Wednesday, February 26, 2014

The Era of Dying Places: Everyone Is Starved for Talent, but Migration Is a Thing of the Past

California is dying and your state is next at Pacific Standard magazine.

Theme: Demographic decline and Legacy Economy.

Subject Article: "Why California needs the young if it's to thrive: Age, not race or ethnicity, matters most for the state's future prosperity."

Other Links: 1. "Puerto Rico Is Dying."
2. "How Return Migration Will Save The World."
3. "The New Geography of Jobs."
4. "Era of Dying Places."
5. "Net Migration Between California and Other States: 1955-1960 and 1995-2000."
6. "Texas Gov. Rick Perry Not About 'To Ride Off Into the Sunset'."
7. "The gain before the pain: Mexico’s demographic dividend will be short-lived."
8. "Young people are NOT leaving Pittsburgh: Statistics in hand, Chris Briem is happy to explode the myth of a continuing exodus."

Postscript: Scouring the ends of the earth for prospective college freshman:

A waning number of high school graduates from the Midwest is sparking a college hunt for freshman applicants, with the decline being felt as far away as Harvard and Emory universities.

The drop is the leading edge of a demographic change that is likely to ease competition for slots at selective schools and is already prompting concern among Midwestern colleges.

“You can’t create 18-year-olds in a lab,” said Brian Prescott, director of policy research at the Western Interstate Commission for Higher Education in Boulder, Colorado. “Enrollment managers are facing an awful lot of pressure that they can’t do much about.”

For Pennsylvania, been there and done that. Good luck catching up.

Tuesday, February 25, 2014

MOOCs Are Going to Make College Even More Expensive

MOOCs are for international talent recruiting, not education at Pacific Standard magazine.

Theme: Higher education and the Legacy Economy.

Subject Article: "How colleges are finding tomorrow's prodigies: American universities are using online courses to discover gifted students in math, science, and the arts. Meet three phenoms from the far corners of the world."

Other Links: 1. "Capturing the world’s emerging middle class: Multinational companies need new “scale at speed” approaches to penetrate the developing world’s increasingly prosperous consumer markets."
2. "Why the United States Will Rule the Legacy Economy."
3. "Are Graduation Rates an Input or an Output?"

Postscript: New Jersey feeds high school graduates to Pennsylvania institutions of higher education. This is a source of considerable anxiety of the brain drain kind. But instead of retention, New Jersey institutions of higher education want to be more like Pennsylvania:

This scholarship is great, but there are a couple of other things we should keep in mind. It’s in the University’s interest to increase enrollment from out-of-state and international students, and yet these students currently make up only 14 percent of the overall student population. The higher tuition from out-of-state students will bring more money to Rutgers, and there could be more of a focus on this oft-forgotten part of the overall student population to increase their enrollment.

Demographically, New Jersey can't support Rutgers. Rutgers must import freshman (i.e. export higher education). MOOCs are a good way to do that and will allow Rutgers to collect more tuition dollars.

Saturday, February 22, 2014

Why the United States Will Rule the Legacy Economy

The United States is exporting higher education to the entire world at Pacific Standard magazine.

Theme: Rise of the Legacy Economy and higher education.

Subject Article: "Mexico’s study-abroad strategy is real news out of summit."

Other Links: 1. "It’s Settled: Silicon Valley Is Dying. So What’s Next?"
2. "A Second American Century."
3. "Era of Dying Places."
4. "Massive open online forces."
5. "30 Years: Exodus from Pittsburgh has finally abated."
6. "Southern California Has Aging Issues."
7. "Talent Production and Job Creation."

Postscript: Higher education in Florida, from paradise to Pennsylvania:

The departure of Florida State University President Eric Barron to join the Penn State University system was met with much surprise, as was the leaving of former State University System Chancellor Frank Brogan, also recently migrating to Pennsylvania, and before him the move of John Cavanaugh from the University of West Florida to this same northern state. We seem to have a budding employment pipeline that runs from Florida to Pennsylvania.

Most would wonder why in the world Pennsylvania would serve as a magnet for Florida-based talent. Is it the severe budget cuts that have occurred there, leaving state funding for their institutions at “1995 levels,” as one university president described it? Is it the record snowfall and cold weather that are so appealing? Is it the statewide demographic challenges of having fewer college-bound residents — added to the practice of neighboring states offering discounted tuition for Pennsylvania students?

Higher education talent is agglomerating in Pennsylvania because institutions there lead the way in exporting services.

Wednesday, February 19, 2014

A Second American Century

Rise of the Legacy Economy and a second American Century at Pacific Standard magazine.

Theme: Convergence of the Innovation Economy.

Subject Article: "How Johnson’s ‘Great Society’ boosted Silicon Valley."

Other Links: 1. "Five Linked Crises in the Contemporary World-System."
2. "Washington Consensus."
3. "Left Behind: Chicago is bequeathing an urban jungle to the next generation."
4. "It’s Settled: Silicon Valley Is Dying. So What’s Next?"
5. "Not Dante's Pittsburgh."
6. "Era of Dying Places."
7. "Diverging Demography of Baltimore and Africa."
8. "The False Promise of Eds and Meds."
9. "Urban Geography of Globalization."
10. "Rahm Emanuel: Mayor America."

Postscript: Riding high on a wave of innovation after the collapse of manufacturing, Chicago is heading towards a major wipe out:

Between 2007 and 2011, Chicago and its immediate suburbs also ended up with about 10,000 fewer residents with a bachelor's degree or higher, even after accounting for new arrivals, according to the U.S. Census Bureau's first attempt to track population shifts by income and education at the county level.

In recent years, local officials and real estate developers have touted a resurgence in young tech workers and affluent empty-nesters revitalizing the city's core. Yet those trends are seemingly being overshadowed by more powerful factors, as other parts of the city and close-in suburbs send even larger numbers of prosperous, college-educated people to DuPage County and beyond.

“Wow, the movement back to the center that a lot of urban planners in the region were hoping for isn't borne out by this data,” says Rich Greene, associate professor of geography and urban studies at Northern Illinois University. “It's counter to what we've all been reading about.”

Compare that to recent trends in Cleveland:

The census estimates show that Cuyahoga County, where Cleveland is located, gained about 3,450 more highly educated people than it lost. An estimated 25,450 adults with at least some college experience came to the county while about 22,000 left.

Granted, Cleveland is trying to catch up to Chicago's lofty perch now in decline. Chicago is betting on the converging Innovation Economy. More places will compete for a shrinking pool of talent. Cleveland is betting on the diverging Legacy Economy. Chicago does have great legacy assets (i.e. institutions of higher education producing world class talent), but seems to be ignoring them at its own peril.

Wednesday, February 12, 2014

Atlanta Is Dying: Young, Smart People Are Fleeing Georgia’s Capital City

Atlanta mayor claims his city stinks at Pacific Standard magazine.

Theme: People develop, not places.

Subject Article: "Mayor working to keep more Tech grads."

Other Links: 1. "The White Flight Myth."
2. "Why 'Brain Drain' Can Actually Benefit African Countries."
3. "Mating With Migrants."
4. "Mesofacts Migration: Rural Counties."

Postscript: France beginning to embrace its brain drain:

Liam Boogar, a Silicon Valley native who three years ago set up Rude Baguette, a start-up blog based in Paris, says French tech entrepreneurs have been going to California since the 1980s. "They have probably done more good than harm to France. French engineers have a great reputation in the Valley, which France has underleveraged," he says.

So much effort is wasted on retention. Better leverage existing outflows and inflows of talent. Above all, remember people develop, not places.

Tuesday, February 11, 2014

The Country Where Unemployment Is Better Than Employment

Germany must import entrepreneurs at Pacific Standard magazine.

Theme: Demographic decline and the war for talent.

Subject Article: "How ‘entrepreneur’ stopped being a European word."

Other Links: "Rabenmutter: Germany Waging the War for Talent Without Women."

Postscript: Where we are all headed:

“In the boom years after the ’90s, all our policies were designed to attract labour,” says Catarina Reis Oliveira, the head of the research department of the Portuguese government’s High Commission for Immigration. “But since the crisis, we’re looking at immigrants as a source of employment – as people to create jobs.”

People develop, not places.

Saturday, February 08, 2014

Cleveland’s Pittsburgh Moment

Cleveland is dying just like Pittsburgh was back in 2004 at Pacific Standard magazine.

Theme: Economic convergence.

Subject Article: "Did Burke Lakefront Airport Miscalculations Add to Hopkins Hub Troubles in Cleveland?"

Other Links: 1. "The Robots That Saved Pittsburgh: How the Steel City avoided Detroit’s fate."
2. "United Airlines ending of non-stop to Oklahoma City could crimp Ohio shale gas development."
3. "Chesapeake CEO Makes Surprise Stop in Region."
4. "Chesapeake forging ahead despite job cuts: Recent job cuts and reports of corporate restructuring at Chesapeake Energy have hit local operations."
5. "United Airlines exit is a major setback that reflects this region's failure to fix the fundamentals."
6. "Terminal Sickness: How a thirty-year-old policy of deregulation is slowly killing America’s airline system—and taking down Cincinnati, Memphis, and St. Louis with it."
7. "A Tale of Two Rust-Belt Cities."
8. "Dismantling Pittsburgh: Death of an airline hub."
9. "Who the hell does this Sienna Miller skank think she is? Question submitted by: Pittsburghers everywhere"
10. "A Neighborhood's Comeback: Part of Pittsburgh Finally Recovers From 1950s Planners; Google Sets Up Office."

Postscript: What's driving the economic turnaround in Pittsburgh? One theory is that the Innovation Economy is converging. The group of metro winners is growing. Silicon Valley's dominance is eroding. Another possible theory is the divergence of the Legacy Economy. A new set of winners are forming with the rise of the next economic epoch in the wake of the Innovation Economy's decline. I think the Innovation Economy is converging in Cleveland. Meanwhile, the Legacy Economy is converging in Pittsburgh. Thus, the disparity between brain hubs.

Wednesday, February 05, 2014

Requiem for ‘The Washington Post’

Churn or burn at Pacific Standard magazine.

Theme: Brain drain and talent churn.

Subject Article: "Labour markets: Churnalism."

Other Links: 1. "Three more Washington Post staffers leave to join Klein venture."
2. "‘The New York Times’ Is Dying."
3. "If you love your most talented employees, set them free."
4. "Zero-Sum Creative Class."
5. "Walkability Boondoggle."
6. "Migration Is Economic Development."
7. "Washington Post's Brad Plumer, Sarah Kliff Joining Ezra Klein's Vox Venture."

Postscript: Why retaining talent (plugging the brain drain) is bad for the economy isn't rocket science. An economic cluster is useless if talent doesn't flow in and out of the businesses within that cluster. Inter-firm talent migration is crucial for innovation. Greater density won't help.

It’s Settled: Silicon Valley Is Dying. So What’s Next?

Google is the migrant, talent the attraction at Pacific Standard magazine.

Theme: Economic divergence and convergence.

Subject Article: "The shadow of success: Facing the facts on Silicon Valley’s affordable housing crisis."

Other Links: 1. "San Francisco’s Detroit Moment."
2. "Lone Star Power."
3. "I left New York for LA because creativity requires the freedom to fail."
4. "Moby Selling Rust Belt Chic Los Angeles."
5. "Zero-Sum Creative Class."
6. "Legacy Economy: Pittsburgh Steel Crazy After All These Years."
7. "Anchors and Arts Help Redefine the Rust Belt."
8. "Pittsburghese as Lingua Franca."
9. "Google confirms expansion to Bakery Square 2.0."
10. "Waiting on Google's announcement at Bakery Square 2.0."
11. "The Rise of the Creative Class."

Postscript: I've been working up to this post for about two years. I termed the successor of the "Innovation Economy" (as Enrico Moretti called it in "New Geography of Jobs") as the "Talent Economy". I'm dumping the term. The "Legacy Economy" is already diverging while the Innovation Economy continues its decline. Meaning, Pittsburgh is not so much catching up to Silicon Valley as it is replace it on a global scale.

Sunday, February 02, 2014

Saturday, February 01, 2014

San Francisco’s Detroit Moment

Like Detroit in 1960, the wages are too damn high in San Francisco at Pacific Standard magazine.

Theme: Economic convergence of Innovation Economy.

Subject Article: "How Silicon Valley’s most celebrated CEOs conspired to drive down 100,000 tech engineers’ wages."

3. "Silicon Valley 2014 economic forecast: Talent crunch, M&A uptick, development sprawl."
4. "Guerrilla Geographies of Artisanal Toast."
5. "The AOL Of China To Build A Suburban Tech Campus In The Sky."

Postscript: Evidence of the decline of the Innovation Economy starts with talent arbitrage. Where can a tech firm find cheaper workers? Clear to me now that we are on the other side of that inflection point:

Jennifer Kelly used to take refuge in her $1,750-a-month, two-bedroom downtown Campbell home.

The former tech sales manager, who made up to $180,000 a year working at startups during the last decade, had a routine of working out on her home Stairmaster or taking joy rides in her sports car to relax after 14-hour workdays.

Now Kelly, who didn’t want her real name used in this story, is stringing together short-term contract work and sleeping in an aging SUV that she parks on a rotating slate of dead-end streets in Silicon Valley.

“Professionally, I’m at director level,” she said. “I had a safety net.”

Two neurosurgeries and a layoff, exacerbated by rising housing costs, have made Kelly, 51, a personification of Silicon Valley’s affordable housing crisis. The region’s high cost of housing affects residents at all pay grades with varying degrees of severity. It also hamstrings employers looking to lure talent to one of the country’s most expensive real estate markets.

Silicon Valley's regional economy is imploding, collapsing under the weight of its own success. Detroit suffered the same fate, but during a different economic epoch. I honestly don't think the Detroit comparison is hyperbole.