in the first place, albeit with a cool sense of academic detachment.The biggest reason, as Maunula points out in numerous places throughout the book is that “Spartanburg’s workers were relatively skilled, not prone to unionization, and inexpensive.”That fact, coupled with an aggressive sales campaign and a business community organized around the idea of paternalistic control over “their” workers as well as the business environment at large, seems to be what drove the supposed Spartanburg economic juggernaut that so many Reganites and economic libertarians wrote about back in the 80’s.
The review goes on to explain how the Spartanburg Chamber of Commerce paved the way for globalization in the South Carolina Piedmont. I would model it as the reduction of legacy costs through authoritarian rule. Singapore in the Appalachian foothills springs to mind.
Coticchia said his greatest assets are love for the job and tolerance for long, focused workdays."Nobody was going to outwork me," said Coticchia, who attributes the ethic to his Pittsburgh upbringing.He also values collaboration, in himself and his staff.Coticchia said he learned the value of collaboration in Pittsburgh, where the city's development efforts have received a spate of good publicity in recent years.In the 1990s, those who funded the city's economic development groups squeezed out leaders "who didn't play well together," Coticchia said.
The Pittsburgh ethos is creeping into Cleveland and we might see the squeezing out of power brokers there who refuse to get with the program. The effect is a slew of greenfield opportunities in cities dominated by brownfields. Globalization tends to punish significant political infighting. (See Richard Longworth's "Caught in the Middle".) One response is to strong-arm legacy costs such as labor unions or entrenched politicians with their little fiefdoms.
Saturday, November 07, 2009
Thus far, the biggest event of my adult life is the fall of the Berlin Wall. The 9/11 attacks are more memorable, but my entire childhood was in the Cold War era. The "War on Terror" highlights my sense of geopolitical uncertainty after the Soviet Union bogeyman died. I'm still stunned how quickly and completely my world changed.
As a result, I can't get enough of the stories celebrating the 20th anniversary for the reunification of Germany. I've read plenty of blog-worthy articles, but the New York Times looks at the boomerang migration from West Germany to East Germany and seems to be a perfect fit for the themes I explore:
In 1997, when Mr. Siebler was 25, the outlook for engineers in the former East Germany was so bleak that people like him were leaving in droves, creating a huge brain drain from East to West. But in a sign of just how much has changed over the past decade, Mr. Siebler, like a growing number of other Germans from the region, is back.
The exodus and return reminds of the Rust Belt. The best talent would thrive elsewhere, but better opportunities would eventually emerge in the homeland. The transformation might best be characterized by a small city on the Polish border:
In recent years, behind the dingy buildings and unemployment lines, Frankfurt (Oder) has become a magnet for high-tech, high-skilled manufacturing and research. First Solar, a Phoenix-based photovoltaic-module maker, opened a 500-person plant there in 2007 to take advantage of Germany’s burgeoning clean-energy market and eastern Germany’s reputation for inexpensive, high-skilled labor. They haven’t been disappointed: originally designed to produce 100 megawatts of capacity a year, the plant and its workers are so efficient that, three years later, they are producing nearly twice that amount with the same equipment.It’s a story repeated by foreign investors across the region. “Eastern Germany combines the best advantages of western Germany and Eastern Europe,” says David Wortmann, vice president for policy and communications at First Solar. “You have a very flexible and talented workforce, like in Eastern Europe, but on the other hand you have a superb infrastructure.” ...... That said, eastern Germany’s skeptics and boosters alike see a similar future, one in which a few metropolitan areas—Berlin, Dresden, Frankfurt (Oder), Leipzig-Halle—reach parity with the West, while vast rural stretches continue to depopulate. That’s not the ideal envisioned by Chancellor Helmut Kohl and the Bonn government in the early 1990s, but maybe that’s not such a problem. “If people wish to move to West Germany, let them,” says Uhlig. “East Germany may become a nature paradise with a few vibrant cities, and I do not see why that would be a bad outcome.”
That might apply just as well to the industrial Midwest. In fact, Youngstown (Ohio) reminds me of Frankfurt (Oder). Youngstown isn't in the middle of nowhere like Frankfurt (Oder), but both small cities are dominated by bigger ones nearby and when I was studying and teaching in Frankfurt (Oder), I could see the possibilities. If I wanted to make my mark on the world, then it would be in a city like this.
Uhlig articulates the main point I want to stress in this post. Let them go. Embrace the shrinking population. Then rebuild a more vibrant economy. But the first step is getting beyond the anxiety about brain drain.
Friday, November 06, 2009
The theme of Richard Herman's new book is that international migration is under-appreciated as a tool for regional economic development. We can learn much from the immigrant experience. I contend that international brain drain policy serves up important lessons for domestic talent concerns. Consider one of the suggested agenda items for the upcoming APEC Summit, labor mobility:
A [report] commissioned by ABAC and carried out by the University of Southern California's Marshall School of Business also urges APEC leaders to create what it calls a "labor mobility task force" to address temporary worker movement."A rationalized policy framework for the movement of people to include all levels of highly skilled, skilled and lower skilled, will give APEC economies benefits of economic development, and do so in an inclusive way," says the report, titled Facilitating Labor Mobility within APEC: Opportunities and Challenges.It warns, "Much is lost if protectionist tendencies prevail and the topic of international labor mobility continues to be neglected."The report says that while the issue may be "uncomfortable" to address in times of recession when economies are haunted by fear of job losses, the lowering of local wages and unwelcome burdens on social services, "real shortages of skilled and lower-skilled workers exist in many APEC economies, even during this recessionary period.""And these labor shortages and imbalances of skills and jobs are predicted to become increasingly critical because of the changing demographics of aging populations. This gives business real concern as access to workers is directly correlated with business and competitiveness and growth," it says.Since few economies are capable of addressing these imbalances internally, or with immigration, external sources of labor are needed.The study voices concern over current temporary worker policies, saying they "have tended to focus on controlling and limiting worker movement rather than facilitating it.""The important circular dimension of temporary worker flows has not been well addressed; often resulting in problems of overstaying workers becoming a drain on resources of receiving economies, and a brain drain for sending economies," it says."Collective courage and political will is needed to create an effective policy framework that addresses these concerns, and produce inclusive growth."The study cites statistics that project labor shortages throughout the world to increase to staggering proportions.The United States is estimated to require an additional 35 million workers by 2030, as more than 75 million baby boomers will retire by 2012 and by 2020 fertility rates will drop below replacement levels.
I emphasized what I think is the key passage. Restricting talent migration is counterproductive. Given the projected labor shortages, coming to grips with this reality has never been more important. Policies designed to limit geographic mobility undermine economic development. Approaches to deal with brain drain in states such as Michigan ignore all the research on the subject, favoring only homegrown solutions.
I suggest that Rust Belt communities embrace brain circulation models. In Eastern Europe, the trend is taking hold. Talent is returning home where better opportunities exist. Economic growth trajectories are now greater in the Rust Belt, particularly in cities such as Youngstown, OH. I can already see the legacy cost bubbles expanding in Texas cities. I see Rust Belt states as analogous to countries such as Poland. Perennial brain drain losers are now calling out to their expatriates. At least, they are in Eastern Europe.