Sunday, August 20, 2006

Knowledge Worker Mobility I

My hypothesis is that as the Knowledge Economy grows, labor mobility will increase. In fact, I suspect that the ability and inclination of knowledge workers to move in order to improve will be a defining feature of the emerging economy. I think my idea makes sense, but I need some proof of concept.

Once again, content connectors come to my rescue. Mike Madison, of Pittsblog fame, posted about an article that describes Pittsburgh's chances of creating the next Silicon Valley about as likely as building another New York Yankees baseball team from scratch. The point is that there is only so much talent to go around. At first, I reacted only to the baseball analogy. A look at the article in question revealed a few useful nuggets for my own cause.

The controversy concerns the return on investment from pumping money into local universities. The rub is that "smart people" and "research ideas" tend to leave the region of origin. State, regional, or local educational subsidies likely produce benefits for other states or regions. Georgia spends a great deal of money trying to keep high school graduates instate. Studies suggest that this is a poor strategy.

There are benefits from investing in higher education, but the returns are not likely to be seen regionally.


tannybrown said...

"There are benefits from investing in higher education, but the returns are not likely to be seen regionally."

Connecting this entry to your last, perhaps there's a way for Pittsburgh to benefit economically from its educated even after they leave.

Of course, I still only really understand how that happens in an abstract sense.

I keep coming back to the idea that Pittsburgh could tap into migration the old fashioned way. Get hipsters from other cities to think Western PA is the new Seattle or new Omaha, or something.

We need some good bands.

tannybrown said...

One more question, or three, kind of:

How did Silicon Valley happen? Or the Yankees? How do you accumulate talent and keep it in one place?

Jim Russell said...

I don't think attracting some hipsters will be a problem. The scene will cycle through Pittsburgh again at some point. Even my old haunt, Burlington, VT, was a music hotbed at one point. I have a very good idea of how that scene came about (I knew many of the key players). But many of the folks who underpin the fun head for other cities at some point.

Pittsburgh needs a few people who appreciate good bands.

Concerning your questions, you can't keep talent in one place. But you can accumulate it by offering top dollar. However, extending the baseball analogy, trying to emmulate the Yankees is unlikely to result in success. The tradition, big stage, and resources available in New York are unique. But spending your way to the top doesn't always work (see Daniel Snyder).

So, you look for valuable talent that is relatively inexpensive. You can develop players in a farm system (Minnesota, Detroit, and Florida) or chase after underappreciated players (that's the Oakland way and Moneyball).

In other words, develop the skill to identify talent before it goes big time.

tannybrown said...

So Pittsburgh's economic situation mirrors that of their Pirates: try to snag talent early before someone else outbids you for their services, or try to find bargains. In the meantime you go fifteen seasons without a winning record, despite having a great little ballpark to call home.

This baseball analogy doesn't bode well for the region.

I still think that Pittsburgh can offer some draw to young up-and-coming professionals and recent college grads from other regions. They just need a reason to get there, and a job to pay the rent.

Jim Russell said...

I've been told that there are good jobs in Pittsburgh, but not enough local talent to fill the positions. But Pittsburgh seems to be aggressively "Locals Only." I'd tried to land a job at Pitt only to be told that my out-of-state address put me at a serious disadvantage.

Pittsburgh needs to stop spending so much time navel gazing.

tannybrown said...

The "locals only" elitism only works when there are tons of outsiders competing for the same jobs and ammenities. It kind of makes sense in Colorado, per your earlier post, or along some border town, I guess. In Pittsburgh? It's just dumb. Hardly anyone I knew in city had just moved there.

Jim Russell said...

I think the mentality has something to do with keeping people from leaving. The exodus of the 1980s is over. Pittsburgh must wake up and start playing by the rules of globalization.

sustainable said...

I admire your mission and strongly agree with your hypothesis. But I disagree with this statement:
"There are benefits from investing in higher education, but the returns are not likely to be seen regionally."

There are entities in the Pittsburgh region whom embrace a model for sustainability with the following elements:
* Realities of the World Economy
* New sources of prosperity
* Innovation & entrepreneuriship