Tuesday, August 31, 2010

"People Develop, Not Places"

Regions don't own their investments in human capital. There are some serious social justice issues with place-centric economic development. It is as unethical to discourage geographic mobility as it is to deny someone access to education. But that is exactly what places such as Pittsburgh are trying to do.

Finally, I always think that it's odd that employers think that they "own" their investments in human capital. Don't the employees "own" what's in their heads and their hands?

Mike Madison is arguing, quite persuasively, that noncompetes should be made illegal to help spur regional innovation and economic growth. Like regions, firms do not own the talent they develop. If you think of economic development at the individual scale, then the idea of captive talent is repulsive. Mike's point is that it is also a bad business practice with occasionally absurd results.

If we define Nicaraguan development only to occur within a certain geographic space, we arbitrarily limit “development” include to some freedoms and while ruling out others. We define freedoms acquired through movement, no matter how substantial, not to constitute development. And we do this without consulting the people who are supposed to be developing—many of whom, through their choice to move, reveal that they value this freedom. Such a view is ruled out by the definitions of development reviewed above. Grubel and Scott (1966) likewise prefer to define “country” as “an association of individuals whose collective welfare its leaders seek to maximize”—wherever they live.

Both economic and workforce development programs in the United States assume a "certain geographic space". That's a big shortcoming and privileges place over people. A place can't go to school and graduate with a college degree. It only seems that way with all the focus on educational attainment rates. As a result, we ignore avenues that would better develop people. Worse, we discourage geographic mobility with no apparent gains in prosperity.

Geographic mobility strategies should be a part of workforce development because doing so would improve economic development of people, which is what all the fuss should be about in the first place. It is even in the interest of the region to think this way. Keep that in mind the next time you see something about brain drain or the talent dividend in the news.

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