Tuesday, November 30, 2010

Blog Release: Pittsburgh to Launch Entertainment Technology Project

From Pittsburgh Art + Technology:

With six internationally released made-in-Pittsburgh films premiering, a new project will connect Pittsburgh entertainment technology with Hollywood.

PITTSBURGH, Nov. 29, 2010

As three big-budget feature films shot in Pittsburgh premiered this past month, the Pittsburgh Technology Council, Idea Foundry, the Pittsburgh Film Office and Carnegie Mellon University’s Entertainment Technology Center plan to detail the consortium’s Pittsburgh Entertainment Technology (PET) Project.

Now showing or coming soon are “Unstoppable” starring Denzel Washington, “The Next Three Days” starring Russell Crowe and “Love and Other Drugs” starring Jake Gyllenhaal, all of which had major portions shot at various locations in the greater Pittsburgh area. More titles, including “I Am Number Four,” “One for the Money” and “Abduction,” starring Taylor Lautner, are slated to be released in 2011.

With these recent movies as evidence of the region’s growing stature among film producers, the PET consortium will showcase new innovations, products and companies in Pittsburgh’s entertainment technology cluster with the objective of introducing those capabilities to Hollywood and attracting additional film and entertainment projects to the region. Those capabilities include 3-D computer graphics and visual effects, music composition, non-traditional viral marketing, branded gaming, online fan community building and a wide variety of other applications.

In addition, the PET will spotlight the region’s talent, especially as it relates to the southwestern Pennsylvania’s top-tier universities.

To that end, plans include a comprehensive inventory of regional assets, a coordinated marketing initiative aimed at Hollywood decision-makers and a trade mission contest, in which companies with the most attractive market-ready products will be awarded a trip to Los Angeles to pitch their work to industry executives.

Previously, the Pittsburgh Technology Council, in partnership with the PET partners, hosted a one-of-a-kind talk with Mk Haley, entitled “Incenting Innovation with New Media.” Haley currently serves as the associate executive producer at Carnegie Mellon University’s Entertainment Technology Center and a leader at The Walt Disney Company’s new research lab at CMU’s Collaborative Innovation Center.

For more information on the Pittsburgh Entertainment Technology Project, visit:


For more information on:

The Pittsburgh Technology Council, visit www.pghtech.org

The Idea Foundry, visit www.ideafoundry.org

Pittsburgh Film Office, visit www.pghfilm.org

The Entertainment Technology Center, visit www.etc.cmu.edu

Pittsburgh Filmography

From “The Perils of Pauline” made in 1914 through the soon-to-be-released “Abduction” starring Taylor Lautner, Pittsburgh has been the location for more than 127 motion pictures and television productions. See the complete list at:


SOURCE Pittsburgh Technology Council http://www.pghtech.org

Rust Belt Built Boomtowns: Portland

At the center of any US urban boom are Rust Belt refugees. On the heels of college graduates from the Industrial Heartland follows regional prosperity. Portland (Oregon) is a good example. The native talent is less than thrilled with the city's transformation:

In August, 23-year-old Kate Williams, whose jobs have included barista, bartender and coffee roaster, ditched Portland for the third time. "I'm going to California -- going, not moving," she emphasizes. "I want an opportunity to miss my home instead of resent it, and I'm starting to resent it."

The story is similar for outsiders. Many are struggling to make a go of it in such a popular destination. Portland's economy cannot absorb all the talent clamoring to live there. Others don't find success so elusive:

I found getting work ridiculously easy; I had a job within a week. But a lot of people here really struggle. I work with 28-year-old people who make $8.50 an hour and smoke pot all the time and come to work and they're lazy. You could not go to Wooster, Ohio, and do what people do here, or Columbus or Cleveland. I don't understand the structure of it, or why people would want to do it. In five years, what are you going to have, if you're not building real relationships, if you're just doing what you feel like doing? I hired (a guy) at Grand Central. He's one of the nicest people, but he's 42 without any roots. He has no savings; he's living on his sister's couch. He's the quintessential Portland person. If Portland is Neverland, he's Peter Pan.

That Rust Belt work ethic is a competitive edge in hip Portland. The best and brightest leaving states such as Ohio are rock stars wherever they go. They compete. They thrive. They propel the city forward. Not all members of the Creative Class are like this. If you want a dynamo, then recruit graduates from Big 10 universities.

There's a caveat to the magical demographic. It's the talent that leaves that is most desirable. Those who move the furtherest from home are the entrepreneurs that Portland needs. Ideally, they come from Pittsburgh or Cleveland. Shrinking cities don't produce many Peter Pans. That's particularly true in the hearth of Rust Belt Chic.

Monday, November 29, 2010

War For Talent: China

I think I've exhausted the demographic time bomb going off in Germany. There's considerable pressure to attract more immigrants at a time when voters are at the pinnacle of an intolerant mood swing. In China, a looming talent shortage looks more dire by the day:

We've noted this trend a couple of times before (here, for example). The interesting question is how firms in Shanghai, Guangzhou and other cities close to the coasts will respond. Factories can raise their wages and improve conditions to appease picky workers. Or if workers won't come to them, they can go to the workers—moving inland or overseas, where labour is cheaper. (That amounts to paying higher logistical costs in order to escape higher wage costs.) But firms in service industries, like Sichuan restaurants, have to remain close to their customers. So South Beauty is trying a third option: migrating up the age-scale. It has removed the age-limit for applicants, and is now happy to hire older staff.

We talk about peak oil. Is there such a thing as peak talent?

Since human capital is renewable, the metaphor is strained. However, people can't move around the world like oil does. As the above passage indicates, firms are more mobile than talent. Also, necessity is the mother of invention. As the supply of cheap labor tightens, businesses get creative.

US regions could learn a lot from China's demographic challenges. They would also benefit from a better understanding of best talent management practices:

If talent is the leading indicator of whether a business is up or down, a success or a failure (and it is) . . . do you know how to accurately judge raw human talent? Understand a person's unique combination of traits? Develop that talent? Convert what supposedly are "soft" subjective judgments about people into objective criteria that are as specific, verifiable, and concrete as the contents of a financial statement?
The talent masters do. They put people before numbers for the simple reason that it is talent that delivers the numbers. Success comes from those who are able to extract meaning from events and the forces affecting a business, and are able to look at the world and assess the risks to take and the risks to avoid.

What regions do wrong is put the numbers before people. Instead of developing talent, we develop places. Why else would we educate foreign born people at our finest universities and then push them back from whence they came?

Talent retention strategies are cut from the same cloth. There is no concern about developing people. The focus is on a place, such as Memphis. We should be trying to better align the interests of talent and place, not undermining growth and prosperity (which what plugging the brain drain does). The failure to acknowledge the linkage between geographic mobility and economic wellbeing is appalling.

Saturday, November 27, 2010

Spinning Migration Data

Politicians are notorious for torturing numbers. Think tanks and consultants also belong on the podium of infamy. I won't absolve journalists, who more often than not eat up the spin. All are in cahoots promoting one brain drain boondoggle after another. Some Texas-sized tall tales:

Texas Gov. Rick Perry peppered his book tour this month with boasts that the Lone Star State had ripped off 153 businesses from the Golden State in the first eight months of the year.

But he was only half right, if that, concluded an exhaustive review of the claim by the Texas branch of Politi-Fact – journalist/fact checkers who call out politicos for their misguided bluster.

The outfit found that Perry's office obtained the figure from business consultants Dun & Bradstreet. What Perry doesn't say is that 92 companies moved from Texas to California during the same period, reducing the net gain to 61. Perry also fails to explain that the D&B figures include companies that stay put but move branches to another state.

The migration unit of analysis is businesses, but the deception is the same. Brain drain Chicken Littles often point to outmigration with no mention of inmigration. This isn't an oversight. It's active deception. You won't get what you want if you present the entire picture.

Thursday, November 25, 2010

Exodus Arizona

Concerning the war for talent, Arizona is clueless:

Of course the law has had the biggest effect on immigrants, both legal and illegal, and Latinos generally. Researchers at BBVA Bancomer, a Mexican bank, this month estimated that 100,000 Hispanics, mostly of Mexican descent, have already left Arizona, for Mexico or for other states, because of SB1070. This means a lot of upheaval for families and individuals, and for Arizona’s economy. Ethnic Mexicans, whether native or immigrant, are younger on average than Anglos, reducing the average age of greying Arizona’s population. And immigrants pay more in taxes than they send to Mexico in remittances. Above all, they tend to have jobs—on construction sites, in hotels and homes—that do not replace but complement American jobs, according to BBVA Bancomer. A permanent decline in the immigrant population could thus destroy many more jobs than just those of the immigrants.

As I look at how the economy is resetting during the recovery, Arizona is an obvious loser. Georgia is a less obvious one. Can the Rust Belt step up its game?

Wednesday, November 24, 2010

Giving Thanks For Steeler Nation

The story is dated, but the recognition is timely:

The People's World took Second Prize in the feature story category for John Wojcik's article Steeler Nation Fights its Way Back.

According to the judges, "Wojcik spoke with out-of-town fans who had made the trek from California to Pittsburgh for the game; it turns out, like many Steelers fans across the country, the family's patriarch had worked at the Homestead Mill until it was shuttered in 1989. Wojcik captures the pride these former steel workers felt in the work they did, the devastation of the mass layoffs, and their struggles since, working fast-food jobs for minimum wage. Wojcik's essay makes an eloquent argument for an industrial policy in America."

"I wondered why there were all these Steeler fan clubs across the country, more than most teams," Wojcik said. "When I was in Pittsburgh, I asked the question of these guys at the bar. It turned out that, because of the shutting of the mills, people scattered and there's this diaspora of people from that area who still love their hometown team."

The Burgh Diaspora sometimes seems as segregated as its hometown. For a few years, I've been aware of the different outmigration patterns for African-Americans. I still obsess gender distinctions. I've thought less about class divisions and how that might impact the expatriate experience.

I would expect white collar, college educated workers to travel far from home. I would predict that blue collar, high school educated workers to bounce around the Rust Belt in search of relatively better economic conditions. I wouldn't guess California as a destination. Is that migration an outlier? If normal, is it unique to Pittsburgh? I find myself always disaggregating the numbers to reveal the more interesting findings.

Tuesday, November 23, 2010

Crime And Migration

Imagine politicians touting the crime problem in their cities. Rallying a constituency to address the issue is one thing. But when image and civic pride are at stake:

The National Conference of Mayors called the report a “premeditated statistical mugging of America’s cities,” saying the rankings are “bogus.”

St. Louis mayor Francis Slay said on Twitter yesterday “Crime stats reflect crimes. Crime stats rankings reflect how we draw our boundaries.”

Cities defending themselves against negative lists and rankings is an old story. It makes sense. Geographic stereotyping affects the regional bottom line. Neither talent nor business wants to move to a bad place. Which is why I find the public airing of brain drain perplexing.

Neither talent nor business wants to move to a place everyone is leaving. Statistically speaking, the complaints about brain drain are bogus. Yet no one is interested in debunking this myth. Instead, politicians and other civic leaders act to amplify the hysteria. Why?

Policies designed to retain graduates are a waste of money. When brain drain is used to justify public expenditure, then the voters can be sure that the project isn't worth the money. Tax cuts? Once outmigration is invoked, the lobbyists are the ones doing the talking. Special interests love to talk about brain drain.

Stories about more crime are a public relations disaster. The spin doctors come out in force, employing damage control. Let's put aside the discussion about urban crime. Better to focus on the brain drain, a problem that doesn't exist.

Monday, November 22, 2010

More Talent Is The New Oil

The metaphor takes an unexpected and explicit turn:

The labour sending countries of South Asia and South East Asia should form a union like OPEC to ensure that the labour receiving countries implement minimum wages, zero cost of migration, decent working conditions, labour laws to protect the workers and special laws for female workers. The labour sending countries should collectively take a decision not to allow workers to go to those countries which are not prepared to fix a minimum wage and offer them decent working conditions.

You either do what we say or we will withhold the talent.

The more striking conclusion of the policy paper is the admonishment of sending country governments for failing to manage the export of labor. I've been tracking the ineptness of the Ireland regarding the handling of its latest exodus of economic refugees. It is squandering a tremendous opportunity. The same could be said for many regions throughout the United States.

Nevada Exodus

As the situation improves, more people are leaving Nevada:

While DETR's Chief Economist Bill Anderson said the report is a sign that the recession's grip on Nevada may finally be loosening, he added that one contributing factor to the state's unemployment rate drop is the decline in the number of individuals looking for employment in Nevada.

"Most likely, a number of workers have moved out of the state, while some have become discouraged and stopped looking for work," he said.

Parker also said the state's unemployment rate is heavily impacted by a decline in Nevada's workforce as people leave the state and to look for work elsewhere.

Estimates show Nevada will lose 70,000 residents this year, Parker said.

The migration has been occurring for some time, Parker said, but this is the first month people have been leaving the state's labor force faster than it has been losing jobs.

Will the last person to leave Las Vegas please turn out the lights?

Paying Lip Service To Talent Attraction

Concerning the war for talent, most states and regions simply don't get it. The game is one of attraction, not retention. But the latter still receives all the resources:

We Live New York is a statewide organization of young leaders that seeks to attract and retain young talent. The group is teaming with the Empire State Development Corp. and the New York State Urban Council to fund a $50,000 grant for young professionals organizations. Each award will be between $500 and $2,000, and will be given to 10 to 15 YP organizations across the state. ...

... We Live New York also seeks to connect young leaders and YP organizations from across the state to share ideas and collaborate on items that help retain young people. ...

... Projects, Cooney said, can be anything from an outdoor concert to enhancing green space in urban areas, so long as it improves the quality of life for young people in New York. "You name it, we can help fund it," he said.

Established leaders realize the value of retaining young talent.

"The energy that's driving revitalization across the country is the young professionals," said Heidi Zimmer-Meyer, president of the Rochester Downtown Development Corp. "We think if we can tether these mobile young leaders to tangible city building projects, we stand a much better chance of keeping them in New York state."

There is no mention of funding for initiatives designed to attract young talent, which is the real issue that New York State faces. The taxpayers are throwing money down the brain drain and cities such as Rochester will continue to suffer.

Engineering inmigration is difficult. New York would be better off giving money to experiments that hope to attract out-of-staters to live in urban neighborhoods in need of revitalization. Keeping graduates from moving to NYC doesn't solve anything. It will, however, do considerable harm to the prosperity of those who stay. It also helps to entrench the chronic economic problems plaguing Upstate cities.

The return on investment for We Live New York is negative.

Brain Drain Boondoggles: CEOs For Cities

CEOs for Cities Carol Coletta is offering bad advice to Memphis. Increasing the regional educational attainment rate is a good idea. The suggestions about how to achieve that goal are, at best, misguided:

We talked to a woman who knows how to keep talented people in town. Carol Coletta is head of CEO's for Cities, a company that consults big cities on competing for the best talent. Something she said Memphis must do a better job of if it wants to reverse the brain drain.

... "You've got to be able to educate and develop your talent but you also need to be able to retain that talent," said Coletta.

Coletta goes on to say that better place making in the urban core is critical. Once again, fear of brain drain (i.e. outmigration) is used to justify public expenditure. Once again, a civic booster does considerable damage to a region's image.

Coletta is wrong to advocate for better talent retention strategies. Her approach will undermine economic development and harm Memphis. More distressing to me is Coletta's poor grasp of migration and how those flows might improve our cities. Serving up destructive practices is no way to promote urban living.

Friday, November 19, 2010

Mesofacts Migration: Rural Counties

Population decline is not necessarily a bad thing. But that's the common perception. Here is the typical sob story for rural America:

"Rural communities are experiencing the out-migration of their young people, an aging population, deterioration of their economic base, industry moving away. How do they maintain their vitality?" J. Robert Reeder asked rhetorically at Wednesday's meeting of the City Club of Martinsburg, where he was the guest speaker.

Net outmigration eats away at community vitality. That's the assumption. The premise is flawed:

The other set of outmigration counties, however, tends to show fewer signs of economic distress than nonmetro counties with little or no outmigration. Their residents have relatively high education, low unemployment, and better housing conditions than counties with little or no outmigration.

I recommend reading the full report. From the abstract:

Most high net outmigration counties, however, are relatively prosperous, with low unemployment rates, low high school dropout rates, and average household incomes.

Emphasis added. High net outmigration positively correlates with prosperity. This research undermines the work of Patrick J. Carr and Maria J. Kefalas detailed in the book, "Hollowing Out the Middle". The culture of encouraging the best and brightest to leave benefits rural communities. Carr and Kefalas get it exactly backwards. Unfortunately, their message is garnering all the attention.

All the interest in stopping brain drain retards economic development. The better policy course is clear:

People often view the loss of young people right after high school as the critical migration issue facing rural America.

For most communities, however, population growth and economic development depend less on retaining high school grads than on attracting newcomers or former residents back later in life.

Return migration—usually defined as an individual moving back to a hometown or other previous place of residence— is a major component of inmigration to most U.S. counties.

You wouldn't know that if you read "Hollowing Out the Middle". Those authors claim that return migration is insignificant. The research is shoddy, but rural boosters readily embrace it. Established narratives of economic development are killing rural America.

Talent Is The New Oil

The current labor market in Germany is a preview of where the United States is headed. Talent shortages are dominating the economic landscape. Via Demography Matters, East German companies are scrambling to fill skilled positions:

For years, demographers have been warning that Germany could face a labor shortage as its population ages. In eastern Germany, such scarcities have already become reality. Competition for talent is fierce -- and businesses are becoming more generous. ...

... These developments show that the lack of skilled workers is no longer an economic problem but a structural one. Well-trained individuals are becoming the most important and scarce commodity in a modern industrial and service society. This doesn't just apply to Germany, but in hardly any other country is the outlook quite as dramatic.

I think this story puts the recent headlines about Google's brain drain into proper perspective. It's akin to China's scramble for energy to support growth. What does this mean? Labor is capital:

If labor is capital, then we have lost the automatic tight connection between spending and employment. Firms can vary their output with little or no variation in employment. This explains how we can have a “jobless recovery,” meaning a large percentage increase in output without a comparable percentage increase in employment. For firms in today's economy, labor represents an investment. Firms hire workers in order to develop capabilities that will eventually produce output more efficiently. The return on an investment in workers may take as long or longer to realize as the return on investment in a machine. The return on investing in workers may be at least as uncertain as the return on investing in equipment.

The dominant model in play today has firms attracting talent (see the above East German example). Various "bottlenecks" restrict these flows and the resulting mismatches could (I predict will) turn the migration on its head. Companies willing and able to move where the talent is will have a competitive advantage. This is a return to the economic geography that birthed cities such as Buffalo. Production needed to be near the scarce commodity. Bad mortgages and protectionist labor markets are eating away at geographic mobility.

Labor is one of the least mobile forms of capital. To the extent that this movement is restricted privileges the regions that produce the most talent. Regions that improved educational attainment rates through inmigration are in a tough spot. They will be competing with each other for the labor that can still move, driving up the price for that talent. Companies will find it increasingly attractive to move to Pittsburgh if they can't outbid Google.

Moving your company from Ann Arbor to Austin for better access to talent is myopic. It looks good now, but is a bad bet longterm. Ann Arbor is struggling to attract the right people. The suggested policy solution is to be more like Austin. That's the migration game, yesterday's economy. Produce more talent and the companies will come knocking.

Thursday, November 18, 2010

Demographically Sorting Pittsburgh

Pittsburgh is shrinking. Pittsburgh is grey (old and damned with a lousy climate). Pittsburgh is tolerant:

In the long term, these immigrants or their children may become local economic stars. In the short term, tension is mounting. Mr Frey found that many of the new magnet states attract immigrants unlikely to speak English or to have completed school. Voters in such communities may view immigration rather differently than do those in San Francisco or Pittsburgh, hubs for skilled, foreign-born workers.

Unequivocally, immigration has been very, very good to Pittsburgh. It's also hard to notice and hasn't done much for the regional demography. Like domestic migration, Pittsburgh tends to attract the few and the very well educated. So does San Francisco, but that city is also an established gateway community for the foreign-born. The Bay Area sports quality and quantity immigration.

Yet Frey (or the Economist) lumps Pittsburgh in with San Francisco. Why?

The answer to that question is long and complicated. Regarding the above article, boil it down to improving educational attainment. Smart cities are weathering the recession well and the politics are less contentious. (So says Brookings) For Pittsburgh, immigration and domestic migration serve to improve the overall skill level of the workforce. Like Google, Pittsburgh is hoarding the best and the brightest.

In aggregate, Pittsburgh is a migration loser. In population, Pittsburgh is a loser. The analysis offered complicates (correctly) that picture. Magnet states are experiencing increasing political instability, which can frustrate recovery efforts. Pittsburgh is relatively demographically stable and therefore ironically tolerant.

I won't get into democracy diffusion theory and demographics. Suffice to say that Grey Pittsburgh was an asset during the turmoil of the recent election. Pittsburgh is ahead of the curve. WAY ahead of the curve.

Net inmigration (domestic or foreign born) is not necessarily a good thing. Those ticking off such numbers did a disservice to their community. I fail to see how one could think otherwise. We obsess population like we do the closing of the Dow Jones. People vote with their feet. End of story.

Where people go isn't a referendum on place. That's a bogus analysis of migration. That's Richard Florida. We can and should do better. Just say no to stopping brain drain. Just say no to resisting immigration.

Team NEO Takes Down Senator Sherrod Brown

But now Cleveland Heights wants to be “ahead of the curve” for when things in the economy finally turn around, Mayor Ed Kelley said.

“We brought Howard on to start working, not just with people outside of the community to come in, but with people who are already in the community who want to expand and do other things to retain them here,” he said. “We’ve had a lot of successes in the past few years, and we hope Howard can build on that for us.”

Thompson said he hopes to capitalize on the city’s location next to the medical community in University Circle and beyond.

He is also looking to “reverse the brain drain” by attracting big companies that are looking to expand.

------End Update------

US Senator Sherrod Brown is one of the biggest promoters of the brain drain myth. His claims amount to a data slight of hand. He's also badmouthing his state to the rest of the country. Ohio deserves better during such difficult times. Team NEO to the rescue:

"What we find in the state of Ohio is about 75 percent of the graduates from Ohio colleges and universities are still here either working or taking more school about a year later. That is exactly on the national average," says Thomas Waltermire with Team NEO.

Team NEO has looked at data over the past few years and says young people are finding the opportunities they need in the jobs they want.

Time for Brown to get his facts straight and stop misleading the people. His brain drain tour and suggested policies are a waste of time and money. There are more pressing economic development issues to tackle. Highlighting the brain drain skirts the issue. Is he out of ideas?

Brain drain is often the red herring of last resort. If the situation is hopeless, then highlight something that doesn't matter. Instead of providing leadership, politicians duck and cover. It's a sham and a shame.

Mythic Landscapes: Marcellus Shale

The rhetoric surrounding the shale gas rush is, more often than not, ridiculous. But the following bit of hype takes the cake:

There is a buzz or rather a rumble in Western Pennsylvania! For years local citizens became use to being part of the rust belt. Job loss became the new normal before unemployment grew throughout the rest of the US. But the energy gods parted the clouds and provided our region with Marcellus Shale.

Suddenly, everything that is good news out of Southwestern Pennsylvania comes from Marcellus Shale. The over-the-top branding campaign does have benefits. Exaggerated or not, buzz attracts migrants.

That doesn't mean residents should give the Marcellus Shale Coalition whatever it wants. On the contrary, the bulk of the evidence undermines the MSC's position. The boom is here to stay:

The U.S. has been a net importer. Interestingly, even with shale gas development, the Energy Information Administration predicts (or predicted as late as July 2010) that we will continue to consume more gas than we produce.

It also projects Canada will continue to produce more than it consumes. But, as our story suggests, it will be importing gas to its eastern provinces from the Marcellus Shale because it's closer and, potentially, cheaper than piping it from its western wells.

To what extent that this counterintuitive geographic relationship sparks job growth in Southwestern Pennsylvania is anyone's guess. What counts (in terms of inmigration) is the image of the region, not the hard data. The energy gods are beckoning you to Pittsburgh.

Wednesday, November 17, 2010

Talent Migration Geopolitics: Turkey

Migrants link two regional or national economies. It isn't a matter of working in one place or the other. We view geographic mobility as a zero sum game, ignoring the importance of the transnational experience. The talent flow from Europe is quietly transforming Turkey:

Once a month, about 50 of them meet in a fashionable bar in downtown Istanbul. It is a time for chat and the swapping business cards and job offers, but everyone is talking German. “German is my mother tongue,” insists Emine Sahin, the 37-year-old real-estate project manager, who organises the monthly meet of German-Turks who, like her, have chosen to come and live on the banks of the Bosphorus. ...

... According to a survey by the German Futureorg institute, one third of dual nationality students in Germany are thinking about a career in Turkey. Companies on the other side of the Rhine have understood how to take advantage of this phenomenon. The Turkish subsidiary of Mercedes-Benz now reseves 30% of its management positions for German-Turks. Government institutions, hoping to benefit from their dual culture, are also opening their doors to Euro-Turks. “Turkey is developing very quickly and needs people like us,” remarks Belgian born and educated Ilker Astarci, who was recently appointed as an advisor to Prime Minister Recep Tayyip Erdogan. “There are more opportunities than there are in Europe. I felt it was important to do something for Turkey, which is my country of origin.”

Instead of trying to retain talented Euro-Turks, EU companies are taking advantage of the trend. This approach can work at the regional level. The Sun Belt boomtowns now hemorrhaging people should piggyback on this migration and redevelop the local economy. Exodus is an opportunity, not a harbinger of doom.

The typical reaction to outmigration is to only the see the leaving with no attention paid to where this talent is moving. This is brain drain, the local labor market losing people. That's the end of it. The act of getting out of town is just the beginning. How far and where they go is very important. Hopefully, they go where there is the most growth so the town they left behind can benefit the most. Inevitably, expatriates are caught between two places. But their hometowns don't seem to notice or care.

Tuesday, November 16, 2010

Pittsburgh Regional Advantage

When I see or hear "Pittsburgh", regional cooperation doesn't come to mind. A "Balkanized" political geography dominates my thoughts. That perspective is a bit of a myth. While we wait for the day of reckoning concerning the City's pension crisis, a lot is being accomplished at the regional scale:

My downfall was that I like to peer out the window while the plane is landing. I also like the aisle seat, so this gives the person next to me the window of opportunity (brilliant pun, I know) he or she has been waiting for the whole time to get into the plane conversation. “So, are you from Pittsburgh?” my fellow passenger eagerly asked. This led to a brief conservation about where I’m from and learning about where he is from. “So, why are you going to Pittsburgh?” As I explain my research project about sustainable and technology-savvy regions, he looked puzzled. “Really? I don’t know why you’d pick Pittsburgh.”

Those types of responses are exactly why I’m here. People always think of Pittsburgh as the Steel City, but they need to pull back that steel curtain and look a little closer. There’s so much more behind it. As I traversed the red-foliaged hillsides and crossed the shimmering rivers during the two amazingly sunny autumn days I spent in the city, I found folks all over the place who are creating a region where sustainable and digital innovation thrives. Pittsburgh is a great example of how thinking regionally can help turn a steel city into a green city, which in turn is drawing people back to the town.

This isn't the first time I've encountered someone holding up Pittsburgh as a good example of regional thinking. We tend to focus on the dysfunction and ignore the opportunities.There is plenty that can be done regionally without the benefit of merging jurisdictions. Just so happens that Southwestern Pennsylvania is relatively adept at exploiting the work-around angle.

A transformation of the dominant policy geography would be ideal. But it is also extremely unlikely. You best just set about your business. The story about Pittsburgh's revitalization is proof of concept:

A film from the 1950s described the city this way:

“It was a grim city, a city you could taste in your mouth, a city that smarted in your eyes. Smoke blotted out the sun. It filled the lungs of every man, woman and child within its reach.”

“There was tremendous concern about the future of the city,” Tarr said.

Leaders from politics, business, universities and nonprofits all worried that the future of Pittsburgh was literally clouded by all the junk in the air. And, despite all their different interests and loyalties, these groups came together after the war to form the Allegheny Conference.

It’s unclear who created it, but Professor Tarr says this combination was immensely powerful and started tackling the city’s problems.

“I think that the Pittsburgh Renaissance, as it’s called, is the first major effort by an industrial city really, not just in this country, but in the world, to improve itself significantly,” said Tarr.

The Allegheny Conference was able to leverage the political space available. The federalist structure of government doesn't privilege urban/metro policymaking. Brookings is trying to change that. Ironically, the lack of structure informed Pittsburgh's success. The novelty of the partnership allowed a lot more to be accomplished.

Now the Allegheny Conference is a regional institution and emblematic of establishment thinking. Where are the new political frontiers? Right here in the world of social media.

Monday, November 15, 2010

Don't Move To Pittsburgh

Is your company looking for talent? Don't look at Pittsburgh. The region, as the editor of the Pittsburgh Post-Gazette once told the world, is suffering from acute brain drain:

If there's a road map to Rust Belt renaissance, a model of postindustrial success, it may be in Buffalo's one-time steelmaking soul mate, a city once described as hell with the lid off.

The leaders of the world's economic powers convened there Thursday for the two-day Group of 20 summit, prompting the question, "Why Pittsburgh?"

"It's a wonderful story of redemption, renewal and renaissance," said David M. Shribman, executive editor of the Pittsburgh Post-Gazette.

It's also a story of pitfalls and stereotypes and of a city still facing serious economic challenges.

"There's still litter on the streets, you can't fly anywhere from our airport, and it's still hard to keep our young people here," Shribman added. "Having said that, there may not be a better place to live in the United States."

Pittsburgh's big moment in the sun and Mr. Shribman mistakenly laments the outmigration problem. This is Pittsburgh's Cleveland Moment, the inexplicable tendency to torpedo your own city about a shortcoming that isn't even true. It's a baffling approach to economic development and improving a region.

Important Nathan Bomey article on AnnArbor.com. It’s entitled “University of Michigan microcontroller startup leaving Michigan for Texas”. The reason: not enough talent here. That’s right, not enough talent in our supposedly high tech mecca Ann Arbor. As Bomey writes: The firm, Ambiq Micro, determined that the Austin region offered the best chance of landing the talent to advance its integrated circuitry technology, which improves energy efficiency in wireless electronic applications. ...

... The lesson we need to learn is if you care about the Michigan economy you had better care about the location decisions of mobile talent. And that mobile talent increasingly is concentrating in big metros with vibrant/high density central cities. No vibrant/high density central cities, no prosperous Michigan. It is the straight forward!

Perceptions matter. Mesofacts drive migration and company relocation decisions. Not only is Ann Arbor in Detroit's shadow, many people think the area suffers from brain drain. That includes local people who run or fund start ups. The hysteria over outmigration has a serious negative impact on the bottom line.

CEOs are just as susceptible to geographic stereotypes as anyone else. Would you move your business to the brain drain belt of the United States? Yet this is how shrinking cities choose to present themselves to the world. Never mind that the migration data suggest the exact opposite to be the case.

You best wire me money or your youngins are gonna leave! It reads like extortion given the ignorance. Regions are paying to chase away companies. They are also scaring away talent. Who wants to move to a place that everyone is leaving?

Brain Gain Cleveland

There isn't an exodus from Rust Belt cities. That's a myth. Aaron Renn (The Urbanophile) takes a hard look at the outmigration rates across the nation and comes to a startling conclusion:

Not what you expected, is it? That’s right, Pittsburgh is dead last among all 366 US metro areas I’m tracking in terms of its out-migration rate. People aren’t leaving, just like they aren’t leaving a lot of other places famous for large absolute net domestic out-migration. Not even Cleveland (#13 from the bottom) or Detroit (#17). (In fairness, net migration did turn positive for Pittsburgh this year).

The flight of the Creative Class? Hardly. The numbers tell us that all the money spent on retention amounts to a boondoggle. What strikes me as stupid (i.e. regional suicide) is that shrinking cities are keen to advertise their brain drain problem. You don't attract business by caterwauling about all the talent leaving your area.

"There's just this whole idea that somehow everyone is leaving and its entirely wrong," says Thomas Waltermire with Team NEO.

The stigma of "Brain Drain" is all perspective. Waltermire has crunched the numbers and says the statistics show, Cleveland is gaining and gaining where it matters.

That is quite a turnaround from the absurd Cleveland Plus campaign to keep graduates from leaving. Perhaps you need a refresher:

His 10-year-old company [Collegia] has been connecting colleges and communities to improve the economic well-being and vibrancy of both in places like Boston, Philadelphia, Pittsburgh and Baltimore.

But PlusCollege is ''the most advanced site we've done,'' he said. For instance, the calendar uses an algorithm that takes a database of 100 activities and spotlights the ones most likely to appeal to the targeted age group.

Hoffman said the desire to keep young professionals at home is not unique to Northeast Ohio. ''Every region feels they could do better,'' he said.

But aggressive region wide efforts to do something about it is a new trend, and Northeast Ohio is ''in the front end of the wave coming across the country,'' he said.

And because college students are ''very influenced by what they read, by what they think is a cool city,'' Hoffman said, then a Web site that helps them find a comfy coffee shop, an electric night life or valuable internships will help them see the grass is green on this side.

The George GundFoundation provided $40,000 for the project.

That's $40,000 paid to blast to the world that Cleveland has a brain drain problem that doesn't exist. Brilliant strategy. That's why Renn's analysis is so surprising. Rust Belt cities expend a lot of time, energy and resources to negatively brand their regions. Now Team NEO is trying to undo this damage. In the past, Team NEO has been one of the culprits of keeping Cleveland down. I'll be interested to see if the organization has really changed its tune.

Sunday, November 14, 2010

More Sun Belt Bust

Leaving Las Vegas is picking up steam. But that's not the only Sun Belt boomtown doing the Rust Belt-like bust. The big story continues to be the lack of inmigration in cities such as Charlotte:

The onslaught of students flooding Gaston County Schools hasn’t happened. ...

... “Those are not going to be met, and I don’t think anybody expects they are,” said John Chesser of UNC Charlotte’s Urban Institute that studies public policy issues in the 14-county, two-state region surrounding Charlotte. It’s also one of the organizations that helped the school system come up with its student population projections. “A lot of that anticipated growth has already not happened. It was anticipated growth every year ...I expect the district’s already figuring it out.”

School districts across the Sun Belt are coming up short as migration-driven economies collapse. Many hope that the pipeline will fill again, but the recovery remains sluggish. For those communities who already bet big on the continued boom, fiscal disaster is not far off. Whatever the revenue scheme, less money is trickling into the public coffers.

Back to the article in the Las Vegas Sun, some are not so pessimistic:

Lang thinks our economic prospects are better than many of the doomsayers realize.

He points to cities hit hard by the savings-and-loan crisis of the early 1990s, which was a debt-fueled commercial real estate bubble that burst and left cities such as Denver, Houston and Phoenix reeling.

When those cities suffered their real estate collapses and finally cleared away the debris — with the help of the government’s Resolution Trust Corp. — they had an advantage relative to other cities: cheap real estate.

Similarly, Nevada real estate is again a comparative bargain next to California. As California recovers, residents there who aren’t underwater will be happy to sell their homes and move to Las Vegas for something cheaper and bigger.

Lang also thinks economic seeds — some unrecognized — are waiting to spring to life.

He cites the potential for Interstate 11 to Phoenix; the development of high-speed rail to Victorville, Calif.; the new terminal at McCarran International Airport; continued development of renewable energy projects; expertise in green building fostered by the construction of CityCenter; and the opportunity for Las Vegas to become a center for specialized expertise in the global gaming business, as Houston is in energy and Los Angeles in entertainment.

Touting cheap real estate reminds me of bleak Rust Belt or rural hopes. There's plenty of opportunity everywhere. Who doesn't have such assets? The bright future scenarios still read like wishful thinking. Everything and everyone will come back. That kind of mindset will be the death of the Sun Belt.

Friday, November 12, 2010

Domestic Migration Ghettos

I like to joke that I live in Little Pittsburgh, Colorado. The expatriate enclave is all in my head. At best, the location enjoys an ephemeral existence on game day at a Steelers bar. Yet domestic migration ghettos are a discernible part of the American landscape:

About the only thing about the upbringing that wasn't Southern, in fact, was the address. Flint might seem a part of the South only if you were standing in, say, Green Bay or Duluth. But Coburn says Flint was a destination for the mass migration of Southerners — including his paternal grandfather, from the southern Missouri town of Hornersville — who landed in Michigan's urban centers in the mid-20th century, lured by jobs in the auto industry. So in Flint, Coburn was surrounded by neighborhoods like Little Missouri, kids who had family back in Tennessee or Florida, and neighborhoods, like the one he grew up in, that were built to resemble the rural towns the people had left behind.

I've already blogged about Detroit's Little Appalachia. The theme of that post is the kind of regions that emerge from historical geographies. The scars of the Great Migration are still evident.

The same should be true of the Not-So-Great Migration out of the Rust Belt. As the tide of people continues to recede, what will be the Northern imprint on Southern communities? I have a hard time imagining a significant landscape legacy.

Thursday, November 11, 2010

Tech Talent Shortage

The big story in my little blogger world is the war for talent in Silicon Valley. The reason seems to be that the biggest players (e.g. Google or Facebook) are cornering the labor market. My read of the handwriting on the wall is that the HR strategists see an acute shortage on the horizon. One result will be a shaking up of the urban hierarchy:

I’ve talked to more than two dozen engineers looking for jobs in the past 8-weeks. I’ve seen some incredible things. One is that talented yet unproven college grads are getting offers from $120,000k to $180,000 (?!?). This has been inappropriately inflated due to competition in the Valley. Another friend literally went 4-days before getting a huge unsolicited offer. Smells fishy.

This was also confirmed by a Sand Hill friend who adds that Valley companies are looking outside the Valley to meet their needs saying ”If you’re not Facebook or Twitter right now good luck getting the top guys.” Some companies are looking to build offices in nearby locations like Portland and SLC where the opportunities are less competitive and talent comes cheaper.

Sure, Silicon Valley is the center of the venture capital universe. But good luck staffing your start-up. This is a huge opportunity for the smaller innovation markets such as Pittsburgh, which looks to be a cost effective alternative to the scene in New York. I suppose Philadelphia will get first crack as the site of geographic arbitrage.

I've noticed Google (Mountain View) sniffing around my blog the last few days, spending hours looking at this and this. Sparing you the click through, one post covers talent as currency and the other maps the economic geography. The takeaway is a focus on where the talent is produced and its employment destination. These are lines of connectivity to be exploited when inmigration starts to break down. That pipeline is now a two-way street.

Wednesday, November 10, 2010

Pitfalls For Seeking Talent Dividend

Arguing against seeking higher educational attainment rates might seem silly. But a glut of doctorates without the capacity to fully employ this talent is a recipe for disaster. Consider the current troubles in Ireland:

The official failure to develop a viable career framework for newly qualified researchers ensures that many face a bleak choice between unemployment, casual working or emigration.

A 'brain-drain' has already started, as qualified graduates travel to jobs in continental Europe, Australia, the USA and Canada. This outflow will become a long-term feature of our as the recovery here lags behind the rest of the world.

Recent government policy has created new disincentives for researchers, which undermine its earlier objective of building world-class research teams across all disciplines.

I don't think the problem is an incoherent policy agenda. We are hellbent on chaining graduates to the native soil. This approach creates a captive labor market, which companies and universities are happy to exploit. The unexpected result is lackluster (if any) growth of the innovation economy.

A better approach would be job placement regardless of location. The strategy is counterintuitive, but forces local industry compete at the global scale for talent. You want the entire world to demand graduates from your regional schools. Ignoring the potential spillovers, outsiders learn about the skilled labor coming from your area thanks to your export program. The easiest way to ensure a bigger slice of graduates is to open a branch there. A cluster is born.

How To Stop Brain Drain

If you want to plug the brain drain, then promote illiteracy. That's the word from New Brunswick:

We know there is a strong coorelation between out-migration and education levels. I did some research into this a couple of years ago and with the exception of the Alberta Fort McMurray boom - overwhelmingly people who leave tend to be more educated than those who stay in New Brunswick (on average).

So if you were to do a full census of everyone who has graduated from New Brunswick high schools and universities over the past 50 years, would the literacy rate among that full group be well below the national average? Maybe - but my hunch would be - based on the data we have on this - that this would not be the case.

Illiteracy is an impediment to mobility.

All you regions so concerned about brain drain need to get to work and make sure the children never learn how to read. Problem solved.

Video Gaming Industry And Talent Connectivity

Los Angeles and Pittsburgh have some interesting and important economic linkages. You are probably familiar with all the filming going on in Southwestern Pennsylvania. Less known is the burgeoning industry of entertainment technologies, symbolized by the presence of Disney on the campus of Carnegie Mellon University. Thus, I've endeavored to track video game design talent migration:

When London is referred to as one of the world's capitals for creative industries, mention should be made of electronic publishing and Eidos, the local firm that created Lara Croft and the Tomb Raider series. Since April last year, Eidos has been part of Square Enix of Japan.

Its boss in Europe, Phil Rogers, was kept on by the new owners. His is a highly competitive business, serving a demanding, fickle audience. Last week, in Tokyo, Square Enix issued a disappointing earnings statement. Part of the reason was technical issues with a new release, leading to poor reviews, while the company also suffered a foreign exchange loss and losses on property in Japan. Total sales for the six months were 68.05 billion yen (£522 million).

Rogers is upbeat, concentrating on new titles and formats, notably online and for Facebook. “We've got lots of game play coming up — there are some pillar releases in the pipeline. We're looking at new ways of engaging with the consumer — for instance, introducing bite-size games.

“Worldwide, the whole market is worth $50 billion. It's all up for grabs,” says Rogers. Demand appears to be insatiable. When Square Enix launched Final Fantasy XIII this year — the game is now in its 20th year, having sold over 97 million copies, and Lara Croft first appeared in 1996 — it had to close the Champs Elysées in Paris because of the crowds. In London, hoards of eager customers turned up at HMV in Oxford Street, dressed as warriors and wizards from the role-playing game. ...

... In London, says Rogers, “there is an amazing amount of creative talent. From here, we can dev-elop games and manage teams worldwide”. But he has to be careful: “There's evidence of a migration of that talent to other locations,” he says, citing Montreal where “they've structured their universities to study and teach gaming development — their education system is geared towards helping the industry — and for the companies involved they've introduced tax incentives”.

Montreal is a talent hotspot that has turned up on my radar more than a few times. In Canada, Vancouver and Montreal are the poles of gaming innovation. In the United States, it is Los Angeles and Pittsburgh. For the two West Coast cities, the legacy of entertainment enterprise attracts talent. For Montreal and Pittsburgh, the legacy of talent production attracts enterprise (e.g. Disney).

Phil Rogers is indicating that Montreal is starting to attract talent thanks to a growing international reputation as a place promoting video gaming innovation. Keep in mind that Rogers is trying to needle government in the UK to make a similar investment. If the evidence Rogers is referencing is credible, that bodes well for Pittsburgh.

Like Pittsburgh, Montreal is deeply parochial and off the map for most outsiders. Winters are long and cold. There is constant concern about brain drain. The outmigration of Anglophones is notoriously robust. Montreal stealing talent from London would be quite a coup.

Back in Pittsburgh, talent no longer needs to move to Los Angeles after graduating from CMU. I would also hazard to guess that it is cheaper to produce video games in Pittsburgh as opposed to Los Angeles. The growth of entertainment technology companies in Pittsburgh is a good example of the benefits of exporting talent. Doing so created strong links with a world class city. Pittsburgh is now cashing in on its brain drain and the migration flow has reversed.

Tuesday, November 09, 2010

MichAGAIN: We Want You Here

Via Flint Expatriates, the latest boomerang migration campaign:

The Troubles In Ireland

You may have read or heard about Ireland's fiscal woes. But there is more to this tale than sovereign debt. The subsequent outmigration from the country has the bears out in force today:

Migration flows have reversed sharply in Ireland in the past two years, with Ireland losing more than 5pc of its labour market. A fall of 110,000 led to a net outflow of 35,000.

Gibson says, “House prices and overall economic growth will be severely impact by the subsequent fall in overall demand, consumer confidence and government investment, as a result of this outward migration trend.”

House prices will continue to contract for the remainder of the year and in 2011, said the report, and are unlikely to regain their peak values before 2010.

As a champion of geographic mobility, I am also aware of the costs of exodus. The conflict is a matter of policy. Encouraging emigration is a short-term fix. It eases the strain of unemployment. Longterm, you have a demographic problem.

Thus, the continual refusal of the Irish government to enfranchise its diaspora bodes ill for Ireland's economy once recovery gets a leg up on the crisis. Keeping in touch and maintaining trust would seem to be a small price to pay for future security. Why not provide expatriates with a stake in Ireland's well-being? I've yet to come across a good answer to that question.

Monday, November 08, 2010

Marcellus Shale Talent Shortage?

Chris Briem recently Tweeted about an article that describes the geography of natural gas for the Northeast:

Further dampening prices is the increasing availability of the large domestic natural gas supply trapped in Marcellus Shale in Pennsylvania, New York and West Virginia. As the technology to harvest it got more economical, the Marcellus Shale natural gas became cheaper than even other supplies of domestic natural gas — such as from the Gulf Coast — and already has contributed to the falling price of the commodity.

“This is probably one of the more exciting times in the business,” Karanian said. “Any time new supply comes into an area, it has a positive impact.”

The Marcellus natural gas eventually will become the principal supply source for Connecticut and drive down prices — Yankee Gas is predicting a 59 percent in its winter premiums over the next five years — but the proposed expansion of its transmission system to more widely use the commodity doesn’t include Connecticut.

Connecticut is a potential customer for use the Marcellus natural gas, but the current demand isn’t high enough to make a new pipeline capacity project economically viable, Karanian said. Yankee Gas may start a transmission project of its own or make it a joint venture to boost the shale natural gas use in the state.

“It is truly a game-changer here in New England,” Cullen said.

Because of the widespread use of domestic shale natural gas, the amount of foreign LNG used in the country is far less than predicted, said Damien Gaul, economist with the U.S. Energy Information Administration. Natural gas coming from foreign sources hit a 15-year low nationally in 2009.

The entire article is an illuminating read. Be sure to check out the entire piece. I'm going to turn the conversation in a different direction. A Financial Times blog posted today about talent shortage concerns in the oil and gas industry. One obvious storyline is brain drain through aging. Less obvious is competition from the alternative energy industry:

The oil industry is not the sexiest place to be right now. The combined effect of the BP oil spill, competition from the highly-paid financial services sector and the emphasis from governments around the world on creating green jobs has left some in the industry worrying about how they can continue to attract top talent.

Oil companies are now rumoured to be offering staff huge incentives to come and work for them, especially if they are working in the field: DVDs, games, food, drinks, you name it they get it. Understandably so if the alternative for a talented science grad is to work in the air-conditioned offices of a bank or with a small start-up working at the cutting edge of green technology.

There's a substantial policy and workforce development disconnect in Pennsylvania between the shale gas boom and the transformation of the Rust Belt to Green Belt. Renewable energy is sexy and is attracting the interest of college students. Would they consider a more viable job market in fracking? No.

Politicians throughout the Rust Belt are touting the growth of green jobs, not the natural gas revolution. I expect most of the shale workers to continue to come from outside of Pennsylvania. Unless you are willing to leave the state in search of work, I'd steer clear of Marcellus Shale training programs. Career-wise, it is a risky bet particularly with the public money still streaming toward deepening the pool of green energy talent.

Sunday, November 07, 2010

Geographic Mobility Incubator

Americans still cannot move their way out of unemployment. The recovery is geographically uneven. However, those most in need of a job are stuck in place:

In a broader sense, the job prospects of nearly all Americans will hinge on education. U.S. competitiveness, like that of all rich countries, will increasingly revolve around moving higher up the food chain in every sector. China may be the world’s factory, but it has yet to create an iPad. Innovations of this sort create truly desirable jobs.

But to ensure that America remains an innovation hub, we’ll need to not only churn out more highly skilled college-educated graduates, particularly in the sciences, but also retrain existing workers to take on jobs in new sectors. Another key difference of this most recent recession from those past is that there is a large mismatch between unemployed workers and existing jobs. A boom in nursing or teaching jobs won’t help out-of-work machinists and builders. “For some time now, there’s been a terrible skills mismatch out there in the economy, particularly for Americans who have been unemployed for six months to a year,” says Bernard Baumohl, chief global economist for the Princeton, N.J.–based Economic Outlook Group. “It’s going to be difficult for someone who has been in the real-estate construction business, building homes for example, to be able to get jobs in this market. So they would love to be able to work as a computer programmer, but they have no skills to do so.”

What’s more, America’s much-heralded labor flexibility has taken a hit because of the housing crisis. The U.S. had traditionally enjoyed lower unemployment rates than Europe, in part because American workers were more willing to move from state to state in order to take new jobs. But with so many homeowners underwater on their mortgages, their ability to relocate has diminished. The result? There are plenty of jobs to be had in such places as Washington, D.C.; South Carolina; North Dakota; and Louisiana. But the unemployed in Nevada, Michigan, California, and Florida can’t afford to take them.

As detailed above, lack of labor mobility is the other major drag on economic growth in those regions which weathered the recession well. Cities and states that have done a poor job producing homegrown talent are biting off more they can chew. (Note the ubiquitous reference to Pittsburgh as the development model of choice) It is even worse in struggling areas such as Bakersfield, California. Without robust inmigration, a significantly more educated workforce will take a generation or longer.

The picture is relatively rosy in the cities better known for brain drain. To be sure, lack of skilled workers is an issue. The domestic diaspora comes to the rescue:

The Hello Regina campaign is a bold bid by the Saskatchewan capital to close the labour gap exacerbated by the province’s resources-fuelled economic growth – a surge underlined by the $40-billion bid by an Australian mining company for Potash Corp. of Saskatchewan.

“We’re going through a bit of a boom here, and to ensure we have enough talent based on our economic growth, we need bodies – we need people,” says Regina Mayor Pat Fiacco.

Where better to hunt than Calgary, which is brimming with Saskatchewan émigrés – as many as 250,000, according to some estimates. If that number is even remotely accurate, greater Calgary would rival Regina (population 200,000) and Saskatoon (250,000) as a home for Saskatchewanians.

This anomaly is the product of decades of migration by smart, ambitious Saskatchewan natives who could not find the jobs they coveted in their often economically inert province.

Regina and Pittsburgh have much in common. Each region's expatriates have built the economies of other boomtowns. Now they are ready to come home. The hiccup in this plan is the same issue keeping the unemployed from leaving Michigan. Brookings suggests a mobility bank. That initiative addresses outmigration from distressed cities. Attracting the best and brightest who left is another story.

Regina's PR campaign isn't novel. Rebranding efforts are a dime a dozen. The logistics of return pose the biggest barrier, by far. There is plenty of low-hanging fruit ready and willing to move home. Hello Regina is a misuse of resources.

I think the answer is a geographic mobility incubator. The idea is to catalyze the boomerang migration of those prodigal sons and daughters who are highly intrinsically motivated (for whatever reason) to return. Aid is given to expatriates who address talent shortages or are willing to live in a neighborhood in need of revitalization.

All the money spent on retention or regional branding would be better allocated to this incubator. Given the current unemployment situation, I'm convinced this is the way to go for regions producing dynamic diasporas. Now I need the opportunity to put this theory into practice.

Saturday, November 06, 2010

Brain Drain Epiphanies

Wisconsin doesn't have a brain drain problem. The real issue is the art of political persuasion. Promoters of a certain policy agenda exploit the common misconception:

“The mantra here is, ‘Oh, we lose our best and brightest,’” said UW System President Kevin Reilly. “Not so, based on the facts.” ...

... A poll conducted this summer by UW-Madison professor Ken Goldstein, commissioned by the conservative think tank Wisconsin Policy Research Institute, found 62 percent of Wisconsinites believe the best and brightest leave Wisconsin for work.

But the UW System analysis found there were no meaningful differences in academic performance between those who stayed in Wisconsin and those who left.

“The bottom line here is we do not have a brain drain problem,” Reilly said. “Where we have the problem is we don’t attract as many college educated people as we need to.”

While I agree with Reilly's assessment, one should keep in mind that the UW System President has a vested interest in debunking the myth. Public universities across the country are fighting for a piece of a shrinking fiscal pie. Why should tax dollars support talent leaving for other states?

The conversation is a non-starter. The brain drain bottom line is a moot point. Institutions of higher education can be drivers of regional economic development. That's the case that Reilly should be making. Instead, he has to waste his time addressing the shoddy research coming from a libertarian think tank. The links made between migration and tax reform/fiscal policy are bogus.

The big election a few days ago has further muddied these waters. Can those who kept highlighting the brain drain on the watch of Democrats push for investing in innovation? No, we are again stuck with a lousy narrative that will continue to undermine economic development.

Monday, November 01, 2010

Benefiting From Brain Drain

My fellow co-founder of the Pittsburgh Expatriate Network, Alex Pazuchanics, wrote an opinion piece that appeared in the Sunday Pittsburgh Post-Gazette. Alex and I agree that the lament over brain drain is unfortunate. Pittsburgh would be better off trying to take advantage of the outmigration patterns:

Our region's growth will come not from trying to keep people in Pittsburgh, but from capitalizing on a highly mobile culture. Pittsburgh should be the physical epicenter of a much larger reality: people moving freely, bringing with them their ideas and experiences, allowing for new developments to occur.

We are heavily invested in retaining the talent produced within the region. We do nothing to derive benefits from the graduates who will surely leave. We comfort ourselves with the fact that few will return, insisting that plugging the brain drain is the only policy worth pursuing. This perspective limits the prospects of economic development.

Both Alex and I are on firm footing with our proposal that Pittsburgh do away with the Border Guard Bob mentality. However, I read an article this morning that suggests the upside of limiting geographic mobility:

"If you can't sell your house, you can't move," said Joseph Seneca, a Rutgers economist who co-authored the report, "Post-Recession America: A New Economic Geography?" ...

... The decline in mobility has the biggest impact on young people, who are historically most likely to move out of state for work, said William Frey, a demographer with the Brookings Institution in Washington.

"They're putting their lives on hold," Frey said. "They're standing still when they really want to be moving."

While lower mobility may be tough on individuals, it can be good for a region — like the Northeast — that would otherwise lose population, Frey said.

"If you're keeping young people, that's a good thing," he said. "It adds a lot of vitality to the community and helps to beef up the workforce."

Talent that would normally leave New Jersey during a downturn is stuck. I disagree with William Frey. Keeping young people as a result of the current circumstances is a bad thing. The inability to relocate for better opportunities is obviously a disadvantage for young people. Not so obvious is the drag on the regional economy. The lack of geographic mobility hurts the community.

Unemployment is higher than it needs to be. Wages are depressed given the glut of workers. Innovation is retarded while inmigration collapses. The town is increasingly isolated, a cul-de-sac of globalization. The local economy is unable to respond to the global restructuring.

If more Sebastian County high school students graduated, a $113 million total improvement in annual income performance could result.

That was one of the findings from "Education, Infrastructure and Regional Income Performance in Arkansas," a study by Tom Fullerton, Enedina Licerio and Phuntsho Wangmo, presented Wednesday at the first Advances in Business Research Symposium hosted by the University of Arkansas at Fort Smith College of Business. ...

... "Brain drain" - the outward migration of a more highly educated work force - may occur in the short term after improvement in educational attainment begins but not in the long term.

"Usually what happens when you improve work force performance, you will potentially have more people moving out of the county," Fullerton said. "As you improve educational attainment, you increase productivity levels. Two other things also happen: Businesses begin to develop in that county and the survival rate of those businesses increases. The people in them are better trained. Outside investors are attracted to those regions as well with improving educational attainment."

Brain drain is a signal that the regional economy is restructuring, for the better. The problem is that we lack the infrastructure to tap into that outmigration and speed up the positive returns from the gains in educational attainment and geographic mobility. The Pittsburgh Expatriate Network will address that oversight and catalyze growth in Southwestern Pennsylvania. The region will be the first in the United States to actively seek a dividend from the export of talent, aligning itself with an international trend (e.g. brain circulation).