Wednesday, February 24, 2010

TechBelt Advantage

Albeit vague, some movement on the TechBelt front can be found here. I expect we'll hear something more substantial in the near future. In terms of deliverables, what can the initiative offer?

A blog post from Richard Florida about the benefits of high-speed rail could be applied to the TechBelt. Florida links to a white paper from his Martin Prosperity Institute concerning HSR service for Ottawa. Three advantages:

First, it expands the labour pool available to employers, bringing talented workers from nearby centres within commuting distance and thus expanding the quantity and quality of available employees. So, for example, high-speed rail would enable a company in Toronto looking for a mobile user-interface designer to draw on talent living in Kitchener-Waterloo, London, and Kingston. In economic terms, an effective transportation system improves productivity because it helps allocate labour inputs more effectively.

Second, high-speed rail expands the size of the job market available to workers. Because it increases the distance that commuters can travel for work, it allows them to seek employment across what were once multiple, separate labour markets. This is particularly important in an era when self-employment, contract-oriented work, and part-time work are all risingi , meaning that workers are searching for jobs more frequently than ever. Eliminating the need to move to a new home to follow economic opportunity saves significant financial and social costs.

Third, faster connections extend the benefits of other expensive, productivity-enhancing infrastructure across the entire mega-region. International airports, major research universities and reference libraries are all more financially viable and internationally competitive when they serve a larger population. High-speed rail allows them to build the scale they need to achieve world-class excellence and also spreads their high costs across a wider population.

From the standpoint of diaspora economic geography, the first two highlight the strategic position of Youngstown. The Mahoning Valley is the talent hub for the TechBelt. A residence there can effectively access both the Cleveland and Pittsburgh labor markets. The returning expatriate might have a job in one city with the trailing spouse employed in the other.

The third benefit speaks to attracting business. Youngstown's talent shed is huge. It includes not only Greater Pittsburgh and Cleveland, but also Columbus (many Mahoning Valley expats live there) and even Erie.

All of the above is already practically available, no additional infrastructure is needed. Just the same, I'd welcome better transport links between the three major TechBelt airports. The idea is to diversify the offerings, meaning the region can leverage the comparative advantage of each member city.

As for economies of scale, scarce venture capital and startup executive talent could be addressed via the casting of a wider net. More from Mike Madison:

The talent pool, and by that I mean the tier of managers needed to grow and run companies, is notoriously thin in Pittsburgh. Pittsburgh is home to some smart people interested in *first* opportunities, but it struggles to attract a larger corps of people to expand that pool, and it struggles because of the relative lack of *second* opportunities. If the job that you move here for doesn't pan out, then what will you do next? Other regions have more of those second opportunities than Pittburgh does.

Ideally, the TechBelt could expand the geography of "second opportunities". What was once characterized as a loss (i.e. entrepreneur moves from Pittsburgh to Cleveland) is now a win. Spatially, it spreads the risk.

1 comment:

John Morris said...

I agree with this completly but I think calling it a tech belt is a bit lame and perhaps limiting. Could we call it a creative belt?

This is comment I put on Rust Wire a few weeks ago.

"My feeling is there have to be a long list of businesses with low fixed costs that are under lot’s of cost pressures, that would benefit from cheaper locations.

All kinds of writing and research,
Editing and publishing
Video and audio production
Video Game development
Economic and Social research
Software Development.
Fashion Design
Product Design
Film editing
Music recording and production
Public Relations
Industrial Design

Let’s just stop there. As we all know, India is moving rapidly up the food chain and biting off chunks when it can. (A lot of Avitar special effects work was done by and India based company in locations around the world)
I specifically came to Pittsburgh, because i saw this as a decent base to be an artist (long story) and because I expected such a trend.

As you said, a lot of these are businesses built on thousands of intricate small specialised firms and the network effect has to be huge. A fashion writer in NY just can see a lot more fashion and be more in touch with things. Even so, one has to think that there are huge pressures and a lot of people are in denial. Lots of creative people don’t earn much and would be open to moving, like I did. I think you see this in Pittsburgh with more ex students hanging around and trying to build lives here and a growing number of strange people moving in. (I mean people, you wouldn’t expect, like the Famous NY street artist Swoon who will be here part time)

I really see this as a big opportunity."

Suppose, Pittsburgh and Cleveland were closely linked. All the space in Cleveland would enable a huge cost advantage, if linked better into the regional student base.