Of course, the people of the plains have seen booms before—commodity prices soared early in the last century, and there was an oil-fired boom back in the 1970s. But growing demand in developing countries could sustain long-term increases of energy and agricultural products. Niles Hushka, CEO of Kadrmas, Lee & Jackson, a growing engineering firm active in Bismarck, sees other factors working for the plains. The public schools are excellent; the Dakotas, Iowa, Minnesota, Nebraska, and Kansas enjoy among the highest graduation rates in the country. North Dakota itself ranks third and Minnesota fourth (after Washington, D.C., and Massachusetts) in the percentage of residents between 25 and 34 with college degrees.Nowhere is this potential clearer than in Fargo, which is emerging as a high-tech hub. Doug Burgum, from nearby Arthur, N.D., founded Great Plains Software in the mid-1980s. Burgum says he saw potential in the engineering grads pumped out by North Dakota State University, many of whom worked in Fargo’s large and expanding specialty-farm-equipment industry. “My business strategy is to be close to the source of supply,” says Burgum. “North Dakota gave us access to the raw material of college students.”
I've added the emphasis about the educational attainment cohort. The talent available in North Dakota might surprise a few readers. As Kotkin reveals, Microsoft is ahead of the curve:
Microsoft bought Great Plains for a reported $1.1 billion in 2001, establishing Fargo as the headquarters for its business-systems division, which now employs more than 1,000 workers. The tech boom started by Burgum has spawned both startups and spin-offs in everything from information technology to biomedicine. Science and engineering employment statewide has grown by 31 percent since 2002, the highest rate of any state.
The geography of innovation is shifting, undetected by most observers. The standard metrics aren't fine enough to reveal deep talent pools in unexpected places, such as Pittsburgh:
We compared the educational attainment of the Pittsburgh labor force to the regional labor forces of the 40 largest metropolitan statistical areas (MSAs) in the U.S. We are particularly interested in the educational attainment of workers aged 25–34, since this age bracket on average, separates those enrolled in school from those who have completed their education.The educational attainment of this cohort provides a clearer picture of the changes going on in the regional labor force today. Younger workers typically have higher rates of educational attainment than older workers; they also tend to be the most mobile both geographically and by job tenure. Because of their mobility, they are an important factor in firms’ recruitment and retention efforts.In 2009, the percentage of workers in Pittsburgh with a bachelor’s degree or higher exceeded the U.S. average for younger age cohorts (see figure 1). For workers aged 25–34 in the Pittsburgh region, 48.1 percent had a bachelor’s degree or higher in 2009, well above the U.S. average of 34.7 percent. This gap was the largest for any cohort. The gap narrowed with age, until, for the oldest age groups, Pittsburgh workers were less likely to have a bachelor’s degree than workers nationally.How does Pittsburgh’s level of educational attainment compare to other regions in the country? Workers aged 25-34 in the Pittsburgh region who had obtained a bachelor’s degree or higher in 2009 ranked fifth among the 40 largest MSAs, following Boston, San Francisco, Washington, D.C., and Austin (see figure 2). Conversely, Pittsburgh ranked lowest in terms of the proportion of the labor force with less than a high school degree or equivalent (see figure 3). In 2009, only 2.2 percent of workers aged 25–34 in the Pittsburgh region had less than a high school degree or equivalent.
Using the same analysis Kotkin uses to highlight the brain gain going on in Minnesota and North Dakota (as well as the comments about the recent energy boom going on in the Midwest), the future would appear to be just as bright (if not brighter) for Pittsburgh. I think this bodes ill for Chicago, a startling underperformer in terms of talent attraction.
Chicago has, for decades, sucked up much of the talent from the Midwest. Now, there appears to be substantially more interest in the second and third-tier cities in this region. The talent pool is getting much deeper in these places than in Chicago. This is a harbinger of the increasing viability of geographic arbitrage, a different kind of globalization. Chicago appears to be banking on yesterday's globalization. The next Detroit?