Planless Cleveland

Richard Herman, of Rust Belt High Skill Immigration Zone fame, e-mailed a link to a bit of commentary in the Cleveland Plain Dealer. Cleveland appears rudderless in the face of globalization. One theme is the lack of human capital. Over at Brewed Fresh Daily, Ed Morrison take Cuyahoga County to task for a lack of vision:

Now here’s the really sad part: Cleveland’s civic leadership is prepared to invest $400 million in public funds for a convention center — a strategy that does not work to create higher incomes. (Worse still, operating costs will drain County resources for decades. Convention centers compete in a very soft market with utilization rates under 20%.)

Cuyahoga County would be far better off if the County Commission took those public funds and created an endowment to support new scholarship programs for the county’s low income parents and children.

Much to Mr. Morrison's apparent exasperation, Cleveland seems disinterested in enhancing its knowledge assets. I might characterize the region as outright combative towards any proactive human capital initiative. However, I recall reading plenty of criticism about Pittsburgh's investment in a new convention center and that's not the only boondoggle eating at residents. But I don't think of Pittsburgh as heartless when it comes to improving educational attainment and developing the economy through brain power.

I'd guess that many, if not most, cities lack a comprehensive human capital strategy. Cleveland may indeed be one of the most egregious offenders of neglect, but I doubt I understand the entire story. My main concern is that I keep hearing, almost without exception, how bad things are in Cleveland. At a minimum, the civic leadership there needs to reach out to its distressed citizens and reassure them that the region has a plan. Because the current sales job has failed.

Rust Belt Toledo

Lately, people are e-mailing me blog fodder. As a result, this week's slate is dedicated to a series on Ohio Rust Belt cities in the Toledo Blade. Thanks to i will shout youngstown for the tip.

I'm not inclined to review the series in chronological order. But since I blogged about Toledo migration yesterday, I'll start where the Blade did. Toledo is not exceptional regarding this recent trend of downtown decline. All of Ohio's big cities, including Columbus, are concerned about the vitality of their central business districts. Here is the crisis in a nutshell:

When glass-maker Owens-Illinois Inc. decamped for the suburbs two years ago, it set off a negative chain reaction in downtown Toledo’s office and retail sectors.

Bellacino’s Pizza & Grinders locked its doors for good. Ditto for nearby Quizno’s Subs. Owners of the upscale Diva restaurant called it quits. And Ken’s Flower Shop shut its downtown operation.

The losses were a buzz-kill for downtown boosters hopeful after the success of the community’s minor-league ballpark, opening of new night spots and condos, and start on a new sports and entertainment arena.

“We have to recover again,” laments downtown booster Bob Seyfang, who owns property in the city core and is involved in efforts to preserve the area’s architecture.

But the situation in Toledo is not unique.

I might be admonished for my ignorance, but I had no idea that Rust Belt cities were experiencing a fresh round of economic challenges. The mortgage crisis hit Ohio hard, but the malaise reportedly started earlier this decade. There has been a steady stream of job losses, further hollowing out these cities.

I won't spend this week looking deeper into what appears to be a dire situation. The articles balance hope with despair and I intend to look at the city profiles through the lens of opportunity. I'm looking for places to invest energy and further the Cleveburgh Corridor vision.

Bullish on Pittsburgh

Looking at the cast of Rust Belt cities, Pittsburgh looks strong. At least, I think the city looks strong. In accepting the Urbanophile Challenge, my goal is to convince you to see the region with the same optimism. My ammo is nothing more than the previous posts in this blog.

Pittsburgh has both net outmigration and natural decrease. The sum of this observation is that Pittsburgh's population is declining, which is an indication of a weak city. I've done my share of parsing the demographics and trying to understand the migration landscape. I wouldn't even consider net outmigration without disaggregating the data. I also wouldn't thumb my nose at population gains and robust replacement rates. However, I'm more concerned with projections and what a city will look like going forward. There are indicators and then there are predictors.

Pittsburgh has an inmigration problem, not a net outmigration problem. Over the two years of writing this blog I've learned that young and educated people leave all cities, weak or strong. I consider the lack of outmigration from Pittsburgh to be one of the region's greatest weaknesses. If more people left, then wages would increase. As a result, inmigration would increase. This assumes that there are enough jobs for knowledge workers. Pittsburgh does just fine on this count. The overall analysis of migration strikes me as too much rational choice and not enough appreciation of chain migration. People don't always go to the strongest cities and emerging opportunities do not drive relocation overnight.

My main worry is the lack of job creation. But even that dire prospect may be moot in the face of the retiring Baby Boomers. Pittsburgh is ahead of the curve when it comes to an aging demographic. However, the region has a glut of talent from local sources. If Indianapolis is starved for knowledge workers, then guess where they will look? Eventually, businesses will just relocate instead of compete with other cities for the shrinking pool of software engineers. The number of shrinking cities will continue to grow, but few of them are equipped to deal with it.

Despite all the listed weaknesses, Pittsburgh is weather the current economic recession relatively well. I would expect a downturn to punish weak cities. The best test of urban strength is a turbulent global market. Thanks to the exodus of the 1980s, Pittsburgh diversified and restructured. The municipal government is still a mess, but the region is remarkably resilient. The worst of the demographic storm is long past and the shakeout of globalization leaves Pittsburgh well positioned for the coming decade.

Toledo Diaspora

Many thanks to Chris Briem for bringing to my attention this Toledo Blade article profiling that city's out-migration. Instead of the typical US Census data, numbers from IRS tax returns are used. Mr. Briem applied a similar analysis to Pittsburgh migration. For comparison here are the top 10 destinations listed for Pittsburgh out-migrants:

1. Washington, DC
2. Philadelphia, PA
3. Atlanta, GA
4. Cleveland, OH
5. Columbus, OH
6. Baltimore, MD
7. Chicago, IL
8. Tampa-St. Petersburg, FL
9. New York, NY
10. Johnstown, PA

The Blade article lists the top out of state destinations for Toledo out-migrants in this graphic:

1. Phoenix, AZ
2. Fort Myers, Cape Coral, FL
3. Las Vegas, NV
4. Charlotte, NC
5. Fort Worth, TX
6. St. Petersburg, FL
7. Chicago, IL
8. Tampa, FL
9. Tuscon, AZ
   
10. Los Angeles, CA

If I remove the two in-state cities from Mr. Briem's list, then I can add Charlotte, NC (#11) and Boston, MA (#12) as hot Pittsburgher destinations. Still, the out-migration profiles of the two cities are remarkably different. People from Pittsburgh are willing to go to non-Sun Belt cities. On the other hand, the Sun Belt is the place to be for Toledoans. Without properly analyzing the data, Toledo relocations seem to be much longer on average.

I think the following passage from the article is interesting:

[Toledo native Marci Williams] said job recruiters in the Southwest will often look in the Midwest for applicants with a strong work ethic.

“I was also told on my interview that employers here like to see the strong Midwestern ethical standard,” Mrs. Williams said. “The work force from the Midwest generally has been raised in middle-class, hard-working, blue-collar families, and they’ve had to earn their way. They understand what it takes to work, and their standards and ethics seem to be higher than some of the local candidates.”

That’s true for fields other than health care. In 2006, recruiters for the Phoenix Police Department came to the University of Toledo to look for young cadets to replace retiring veterans.

Younger people — with fewer regional ties and looking for new jobs — are more likely to move, according to experts.

Migration often requires some help. That young Toledo adults are heading to Phoenix, over other sunny destinations, is no accident. Again just eying the data, the effects of network migration would appear to be in play. The economic rationale is obvious enough, but there is a wealth of choices within the geography of better opportunities.

I can't shake how many Pittsburghers leave for Cleveland and Columbus. There is a strong intraregional human capital exchange. Beyond the moves within Ohio, Toledo isn't part of this economy. Score another one for Cleveburgh+.

Rust Valley

I'm rolling out the welcome wagon for a new Rust Belt Blogger, Rust Valley:

Rust Valley is a set of writing and collected data about Technology and Life in Pittsburgh. It’s written by me, Todd Underwood. I’m moving from Lebanon, NH to Pittsburgh, PA.

An in-migrant to Pittsburgh? I think Hell just froze over.

H-1B Geographic Loopholes

There appears to be a precedent for the Rust Belt High-Skill Immigration Zone:

Guam has received an H-1B exemption to ensure that enough workers will be available to prepare the island for 8,000 Marines being transferred from Okinawa, writes Computerworld blogger Patrick Thibodeau. The exemption is included in the Consolidated Natural Resources Act of 2008, approved last month by President Bush. It will expire at the end of 2014.

Rust Belt cities, such as Pittsburgh, already understand how the liberalization of immigration law could benefit them. I'm skeptical that a sweeping cap increase would help, but a geographically targeted approach akin to the EB-5 visa program looks like a winner. Obama and McCain should take note.

Cleveburgh+ Corridor

While the Urbanophile is skeptical about the linking of weak cities (I'll address the challenge in detail tomorrow), I'm excited about the prospects of building an economic corridor stretching from Columbus in the west and Pittsburgh in the east northward to Toronto. Null Space has promoted a Toronto strategy for Pittsburgh for a while now. The recent surge in gas prices is breathing new life into that vision:

[U.S. Rep. Steven C. LaTourette, R-Bainbridge Township,] is a strong proponent of a passenger rail system, but said it needs to proceed in a way he believes can actually be done.

He is excited about the high-speed rail plan under development for about 10 years by the Ohio Rail Development Commission based in Columbus.

Since funding for the plan always has been the problem, there is hope that the new federal legislation would change that if it becomes law, said Stu Nicholson, ORDC spokesman.

"I've never been more optimistic than I am now," he said. "This bill is huge. It's as much of a game changer as $4 a gallon for gas is."

Part of the plan calls for a corridor from Cleveland to Buffalo to Toronto and also to Pittsburgh.

I blogged yesterday about the privileged position Rust Belt cities might hold if gas prices remain relatively high. I'm not thrilled with the talk about commuter mass transit, which will help maintain sprawl, but high-speed passenger rail between urban centers is another story. Making it easier for someone in Columbus to do business in Buffalo should spur economic growth in both cities. Or, urban residents of Pittsburgh could walk to the train station for a day at the beach in Erie.

The above is the kind of mega-regional thinking Richard Florida champions. But noting a contiguous stretch of urban lights isn't a useful way to define the economic area. The parochial geography of the Rust Belt will be difficult to overcome (as John Austin and Richard Longworth well know). To some extent, Greater Cleveburgh already exists. Buffalo and Toronto test the limits of this corridor, but not for my Erie-centric worldview.

See you in Erie ...

Brain Drain Report: Friday Edition

Back by popular demand (no, not really), my global tour of brain drain news continues. The first stop is Canada, where the anxiety about the exodus of talent is a future consideration. However, Canada allegedly has a step on other countries such as the United States and France in the coming war for talent. One of the advantages cited is Canada's immigrant friendly disposition. I'd temper this exuberance with the fact that Canada isn't immune to brain circulation or geographically fickle college graduates. I could imagine a scenario of Canada bearing the initial costs of sorting through the immigrants only to have the United States poach the cream of the crop.

Venturing across the Pond, the Dutch are leaking knowledge. Instead of sticking fingers in the dike of out-migration, the Netherlands is promoting study abroad. The rub is that 70% don't plan on returning. Once again, the problem of investing in native human capital rears its ugly head. The Dutch should get with the program and start building an effective diaspora network.

Last on the brain drain docket is South Dakota. Dakota Roots is a boomerang migration initiative designed to lure wayward graduates back home. The idea is to let twentysomethings sow their wild oats, mature to thirtysomethings when they can appreciate what South Dakota has to offer. Might non-native thritysomethings harbor similar aspirations? What about the talent that left and doesn't want to come back? This demographic might still care about what is going on and represent a significant business opportunity. There is more than one way to leverage a region's diaspora.

Expensive Oil to Fuel Rustbelt Rebirth?

As oil approaches another record high price, Rust Belt cities should be celebrating. There is already plenty of talk of how cities are becoming more attractive to the weary commuter. But not every city is in a position to benefit from the transforming pattern of residency:

The shift in housing preferences may begin to reverse one of the defining national trends of recent decades - the massive migration toward the south and west of the country. Sunbelt boomtowns like Atlanta, Houston, and Riverside, California have grown at breakneck pace thanks to cheap and plentiful housing built along sprawling highway networks. Some of these places are now rushing to build transit service, but the soaring cost of petrol has caught most flat-footed. Such cities can expect outward expansion to slow, but perhaps more importantly, households considering moves to warmer climes may rethink their decision. Northeastern and Midwestern cities in long decline, such as Baltimore, Philadelphia, Pittsburgh and Cleveland, may find their dense structures and legacy transit systems an incalculable asset.

I wouldn't be so quick to celebrate the "legacy transit systems", but the density capacity should be a strong asset in a climate of $4 per gallon of gasoline. Another advantage is the proximity to other urban centers. I live in the Denver area and I'm beginning to wonder how this region's geographic isolation will affect the economy here.

I'll buy into the trend when and if the jobs start moving in from the suburban ring. I suppose this first wave of urban pioneers is comprised of workers who are commuting into the city. Are the industrial and business parks next in line?

Winning the War on Talent

A world survey of immigration policy would reveal a host of inherent contradictions. Cries for more talent and stronger borders are common among OECD member countries. A reconciliation is in the offing:

But where recent economic booms had been strongest, and where the inflow of migrants had reached record highs, the prospects for a sharp decline are clear. This is particularly the case in western Europe. Ireland and Spain, both historically countries of emigration, have seen massive arrivals of foreigners in the past decade. Romanians, in particular, flocked to man Spain’s building boom; Poles and Lithuanians went to Ireland. Britain has drawn an exceptionally large number of migrants from Europe’s east, especially Poland; Greece attracted Albanians; Italy drew in Romanians and others. The rush of people on the move went hand-in-hand with the expansion of low-cost travel in Europe, especially by air.

Now some of these flows are slowing, even reversing. A study by the Institute for Public Policy Research (IPPR), a British think-tank, this year noted that of the 1m or so East Europeans who came to Britain since 2004, around half have already left—some for better economic prospects back home, others because they intended to stay only to learn English or to work temporarily, or because they wish to return to their families. The inflow of migrants to Britain from this region has also dropped sharply, by 17% last year. Danny Sriskandarajah of the IPPR concludes that “After one of the most intense periods of migration there has to be a natural end. The dominoes are starting to fall.”

An increasingly spiky world may be going flat. Return migration wouldn't be feasible without at least some leveling of the economic landscape. But the main concern should be how spiky hot spots are being starved for talent by the countries that host these world cities.

You call this phenomenon "the revenge of the valleys of globalization." Economic outliers who refuse to move are not inclined to support policies that will further erode their own wellbeing. That should bode well for the brain drain countries as talent completes the journey of brain circulation. Will native OECD human capital follow them?

Brain Drain Report

Ohio is still celebrating its latest initiative to stop brain drain. I doubt that this is the first time the state tried to keep college graduates from leaving and I'm certain that this won't be the last. Ohio should figure why it can't attract talent from other states or countries. Unfortunately, Ohio is going backwards instead of forwards.

The Economist puts the spotlight on why human capital is increasingly geographically mobile. That college graduates out-migrate isn't unique to Ohio. Does anyone in Columbus read the Economist? A policy that works with the emerging migration trend would be most welcome. Instead, we get English-only legislation.

Not to pick on only Ohio, pundits continue to lampoon the lack of a coherent economic immigration policy in the United States. The European Union may emerge as the next great talent magnet, if their colossal bureaucracy can get out of the way. That's a big "if." However, the debate about US immigration is at least an equal impediment. But the United States currently stands at a considerable advantage in the war for talent and demographic time bomb may go off just in time to out-maneuver the EU.

Activating Your Expatriates

Brain drain never felt so good. There are benefits to exporting human capital. The problem is figuring out how to keep in touch with the geographically mobile hometown economic superstars:

Chris Crowell is one of the many young people who has left Atlantic Canada for the appeal of the big city.

And although he didn't say he has any immediate plans to return home, Crowell still has strong ties to the region and works to dispel the various stereotypes that exist about Atlantic Canada.

"People sometimes leave the region for very valid reasons and they can come back with increased business networks, increased experience -- it can be very valuable," he said. "We're not trying to say what any individual should do, what we're trying to do is keep them engaged in what's going on here."

Crowell, president of the Toronto-based group East Coast Connected, spoke at a business breakfast in Fredericton yesterday morning.

The group consists of former Atlantic Canadians living in Toronto who work together to promote the region and foster ties between their home provinces and Ontario.

Building these networks on the back end of the migration is doing it the hard way. The proactive approach is to facilitate the relocation. Help place regional human capital where it can best thrive.

Does such an economic development plan sound crazy? China has employed this model successfully. The perceived brain drain has transformed into a significant migration pattern of brain circulation. India, a country that mostly ignored its emigrants, now struggles to call its expatriates home. The Indian government is left scrambling to enfranchise its Diaspora.

Pittsburgh Ascendant

I picked up on this article lauding Pittsburgh's growing tech sector over at Null Space. Low cost of living and low wages, along with ample talent supply, are cited as reasons as to why tech companies are eying Pittsburgh for relocation. But I honed in on the talent supply discussion:

While demand has seen a steady increase, the AeA report also cautions that if changes are not made in the U.S.'s the immigration policies educational system, the supply of workers will continue to decrease, jeopardizing the technology industry in the U.S.

Many high-tech master's degree programs are populated predominantly by foreign nationals, [said Josh James, a senior research analyst at the AeA]. Streamlining the visa process to encourage them to stay in the U.S. after graduation would go a long way to help meet the industry's needs.

"At least half the master's and Ph.D. candidates are foreign nationals. Yet once they [graduate], we make it incredibly difficult for them to stay. We push very strongly for increasing the cap on H-1B visas and streamlining the process for green cards," he explained.

The above concern about the immigration bottleneck is why I wondered if an increase in the H-1B cap would be a good thing for Pittsburgh. I haven't thought this through, but companies might move to Pittsburgh to take advantage of foreign-born talent matriculating at CMU. Plus Pittsburgh generates enough graduates to keep wages relatively low. If tech companies can't use immigration to reduce costs, then they will start taking a longer look at places such as Baltimore and Pittsburgh.

I have no doubt whatsoever that substantial immigration is necessary to keep expensive regions such as Silicon Valley afloat. Meanwhile, Pittsburgh is building an economy that is faring comparatively well during the current economic downturn without the benefit of a large number of immigrants. Once tech companies start relocating to Pittsburgh, the in-migration will follow.

Rust Belt Bloggers Summit

Register for the upcoming Rust Belt Bloggers Summit here.

Help us craft the agenda here.

A number of people are interesting in having this summit. However, I'm unclear (as I am sure others are as well) what we would like to do once we meet. I am making the flight from Denver to Akron/Canton and I plan on spending some time in Youngstown and Pittsburgh. If you can't make it to Erie, but would like to meet face-to-face, let me know. I'm in the area starting Thursday afternoon (~4pm) on July 10th and leave early the following Monday morning.

Domestic Diaspora Model

Pittsburgh already has a working diaspora organization, Steeltown Entertainment Project. There may be other projects in operation or in the works, but I'm still trying to piece that story together. I'm anxious to replicate the Globalscot model in Pittsburgh, but perhaps East Coast Connected offers a better guide:

"Just because people have moved away doesn't mean that they may not come back or that they don't want to be involved. Ex-pats have moved away but they still think of themselves as Atlantic Canadian," [East Coast Connected founder Chris Crowell] said.

Keeping connections open with those who leave home for jobs elsewhere makes it easier to bring those people back when opportunities come up, he said. By maintaining their relationships with those back home, roots stay firmly planted.

"The worst that can happen is that people move away and forget where they are from," Crowell said.

In the short time it has been around, East Coast Connected has attracted 1,600 members and held many events, from kitchen parties to a business summit.

While I've been somewhat reluctant to embrace the boomerang model, I think we are seeing the beginnings of a significant demographic trend. But I'm still wary of mining prospects for return. Those highly motivated to move back would make excellent entrepreneurs and help spur job creation. Otherwise, there may not be enough jobs to afford substantial in-migration.

What about people who are happy where they are and don't want to come home? This consideration makes Globalscot the superior approach to cultivating a diaspora network with the goal of economic development. I'm sure Atlantic Canadians would prefer that friends and family return, but a willingness to invest in opportunities in the region is just as good (if not better). The Pittsburgh Diaspora Illuminati is ready to do business. I envision Silicon Valley venture capital, with a few well-positioned Yinzers, financing a start-up in Pittsburgh without the need to relocate it closer to the money. Also, given the shortage of executive entrepreneurial talent, might the answer be among dislocated Pittsburghers?

Blog Release: Big Ten Universities convene summit on Midwest economy

Here we go, folks:

Motivated by a desire to draw attention to the vital role the Midwest plays in the life of the nation and to highlight challenges the region faces to remain economically competitive, the provosts from the Committee on Institutional Cooperation (CIC), a consortium of the Big Ten universities plus the University of Chicago, have partnered with the Federal Reserve Banks of Minneapolis and Chicago to bring together key leaders for an economic summit Thursday, June 26 and Friday 27 at the Federal Reserve Bank in Minneapolis.

The CIC is made up of 12 research universities with campuses in eight states which include the University of Chicago, University of Illinois, Indiana University, University of Iowa, University of Michigan, Michigan State University, University of Minnesota, Northwestern University, Ohio State University, Pennsylvania State University, Purdue University and University of Wisconsin-Madison.

University leaders, leaders of regional banks, chief executive officers, government leaders, economists, researchers and professors will come together to find ways to break down barriers that prevent them from effectively working together to build a vital Midwest economy. The summit, “Developing a Regional View of the Midwest Economy: Breaking Down Barriers That Impede Regional Progress,” is sponsored by the University of Minnesota, the CIC and the Federal Reserve Bank of Minneapolis.

“Like the national economy, the Midwest economy is facing great challenges. We believe it is important for our universities to work closely with each other and with CEOs and leaders of government to make the Midwest economy more robust,” said University of Minnesota Provost Thomas Sullivan.

The region already possesses vitally important assets, including the Great Lakes, significant industrial and corporate entities, world-class research universities, dynamic cities and agricultural resources -- all of which are central to a vibrant Midwest economy. The National Science Foundation (NSF) reports that the 12 CIC universities received over $3.1 billion in federal science and engineering support in FY2005. This represents 12.4 percent of the total federal science and engineering dollars -- some $25.4 billion -- awarded in the U.S. for that year. In addition, CIC universities have been awarded 18 percent of the total NSF science and engineering dollars, and nearly 16 percent of the total U.S. Department of Agriculture dollars.

The American Association for the Advancement of Science (AAAS) reports that the seven states of the Midwest -- Iowa, Minnesota, Indiana, Illinois, Wisconsin, Ohio and Michigan -- have a robust nonprofit sector, which is highly competitive for federal research and development funds, with three of the top 10 nonprofit recipients of federal research and development funds in the Midwest -- the Mayo Foundation, Battelle Memorial Institute and the IIT Research Institute.

“When you assess the human and physical capital assets of our region, they are considerable; however our region’s position is slipping relative to the rest of the country,” Sullivan said. “This may be a watershed moment for the Midwest in terms of an available, talented workforce, as well as productivity.”

The region attracts research and development and boasts educational resources, but the Midwest has also witnessed a dramatic restructuring of the region’s economy to rely less on manufacturing. And, the Midwest population is also growing older than the nation on the whole and, in turn, the region has been losing its influence at the national level -- since 1930, every Midwestern state has lost congressional seats.

“The Midwest economy is undergoing an uneven transition to a new economic model propelled by knowledge based industries. While cities such as Chicago and Minneapolis have prospered by reinventing themselves and becoming meccas for new industries and talented workers, other parts of the region struggle with moving up the economic food chain. What is clear is that the production and retention of skilled human capital will have to be at the center of any regional plan to promote economic vitality,” said Richard Mattoon, senior economist and economic advisor, Federal Reserve Bank of Chicago.

The region has strengths to build on, but it is losing ground as other regions make a more compelling case for where investment should go.

“The Midwest is failing the challenge of globalization, largely because it’s so balkanized, with each state trying to compete in the global economy. Midwestern states are simply too small, too incompetent, too obsessed with the wreckage of the industrial economy, to deal with the problems of the future, like education. It’s time for other players -- cities, businesses, especially universities -- to come together in a concerted regional approach that would leverage the Midwest’s strengths, not undermine them,” said Richard C. Longworth, senior fellow, Chicago Council on Global Affairs and author of the new book, “Caught in the Middle: America's Heartland in the Age of Globalism” (Bloomsbury).

CIC member university leaders as well as leaders of regional banks and other summit attendees want to stop that erosion and, instead, start gaining ground.

“We believe it is time for us to do more than talk together. It is time to act together,” Sullivan said.

Summit Agenda

Thursday, June 26

8:00 p.m. Welcome: Gary H. Stern, Federal Reserve Bank of Minneapolis President and Robert Bruininks, University of Minnesota President
Keynote Address: Robert Lucas, University of Chicago, Nobel Laureate

Friday, June 27

9:00 a.m. “The Private Returns to Human Capital”
Speaker: Lance Lochner, University of Western Ontario

10:00 a.m. “Mobility of Human Capital”
Speaker: John Kennan, University of Wisconsin-Madison

11:00 a.m. “Valuing the Benefits of the Education Provided by Public Universities”
Speaker: Paul Glewwe, University of Minnesota

12:00 p.m. “Early Childhood Development: Economic Development with High Public Return”
Speaker: Arthur Rolnick, Federal Reserve Bank of Minneapolis

1:00 p.m. Panel: “The Case For a Regional View: How Can Our States Cooperate in Order to Gain Competitive Advantage?”
Moderator: Chris Farrell, Marketplace Money Radio Show
Richard Longworth, Chicago Council on Global Affairs
Tom Holmes, University of Minnesota

2:15 p.m. Panel: “Where do we go from here?”
Moderator: Chris Farrell, Marketplace Money Radio Show
Frank Beal, Chicago Metropolis 2020 Project
Connie Shoemake/Mark Cleverley, IBM

3:00 - 4:00 p.m. “The Imperative for Regional Cooperation”
Speaker: Lou Anna K. Simon, Michigan State University President
----------

Longworth Heads East

The Richard Longworth express is making an Ohio stop:

The Akron Beacon Journal's effort to help the middle class Reclaim the Dream will be discussed on the WCPN (90.3 FM) program The Sound of Ideas in the next two weeks.

In the Monday program, which begins at 9 a.m., author Richard Longworth will discuss how the Midwest is dealing with the dual challenges of losing its manufacturing base and searching for a new engine to drive the economy. Longworth discusses his new book on the subject and will take questions from listeners, after which the Beacon Journal series describing the alarming changes in the American dream will be discussed.

I'm interested to hear/read Cleveburgh's thoughts about Longworth's discussion. Listen here.

The Urbanophile Challenge

Weak or strong player? The blogger behind the The Urbanophile and I were discussing the prospects of Pittsburgh over the weekend. The challenge is for me to explain why I'm so bullish on Pittsburgh. The Urbanophile notes the dire indicators such as anemic job creation, net out-migration, and educational attainment. I must admit, Pittsburgh does look relatively weak on paper.

My charge is to review my own blog posts and cobble together my rationale for a strong Pittsburgh. Perhaps I'll get around to providing an answer this week, but the work involved makes this weekend the better prospect. Meanwhile, I'll leave the quantitatively inclined with some numbers to chew on:

From Null Space: For those of you not in the know, Chris Briem's blog is a wealth of data analysis and helpful visuals. I've learned from Chris that one should drill down into the data (usually disaggregate) before hitting the economic panic button. The example I reference describes how depressed wages and the obsession with young adults leaving the region are difficult to reconcile. If Pittsburghers want to fret about something, then city debt would be worthy of all the hand wringing.

The second website/blog that any critic of Pittsburgh should peruse is Pittsburgh Today. How does Pittsburgh compare to other US regions? Primarily the work of John Craig, the host of regional indicators paints a sophisticated picture of the economic landscape. Digesting the wealth of data, I find it difficult to decide if Pittsburgh is a weak or strong player. There are assets to be leveraged and liabilities to be addressed. The companion blog also reveals both good and bad, but I leave The Urbanophile with a glimpse of why I think Pittsburgh is a good bet to emerge as one of the strongest cities in the Rust Belt.

I accept this challenge with some trepidation. I tend to be overly optimistic and I'm sure a strong case against Pittsburgh could be constructed. However, I haven't ignored the negative harbingers. If anything, the lack of in-migration and immigration has forced Pittsburgh to get lean and mean. The deck has been stacked against Pittsburgh for some time and I think a lot of the restructuring is positioning the region for a strong run into the future.

America the Geographically Mobile

There is a great article in the latest issue of the Economist about the like-minded clustering in US communities. Ironically, better education is resulting in more parochial geographies:

Intriguingly, the more educated Americans become, the more insular they are. (Hence Mr Miller's confusion.) Better-educated people tend to be richer, so they have more choice about where they live. And they are more mobile. One study that covered most of the 1980s and 1990s found that 45% of young Americans with a college degree moved state within five years of graduating, whereas only 19% of those with only a high-school education did.

As I've often quipped, don't send your children to college if you want them to stay. I mean that sarcastically. Of course, being a parent myself, I wouldn't ask any family to deny their children the benefits of a college education. But attempting to impede talent from out-migrating is almost as bad as not helping young adults attend university.

Addressing the issue of the article, the Creative Class isn't seeking diversity. City living can be just as segregated as the suburbs. We seem to be witnessing a new version of White Flight, with ideology replacing race as the primary push factor. The one constant is that domestic migration continues to be a rather sordid affair.

Dislocation Economy

Today's tale starts with a skill shortage in the United Kingdom and ends with the news that Eutechnyx "will open a games studio in Pittsburgh, Pennsylvania, later this year." Running the length of this narrative is the wealth of talent located in Southwestern Pennsylvania helping to fuel the boom of virtual collaboration:

Ansys makes 3-D simulation and testing software for the auto, aerospace and chemical-processing industries. Profit has grown 48% year on year in each of the last two quarters — the best in years.

Its shares rose 3% to a new high of 49.15 on Thursday.

The company also has beaten profit views by at least 16% in each of the past five quarters, though sales growth has decelerated over that span, from 91% to 25%.

The top line should get a boost from Ansys' planned $832 million buyout of Ansoft, which makes design tools for electronics makers.

Both are based in the Pittsburgh area but generate over 60% of revenue overseas. The merged firm will have annual sales of $500 million.

"The bottom line is we get a very talented group of people," said Ansys CEO Jim Cashman.

In my view, this emerging talent cluster is the core of Pittsburgh's comparative advantage, which is why Eutechnyx is seeking a Pittsburgh presence. Of course, there is a certain irony in businesses building better tools for virtual collaboration agglomerating in one region. However, that's exactly what is happening.

Driving much of the innovation is the Entertainment Technology Center (ETC) at Carnegie Mellon University. The best example I know about is Etcetera Edutainment, an ETC spin-off:

Etcetera Edutainment specializes in adapting the techniques and technologies of the videogame industry to simulations for training and educational purposes. Our mission is to be a leader in virtual training software for industry safety and education.

Eutechnyx is joining the party, albeit for the more expected purpose of entertainment. But instead of CMU graduates moving to the UK for a job, the jobs are beginning to come to them. Now if we can just help foreign-born Desis remain in the States, the regional economy might finally kick back into high-gear.