Saturday, April 13, 2013

Toronto’s Portland Problem

Portland's well-educated workforce is an economic under-performer. Your region may do a better job of attracting/retaining people with college degrees. However, an employee with a bachelor's is not necessarily more productive and innovative. The Talent Dividend is a myth. Trouble in Toronto:

With so many people already underemployed, it is far from clear where a new wave of talent would fit. The government funding infusions that drove a postsecondary enrollment boom for the last decade are drying up quickly, and education leaders increasingly acknowledge that simply flooding the job market with graduates without helping steer them to opportunities is no recipe for success.

I don’t believe in just saying that more degrees equals more productivity,” said Robert Luke, assistant vice-president of research and innovation at George Brown College. “Education must be linked to the economy, right?” ...

... Many people still think talk of growing Toronto’s degree-holding class is putting the cart before the horse.

“If you’re hiring someone with a BA or a master’s degree or a PhD, they need to have the plant and equipment, they need the computers to make them productive. And it’s not clear that Canadian firms are investing,” Dr. Sweetman said. That’s where industry clusters might help steer the way. Boston’s booming productivity revolves around an education cluster with a vast number of universities, colleges and R&D enterprises that helped nurture a concentration of innovative business, information and medical technology ventures paying wages well ahead of U.S. averages.

Closer to home, Mr. Drummond suggests it is entirely reasonable to suggest “Toronto should be the world centre for the study and practice of financial sector risk,” or a number of other finance niches, but is missing the collective vision to make it a reality. “There’s a lack of confidence, as usual, in Canada, there’s a lack of ambition,” he said. “And yeah, there would be, then, a lack of skilled talent to fill that. But having 10,000 people with PhDs in financial sector risk walking around Bay Street is not going to do an awful lot on its own.”

Emphasis added. The Portland Problem is thinking that more degrees do equal more productivity. All a city has to do is attract/retain talent. Then, sit back and watch economic development happen. Toronto fell hard for this hollow strategy. Buyer's remorse is settling in.

"[S]imply flooding the job market with graduates without helping steer them to opportunities is no recipe for success." Yet this is the logic behind plugging the brain drain. In and of itself, retaining talent fixes nothing. If anything, it makes the economy worse. The Talent Dividend is a boondoggle.


Done By Forty said...

What if you flood the market with entrepreneurs?

Jim Russell said...

What if you flood the market with entrepreneurs?

This morning, I read a story about Richmond, VA. There is no shortage of ideas, but not enough talent to bring them to market.

Data driven economic development has run amok.

Dave said...

Some of your earlier posts say that companies are moving to where the talent is, specifically where the talent is "produced", in your words. Here you seem to be saying that Toronto and Portland "attract" talent, and it isn't working out for them too well. Why is there a difference in performance between cities that produce talent and those that attract talent? I would think talent is talent. Are Pittsburgh and San Antonio producing a better type of talent than Toronto and Portland are attracting? Or is it a cultural issue revolving around "confidence" and "ambition"?

Also, if you have a link to the story about Richmond, I'd like to read that article.

Jim Russell said...


I can't find the article I read. Sorry about that.

I'm perplexed by Toronto's supposed inability to better leverage its talent pool. Toronto attracts talent. Toronto also produces talent (e.g. University of Toronto). I would figure, a la NYC, Toronto also refines talent.

Toronto might be an interesting case study to test my ideas about the geography of the Talent Economy.