Sunday, October 29, 2006

Real Estate Migration

Dominicans are on the move. That alone isn't news, but their secondary migration from New York City to Reading, PA is the subject of a recent New York Times article. The story is about relocating far enough outside the big city in order to afford a first home:

Reading, an old industrial town once known for its textile mills, has had a significant Latino population since Puerto Ricans seeking jobs came in the years before World War I, according to Jonathan Encarnacion, the executive director of the Centro Hispano Daniel Torres, a local nonprofit organization.

Mexicans and others have also come in recent years, but the Dominicans are unique in that most — some estimate 90 percent — of them come not directly from the Dominican Republic, but from the New York City area, what social scientists call secondary migration. “We saw a spike after Sept. 11,” Mr. Encarnacion said. “Ask them why they come here, they say, ‘We wanted to get away.’ ”

But many places are “away,” and they chose Reading in no small part for the modestly priced houses. The average house in Reading has risen from $47,000 in September 2004 to $73,000 in September 2006. In New York City, those numbers are called down payments.

This somewhat remarkable migration pattern is part cheap real estate and part chain migration. Pittsburgh has one variable of the equation, affordable housing. Missing is a core community to ease the transition to a new place. Without an established network, one of Pittsburgh's greatest assets will fail to attract any substantial human capital.

Positive publicity will not help Pittsburgh attract new people without tacit knowledge of the region.

Saturday, October 28, 2006

Boomerang Burgh

Null Space highlights two articles about Pittsburgh found in some of the nation's major newspapers. The second one starts out with a member of the Burgh Diaspora disparaging his hometown:

A while back I was sitting in a cafe near a couple of freshly minted techie types. I happened to overhear -- OK, after a while I strained to overhear -- as one explained to the other how he'd loathed his Pennsylvania hometown for its stodgy work ethic, its Middle American attitudes and so on.

He summed up by breezily remarking, "Another generation of steelworkers would have to die before I'd go back to Pittsburgh."

If Pittsburgh is going to rebrand itself, setting the record straight, these cafe ambassadors are key. Many Pittsburghers do not want to return. The romantic notions may not extend beyond regional comfort food and the Steelers. This is likely the first and last impression of Pittsburgh for the audience, other young knowledge workers.

That concern aired, anyone fresh out of college will express some disdain for their hometown. No region is immune to this perspective. Anywhere but Pittsburgh is another case of the grass being greener over the horizon. The author of the newspaper article expresses an appreciation of Pittsburgh's history and character that many young people who left the region will eventually embrace.

If Pittsburgh does experience some significant return migration, the demographic will trend towards the more mature workers.

Immigration Law Pittsburgh

While Iowa continues to stumble along with addressing the People Drought, North Carolina is embracing a solution:

As immigration policies continue to make it harder to import and naturalize foreign workers, more businesses -- from small restaurants to large multinational corporations -- are turning to lawyers for help. As a result, more law firms are expanding their immigration practices, adding immigration consulting and defense work to the more traditional range of processing applications for visas and "green cards," permanent-resident status.

Corporate immigration lawyers are particularly pervasive in the Triangle, where large foreign companies such as Royal Bank of Canada, GlaxoSmithKline and Bayer need help shipping workers to and from the corporations' home countries. Local technology firms also fuel demand as they plumb for software and biotech professionals from Europe and Asia and open foreign offices.

"Global mobility is the business trend," said Steven Smalley, a Raleigh partner with Ogletree Deakins Nash Smoak & Stewart of Atlanta. The company's Raleigh-based immigration practice has expanded to more than 50 lawyers and paralegals from a handful in 2001. This month, it took the practice global by partnering with Emigra Group, a Vienna, Va.-based immigration consulting firm that operates in nine countries.

I doubt many politicians running for office this November could add attracting foreign nationals to their platforms, so solutions to the knowledge capital shortage will likely stay in the private sector. When demographics force the issue, we can look to North Carolina for guidance on how to promote and manage international migration.

Regardless, any region should embrace the business trend of "global mobility." I haven't heard of any politicians discussing this. I also haven't seen many economic plans that put this trend at the core of their vision. Meanwhile, the talent to manage immigration is pooling in the Piedmont.

Friday, October 27, 2006

Human Capital Conflict

In the semi-arid Front Range, water scarcity is a big issue. Poor access to any resource can starve a regional economy, and human capital is no exception. Tapping Convergence again, I notice that the Iowa gubernatorial debate includes the dire prospect of a People Drought:

Whoever becomes governor will need to shift gears, so that drawing people to Iowa becomes not just the ancillary part of an economic-development strategy, but the core of it.

As the anti-immigration fervor heats up, a number of states are facing a massive labor shortage in the near future. Foreign workers will fill some of the slots, but Europe and Canada will be in direct competition with the United States for increasingly rare talent. If you think your region is suffering from brain drain now, just wait a few years and see how bad it gets.

The demand for knowledge capital will only increase. Regions will compete for people just as they now compete for businesses that promise job opportunities. Labor mobility is far from frictionless. The ability to bring the work to the employee should be a competitive edge. Otherwise, be prepared for another large-scale guestworker program. With diversity comes the needed youth.

Thursday, October 26, 2006

Balkanized Pittsburgh

I stumbled upon a goodbye to Pittsburgh published on the web. I wanted to make sure I wasn't rehashing a tired story, throwing the title into a Google search. The results added to my snowy day melancholy. A great number of Pittsburghers have made a public goodbye. I don't know if this is remarkable or not, but I read quite a few of them.

Returning to my tale of interest, a former member of the Indian community in Pittsburgh relates an important part of the diaspora community:

Carnegie Mellon has several Indian students, like any other place. Even though everyone has his or her own life, we operate as a community to a good extent. We are a really small community, the college campus hardly the size of a usual engineering college in India. Fortunately, we don't have a caste system of IITs vs others, metallurgists vs computer scientists and the more blatant, Northy vs Southie divisions. People are so much into their research and courses that they don't have time for petty ego trips. Meeting other desis tend to be pleasant and the norm is that you try to be friendly with your fellow citizens. You can literally walk into anyone's apartment and will be asked to stay over for dinner.

I've made a few comments about Pittsburgh being a divided city. Beyond the Burgh, there are no North Side vs. South Side divisions. Members of this diaspora cross the rivers all the time. Often you have to leave a place before learning to appreciate a larger sense of place. There is a "desi" experience for Pittsburgh expats, but it hasn't been articulated as richly as the wealth of details available about the lives of the Indian Diaspora.

If there is a greater Pittsburgh identity, a well-integrated region, it is in the minds of the Burgh Diaspora.

Wednesday, October 25, 2006

Pioneer Pittsburgh

If you want to Save Our City, first you have to Save Our Brewery. The Burgh Diaspora to the rescue:

An East Liverpool, Ohio, businessman turned social entrepreneur is offering to help save a bankrupt Pittsburgh icon.

Craig E. Newbold, 58, who operated a successful computer consulting business in the Seattle area, said he has offered Pittsburgh Brewing Co. a line of credit up to $500,000 to help preserve jobs in the region.

"I was impressed with his (Pittsburgh Brewing President Joseph R. Piccirilli) interest in saving the brewery and keeping that icon in Pittsburgh," said Newbold, who was raised in the East Liverpool area and worked in Pittsburgh and McKeesport.

Newbold is an archetype of the entrepreneur pioneer returning home, bringing his experience abroad with him. Newbold's success in Seattle allows him to inject fresh ideas into the Pittsburgh region. Ideally, he is forging the path for other members of the Burgh Diaspora to complete the loop of brain circulation.

Pittsburgh is ripe with investment opportunities for people with enterprise know how. But most of this knowledge capital is spread throughout the United States. Whatever Pittsburgh needs, there is an expatriate out there who can fill that niche.

Tuesday, October 24, 2006

Venture Capital Geography

Pittsblog already tagged the Sunday New York Times article about Silicon Valley venture capital not straying more than 20 minutes from home. I'm not so much interested in the rule as in the exception:

Sequoia makes its preference for the 20-minute rule almost explicit, telling applicants whose companies are at the “seed stage” (receiving less than $1 million) or “early stage” ($1 million to $10 million) that “it is helpful if the company is close to our offices” because they “require very frequent contact.”

Kleiner Perkins has only one office, the one in Menlo Park. Sequoia has reached out to entrepreneurs more considerately, providing five offices. But only one of the five, the one in Menlo Park, is in the United States. The others are in China (two), India and Israel.

If you have a brilliant idea for the New New Thing and want Sequoia to provide its funds and blessing — using the same golden touch provided not long ago to Google’s founders — you would be much better off in Beijing, where Sequoia has an office, than in Boston, where it does not.

Why does Sequoia have an office in Beijing but not in Pittsburgh or other American cities? China, India, and Israel are countries where former Silicon Valley entrepreneurs are now incubating start-ups in the places where they were born. These countries provide unique growth opportunities. There is little reason or ability for these companies to relocate to the United States. In other words, the 20-minute rule is untenable.

That isn't the case domestically. If you want Silicon Valley venture capital, you'll have to move there. My point is that this money moves along an established network of trust. Investments in far off countries demonstrate that the risk isn't about a lack of proximity for the start up to the funder. If a bunch of entrepreneurs living in Silicon Valley decide to move back to their homeland in Pittsburgh (if there is such a notable group), they can still tap their contacts in California. I wouldn't be surprised to see a venture capital firm open an office in Pittsburgh if there was sufficient demand for it.

Wednesday, October 18, 2006

Emergence Pittsburgh

The definition of Pittsburgh is expanding, even if the population of Allegheny County continues to shrink. We need new data to keep up with globalization. State-centric metrics mask global flows of capital. What is emerging is a network of cities, places that have more in common with each other than they do with their host countries.

Geographer Peter Taylor is busy generating the numbers we need to understand the developing world system:

1. The globalisation premise is that contemporary social change is proceeding at an unprecedented rate and key processes behind it are operating at a global scale and are fundamentally trans-state in nature.

2. The data deficiency premise is that although there has never been as much data for describing the world as exists today, the vast majority are collected for states and are about states and as such facilitate international comparisons but not the study of trans-state processes.

3. The organisation lacuna premise is that while many social scientists have recognised the problem and have had to either make do with international data or have created their own project-specific data, there has been no centre acting as a clearing house for the critical research issues that arise from the mismatch between a trans-state world and state-based data. The Loughborough Global Observatory aspires to fill this lacuna and be that clearing house.

Our mission is to provide a service to the world wide social science community as the centre with information about access to trans-state data.
The research underpins new maps of the world that stress the importance of global cities as the primary economic engines, supplanting the nation-state.

Pittsburgh makes the cut in the above map of the global urban hierarchy. This is a visual of the global connectivity of cities, a measure of 'extra-territorial' service activity. Pittsburgh is a 5th-tier city, the lowest rung measured. You can find the city key here (bottom of page).

While a more precise understanding of regional assets is useful, we should also measure global integration. How we can best do this is up for debate, but taking stock of Pittsburgh's interregional relationships is just as important (if not more so) as any regional economic indicator. With this in mind, I dream of a day when Pittsburgh counts its Diaspora when assessing the well-being of the region.

Tuesday, October 17, 2006

Churn Pittsburgh

You either move up, or you move out, with the latter being much more likely. Large corporations and businesses are contributing to the trend of increasing labor mobility. The Future of Work is ever shorter tenures at one firm and the never-ending quest for better employment opportunities:

Job tenure has decreased markedly in all age groups over the last two decades - but only among men. Both boom and bust contributed. Economic growth encourages job-hunting, job hopping, and job-shopping. Recessions foster downsizing and bankruptcies. Jobs are mainly obtained through nimble networking. This is especially true at the higher rungs of the income ladder.

Still, the median figure for job stability hasn't changed much since 1983 in both the USA and the UK. Moreover, some jobs - and employment in some states - are far more stable than others. Transformation across all professions took place among workers younger than 32 and workers with long tenure.

The job stability of the former decreased markedly. By the age of 32 they had already worked for 9 different firms, according to figures published by "The Economist". The job security of the latter has vanished as firms, until less than 2 years ago, succumbed to a "youth cult" and inanely rid themselves of precious social and professional capital.

Another phenomenon is the emergence of a Hollywood-like star system among ultra-skilled workers - both technical and executive. Many of them act as freelancers and get paid with a mixture of cash and equity. They regard themselves as a brand and engage in brand marketing on a global scale.

The game is to attract and retain "ultra-skilled" workers while turning over (churning) the low-level position with younger and cheaper labor. But there are problems with this approach to faster, better, and cheaper.

First, even low-level employees serve as important repositories of firm tacit knowledge. Despite attempts to homogenize the worker bees and make their every move visible to management, considerable human capital is lost in the churn. Transforming relationship-dependent services into a flowchart of interchangeable parts is both expensive and difficult.

Second, the churn approach under-utilizes workforce skills, the phenomenon I term "over-educated, under-employed." Employees are often bored and disengaged, yet better versed in the day-to-day operations than their managers. Corporations might benefit from real-time, frontline decisions, but the current hierarchal business model does not support such innovation.

Thursday, October 12, 2006

Chain Diaspora

There are two sides to any diaspora. The Resilience Science blog noted this phenomenon described in the New York Times series on the plight of the Katrina refugees and the recovery of New Orleans. Those who left voluntarily and chose their destination fared much better than those who were evacuated, forced to camp in places such as Houston:

But the divergent experiences of those who went to Houston and those who went to Atlanta suggest that recovery depends on more than individual resources and demographics. Just as important are less quantifiable factors: a sense of welcome and connection, the presence of friends and family, even how narrowly they survived the disaster.

Moving along the path of your choice in an established network can smooth a difficult transition. Pioneers from your region pave the way for subsequent migrants, providing resources and local knowledge that outsiders normally don't have. This is known as "chain migration," which can help predict where new members of the diaspora will go (if given a choice) and how successful they will be once they arrive at their new home.

When people fled Pittsburgh, they did not distribute themselves randomly around the United States searching for economic opportunity in the best places. They tended to relocate nearby in regions where other Pittsburghers have moved. Chain migration can also work in reverse, but that won't happen until a few pioneers show the way.

Wednesday, October 11, 2006

Rural Diaspora

If any region has struggled with recent trends of domestic migration, the Great Plains stands out from the crowd in the game to attract human capital. Ord, Nebraska is overcoming the dire demographics, leveraging an instate advantage of philanthropic investment:

[Ord] has hired a “business coach” to help teach local stores how to sell their goods over the Internet and to match up retiring shop owners with aspiring ones. Schoolchildren learn how to start their own little businesses — like the sixth-grade girl who made a video of the town’s history and sells it at school reunions — so they will not grow up to think the only job opportunities are at big companies in Omaha or St. Louis. Graduates of Ord High School who have moved elsewhere receive mailings telling them about job opportunities back in town.

The article explains the success as a result of the thriving tradition of giving in the American heartland, which is proportionally greater than that of many other regions. However, if money was the main concern, more regions would rebound. One thing Ord has done well is reach out to its own diaspora:

Nebraska does not have a large pool of part-time residents to tap, and it has an outflow of young residents - the children of potential donors - who move away when they go to college and do not return. So virtually every town has tracked down alumni networks, even for grade schools, to draw from the huge intergenerational wealth transfer that could be coming in the next decades.

Ord also possesses a "critical mass of like-minded people." The community pooled together its resources and advanced a well-coordinated agenda that attracted new residents while promoting an entrepreneurial culture. Pittsburgh does not enjoy a similar cohesive vision. There is enough money in the region to reverse the disadvantageous demography, but few people in Pittsburgh are moving in the same direction. We could learn a great deal from Ord and the Nebraska Community Foundation.

Building Network Pittsburgh

There are a number of successful social networking sites in existence. Why build another one for the Burgh Diaspora? The biggest social network sites employ a transactional business model: revenue is a function of the number of people in the network. Software automates this process allowing companies such as MySpace an unlimited scale of reach. But the University of Pennsylvania's Wharton School points out the finite possibilities of any network:

By expanding, "you can dilute what the community stands for," says Wharton marketing professor David Bell. "Once that happens, people leave. It's a key tension between growth and dilution of the brand."

Regarding that observation, might even the subset of the Burgh Diaspora be too large? My experience says otherwise. The common interest in Pittsburgh often proves sufficient for generating enough trust to form a meaningful social network. In fact, I would argue that the experience of moving away from Pittsburgh lends itself to social, political and economic relationships that look to be impossible for Pittsburgh region.

There is too much emphasis on technological infrastructure and not enough on managing a social network. Successful communities employ a tacit business model, focusing on the much more complex human side of the virtual equation. Pittsburgh and other regions have invested heavily in creating a substantial web presence, but they have done little to foster a sense of community. The nightmare scenario is spending millions of dollars on a website that either draws little traffic or fails to serve any purpose:

The San Diego Workforce Partnership spent $2.6 million on an online program for job hunters that took four years to develop and is little more than a compilation of Web links that so far has attracted 199 users.

There are a number of lessons to be learned from the various public online initiatives to the growth of Facebook. These mistakes are paving the way for the development of the Burgh Diaspora Network.

Tuesday, October 10, 2006

Burgh Diego

8 times a year, the Steelers Nation invades another town. I try to attend at least one away game per season in order to reconnect with the Burgh Diaspora. The airport was covered with Black and Gold. The roving fan base is more than a large group of expatriates who relocated to the San Diego region for economic benefit. People come from all over the country to celebrate their team and their culture.

The tailgating never disappoints. I shipped Parma kolbassi to a fellow fan whom I knew only through a website. Fansites are the engine of this nomadic support group. 25 or more of us organized online to secure a block of tickets and make sure we would enjoy a real Pittsburgh shindig in the heart of San Diego. A woman who goes by the handle of CASteeler set out a spread that would rival anything in the parking lots of Heinz Field on game day. In addition to the kolbassi, we had traditional goodies such as pierogies and chipped ham. We washed it all down with some Iron City another fan carried in from Arizona (you can't get Pittsburgh Brewing in California).

Once inside the stadium, you can't miss all the Terrible Towels. 20,000? 25,000? It felt like a home game at certain times. When the Charger players were introduced, you could hear booing and many of the fans in attendance held up their Towels with pride. For a few moments, the stadium was a sea of Black and Gold, with flecks of powder blue. This was an awesome display of the power of the Steelers Nation.

Wednesday, October 04, 2006

Downtown Virtual Pittsburgh

Now that downtown Pittsburgh is a Wi-Fi hotspot, how might the urban social geography change? Co-op housing at the University of Texas at Austin offers a few hints:

The current interest in co-ops stems in part from the economic imperative that rising housing costs have wrought. But more than anything else, students suggest, it has grown up in reaction to the alienating aspects of modern campus life, where the increased presence of technology, while enabling certain kinds of connection, has had a hand in limiting others.

In Austin, the sense of social dispersion is especially acute. Fifty thousand students attend the University of Texas, though it has room for fewer than a fifth of them. This means that students seeking rental apartments in the city’s booming real estate market, where a 1,000-square-foot apartment near campus may command $2,000 a month, are often forced to live 20 or 30 miles away, divorced from any semblance of collective life. And dormitories at the university, chief among them Dobie, a glass tower that reaches up into the city skyline like the headquarters of a global bank, are typically likened by students to nursing homes or prisons.

Living on the internet lends itself to a feeling of social dislocation and high real estate prices may exclude younger (along with the retired) knowledge workers from living in dense urban environments. Co-operative housing could provide a solution to both problems. Sharing housing costs (and chores) with members of your affinity network would not only decrease your rent or mortgage, you would have the opportunity to spend considerable face time with your creative peers.

The presence of a large Wi-Fi network also provides a cheap alternative to web access while providing people with another reason to hang out downtown. City public places should be redesigned to encourage a hybrid of virtual and real interaction. People might gather in a park for a global webinar, listening on wireless headphones and then engaging in local discussion afterwards.

I envision Burgh Diaspora co-ops around the United States, strategically located in other municipal hotspots. People living in these network nodes would have more knowledge of their widely-scattered neighbors than their surrounding area. This is quite similar to the relatively homogenous experience of any global city's business district. As one college town looks more and more like any other, so will the neighborhoods of municipal hotspots.

Pittsburgh West

The intensifying relationship between Stanford University and Carnegie Mellon University highlights the growing similarity between Pittsburgh and San Francisco. The entrepreneurial connection is social enterprise. Pittsburgh's key actor in this arena is the Pittsburgh Social Enterprise Accelerator, a company with an ambitious mission:

Establish the Pittsburgh region as a world leader in social enterprise by helping nonprofits build innovative earned-income ventures that contribute to their social mission.

President Tim Zak is spearheading this effort and he is also active on the academic front:

Carnegie Mellon University’s H. John Heinz III School of Public Policy and Management has created the Institute of Social Innovation (ISI) to foster creativity and entrepreneurship in the social sector. Funded by a two-year grant from The Grable Foundation and an anonymous donor, the institute will focus on creating new courses, conducting research and establishing outreach programs aimed at promoting innovation and societal change.

The institute is being led by Denise Rousseau, the H. John Heinz II Professor of Organizational Behavior at the Heinz School and the Tepper School of Business; Tim Zak, president of the Pittsburgh Social Innovation Accelerator and an adjunct professor at the Heinz and Tepper schools; and Marie Coleman, senior director of development and special projects at the Heinz School...

"An entrepreneur is a packager of change," Zak said. "Social entrepreneurs are passionate, smart and motivated — just like entrepreneurs in the for-profit sector — but they apply their energies to solving intractable social problems. We want to inspire more people to pursue those dreams."

This is another example of Pittsburgh taking cues from Bay Area creativity. Stanford has its own Center of Social Innovation, which "leverages Stanford's knowledge, expertise and networks, bringing community leaders together with our faculty, alumni and students to illuminate and address social problems." Pittsburgh's embrace of social enterprise aligns the region with the Stanford-Silicon Valley knowledge engine.

CMU has its own impressive network and a substantial presence near San Francisco. The foundation is there for inter-regional cooperation and collaboration. The actor missing from this scene is the Mobility Class. Pittsburgh expatriates form a strong link between the two regions. When does Stanford East open shop?

Tuesday, October 03, 2006

More 'Brain Drain' Hype

Migration is a hot topic in Ohio politics. Both Democrats and Republicans are sounding the alarm over the college-educated talent leaving the state. The Toledo Blade claims that the politicians are crying wolf:

University of Toledo research suggests both candidates for governor are misguided.

UT's Urban Affairs Center analyzed 1.11 million alumni records of Ohio graduates between 1980 and 2003. It found more than 80 percent of those who graduated between 2000 and 2003 did not leave for "cool cities" along the coast. They stayed in Ohio. Out of the entire 24-year pool of alumni, 70 percent are still Buckeyes.

The newspaper article also points out another conclusion from the study, greater education positively correlates with the likelihood of leaving the state:

The study detected another trend, which the Ohio Board of Regents confirms. Those with master's degrees, doctorates, and professional degrees are 50 percent more likely to leave Ohio than those with bachelor's degrees.

The problem is identified as one of attraction, certainly not news to this blog. The shame is that politicians are failing to properly identify the problem to the voting public and thus fail to make the necessary changes to improve the regional economy. Though the Blade is an outstanding exception, the public is misinformed and the resulting policies are ineffective. However, the politicians may be offering this shrill assessment because there is little they can do to fix things.

There are no easy answers to Ohio's woes, the article concludes. The region needs a critical mass of "great thinkers" but no one is sure how to accomplish that. Knowledge workers need a good reason to set up shop in Ohio, usually the presence of many other creative talents. The study offers that Ohio lacks ideas (patents + education), which is painfully obvious to those listening to the political hopefuls on the campaign trail.

Monday, October 02, 2006

Convergence Pittsburgh

Virtual Burgh Diaspora is starting to grow. Thanks to a Richard Florida post, this blog's affinity network is taking shape. Via Technorati, a blog tracking site, I can see what other blogs link to the Burgh Diaspora. Hot on the heels of Florida's kind words, Convergence entered into the conversation:

This site is intended to compile my ever-evolving knowledge base of workforce, economic development, Chamber of Commerce and non-profit governance information. Expect some technology info sprinkled in as well.

While Florida's Creativity Exchange blog is our touch point, I think we share some common interests of our own. For example, concerning my recent foray into the world of high speed internet connectivity, Convergence author Thomas Fellrath is much more intimate with the subject. In short order, I can catch up with the latest on community and regional WiFi initiatives.

The Burgh Diaspora network can learn quite a bit from the experiences of other regional initiatives. Connecting stakeholders within a region is challenging enough, but inter-regional cooperation is the frontier of economic development. This part of the blogosphere is a step in that direction.