Monday, February 22, 2010

Oregon Talent Exodus

Concerning Oregon's murky future, economic development experts are engaging in a battle of paradigms. The first salvo was fired by Jack Roberts. He draws a distinction between advocates and detractors of Michael Porter's cluster theory. I'm not sure that is the heart of the controversy. More fundamental is the chicken-or-egg problem. Which comes first, talent or business?

The two are not mutually exclusive and I don't intend to reinforce a false dichotomy. In his defense, Joe Cortright makes that point. In fact, Cortright makes ten of them. Two that resonate with my blog:

4. Utterly missing from Jack and Tim's prescription for improving Oregon's economy is raising levels of educational attainment. There are two things you have to do: (1) better educate Oregon's children, at all levels, but especially by improving post-secondary education, and (2) retaining these smart kids and attracting others. There is no one who is more mobile in our society that a 24-year-old with a bachelors degree. If we do not have a place that offers a quality of life that is attractive to them, they will move elsewhere: That is precisely the problem that many large, declining metro areas in the East and Midwest face. It is also why, despite our niggardly investment in higher ed, that Portland has managed to improve its educational attainment. Want to be friendly to business and have higher incomes? Improve the education level of your population. ...

... 9. Jack doesn't believe that I would ever ask what makes Oregon (or any place) attractive to large firms. In fact, that's a central part of my business: understanding what drives business growth and location decisions. I work with firms and economic development groups and site locators around the country. The number one answer to that question, according to all of them is: Does a community have a ready supply of talented – especially young – workers, and is it a place to which it would be relatively easy to attract more? If Jack doesn't understand that, he probably shouldn't be doing economic development work. A key part of Eugene-Springfield's problem is that while it educates lots of young adults, it does a relatively poor job of hanging on to the best and brightest after they graduate.

Ignoring the inflammatory rhetoric, the talent available matters. But Cortright has his workforce development equation backwards. Attraction, not retention, is the problem. An article about Google's makeover of Mountain View reviews the tradition:

Historically, company towns have grown up around organizations with large manufacturing operations that can support thousands of local workers. To attract top executives to often less-than-ideal locales, the companies donated large sums to cultural institutions.

“The main reason Ford put money into the Detroit Symphony Orchestra is to make it plausible to recruit executives to Detroit,” Professor Davis said. “It was a human-resources move as much as it was philanthropic.”

But the technology companies that grew amid the striking scenery and balmy weather of the Bay Area have not felt the same imperative. As they grew, they turned inward, putting their resources into employee perks like stock options and free lunches.

Funding the symphony orchestra wasn't about enticing executive talent to stay. As for retaining brains, Silicon Valley is far from a model community. If Cortright doesn't understand this, then he shouldn't anoint himself a "talent attraction expert". His remarks about retention suggest that he doesn't understand migration. His recommendations for Akron were ill conceived.

Want to improve the education level of your population? Attract more brains like Colorado has. Struggling to attract talent like Ann Arbor, Michigan? Improving the quality of life won't help. Neither will Joe Cortright.


The Urbanophile said...


Are you unhappy with Cortight because he talks about retention, or because he says livability is the X factor for talent? Or is it something else?

I'm curious to know your take on Ann Arbor.

Jim Russell said...

I think livability clearly matters in terms of talent attraction. But many of our talent magnets have relatively high out-migration rates. Let's see the numbers positively correlating livability and talent retention. I'm tired of the unsubstantiated fanfare. Cortright doesn't have a better brain drain plug. I'm sure of that. I'm increasingly convinced he's a charlatan like the other consultants who offer initiatives to keep college graduates in a region.

The Ann Arbor story:

And despite Ann Arbor's educated work force, employers here find Michigan's reputation as a failing manufacturing economy can deter potential hires from moving to the state.

At HandyLab, an Ann Arbor firm that makes a DNA-analysis device, Chief Executive Jeffrey Williams says he has had a hard time finding Ph.D.-level workers with highly specialized skills. His company, which has doubled to roughly 60 employees in the past year, has 10 job openings.

"It's definitely gotten much harder with all the stigma around Detroit," he says. "Somebody tries to pigeonhole us as Detroit, we say, 'No, it's Ann Arbor, it's a completely different environment.' "

The Urbanophile said...

What is Ann Arbor's problem? Reputation of Michigan?

I think livability and talent is like tax rates and business. There's something to it, but it is only one piece of the puzzle.

Cortright did all the work behind the CEO's for Cities various "dividends". The thing I like about their approach is the focus on education. Rather than trying to simply poach talent from elsewhere - a zero sum game - to benefit America nationally we need to raise overall educational attainment.

Jim Russell said...

Reputation of Detroit, Michigan and the Rust Belt in general. The connection between perception and migration is well established.

Of course livability is only one piece of the puzzle. There are no silver bullets. But there are dominant orientations of economic development approaches.

Raising educational attainment is a laudable goal. I don't dispute the Talent Dividend. Also, I appreciate the suggested investment in local human capital. But the promise of better retention rates is disingenuous.

There's great value in what Cortright is evangelizing. But his migration picture is inaccurate and misleading. That's a poor foundation for good policy.