Monday, February 28, 2011

TechBelt Brain Gain

I don't think brain drain is a "problem". Anywhere. However, some places do face greater challenges considering the educational attainment rate of the workforce. A little digging into the numbers can put the issue in proper perspective. But the myth persists:

High atop the Encore on 7th Downtown, Jamie Seabrook, 25, shares a 1,137-square-foot, two-bedroom apartment with Olivia Benson, 25, a longtime college friend she met during minority pre-orientation at Carnegie Mellon University, and her two attention-loving cats, Abi and Min.

Ms. Seabrook, originally from Westchester, N.Y., and Ms. Benson of Aliquippa, are exceptions to the Pittsburgh "brain drain" -- the city's reputation for attracting students to its 11 colleges and universities, but losing them four years later to a stagnant area job market.

Ms. Seabrook and Ms. Benson are the rule, not the exception. Pittsburgh does a "remarkable" job retaining regional college graduates. There is no other way to explain the following analysis from the Federal Reserve Bank of Cleveland:

Columbus has the most educated cohorts generally. Across the country, state capitals often have unusually high educational attainment. This is especially true if they are home to a large state university, as is Columbus. The Pittsburgh trend is remarkable. Among older Pittsburgh residents, education levels are below the national average, like those of Cincinnati and Cleveland. For residents younger than 40, however, degree attainment jumps up to the levels of Columbus. If the highly educated cohorts in Pittsburgh continue to phase in, the city will eventually have a workforce like a university town rather than a former industrial center. Cincinnati, Cleveland, and Toledo can also anticipate modestly rising education levels based on cohort replacement. The education levels in the Dayton and Youngstown areas are essentially the same across the age cohorts, so these areas may not experience any rise due to the phasing in of more educated young people.

Perhaps the Pittsburgh trend is due to attracting college graduates. That's not the case:

Click on the image to make the graph larger and more legible. What you will see is a big increase in native graduates. In other words, significant talent retention. The narrative associated with the graph:

Next, I looked at the six largest metro areas in the Fourth District in terms of whether their graduates and nongraduates were native to the state (“natives”) or whether they had moved in from another U.S. state (“migrants”) or outside the country (“immigrants”). Across the board, every metro area has more native college graduates in 2008 than it had in 2000. Cincinnati and Columbus have 29 percent and 27 percent more native graduates, respectively. Pittsburgh added 17 percent and Cleveland added 15 percent to their native graduate counts over the period. Gains among the immigrant graduate populations were also substantial. Cleveland-Akron and Columbus both had over 13,000 more immigrant graduates in 2008 than they had in 2000. Pittsburgh added approximately 9,600 immigrant graduates. However, in terms of attracting interstate migrant college graduates, all of the large Fourth District metro areas lag the national average, with the exception of Columbus. The national average in this category is 11.9 percent of the workforce. In Cleveland, the figure is 7.7 percent and in Pittsburgh, it is 6.8 percent.

In fact, the dominant trend for the Fourth District is strong retention and lagging domestic attraction of college graduates. (Ohio Governor John Kasich scapegoating brain drain for the the state's woes is an unfounded assertion.) The outlier is, of course, Columbus. Pittsburgh is catching up to Columbus without the benefit of strong inmigration and being the state capital (not to mention the absence of a flagship state university). Furthermore, as Bill Testa has offered, Columbus started off in a much better position than Pittsburgh.

If you think Pittsburgh is receiving good press now, then just wait a few years. The accolades will be as nauseating as another Steelers Super Bowl victory. The boom will benefit the entire TechBelt. That's the proximity dividend that you see in Northeastern PA thanks to nearby New York and Philadelphia. The Fourth District has long lacked a metro engine for economic growth. Pittsburgh is on the cusp of taking on that role for the region.

Eventually, the concentration of college graduates attracts graduates from other places. This positive feedback loop is partly why the world is spiky and a handful of cities are perennial winners in the war for talent. Town and gown Pittsburgh will start looking like the next Boston, dominating a region about the size of New England. The sphere of influence will stretch to Detroit and up against the gravity of Chicagoland.

I anticipate that no one else out there thinks the above will happen. The rise in Pittsburgh's educational attainment and per capita income are no less fantastic. I would submit that the numbers are unbelievable, incredible. Pittsburgh is the Marcellus Shale of talent. Eventually, businesses will figure that out.


BrianTH said...

I was just thinking yesterday about how Chris Briem's graphs of educational attainment by age cohort in Pittsburgh could be seen as a simultaneous look into the past, present, and future of the region. And I further thought that if that is true, then the present stories of Pittsburgh's renaissance would very likely pale in comparison to what will be written in upcoming years.

In short, count me as one other person who thinks you are correct.

Anonymous said...

I never heard anything like this before, excepting every community development corporation in the country. They all say it one way or another. Organizations chartered with luring business and developing companies are the ultimate spin-doctors to the nth degree.

I would stop short of predicting the future economy based on so few stats. Other things that may have an impact: government laws, trade agreements, environment, social change. Here's hoping the best for Pittsburgh nonetheless.