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.

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