Wednesday, October 10, 2012

Building Industry Clusters Via Brain Drain

Talent migration is an economic link between two places. It's not a zero-sum game. There aren't winners and losers in a vote-with-your-feet race. When people move, people develop and two communities should benefit. How brain drain is building an industry cluster in Pittsburgh:

After seven years with Disney in California, Schell — a New Jersey native with a Carnegie Mellon University graduate degree — returned to Pittsburgh 11 years ago and began teaching at the university’s Entertainment Technology Center.

He wanted to keep working with many of the talented students graduating from the CMU program.

He started the company with five people and $10,000 of his own money for computers and other equipment.

Our early projects were Disney projects, because they wanted to keep working with me,” he said. He recouped the $10,000 within six months. “More projects started coming our way, so we kept at it, and now we have 70 people.”

Some early creations: Disney’s ToonTown Online, which Schell developed while working at that company; and Pixie Hollow Online, featuring Tinker Bell, which debuted in 2008 as the first online world designed for girls. With millions of players, it’s likely Schell’s most-played game to date, he said. 

Emphasis added. Typically, the Jesse Schell migration tale is seen as a community shortcoming. Local university attracts out of state student, but fails to retain the graduate. Pittsburgh is dying. Time to pony up the jingle and get Richard Florida to save the day.

When Schell left the CMU program, Los Angeles was ready for him. Pittsburgh was not. When Schell returned, he was much more valuable to the regional economy than when he made his ambitious move to the Left Coast. He created Pittsburgh jobs that CMU graduates could fill. They didn't need to go to Los Angeles to work for a digital media company. Pittsburgh would be ready for the next Jesse Schell.

Looking at Disney Research, the link between Pittsburgh and Los Angeles is easy to see. That connection is a direct result of brain drain from Pittsburgh to Los Angeles. Not only does Pittsburgh now boast its very own Disney lab; its director also runs the one in LA (as well as the one in Boston).

Why are people leaving? That's the wrong question. Where is the talent going? Concerning economic development, that's critical intelligence. The economies of LA and Pittsburgh are becoming more intertwined. That's a good thing, for both places. I posted yesterday that telecommunications is finally catching up to the trend. Pittsburgh has major talent migration networks to manage in NYC and DC, as well as LA. The region is booming, thanks to brain drain.

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