Blog Release: Show Your Support for Pennsylvania’s Innovation Economy

Another legislative action alert from the Pittsburgh Technology Council:

Unfortunately, this year’s budget deal maintains many devastating cuts that occurred last year to key innovation initiatives in Pennsylvania. In particular, last year the state budget process resulted in a nearly 65 percent reduction to the Ben Franklin Technology Development Authority and also reduced our state’s research and development tax credit. To balance this year’s budget, the General Assembly will also leave our major business tax rates significantly higher than those in competitor states.

With a gubernatorial election right around the corner, the Pittsburgh Technology Council will work in the coming months to educate our policy leaders about the many roles that technology businesses play in supporting the growth of the Commonwealth and in reversing the long-standing brain-drain that has besieged southwestern Pennsylvania.

Other issues on our agenda include efforts to improve the business climate in Pennsylvania to bring our major taxes in line with our competitor states, reforming our economic development initiatives to focus primarily on supporting homegrown technology and manufacturing businesses and developing a workforce strategy that will enable our Commonwealth’s technology businesses to access the critical talent needed to fuel their growth.

To help us make this case, please consider contacting your elected official within the next 24 hours to express your support for these issues? Though this year’s budget deal is close to completion, our elected officials are still in Harrisburg and these issues are still fresh in their minds.

Please consider using this link to immediately contact these officials and help us generate 1,000 letters in the next 24 hours.

Contacting the officials via the link above takes about 30 seconds of your time. You must be a PA resident (damn parochial political geography). I particularly like the comments about crafting a better workforce development policy to make the state and region more economically competitive.

Burgh Diaspora Blog Sightings

Lately, I'm seeing more of my work here pop up elsewhere. I have to thank Aaron Renn and his Urbanophile blog for the publicity. Otherwise, I don't think my ideas end up on the Next American City website:

But as Jim Russell points out at Burgh Diaspora, not all talent is created equal. Indeed, it may not be graduates that you want, necessarily, but migrants. Migrants are especially entrepreneurial, and the further they’ve come to get to your city, the better.

ErieBlogs picked up on the conversation:

Erie isn’t the only city crying brain drain….larger cities like Milwaukee can’t seem to attract young college grads. But is that really the answer? Short but interesting discussion in Next American City.

I can tell you that city, state and even national governments are interested in what we bloggers have to say. So much, in fact, that certain experts are threatened by amateur opinion. That's how John Austin's shot across my bow felt. Actually, such a dismissal is quite flattering. Not too bad for noodling.

Finally, I want to express my appreciation to Brian Kelsey of Civic Analytics for plugging my blog on a few occasions:

Aaron Renn and Jim Russell are two of my favorite thinkers in the world of planning and regional development. You can find Aaron at The Urbanophile and Jim at Burgh Diaspora.

Blogging is a great medium for exchanging knowledge. Experts and professionals needn't feel insulted. Set us noodlers straight and we'll all benefit.

Mapping Talent Linkages

Yesterday, I was researching innovative uses of migration data and stumbled upon this gem for the University of Louisville (published in 2005). More on that report in a minute. I've blogged so much over the past few years that I have to make sure I didn't previously write about what seems to be a discovery. Looking back through the blog and references to Louisville (Kentucky), I found the source of my contention that most outsiders harbor misperceptions about Denver (Colorado). From the focus of the post:

"We've historically had a difficult time getting employees for companies in the Northeast to move to Denver," Clark said. "Even if those interns choose to take jobs in the Northeast, their experience in Denver will probably help us in the long term with other people."

Clark thinks those unfamiliar with Denver often find it to be "a delightful surprise."

"At a minimum they're ambassadors for the high quality of life in Denver," said Rowan Claypool, who started the first such Yale internship program in Louisville, Ky., nine years ago because Louisville was experiencing a brain drain.

Since that program started, 27 of the former interns moved to Louisville - a preview of the kind of impact the Denver program might have.

"This is changing the course of the river," Claypool said.

You see the connection to Louisville. The main issue is how geographic stereotypes influence migration. Denver is on the mental maps of East Coast talent, but not in a good way (e.g. too much snow). Sound familiar, Pittsburgh?

Mesofacts are difficult to overcome concerning talent attraction. One way around the negative stereotypes is to cultivate a legion of ambassadors to sing the praises of your region. As you might note from the Yale internship program, the number of participants is very small. Your city could approach this campaign more strategically, mapping the established patterns of talent connectivity:

Migration links communities, whether they are neighborhoods or entire metro areas, through an on-going physical exchange of people. As Ravenstein observed over a century ago, each main current of migration produces a compensating counter-current. Over time, these exchanges establish relationships, human linkages, between communities. In this report, we explore the linkages that migration has forged for the Louisville metro area.

Armed with that talent linkages atlas, Louisville started plundering other regions for highly-educated expatriates:

Louisville Mayor Jerry Abramson has a message for Tampa Bay's young professionals: Pack your bags for Kentucky.

Sure, he says, the Bay area has great beaches and warm winters, but Louisville has a growing economy with lots of companies that are hiring. And the city has a vast supply of good Kentucky bourbon to boot.

That's the message Abramson hopes to spread in Tampa on Thursday night when he hosts a party dubbed The Louisville Reunion. More than 1,000 people with a connection to Louisville or Kentucky have received invitations.

Abramson said he will be armed with plenty of Maker's Mark bourbon candy and top-shelf samples of the liquor. Most important, he said, he's bringing contacts from major companies willing to collect resumes and talk with job candidates.

"The reality is, if you're 23 to 35 and you've gotten married, you might be starting a family and you're tired of commuting from the suburbs," Abramson said. "You might be scratching your head and remembering what was good back home."

Tampa Mayor Pam Iorio scoffed at the idea of Louisville stealing young professionals.

"It seems kind of strange to me that a mayor from another city would do that," she said. "If he wants to get a Cuban sandwich with me, I'll give him a tour, and then he might want to move here himself."

When Tim Logan of the St. Louis Post-Dispatch contacted me about best practices for luring expatriates back home, I immediately thought of Louisville. At the time, I had no idea that the city had done such impressive and creative research into the migration patterns for the region. I'd like to see such an analysis for all Rust Belt communities.

The result would be a sea of change for regional talent management policy. Workforce development needs to emerge from the Industrial Era and embrace economic globalization. Urban connectivity profiling is a good place to start. Visualize the impact of your community well beyond the pale.

Economic Benefits Of Brain Drain

Too little brain drain is bad for the economic health of a region, and not just the ones experiencing relatively high unemployment. Yesterday, I sung the praises of Pittsburgh's success in talent retention. Today, I'll discuss the shortcomings of this approach to workforce development.

A Philadelphia Inquirer columnist laments the inertness of Pennsylvania's population in general and the lack of churn in her city:

When your world is small, you tend to think small. You take for granted the bounties that you have while believing that what's inexorably wrong can never be fixed. You're not prone to adventure. You believe the broken way of our government is the way that all governments work, and you give up trying to change the system or your situation. You accept the inadequate leadership, the status quo.

Karen Heller is describing how the lack of brain drain (the conventional understanding) hurts the community. A columnist for the Cleveland Plain Dealer describes how staying put is not in the best interest of the individual:

This summer, one of the largest state universities in the country -- Ohio State -- is launching a new program to encourage every incoming freshman to get a U.S. passport. The program, Gateway to the World, is designed to encourage roughly 6,600 freshmen -- 30 percent of whom are first-generation college students -- to get used to the idea that their community is a global one.

"A passport is their driver's license for the 21st century," OSU's Dolan Evanovich told me. "We want each of them to consider studying abroad at some point during their time at Ohio State. Right now, about 20 percent of our students do that. We want to double that number with this class."

Evanovich is OSU's vice president for enrollment. He also was the first in his family to go to college, so he understands the reluctance of some working-class parents to embrace a globe-trotting life for their children.

"I'm from the Pittsburgh area," Evanovich said. "It was a big deal for us to drive to Cleveland."

Evanovich made his first trip abroad as a college basketball player. He returned a different man.

Ohio obsesses the outmigration of its college graduates. It does not want its native sons and daughters to go out and see the world, no matter how much the experience might benefit the individual. So the voters and politicians labor to stifle creativity and entrepreneurship. The brain drain plugs are fundamentally anti-innovation. Ohio means a parochial way of doing business.

The same goes for Pennsylvania and Pittsburgh. The Allegheny Conference isn't serious about attracting talent. Almost all of the public and private leadership is focused on talent retention. The region is risk averse. Job creation is chronically anemic. Slow and steady has won the day.

Pittsburgh's success isn't defined by the dramatic rise in educational attainment, at least not in the way you might expect. The stories of the Burgh Diaspora (e.g. the journey of Evanovich) distinguish Southwestern PA from the rest of the Rust Belt. The challenge before us now is how to best manage that expatriate talent.

Canada is beginning to grapple with the upside of its brain drain. The same is true for Global Brit:

In a globalised world, with increasing movement of people, huge numbers live not within the boundaries of the state of which they are citizens, but in other countries. More governments are recognising that these citizens represent a great asset abroad. But for these assets to be supported and mobilised effectively, governments need to be able to engage with their overseas populations in a coherent and strategic way.

This is ippr’s conclusion in relation to the British diaspora – a large, diverse and talented group. In follow-up to our Brits Abroad report of 2006, we have researched the extent of British emigrants’ integration into their countries of residence and their continuing attachment to the UK. We conclude that the UK government needs to build on the good work it is already doing by reconceptualising its approach to engaging with the diaspora. This would bring benefits both to emigrants and to the UK.

Ohio's policies of encouraging college students to get a passport and trying to better retain graduates are incoherent, moving in two different directions. Rust Belt states are determined to fight globalization, not take advantage of the opportunities. This mindset is undermining the prosperity of the entire Great Lakes megaregion. The battle to retain talent is a colossal waste of time and resources. Shrinking cities are spending millions of dollars to damage their own regional economies.

I'm not aware of a single Rust Belt community researching possible economic benefits of outmigration. Most of the money goes to retention. Some is spent on attraction. Ohio State University shouldn't promote outmigration until the state figures out how to leverage that talent flow. I doubt the politicians have the stomach to engage in meaningful economic development. Better to pander to the protectionist fervor.

Regional Talent Management: Austin Versus Pittsburgh

In part, the talent migration from Pittsburgh to Austin inspired Richard Florida's Creative Class enterprise:

As I walked across the campus of Pittsburgh's Carnegie Mellon University one delightful spring day, I came upon a table filled with young people chatting and enjoying the spectacular weather. Several had identical blue T-shirts with "Trilogy@CMU" written across them---Trilogy being an Austin, Texas-based software company with a reputation for recruiting our top students. I walked over to the table. "Are you guys here to recruit?" I asked. "No, absolutely not," they replied adamantly. "We're not recruiters. We're just hangin' out, playing a little Frisbee with our friends." How interesting, I thought. They've come to campus on a workday, all the way from Austin, just to hang out with some new friends.

I noticed one member of the group sitting slouched over on the grass, dressed in a tank top. This young man had spiked multi-colored hair, full-body tattoos, and multiple piercings in his ears. An obvious slacker, I thought, probably in a band. "So what is your story?" I asked. "Hey man, I just signed on with these guys." In fact, as I would later learn, he was a gifted student who had inked the highest-paying deal of any graduating student in the history of his department, right at that table on the grass, with the recruiters who do not "recruit."

What a change from my own college days, just a little more than 20 years ago, when students would put on their dressiest clothes and carefully hide any counterculture tendencies to prove that they could fit in with the company. Today, apparently, it's the company trying to fit in with the students. In fact, Trilogy had wined and dined him over margarita parties in Pittsburgh and flown him to Austin for private parties in hip nightspots and aboard company boats. When I called the people who had recruited him to ask why, they answered, "That's easy. We wanted him because he's a rock star."

That anecdote is almost a decade in the past. It defines the workforce development strategy for both cities. Pittsburgh strives to retain local talent while Austin does whatever it can to attract brains. Both cities are very good at what they set out to do. Pittsburgh's approach is superior.

Brian Kelsey of Civic Analytics defines Austin's challenge:

Talent drives economic competitiveness. Austin has no problem attracting talent from other U.S. regions, and, increasingly, from around the world. We should be proud of our strong economy and ability to attract skilled workers, but over-reliance on imported talent is not a viable long-term strategy. We can’t survive on growth forever. We will eventually need to come to terms with the fact that the talent pipeline starts here with existing residents, and we must do a better job equipping people with the education and skills they need to succeed, and keep us competitive.

In other words, Austin needs to be a lot more like Pittsburgh. That means better educating the regional workforce and then retaining those graduates. Both cities have a glut of talent for different reasons. Pittsburgh is not dependent on the inmigration pipeline. Austin is. Other parts of the Sun Belt prove that betting on the people continuing to move there is foolish. Recently, Silicon Valley expressed a similar concern.

Pittsburgh can afford to gaze at its navel while mulling over workforce development. That's exactly the message communicated by LANXESS CEO and chair of the Allegheny Conference Workplace Committee Randy Dearth during a recent interview with OnQ. He's telling talent to stay put and find the opportunities that exist in the region. There is no urgency to attract workers. The main issue is better matching job seekers with available openings. The local demand for labor doesn't look to outstrip the supply any time soon.

That's good news for companies starving for talent. It is places such as Pittsburgh that can guarantee a reliable supply of trained workers. Austin is trying to stay out in front of this trend, hoping to offer both substantial inmigration and organic talent to companies expecting to grow. That's easier said than done. Of course, Austin likely has time to engineer the turnaround. People are still flocking to Texas for a good reason, jobs.

Urban Manifest Destiny Geography

The Department of Urban Affairs and Planning at Virginia Tech maintains a blog titled, "Shrinking Cities". Many readers here would appreciate the content posted there. Today, Michael Hill provides a critical geography of the urban frontier. There appears to be an early draft of the analysis from last year. It reads like a diatribe against Creative Class gentrification. Just to be clear, Hill is deconstructing the very same urban frontiers I seek to promote. Keep that in mind as I interrogate his construct.

Hill sets his sites on the American myth of Manifest Destiny and the homesteading migration of the 19th century. There are two geographic themes:

The first is that people simply moved to the frontier for abstract notions of freedom and liberty. People moved to the frontier mostly for economic reasons – they wanted to make a decent living and decided the dangers, when weighed against the opportunities, were worth it. They were often escaping limited options in other countries or in established American urban areas, including racial and class discrimination against Eastern Europeans, the Irish and people from the Mediterranean countries in Europe. This is in addition to African Americans and poor whites from the Appalachian regions of the Northeast.

The second myth is the myth of the uninhabited landscape. Hostile and alien, maybe, but not uninhabited. Like every other area on the American continent, the west had been inhabited for centuries by Native Americans whose social and community structures were well-adapted to their environment. The sense of an alien landscape can be attributed to the common practice of European settlers applying habits of living developed in other places to the western landscape.

Homesteading and Manifest Destiny aren't necessarily related. The former predates the latter, by decades. Manifest Destiny doesn't make any sense in the context of contemporary urban homesteading. On the other hand, the American frontier has proven to be a durable part of the national mythology and helps us to model the exodus to the suburbs. In terms of understanding American historical geography, I think the difference between Frederick Jackson Turner (frontier/homesteading) and John L. O'Sullivan (Manifest Destiny) is crucial.

There is no myth of the uninhabited landscape. "Frontier" is culturally relative. There is being closer to the hearth of civilization and then there is the land of the profane, the periphery. Any reader of James Fenimore Cooper should grasp the dichotomy. Putting Natty Bumppo in today's urban core (or Huck Finn lighting out for inner city Detroit) is a grand irony. Only dense living in shrinking cities will save your depraved suburban soul.

People did and do move "for abstract notions of freedom and liberty." Economic reasons may push people out, but rarely do they pull them into the orbit of a place. A good example is the Mormon migration. In the 19th century, you don't move to Utah for economic opportunity. In the 20th century, no Dust Bowl no Okies. California Dreaming is all frontier and no Manifest Destiny.

Support Pittsburgh's Innovation Economy

Governments at all scales are in a fiscal crisis. That doesn't mean all expenditures should be slashed. Why gut a program that creates businesses and jobs? I'm passing along a call from the Pittsburgh Technology Council to support the Ben Franklin Technology Development Authority.

Ben Franklin funds Pittsburgh-based Innovation Works, an incubator that helps to bring local ideas to market. In today's New York Times, Innovation Works is celebrated as an excellent example of how universities can be leveraged to grow regional innovation clusters:

And in Pittsburgh, a state-financed nonprofit group, Innovation Works, has invested $45 million over the last decade to help the area’s university researchers — and anyone else — prove their ideas and showcase them with investors. The companies have attracted more than $800 million in venture capital and have gone on to create 3,000 local jobs, says Matt Harbaugh, the chief investment officer of Innovation Works.

One company, Bossa Nova Robotics, is made up of Carnegie Mellon robotics researchers who had a commercial hit last year with a pair of toy robots, the Prime-8 gorilla and Penbo, a penguin.

Look around the country. Such a glowing review is the exception, not the rule. From the same article:

Toby E. Stuart, a Harvard Business School professor who researches social networks and entrepreneurship, noted that virtually every government wants to replicate Silicon Valley’s university-driven system of innovation.

“But you can’t engineer it through policy means,” he says.

He thinks proof-of-concept centers would be more useful at universities other than the likes of M.I.T., Stanford and Harvard, which are already hubs in entrepreneurial clusters.

“But in any significant way, it will happen organically,” he says, “and not through some bureaucratic intervention.”

Pittsburgh is fortunate to have Innovation Works. Other regions wish to mimic its success. Yet Pennsylvania would starve the program of funding. Toby Stuart suggests that Pittsburgh is one of the few places where such an initiative is working. Killing an effective public investment to balance the budget will do much more harm than good.

Atlantic Canada Eyes Pittsburgh

Adding to the urban redevelopment lore, shrinking Saint John, New Brunswick looks to Pittsburgh for a way forward:

Brock Dickinson, who works for Millier, Dickinson and Blais, Canada's largest economic development consultant firm, said a number of industrial cities in this country and the U.S. have seen a "hollowing out" of their population in recent years.

"Twenty years ago, Detroit had a population of two million people and it's now down to about 800,000," he said.

Pittsburgh, Cleveland, Buffalo and Windsor, Ont., have all seen similar patterns of de-population that have been brought on by the decline of traditional industries and by the push for people to move to the suburbs, where there are larger homes with larger backyards.

"That made sense in an era where gas was cheap and the cost of living was relatively low ... but then increasingly, those sorts of realities that led to the kind of sprawling communities of the past are not what's facing communities anymore," Dickinson said.

"A lot of communities are anticipating a return to more urban living as the cost of owning and operating a house in the suburbs rises, as the cost of operating a car rises and as traffic congestion increases."

Dickinson said cities such as Pittsburgh are going through a re-urbanization as it aims to attract more technology and knowledge-based jobs as a way to allure the type of worker who prefers to live in the urban core.

Dickinson puts a curious spin on the Pittsburgh revitalization narrative. More residents within the city limits is a pressing concern. However, I'm not sure if it was (or is) the centerpiece of the redevelopment strategy. I understand the policy as a move away from a dependence on manufacturing.

No doubt, the Pittsburgh comeback story is changing. The city is increasingly cast as a best practice example of attracting Generation Y knowledge workers. The characterization is both premature and prescient. Fiction, not facts, drives talent migration.

Taxes And Talent Migration

Cutting taxes won't make your state or region a talent magnet. It won't keep graduates from leaving. At issue is your state's tax regime. A lean and mean government machine is the policy flavor of the day. Michigan Future suggests that the gubernatorial candidates there don't understand the reality of today's economic geography:

Right next door to South Dakota is Minnesota. Minnesota has attracted a lot of college grads (highest percentage in the Midwest) and thus has the lowest unemployment and the highest per capita income in the Midwest — and relatively high tax burden. South Dakota has relatively few college grads, and much lower per cap income.

Why does [Rick Snyder], along with his competitors for governor, want Michigan to follow the strategy of a failed state, like South Dakota, and not a successful state, like Minnesota, when he lived through such a difficult decision? If Michigan follows the low-tax, low-service strategy, it will get low-tax, low-service results…a few low-paying factory jobs may come, but they will be at the expense of public policies that attract young talent, and our economy will never return to prosperity.

The main attraction in Minnesota is Minneapolis/St. Paul. As described above, low taxes aren't the draw. Furthermore, the candidates are mired in a policy debate that might have made sense 50-years ago. But I don't buy the claim that cool urban amenities put big tax Minnesota on top of the Midwest.

Back to Bill Testa's analysis of Great Lakes cities:

What should be obvious is that Minneapolis has long been a brainy city. Smart regions tend to attract more smart people and the rich cities get richer. While South Dakota may not be the answer for Michigan, Minnesota is a different ball of wax. The global economy shifted in such a way that privileged one of that state's greatest assets, a well-educated labor force.

I'm of the opinion that a significant rise in educational attainment comes before all the Cool Cities boondoggles. Field of Dreams economic development is any more effective than gutting government and cutting taxes. (Via Ed Morrison) I recommend all those concerned in Michigan read the testimony from University of Akron's Wayne Watkins to the US House Subcommittee on Research and Science Education.

Rust Belt Chic: Wearing Braddock

Levi Strauss & Company want to sell you Braddock, PA. Via True/Slant, I learned how Rust Belt Chic has invaded the fashion industry:

The ads also address a point raised in the last year about the “Go forth” campaign, which some deemed too ethereal. The ads included salutes to the pioneering spirit of young Americans and the poetry of Walt Whitman.

“We’re marrying ‘Go forth’ with something very tangible,” Mr. Sweeny said, by grounding the upbeat optimism of the theme with the gritty realism provided by the Braddock settings.

The suggestion to feature Braddock in the campaign came from the Levi’s creative agency, Wieden & Kennedy in Portland, Ore., which also produced the first year of “Go forth” ads, which began running last July.

The agency said it could be risky for the Levi’s brand to do this, Mr. Sweeny recalled, but after he met with Mr. Fetterman and other residents, he realized that “the people have an incredible sense of optimism.”

“No one knows” if Braddock will be able to reverse its decline, Mr. Sweeny said. “It’s a big question mark. Nothing in life is guaranteed.”

“But I do fundamentally believe that real work and real people will ultimately drive real change,” Mr. Sweeny said.

The campaign plays up the concept that Braddock residents are descendants of the pioneers who first wore Levi’s in the 1870s.

“People don’t think there are frontiers anymore,” says a girl who narrates a commercial that depicts scenes of life in Braddock. “They can’t see how frontiers are all around us.”

Lately, I feel like I see the urban frontier meme wherever I look, "all around us." Now this geographic lens is being used to sell jeans. I hope the campaign proves to be popular. Either way, Braddock is rewarded for playing the central character in the advertisements. The community receives $1 million plus the pay that goes to the actors who live in Braddock. I'd imagine there would be some spillover from the filming taking place there.

More importantly, it puts Braddock and other shrinking cities on the map in terms of what is currently cool. As if you needed another reason to drop everything, go forth and move to Pittsburgh. Beats boring Austin any day of the week.

Austin Jumps The Shark

In 2003, I drove with two fellow graduate students from Boulder to New Orleans for the annual Association of American Geographers conference. We planned a stop in Austin to break up the trip. We stayed with a friend who showed us around town and we had a late lunch in a part of town that used to be known as the primary hangout of Slackers. According to the locals, that scene had long since moved on and Austin had changed quite a bit since the early 1990s. This post is about that transformation and how it helps us to understand talent migration.

Over the past week, I've noticed a lot of discussion about the large flows of people moving to Texas (summaries of the exchange found here and here). Matthew Yglesias mentions one part of the migration model that I think is germane to Austin's growth:

Last, as Brad DeLong observes part of the issue with certain coastal metropolises like San Francisco is the “no one goes there anymore, it’s too crowded” phenomenon. If you get really good at attracting human capital then it gets expensive for people to live there which makes growth into a self-limiting phenomenon.

The inexpensive cost of living is not the entire picture of a frontier community. The other pillar is anarchy. Acting as catalyst to a scene are the creative nomads looking for the next cultural buzz. Keep Austin weird. Keep an eye on what is happening in Buffalo.

The Slacker mentality lives on in Austin. But for how long? Why I think the city finally jumped the shark:

I experienced everything Joah mentions above while living in San Francisco. When my brother and I moved out to SF, I thought SF would be crazy creative with music and dancing. Instead, I got a rat race in which artists and musicians couldn’t live. In fact, most of the musicians and DJs that I knew from SF no longer lived OR PLAYED in the city.

San Francisco had gotten so completely unaffordable that artists had to move out or work ALL the time to be able to live in the city. And because the art scene has vanished, there isn’t any fun to be had. So why work all the time if you have nothing to show for your efforts? At least in NYC there is still a little bit of magic.

So I moved back to Austin. Here people can be artistic and still afford to live.

So far, so good. Austin still has what San Francisco has lost. But Joah is worried that Austin is on its way to being the next San Francisco:

The buy local movement is usually built to support retail businesses like the one I own, but I fully believe that the only thing that will really protect retail businesses in Austin in a sustainable way is a live music scene that keeps this city fun. If this city becomes less fun to live in – like what has happened to Rust Belt cities like Detroit and Cincinnati over the years – people won’t care to spend money to look good or listen to new music because they’ll be too busy stressing about how boring their lives are. Once that happens, no number of tech jobs or UT degrees being handed out will keep people here…especially when real estate prices are climbing.

If you’re going to pay New York, Miami or Chicago rent, you might as well live in those cities if Austin is no longer as much or more fun in comparison, right? That’s why the next decade is so extremely important in Austin.

Austin is cheap real estate and fun. How do we quantify fun? We know what it isn't: Rust Belt cities. That's Joah's mistake. America's Urban Frontier has in spades what Austin is losing. The threat:

The city has been really working my nerves lately. Yes, the Cathedral of Junk got a stay of execution, but why attack the 20+ year old Austin institution? And why bust the renegade bridge parties? Didn’t the city get the memo: The crime rate is rising in Austin. Shouldn’t they focus their attention on that? Oh yeah, and what’s this about the city not wanting to hear any more input from the public on the Nueces Bike Way?

One person complained about the Cathedral of Junk. One person complaining almost had Shady Grove’s Thursday night concert series shut down. So maybe one person (me) complaining can slap some sense into some folks before more of the city we love vanishes.

"Renegade bridge parties" sounds like a night in Youngstown, Ohio. Austin is maturing into a region that attracts a wealthier, older and more mainstream demographic. It's becoming a lot like Boulder, Colorado. Don't get me wrong. There is still a lot to appreciate in Boulder. But the wild days are a thing of the past. No one I know can afford to live there. The downtown freak shows have been pushed out, squashed or watered down to make the pedestrian mall more family friendly. It's boring, domesticated. Life is elsewhere. Time to move to the Rust Belt.

Mesofacts Iowa

Perception is migration. Mesofacts matter. That's why Baltimore is desperate to distinguish itself from the likes of Pittsburgh and Cleveland. It's also why we might think that what works in Denver will work in Dayton:

You aren’t getting the point of bike share- it’s an extension of your transportation system- not your actual transportation system. There are 20K students at Sinclair afraid to leave campus because they’ll lose their parking space. There are 10K students at UD who don’t have bikes- and parking is at a premium. Premier Health Partners has buildings downtown and at MVH- bikes back and forth work well.

It’s about having a bike available anytime- not having your own bike with you. And don’t tell me about our seasons- Denver has more snow than us.

Denver may have more snow, but I'd bet it also has more bikeable days than Dayton. A survey of the climate data doesn't provide a useful understanding of Denver's weather. Snow. Mile High City. Tap the Rockies. Mesofacts. Truth is, Denver has one of the best climates in the entire country for bicycle transportation. Keep that under your tossle cap.

I enjoy tracking the shifting of geographic stereotypes. Iowa is as good as place as any to watch the transformation:

Outside of the state, perceptions abound that Iowa is a fairly lackluster place. “No major cities, no major professional sports, but plenty of corn and the presidential caucuses,” the meme goes. But we Iowans appreciate the quality of life, and it helps that is affordable and in reach for most. Des Moines is no Chicago, just as is Iowa City no Austin, yet there are economic advantages in our geography and size.

“Iowa has won good marks for its economic strategy,” said Tim Sheehy, the president of the Metropolitan Milwaukee Association of Commerce, to the Milwaukee Journal. “Some of the work that we did early on looked at Des Moines.”

The cities of Iowa are a lot like Pittsburgh in that they are receiving a recent wealth of positive press. Outsiders will eventually catch on and, at some point, hip destinations such as Austin inevitably jump the shark. More on the latter tomorrow.

Social Media And Regional Economic Development

I had breakfast this morning with one of the members of the Youngstown vanguard involved in that city's stunning revitalization. We discussed at length the use of social media for purposes of economic development. I've noticed that this is a hot topic. But I've seen little in the way of forward thinking on the subject. It's all buzz, no substance. Reminds me of the Power of 32 regional initiative:

Launched in 2009, according to Kukovich the goals of the project are to create a shared vision and regional agenda; to instill a sense of realistic optimism; to inspire cross-sector leadership and to connect people, communities, and institutions. For the growth of the region, he says we have to look at building more livable communities.

“These efforts give us all a voice in the future,” said Kukovich. “In order for the project to be successful it has to be inclusive of everyone.” To get involved, which he defined as imperative, he says community conversations will be held over the summer. At that time assets, challenges and opportunities facing the region will be identified. During the fall, framing solution sessions will take place to develop and vet policy options to address the top challenges that were identified during the Community Conversations. In the winter of 2011 regional town meetings will provide a forum for thousands in multiple locations, linked by technology, to prioritize the policy options that will best address each of the top regional challenges. An online survey and online media programs are also designed to reach people at home, libraries and or community centers.

In principle, Power of 32 sounds great. In practice, it has been a disaster. Community conversations aren't magically linked by technology. Social media technologies are largely irrelevant. The platforms don't matter. The innovation we need is how to best leverage these tools. Power of 32 hasn't demonstrated such vision. Not even close.

In terms of economic development, Youngstown is a showcase for social media best practices. Bloggers there can point to results of their efforts. That's why I'm all in on the TechBelt. Congressman Tim Ryan appreciates the value of the social media talent in the Mahoning Valley. So does Youngstown Mayor Jay Williams. I can't say the same about Pittsburgh and the Power of 32.

Sundown Belt

The Sun Belt has long harbored shrinking cities. It's a Rust Belt story where you least expect to find one. There is a new kid on the block, real estate bubble boomtowns. Via Justin Hollander, the Sundown Belt has arrived:

The foreclosure and housing crises also hit [St. Petersburg] hard, according to Justin Hollander, an assistant professor for urban planning at Tufts University. He said 13 of the city's 16 ZIP codes lost residents from 2006 to 2009. But it's the same throughout the Sun Belt.

"Wide swaths of the Sun Belt are used to just growing all the time," he said. "But a large number of these places are just shrinking."

I started blogging in 2006 and read more than a few articles lamenting the brain drain in Florida. At the time, I figured the anxiety was only about the natives seeking greener grass. Little did I realize that these Sun Belt communities were getting their shrink on.

From the same article, St. Petersburg is trying to come to terms with the end of inmigration:

St. Petersburg joins such economically hard-hit Rust Belt cities as Flint, Cleveland, Buffalo and Detroit — cities that led the nation in population loss from 2008 to 2009, according to U.S. census estimates.

"It isn't a good sign for any area to be losing population," said Florida economist Hank Fishkind. "It erodes the demand for all goods and services."

Others say losing population isn't all bad, if it's managed well. Mayor Bill Foster said the city's population has long held steady between 240,000 to 250,000 residents, so he's not too worried.

"I don't think St. Pete has ever been of a mind-set that bigger is better," Foster said.

Sun Belt boomtowns are now in the business of managed decline. Next thing you know, folks will start leaving town for Pittsburgh and better job prospects. That's already yesterday's news.

Rust Belt Metro Educational Attainment

I intended to discuss the chapter about educational attainment in the Brookings "State of Metropolitan America" report later this week. I am blogging about it now because of the conversation concerning my post from earlier today, "Chicago Talent". Understandably, Chicago Nation is less than impressed with my opinion on the matter.

Piecing the Rust Belt megaregion back together, I'm comparing Chicago to its manufacturing brethren. Actually, that's what Bill Testa has done:

Almost all of these cities have struggled with an over-reliance on manufacturing. In terms of income per capita growth, Chicago is lagging behind the US average. Only Minneapolis and Pittsburgh exceed it. The narrative associated with Testa's analysis of the above:

In considering educational attainment of the populations, the table below displays the ranks of Great Lakes metropolitan areas among 118 metropolitan areas in 1970 and 2006. The two local leaders in 1970 college attainment, Columbus, Ohio, and the Twin Cities also experienced the fastest employment growth. While Pittsburgh ranked low in college attainment in 1970, its gains in this metric since then have been the most rapid. Perhaps not accidentally, Pittsburgh’s growth in per capita income also outpaced other cities in the region.

That's a good segue to the Brookings chapter, which also notes the considerable variance among the cities transitioning out of a primarily manufacturing economy:

In general, two types of metro areas made significant gains: large, coastal regions with high value-added economies (e.g., Boston), and mid-sized markets that have made a transition away from manufacturing toward higher education and health care industries (e.g., Pittsburgh, Baltimore).

The top-10 gainers in educational attainment for 2000-2008:

1. Worcester, MA 6.1
2. Miami, FL 5.4
3. Pittsburgh, PA 5.3
4. Indianapolis, IN 5.3
5. Baltimore, MD 5.1
6. New Haven, CT 5.0
7. Akron, OH 5.0
8. Boston, MA 5.0
9. Cape Coral, FL 5.0
10. Des Moines, IA 5.0

We care about educational attainment because of its positive correlation with employment and per capita income. That's the talent dividend CEOs for Cities is promoting. It boils down to economic prosperity. Relative to its Great Lakes cohort, Chicago has not outperformed. Again, Bill Testa:

[As seen above], for much of the 1990s, the Chicago region’s per capita income made little if any gains on the Great Lakes region. Rather, by way of explanation, the surrounding Midwest region was also experiencing a comeback of the same degree [1].

That's the megaregional (i.e. Rust Belt) benchmarking for prosperity. Perhaps as one commenter suggests, I'm looking at the wrong measures. Make of it what you will. There is a data story for every perspective. I remain unconvinced that Chicago is doing a good job of attracting talent, even relative to other Rust Belt cities.

Pittsburgh Manufacturing Job Openings

For the strange-but-true file:

Addressing frustrations of Pittsburgh- area manufacturers, three organizations are teaming up for a program aimed at training people interested in manufacturing jobs with basic skills needed to enter that labor market. ...

... Despite high unemployment due to the recession area manufacturers are having difficulty finding employees that have the technical training but also the work ethic.

“Employers want someone who can show up on time and be drug free,” said David Rea, organizational development consultant at Catalyst Connection. This program was created to try to address that difficulty.

Beggars can't be choosers, so the talent shortage isn't that acute. Companies are willing to prolong the search in a quest for the best available workers. In terms of overall unemployment, the news is more bad than good.

Chicago Talent

There is a great discussion going on about Chicago over at The Urbanophile. The sense is that Chicago is slipping from the ranks of America's great global cities. I thought to add my own comment about how Chicago is still a powerful talent magnet. I thought better of it once I looked at some data.

For 2007 to 2008, Hartford (Connecticut) gained more college educated workers than Chicago. That's at the CSA level. Minneapolis also did better than Chicago on that score. On the balance, Pittsburgh benefited more than 2.5 times from net talent migration. Those numbers don't take into account differences in population. Chicago is hitting way below its weight class.

Concerning Chicago's heavy investment in its core, the returns are lousy. Its central city lags behind both downtown Pittsburgh and Minneapolis in terms of educational attainment rates. Chicago even trails Minneapolis in terms of per capita income.

There's more to talent than college degrees. Chicago is still a primary immigrant gateway. But that has little to do with urban policy. What Chicago does control has largely failed to generate dividends.

The distance between Midwest top-dog Chicago and Pittsburgh/Minneapolis remains great. However, those two cities are seeing excellent returns on their investments. Pittsburgh in particular is a fast riser in both per capital income and educational attainment. The region also has a lot of ground to make up. Not only is Chicago falling back to the pack, Pittsburgh is surging forward. Enough to upset the global urban hierarchy? No.

The fear is that Chicago is slowly imploding, the global city status a house of cards. In terms of talent, I think the concern is warranted. Relative to its Rust Belt cohort, Chicago is a weak performer. Nationally or globally, the tale of the tape must look even worse.

Isle Of Pittsburgh

Another casino for Pittsburgh? No, thankfully nothing of the sort is in the pipeline. Then again, gambling might have saved Dubuque, Iowa. I'm referring to the Pittsburgh residential real estate exception to the Pennsylvania rule:

The Pittsburgh area’s home prices rose 1.16 percent from April 2009 to April 2010, while prices in the Pennsylvania dropped 3.7 percent in the same period. Prices in the Philadelphia area fell 5.28 percent.

The Pittsburgh market has been relatively rosy throughout the recession concerning the entire country. Now, the metro is pulling away from the rest of the state. I think that's significant because Pennsylvania was well insulated from the foreclosure crisis. Pittsburgh real estate is much more than prudent home loans.

In absolute terms, there is no boom in Pittsburgh. That's irrelevant at this juncture. Historically, this is a mild recession for the city. That's not the case almost everyplace else. The attraction pressure continues to build.

Pittsburgh Population Forecast

Pittsburgh is shrinking. That's been the headline for decades. But the city hasn't given up hope of turning that around. Today's Post-Gazette highlights prospects for growth:

In a projection used by Mr. Briem, known as the Pittsburgh REMI model, the county shows modest population gains over the next decade but sharper ones in the 2020s, to gain nearly 200,000 residents over the next two decades. That would mark quite a change from having lost some 410,000 over the past five decades.

A private consulting service, Woods & Poole Economics Inc., forecasts slimmer growth in the next decade and the same pace thereafter, for a gain of less than 17,000 by 2030.

And the Pennsylvania State Data Center sees more long-term decline instead of growth, having predicted in 2008 that Allegheny County would have about 85,000 fewer residents in 2030 than it does now.

Sue Copella, director of the data center, said that gloomy forecast is driven largely by the negative history of recent decades. Rather than guess at future influences on population, the data center leans on a demographic theory that whatever's been happening will keep happening.

Mr. Briem said economic factors play a key part in the Pittsburgh REMI projection and some of the region's recent hardships were so severe that it wouldn't make sense to project them as being duplicated in the future.

The most pessimistic forecast is a good baseline for analysis. It describes the impact of Pittsburgh's Great Recession, way back in 1981. The most recent Brookings MetroMonitor looks at the last four economic recessions for America's 100 biggest cities. Almost 80% of the metros are at their nadir for the last 30-years. The exceptions:

In parts of the Northeast, the eastern Great Lakes, Texas and nearby states, and several high technology centers, earlier recessions had more severe impacts on employment after two years than did the Great Recession. In parts of the eastern Great Lakes and Texas and nearby states, the 1981 recession was the most severe of the last four recessions in its impact on employment after eight quarters. In much of the Northeast the 1990 recession was the most severe. In the information technology centers of Boston, San Jose, Austin, and Dallas, the 2001 recession was most severe.

Pittsburgh already experienced its Great Reset, suggesting that the region is primed to take advantage of the current economic upheaval. Compared to the rest of the country, Pittsburgh is experiencing a period of unprecedented prosperity. This tidbit is driving Briem's projection. A new dominant demographic influence is in play.

The drag on this optimism is the opaque near-term. The entire world is busy reshuffling the deck. The old rules might not apply. For example, geographic mobility might remain gummed up with bad mortgages or Americans could emerge as more risk averse concerning relocation. In other words, people won't move to Pittsburgh in search of jobs because they are stuck in place.

I feel comfortable with the conclusion that Pittsburgh has turned the corner and will increasingly distance itself from the legacy of the early 80s exodus. In fact, I predict that the turnaround will seem quite dramatic over the next year or two. New headlines will scream talent shortage as more businesses seek access to one of the most educated workforces in the country.

War For Talent: Michigan

Brain drain is good for Michigan. At least, this study suggests that there isn't any evidence that brain drain is bad. (Via Demography Matters) One social scientist considers outmigration to be an important part of Michigan's economic recovery:

In other words, [Olivier Blanchard and Lawrence Katz] find that the US labor market is fairly well integrated, and an extended period of unemployment and low wages leads workers to seek new opportunities in other regions. (Here is a recent book by Katz and a collaborator; The Race between Education and Technology.) ...

... [250,000 out-migrants from the labor force] is a significant but not overwhelming loss of population -- about 5%. And the number of jobs required on this scenario is moderate and achievable -- 150,000 new jobs in ten years. This amounts to about 4% jobs growth per year. We can make some educated guesses about the demographics of the population that leaves the state -- they are likely to be young, they are likely to have children, and they are likely to be better educated than the general population. So the economic and social impact of this exodus is likely to be greater than their 5% share of the general population. But all of that conceded, it would appear that there is a reasonably achievable pathway for Michigan to dig itself out of its current crisis.

Acute brain drain is rare. The conditions sparking an exodus of talent are at the extreme end of any recession. The economic push to leave is tremendous. The entire State of Michigan is unaware of the research.

The Grand Rapids Press kicked off a series about talent migration titled, "How do we create cool cities that retain talented Millennials?" Ugh. The suggestions will hurt Michigan more than they will help. The place-making strategies might work if the push factors of talent migration were not so strong. The Michigan labor market needs a structural adjustment.

Michigan can both shrink and raise the level of educational attainment. Inevitably, it is a matter of attraction. One of the stories in the series looks at that end of the migration equation. All the A-list cities mentioned in that article got brainy through attraction, not retention. Yet the side bar is all about those who leave the state. Grand Rapids does not have a "bright flight" problem:

On the plus side, Grand Valley State University, with campuses in downtown Grand Rapids and Allendale, boasts that 97 percent of its graduates stay in Michigan, either to work or to attend to graduate school here. That's far higher than colleges in the rest of the state: A recent Michigan Future survey of graduates showed about half flee Michigan within a year.

"I've lived in many places in my career, and talent drives communities," says GVSU President Thomas Haas, who attributes his university's high retention rate to a strong downtown presence and co-op and internship programs that link students with local businesses. "The more we wrap our arms around that, the more we can see the bright light at the end of the tunnel. We have to recruit it, we have to nurture it, and we have to retain it."

What ties all the Michigan communities together is a lack of talent attraction. Too much retention can be a bad thing. That's the case in Michigan. The problem is at its worst in Grand Rapids. The rub:

Young entrepreneur Daniel Estrada, president of D.C. Estrada, a Grand Rapids-based legal technology consulting firm, says to draw more inventive business minds, West Michigan must embrace change.

"I think Grand Rapids is too risk-averse and too much against change, and those things make a young professional starting a new career feel like an outsider," he says.

It sounds a lot like Pittsburgh save the lack of exodus during a devastating economic recession. There will be no inmigration without more outmigration. A lot more. The culture will remain risk averse. Little will change. Plugging the brain drain is a counterproductive policy.

Authentic Rust Belt

Defining the Rust Belt is more difficult than you think. Every region has cities and towns that fit the bill. There's a discernible manufacturing ethos. Working hard to make things is highly valued. America's Industrial Heartland would like to claim that distinction. I'm skeptical. If you buy that cultural argument, then Los Angeles is a Rust Belt city.

Distill the Rust Belt essence and you will be drinking Appalachia. This post is a confession that I've come around to Mike Madison's line of thinking. Pittsburgh is uniquely parochial:

I'm not much of a believer in the influence of individual disposition or ideology, and I'm inclined to accept the role of culture. Not everyone is. The persistence of cultural types associated with the original Appalachian pioneers has been widely noted, including previously on this, and not by me -- rather, by local descendants of those original communities. Make of that what you will.

While I certainly agree that Pittsburgh suffers from a profound lack of in-migration, I don't think that righting its demographic imbalance is alone the key to prosperity. I do think that local hostility to outside influences is markedly more pronounced than similar attitudes in Minneapolis, or Providence, or Louisville, Denver, or St. Louis, to pick three cities more or less at random, and that the difference makes in-migration far more problematic as a Pittsburgh solution. "You're not one of us" is a nearly universal human emotion, but its impact depends on the existence of an "us." Pittsburgh is one of the most powerful and enduring "us"-es in the U.S.

How parochial is your community? That's the measure of authentic Rust Belt Chic. Mike referenced an article in the New Yorker that aptly marks the Rust Belt core:

Virginia Democrats knew, however, that, impressive as Obama’s primary victory was, the most notable result from that day’s voting might have come in the only district he lost—the Virginia ninth, which includes Lebanon. The rout there—by thirty-two points—had troubling implications for Obama’s chances in Virginia as a whole, and beyond. The southwestern region, rising from the Roanoke Valley up to the Appalachian Plateau, is a place of small farms, coal mines, and chronic economic hard times. It was settled in the eighteenth century by Scots-Irish Calvinists who fled Anglican-dominated Ulster and, eventually, came to that portion of Virginia which the planter aristocracy didn’t want. Their descendants live in small hill towns that are nearer, in mileage and in spirit, to the old factory town of Ironton, Ohio, than to the glass office towers of northern Virginia. Three weeks after the Virginia primary, the mostly white, working-class voters of southern Ohio, a significant portion of them of Scots-Irish descent, helped deliver that state to Hillary Clinton. In the next weeks, their kin did the same in Pennsylvania, West Virginia, Indiana, and Kentucky. It became clear that if Obama hoped to win in November he would probably have to overcome his Appalachia problem.

Many people think that the Midwest is synonymous with the Rust Belt. That's mistaken. To the extent that Detroit is a Rust Belt city is thanks to migrants from Appalachia. Authenticity is found in the political geography. How Balkanized is your city?

This moment of clarity is brought to you by moonshine. Authentic moonshine:

In 1800, there were 14,000 distilleries in America. Over the course of the Nineteenth Century, that industry experienced a natural consolidation -- with better transportation, bigger cities, bigger commerce, it was only natural that distilling would commercialize. Still, in 1900, there were about 1,000 distilleries. After prohibition, and for the next 60 years or so, there were about a dozen. Small distilleries are a part of the American landscape that vanished. They are coming back. We’ve got about 200 now, and to me they speak to a historical authenticity. They make something with care, they use local products, and they sell to people with whom they have a connection. That’s authentic.

Among the moonshiners, the illegal distillers, there is a group of people who work very hard to carry on the mountain traditions and to make whiskey in what I’ve come to think of as the “bluegrass” way. They are few, but they are up there in the hills, making liquor the way that it’s always been made. Hats off to them.

Of course, there’s nothing inauthentic about the new, foodie, explorations of the crazy folks haunting the farmer’s market for overripe fruit. That’s new, but new can be authentic, too.

America's cradle of illicit whiskey is the true Rust Belt. The Great Lakes really has little to do with Rust Belt ontology. Concerning Michigan, remember "Roger and Me"? Flint Rabbit. Or, try Ypsitucky. The images are all Appalachia. Cultural imports. What outsiders hate the most about shrinking cities.

Backwards Nation is also home to Slow Food. Rust Belt Chic is one part nostalgia (see ModCloth) and another part hyperlocal (i.e. parochial). Nomadic Generation Y has a taste for place. Hence a book about white dog and the anti-globalization ethos. What's the flavor of Suburban Chic?

Marge Versus The Monorail

If you have a speaking engagement in New Brunswick and you aren't from Atlantic Canada (or anywhere in the Great White North), then you best bone up on the regional geography. A few of you reading this likely know Kevin Stolarick since he spent so much time at Carnegie Mellon University in Pittsburgh. Dr. Stolarick is working with Richard Florida at the University of Toronto, the current home of the Creative Class enterprise. In today's news, Stolarick offered some advice to Atlantic Canada:

Stolarick's points are as follows: You have to think big; you have to look big; you have to use a shotgun, not a rifle; and you have to be lucky.

The solutions may sound nonspecific but they are the result of his studies of jurisdictions in the same predicament across the globe.

He says rural parts of the United States, Sweden, Norway, Denmark, England and in particular southern Ontario face the same challenges in retaining talent.

Those of you who are familiar with my blog know what I think about talent retention policies. That's not the point. How the advice played with one economist living in New Brunswick:

Not all of New Brunswick has trouble retaining talent. Again, another broad sweep based on the definition that New Brunswick=Rural. Certain parts of New Brunswick and certain industries are having trouble but I wonder if the Toronto-based guru realizes that from 2001 to 2006 there was a positive net-migration from Toronto to Moncton. Take a look. 675 people were living in Moncton in 2006 that were living in Toronto in 2001. 445 people were living in Toronto in 2006 that were living in Moncton in 2001. Oops. Maybe Toronto has a brain-drain problem - at least to Moncton it does.

I’m sure this guy is well intentioned. New Brunswick isn’t on his radar so he is plucking concepts from other locations and trying to tweak them for relevance here. Fine. Hope the lobster was good.

That's a snippet of the rant. You must demonstrate an intimate understanding of the regional geography if you want residents to buy into your policy prescription. As far as I am concerned, the gaffe is unforgivable. Lazy.

Stolarick made the same type of blunder as Joe Cortright did in Akron, Ohio. The bristly reaction:

Cortright said ''close-in neighborhoods are the key to keeping young talent. Young people are much more likely to choose to live in close-in neighborhoods.''

Dr. Luis Proenza, president of the University of Akron, said he is proud of the region's ability to keep UA's products.

''We have 28,000 students each year at the University of Akron,'' he said, ''and 85 percent will stay in the region after they graduate.

''We realize with the young, educated people that location matters. So long as they stay in the region, because it's the region that defines our economy and will define the long-term economic vitality for us all.''

Again, a local expert cites a counterfactual. The underlying premise informing the suggested policy is flawed. The problem identified is not the problem. Bottom line, both Stolarick and Cortright stepped on some local toes. A little more research could have prevented the quick dismissal of advice. Of course, a little more research would have resulted in different advice.

Not all of the Rust Belt has trouble retaining talent.

More Mesofacts Pittsburgh

The Steel City is dead, long live the Steel City:

The major metropolitan areas [Richard Florida] uses to demonstrate a relationship between higher house prices and "healthier economies" are, in fact, reflective of the opposite. Between August 2001 and August 2008 (chosen as the last month before 911 and the last month before the Lehman Brothers collapse), Bureau of Labor Statistics data indicates that in the New York and Los Angeles metropolitan areas, the net job creation rate trailed the national average by one percent. The San Francisco area did even worse, trailing the national net job creation rate by 6 percent, and losing jobs faster than Rust Belt Pittsburgh, St. Louis, and Milwaukee.

You know your city is in dire straits when it is doing worse than Pittsburgh.

Buzz City Pittsburgh

You might say that I am cyberstalking former Pittsburgh Mayor Tom Murphy. He's a strange booster for the city. But he is touring the country and other regions are interested in what he has to say. The St. Louis Post-Dispatch has a few words about Murphy's visit there and his advice to that city. The gist is that St. Louis has the bones to put the likes of Cleveland (don't shoot the messenger) in the rear view mirror and join the ranks of Boston, Seattle and Pittsburgh as the next "buzz city".

While you mop up whatever you just spit all over your keyboard, I'll serve up another perspective from a member of the Burgh Diaspora who heard Murphy's talk:

As someone who grew up outside Pittsburgh, it’s sometimes weird to see the city hailed as a model for urban revitalization. ...

... St. Louis could learn a lot from Pittsburgh (which Forbes named the nation’s most livable city this year) as it works to attract more residents and companies to downtown, Murphy said.

For starters, St. Louis’ $30 million in annual venture capital is dwarfed by Pittsburgh’s $230 million, he said. It’s all about translating the great ideas hatching in universities into start-ups and real investment dollars.

The journalist is from Latrobe and expresses the same disbelief I find to be common among Rust Belt refugees. I'm sure there is an expatriate out there reading this scoffing at Pittsburgh's supposed venture capital success. What those folks think is of little consequence. I'm not holding my breath, waiting for the cynics to have a change of heart. Truth be told, much of what drove them away in the first place continues to thrive in Pittsburgh.

When I read about Lexington, Detroit or St. Louis singing the praises of Pittsburgh, I think of the impact on the mental maps of young talent living in those regions. Murphy's evangelizing is changing the outsider's perception of Pittsburgh. Those who know the city either love or hate it. Appealing to that demographic is a waste of time. If anyone would appreciate Pittsburgh's charms, I would bet he or she is from another part of the Rust Belt.

I look at the annual outmigration from St. Louis and wonder how Pittsburgh could attract more of that flow. Murphy is making such a strategy easier to execute. We already know that the "achievers" and "seekers" will leave. A goal for Pittsburgh is to become one of the primary destinations.

Talent Density

I've been meaning to get to the provocative post at Extraordinary Observations titled, "Where the Smart People Live". Among others, Richard Florida noticed the analysis and the concept took off from there. I highly recommend reading the comments reacting to the post. There is also a follow-up post that helps to flesh out the concept as well as addressing the fascinating jealously regarding the fame stemming from the idea. That's a subject for another day.

I want to address the Degree Sprawl metric:

This data suggests some level of "degree sprawl" in these cities, where college degree holders and sprawling out into the suburbs rather than staying in the central city. While further research would be helpful, this preliminary result is particularly worrisome if you believe that metro areas need strong central cities and strong central cities need a lot of smart people.

That resonated with Dr. Florida:

Pitingolo also provides an interesting analysis of human capital density at the county level, as well as identifying places that perform better or worse than expected on "predicted degree density" via a residual analysis. He raises an important question about "human capital sprawl." As he defines it, this occurs when human capital density is lower in the central city than its surrounding county. He finds preliminary evidence of human capital sprawl in five places -- Louisville, Jacksonville, Oklahoma City, Nashville, and Indianapolis, noting that: "This preliminary result is particularly worrisome if you believe that metro areas need strong central cities and strong central cities need a lot of smart people."

I'm here to say that the sprawl as defined doesn't matter. Pitingolo is looking at where smart people live, not work. Concerning the talent dividend, today from CEOs for Cities:

"Recent economic research has found that the greatest "spillover" benefits of having lots of college-educated workers occur in relatively small, densely populated areas. After a few miles, economic blessings - such as the attraction of new businesses and higher wages for workers across the board - erode significantly, the research concludes."

I've added the emphasis. The key is density of college-educated workers, not residents. Regions should not care where smart people live. In terms of talent, commuting can bring a lot of vitality to the core (see Pittsburgh). Boston may have a lot of smart people as a percentage of population, but the geography of where they work is another story.

Energy Innovation Hub Geography

Understandably, states are vying to land a federal energy innovation hub. The government of New York State has been nosing around my blog the last few days thanks to the search query "energy efficient building systems regional innovation cluster initiative". That landed the surfer here. Energy efficient buildings are one of three hubs funded by Congress. The other two concern nuclear and sun power. As I have noted, the TechBelt is taking aim at the efficient buildings hub. I think Cleveburgh has an excellent chance at winning the bid.

The reason for my optimism is Pittsburgh. When the Allegheny Conference started pushing the region as an energy hub, I took notice. Pittsburgh is well linked to DC and I could imagine how the back room deal went down. Today, I read confirmation of Pittsburgh's pull:

PITTSBURGH, June 15 -- /PRNewswire/ -- Westinghouse Electric Company will be the key organization spearheading industrial applications for one of the U.S. Department of Energy’s (DOE) Energy Innovation Hubs. As part of a broad effort to spur innovation and achieve clean energy breakthroughs, U.S. Deputy Secretary of Energy Daniel Poneman recently announced selection of a team led by Oak Ridge National Laboratory (ORNL) for an award of up to $122 million over five years to establish and operate a new Modeling and Simulation for Nuclear Reactors Innovation Hub. ...

... In addition to ORNL and Westinghouse, the CASL team includes the Electric Power Research Institute (EPRI), Idaho National Laboratory, Los Alamos National Laboratory, Massachusetts Institute of Technology, North Carolina State University, Sandia National Laboratories, Tennessee Valley Authority and University of Michigan.

I'm unclear as to the location of the hub, but suspect that Oak Ridge will serve as the main site. The initiative is more of a research network, all listed actors getting a piece of the funding pie. While politically palatable, the geography may more reflect the flows of innovation in the nuclear industry.

Drive 45-minutes west on the PA Turnpike from Westinghouse's headquarters in Cranberry, PA and you will arrive at the center of the TechBelt. From that vantage point, you could see another research network more concentrated in a contiguous geography. The wealth of energy and manufacturing know-how is impressive. Again, the Pittsburgh-DC link should provide a considerable advantage in the application competition. My only concern is that Pittsburgh already received some love via the nuclear hub.

There is a big difference between the two innovation network geographies. The nuclear hub is national in scope. There's no proximity advantage. The same would be true for a knowledge network in the Great Lakes megaregion. It could just as easily be global. On the other hand, the TechBelt could leverage some spillover benefits. The entire corridor is part of the Greater Youngstown commuter-shed.

The contention that high-speed rail could offer something similar on a megaregional scale isn't grounded in reality. However, we could connect various innovation urban corridors. The TechBelt is the future for economic geography, not Chi-Pitts or GLEI.

Incentivizing Talent Migration

American geographic mobility is on the decline. That's too bad for cities such as Pittsburgh, places that normally would gain migrants as the economy recovered. From Ryan Avent:

Still, the difference [here] is dramatic. It is largely attributable to illiquidity and negative equity in housing markets. And it represents a nice, big barrier between people and better job opportunities.

I think the failure to come up with a comprehensive solution to the problem of negative equity will come to be considered one of the biggest policy errors of this crisis.

Desperate job seekers are stuck in bad mortgages. Thus, they can't move for work. I think there is a more general malaise. People seem less optimistic about what will happen on the other end of a relocation. However, I agree with Avent. There is a huge policy opportunity.

While in Youngstown last summer, I was part of a discussion concerning the luring home of expatriates. One idea floated was geographic arbitrage and helping talent deleverage mortgage debt. We didn't discuss the logistics (or how to fund such a venture). The gist is Greater Youngstown would help members of the diaspora who have negative equity problems in exchange for them living in one of the neighborhoods undergoing redevelopment.

More simply (and generically), shrinking cities would offer up housing stock as a beacon for talent. This strikes me as something HUD could underwrite. In Next American City, Phil Kidd describes how federal policy is failing Youngstown:

There’s 37 neighborhoods in Youngstown, and not enough time. Worse yet, the federal government provides more roadblocks than it does guidance and money. The federal government doesn’t have a vision for shrinking communities like Youngstown. In Phil’s words: “Whatever money Portland’s going after, it’s probably not the same kinda of money that Youngstown is going after…we’re looking to take 22,000 vacant lots in Youngstown and find a productive use for them. Portland’s probably thinking about, you know, how does light-rail work in the northeast neighborhoods into downtown?...that is language that Youngstown will never speak for maybe thirty years. Hopefully in thirty years we’ll be talking about it. It’s just a way different context.

“This isn’t something that it’s like, ‘boy wouldn’t it be great if’...we don’t have that kind of time here! We don’t have that. If this stuff doesn’t get fixed, if we aren’t able to cut the chains here, then we’re gonna lose these neighborhoods, and all these communities. And…all this talk of rightsizing and how sexy that kind of thing is right now, it won’t mean shit—it will not mean shit—if we can’t cut the chains, and let us do our work.”

This is another case of policy addressing the geography of yesteryear. As far as HUD is concerned, globalization never happened. Shrinking cities fall through the cracks. Managing a growing population and the associated economic problems remains the default setting. Boomerang migration incubation is a jobs program, urban blight initiative, and housing solution all rolled into one.

Outdated Workforce Development Policies

If a region is complaining about brain drain, then you can be sure that the workforce development policy there is broken. From a geographic perspective, the dated perspectives are obvious. Local talent is being trained to work at local businesses. The best practices are over a century old and are designed to deal with an economy that no longer exists. Inside Higher Ed makes the same observations about US universities:

So what should be done? First, we need to recognize that this is not the first time colleges and their students have been out of step. In the early 19th century, as the industrial revolution gathered momentum, colleges in the main clung stubbornly to their classical curriculums, rooted in the ancient trivium and quadrivium, and to outmoded methods of instruction. College enrollments actually declined, and numerous institutions closed their doors. Bold colleges like Union, in Schenectady, New York — among the earliest adopters of modern language, science and engineering instruction — boomed in enrollment, topping Yale and Harvard combined.

Today, with college essential in obtaining most well-paying jobs, we will not see higher education enrollments drop. However, tardiness in acting will give impetus to the growth and expansion of alternative higher education — for-profit and nontraditional educational institutions that have been more successful in offering programs better geared to digital learners and their older counterparts.

Second, it is important to ask how much colleges and universities need to change. In 1828, facing industrialization and a Connecticut legislature that disapproved of Yale’s classical curriculum, the Yale faculty responded with a report which asked, in part, whether the college needed to change a lot or a little. This, Yale’s faculty said, was the wrong question. The question to be asked, they argued, was: What is the purpose of a college? This remains the right question today.

The Union College model is alive and well today, still dominating the higher education landscape. We are preparing students for a late 19th century world. Not coincidently, we cling to the same basic geographic concepts developed at that time (e.g. world regional geography). We seem willing to update certain practices but not others. Traditional ideas do not go quietly into that good night.

Talent retention is yesterday's strategy for yesterday's economy. Someone promoting the latest and greatest brain drain plug doesn't understand globalization. Fin de siècle thinking won't fix anything.