Tuesday, March 31, 2009

Green Building Pittsburgh

This press release from the Green Building Alliance is one of those items that I typically bookmark but then never use in the blog. If you like civic boosterism, then you'll love the report. Gushing about Western PA's "green economic growth potential" must have caught the eye of the New York Times:

The city’s commercial real estate market is relatively healthy. In the fourth quarter of 2008, Pittsburgh earned the top ranking in Moody’s Investors Service’s quarterly “Red-Yellow-Green” report on the state of commercial real estate in 60 major United States cities.

Though the southwestern Pennsylvania metropolitan area is only the 22nd largest in the United States in terms of population, the city employed energy-efficient construction well ahead of larger cities.

In 2005, Pittsburgh claimed more LEED-certified square footage — meaning it had met Leadership in Energy and Design standards for energy-saving designs and building techniques — than anywhere else in the United States. As other cities have caught up, Pittsburgh now ranks seventh nationally in the number of buildings with such certification, according to the local Green Building Alliance.

Just when I think the national press coverage of Pittsburgh couldn't get any better, along comes another story. Did Dan Onorato hire the Times for an Allegheny Country marketing campaign? I'm not sure if the stars could align any better, save a new face in the mayor's office and the Allegheny Conference becoming a more transparent agent of regional economic development. Actually, listening (I highly recommend it) to Richard Stafford yesterday on Cleveland Public Radio has me optimistic on that last score.

I feel I need to balance the above with some bad news. Harold Miller's latest recession watch report revealed that the economic downturn was tightening its grip on Pittsburgh. However, the region is still faring relatively well. Eds and meds remain strong, but manufacturing has taken a tremendous hit. While nothing to brag about, it beats living in Charlotte.

Rust Belt Czar

The Washington Post profiles the new head of the Rust Belt recovery, Pittsburgh native Edward Montgomery:

Montgomery began his career as a professor at Carnegie Mellon University and worked for the Labor Department during the Clinton administration, rising to second in command at the department before returning to academia at Maryland, where he is dean of the College of Behavioral and Social Sciences. He also headed Obama's Labor Department transition team.

He has studied many topics, including whether workplace smoking bans reduce smoking by employees, how universities affect local labor markets and whether unions increase unemployment.

"He's not the sort of economist who views these as abstract problems," said Robert Schwab, associate dean of the College of Behavioral and Social Sciences. "This is a field that's important because it plays such a key role in everyone's life -- not just an interesting abstraction. That permeates all of Ed's research."

Can Pittsburgh save Detroit?

Glowing Job Prospects in Pittsburgh

The future energy job market looks bright in Pittsburgh:

Despite these uncertainties, the industry is growing again, particularly in western Pennsylvania -- not far from Three Mile Island -- a region long associated with nuclear businesses. Larry Foulke, director of nuclear programs at the University of Pittsburgh, sees it in his classrooms: Pitt created an introductory nuclear engineering class in 2006 and expected 25 to enroll. Seventy-five signed up. For next fall's class, 104 have already pre-enrolled.

Pittsburgh-based Westinghouse, which builds and maintains reactors and is now part of Japan's Toshiba Corp., added 1,400 workers last year to handle the influx of business, and says it will keep adding 650 a year for the next half a decade.

"The recession is something everyone is paying attention to, but it doesn't seem to be having a significant impact on us," says company spokesman Vaughn Gilbert, noting that the company inked another deal in January. Westinghouse now has contracts to build six reactors in the U.S.

That's quite the talent magnet. I discussed yesterday Pittsburgh's improving educational attainment profile. The concentration of brains has its own gravity, attracting more smart people and businesses. The boom in the nuclear industry is just another indicator of the changing demography in the region, continuing to trend towards a national center of innovation.

Monday, March 30, 2009

Update: Pittsburgh Migration Tales

Thanks to Brian Kelsey, of Civic Analytics, for pointing me towards William Frey's migration update. The Brookings article links to an interview with Frey on C-Span. The host had some graphics that looked to be part of a Brookings report, which I found here. There is a section on talent migration and Pittsburgh merits mention:

Finally, areas in the long-declining manufacturing regions surrounding the Great Lakes, such as Pittsburgh, continue to experience difficulty in attracting many and retaining many college graduates (Figure 6-1). Their rates of educational attainment continue to rise due to aging of their populations, but many are seeking to re-invent themselves and their economies more deliberately by retaining their “homegrown” college graduates, and attracting both high- and low-skilled immigrants.

Brookings profiles the "Highest Level of Educational Attainment, Population Age 25 and Over" for Charlotte, Phoenix, and Pittsburgh. What's unique about Pittsburgh is that the numbers of people with a high school diploma or less are shrinking, while the numbers of people with college degrees are growing. Phoenix is seeing growth in all educational attainment categories, while Charlotte is remarkable because it "experienced gains in college graduates but declines in adults without high school educations." Contrasting Pittsburgh and Charlotte, Pittsburgh is shrinking the number of less educated more rapidly than Charlotte. On the other hand, Charlotte is growing it pool of college educated at a faster rate than Pittsburgh. Slice it any way you want, Pittsburgh's talent profile is improving.

Turning back to the Frey article, there is a slideshow Slide #3 looks at of metropolitan domestic migration trends.net migration (2000-2008) for a representative sample of Rust Belt cities: Buffalo, Pittsburgh, Cleveland, and Providence. All four cities are now shrinking at a slower rate than just a few years ago (the nadir). Cleveland is the clear loser, hovering between losing 15,000-20,000 people per year over the eight-year period. Pittsburgh is dramatically trending towards growing again, at least in terms of domestic migration. Interestingly, Buffalo isn't far behind. Providence looks to be in for a lengthy decline, though not quite as bad as Cleveland.

New Geography's Joel Kotkin wondered aloud to me via e-mail why Pittsburgh was beginning to positively deviate from its Rust Belt cohort. A story on Cleveland Public Radio might help explain the divirging fortunes of Cleveland and Pittsburgh. I also remained convinced that Pittsburgh started successfully investing in human capital earlier than other shrinking cities and the region is now reaping the dividends. Thirdly, I think Pittsburgh continues to benefit from deep connectivity with Washington, DC. Via the Creative Class blog, DC is thriving and the economic productivity of capital cities around the world are on the rise:

Similar trends are brewing in North American government towns. Last year, home building nose-dived throughout Canada—except in Ottawa, where industry is scant and one in five workers draws a government paycheck. In the Canadian capital the resale price for condos jumped nearly 12 percent in 2008 and 5.7 percent for single-family homes. No wonder, given that federal employees enjoy a 41 percent wage premium over private-sector workers. As Toronto Star columnist Jim Travers wrote recently, "Hard times arrive here in mink slippers."

Ditto Washington, where 28 percent of the District's paychecks are cut by the various layers of the federal bureaucracy. While the private sector has shed 4.6 million jobs since December 2007, when the economic contraction began, the federal government has hired 200,000 workers, according to the Bureau of Labor Statistics. The new administration will likely create another 400,000 temporary jobs and 180,000 permanent ones. No wonder D.C., without a factory in sight, was the nation's second-fastest-growing job market (after Alaska) in 2008.

A resilient DC is good for a resilient Pittsburgh. Perhaps even more telling is that DC's great job market is failing to undermine Pittsburgh's recent migration trends towards growth. That's astounding given the churn of talent between the two regions.

Update: Obama tabbed Yinzer Ed Montgomery to be the director of Recovery for Auto Communities and Workers. Just another example of Burgh-DC connectivity.

Sunday, March 29, 2009

The Trust Bubble

What do collapsing real estate markets and the geography of food have in common? Both were unsustainable economic bubbles of trust. The current financial crisis is fueling the rise of localism. Increasingly, transactions require a firsthand account. Small banks are growing and continue to back solid mortgages given the intimate knowledge of the loan applicant, as opposed to using an algorithm to assess risk from hundreds or thousands of miles away. The politics of food is undergoing a similar transformation, as more people want to know about where and how their meal was farmed:

“The person who puts that scone in their mouth can now say, ‘Oh my God, there’s a real person behind this,’ ” said Read Smith, 61, who runs Cherry Creek Ranch, a 10,000-acre farm and cattle ranch in Eastern Washington. “They are going to bite into that bread or pastry and know whose hands were on the product.”

The FindtheFarmer site is the brainchild of Josh Dorf, 39, a disaffected dot.com entrepreneur who got into the food business six years ago by buying the Stone-Buhr brand from Unilever, the multinational consumer brands company.

Mr. Dorf gathers wheat from 32 farmers in the Pacific Northwest whose methods have been certified by an environmental organization. That wheat is kept segregated from uncertified farmers’ wheat while it is milled at a Spokane, Wash., factory, even though a single flour sack could contain wheat from as many as four farmers.

“Is it gimmicky? Sure, but it has value. Consumers have an interest in dealing directly with and supporting the American farmer,” said Mr. Dorf, who said he was inspired to create the site by “The Omnivore’s Dilemma” a book about the damaging effects of a hyperindustrialized food system.

The author of that best seller, Michael Pollan, a professor at the University of California, Berkeley, said FindtheFarmer was one part of a bigger effort to reintroduce trust into the food system.

The virtual connection to food probably was not the story you were expecting. Dorf's innovation is what I would call a distance trust technology: A tool that facilitates transactions between two different localities (two different geographies of trust). The lack of transparency is what gummed up global finance. The risk modeling used promised more trust than it could deliver and thus all the economic bubbles that burst.

That same dynamic applies to food safety. Some of you might remember the ban on US beef in South Korea. When the ban was lifted, there were numerous demonstrations and some violence. South Koreans simply didn't trust American meat. That's a crisis of globalization and undermines world trade. We need to create the means to restore those long distance transactions that helped the global economy to grow so dramatically. That's the kind of innovation I see happening in Pittsburgh. The trust born of industrial parochialism provides an infrastructure for a functioning global economy thanks to the region's diaspora. Yinzers will do business with other Yinzers halfway around the world because they understand each other.

A diaspora network is an excellent example of a powerful distance trust technology.

Connectivity Debate

If you could do one light rail project in Pittsburgh, which one would you choose? Some prioritize the link between downtown and the airport. Others, see greater value connecting the Golden Triangle with the innovation center in Oakland:

... [Dennis Yablonsky (chief executive of the Allegheny Conference on Community Development) said] to pursue the longtime goal of the conference for some sort of mass transit link between Downtown, the second-largest economic engine in the state, and Oakland, which comes in third.

In addition to linking the two business centers, a transit link also would provide students access to Downtown, which would make the area more vibrant after dark.

When I first started blogging, I would have posted that better transit to and from the airport was the much more important initiative. I viewed Pittsburgh as too isolated and in dire need of increasing global connectivity. I still think that is the case, but investing in the College Corridor is crucial to Pittsburgh's future prosperity.

Developing the College Corridor is a great idea. If I could funnel Pittsburgh resources in only one direction, that's the avenue. What or who is standing in the way?

Update: Cleveburgh Immigration

The Cleveland Plain Dealer keeps promoting liberalizing immigration law as a way to give Cleveburgh a boost:

For too long, Greater Cleveland's business community has shied away from this issue. So it is very good news indeed that the Greater Cleveland Partnership's 2009-10 public policy agenda unambiguously identifies immigration as key to attracting needed talent.

Specifically, the partnership pledges to support welcome centers and encourage programs to make it easier for foreign students to study here and remain in jobs after they graduate. It also calls for the creation of high-skill immigration zones. That last idea -- soon to be introduced in the U.S. House by Pittsburgh-area Democrat Jason Altmire -- would give businesses easier access to visas for highly educated professionals, provided they employ them in economically distressed areas.

Business and political leaders need to support efforts already under way to attract immigrant-investors through a federal program that gives them access to green cards. The EB-5 visa, as it's known, just got a six-month extension in the omnibus spending bill but needs congressional action to keep going.

The geographic scope of the commentary is Greater Cleveland, which makes the mention of Congressman Altmire's bill all the more interesting. Altmire is part of the Tech Belt dynamic duo, the other member being Congressman Tim Ryan (Youngstown). I just noticed that Chris Briem makes the same observation.

The Pittsburgh press seems oblivious to the Tech Belt initiative, at least compared to coverage I've seen in Cleveland or Youngstown. I'm not aware of any reaction, positive or negative, to the idea in Akron. However, I do know that various stakeholders in Pittsburgh are committed to increasing immigration to the region. Giving Altmire some ink is a good place to start. Strange to think that Altmire's biggest cheerleader for his immigration bill is the Greater Cleveland Partnership.

Saturday, March 28, 2009

Can Japan Save Pittsburgh?

While Jero continues to subtly connect the Burgh and Tokyo, the farm communities of Japan tell (more acutely) the tale of Rust Belt demographics:

To hear many farmers and agricultural experts tell it, rural Japan is fast approaching some sort of dead end, the result of depopulation, trade liberalization and depleted government coffers. They speak of the worst rural crisis since World War II. In Shonai, farmland prices have dropped as much as 70 percent in the past 15 years, and the number of farmers has shrunk by half since 1990.

The analogy might be more appropriate for shrinking cities that globalization will likely finish off. However, there are parts of the Pittsburgh region (e.g. Mon Valley) that fit the above description of rural Japan. Most of the Rust Belt will never benefit from the current economic geography.

Particularly in Japan, urban density rules. But the rural regions stubbornly hold onto the past as a last refuge. Ironically, this speeds up the community irrelevance. Towns and small cities grow increasingly isolated while the overall population rapidly ages. Better connectivity to the urban economic engines might help, but any sort of revival is unlikely. Geographic triage seems to be the only viable policy.

Tech Belt College Towns

Pittsburgh is a big college town. That fact may be the main reason that Pittsburgh is weathering the economic storm better than most regions. The news (hat tip Creative Class blog) is even better in nearby Morgantown, home of West Virginia University (WVU):

But for now, at least, job seekers who act quickly -- and are willing to relocate -- could well fare better in places like Morgantown, which is about 70 miles south of Pittsburgh near the Pennsylvania border. College towns like Morgantown have a distinct advantage over many other cities: They enjoy a constant stream of graduates, some who stay put and others who return years later -- and each year brings a new crop of students and potential residents to the area.

Like other college towns, unemployment in Morgantown (3.9%) is among the lowest in the United States. WVU anchors the southern most part of the Tech Belt, an economic corridor surprisingly rich in human capital. The positively gushing story in the Wall Street Journal is indicative of the transformation, right down to the boomerang migration phenomenon, this region is undergoing.

There exists considerable value in exporting talent, as the Morgantown boom exemplifies:

Nikki Bowman, a 1992 graduate of WVU, is the kind of person economists have in mind when they speak of "human capital." She spent years in the magazine industry in places like Chicago and Washington, D.C., before returning last year to start her own magazine, WV Living, which was launched in November.

"It was my dream to come back, and I knew I could make it work," says Ms. Bowman, 37. "Part of why I wanted to be here was to pull from the journalism school and I have a lot of great interns as a result," which helps keep her payroll costs down.

The same goes for Pittsburgh:

I am the Professional Projects Manager at amBX and an ETC and CMU Drama Alumni so the hiring of ETC talent into the UK market is already well underway, also the reason that this project and opportunity came about... believe me ETC is one of the main reasons I too am bullish on Pittsburgh and amBX is why i am bullish on the future of entertainment technology.... together it is a very exciting world atm.

As I posted a few days ago, amBX is investing in the ETC and mining the talent produced at Carnegie Mellon University. If it doesn't already, this relationship will have significant economic development implications for Pittsburgh. That is, if key regional stakeholders are willing to leverage these farflung assets.

Rust Belt Renaissance

I've written about Pittsburgh as a Rust Belt outlier. Indianapolis is also separating itself from the postindustrial pack. Cincinnati might be poised to be the next city to join this economic turnaround cohort:

Cincinnati's 4 percent growth in young adults surpassed rates in several similar cities in the Midwest. Young adults grew 3 percent in Columbus and Indianapolis from 2005-07, and 2 percent in Louisville and 1 percent in St. Louis. The young population was down 1 percent in Cleveland. All have reputations based on old-economy businesses, and a lack of mountains or beachfront to attract a young, active population.

But Cincinnati lags some of the cities it aspires to become, in terms of being a destination for young professionals. Austin and Nashville both experienced a 9 percent growth in young adults from 2005 to 2007. Portland, Ore., and Charlotte, N.C. - two cities often held out as examples of thriving mid-sized metropolises - experienced slow YP growth during these years, but that's likely because they grew rapidly in the 1990s.

Stories of growth should be put into such a context. Cincinnati looks good when compared to other Rust Belt cities, but it has a long way to go before it can compete with an Austin. The region's overall population is up, which is more than I can say about Pittsburgh. But like Pittsburgh, Cincinnati is an under-appreciated urban gem:

... Cincinnati is such an incredible city, one like no other in America. Every time I go there I am blown away by what it has. This isn't just another American sprawlburg, it's a place with amazing character. I'm not the only one who feels this way, as Mike Doyle's long take shows.

I encourage you to read that entire post from The Urbanophile. The critique is that the Cincinnati region is guilty of under-appreciating itself. The question shouldn't be about how to become Austin or Nashville, but how to leverage its unique assets. There's Richard Florida cool and then there's Rust Belt chic. Indeed, Cincinnati is a shining example of America's great urban frontier.

Friday, March 27, 2009

Biggest US Brain Drains

Which states are really losing talent at an alarming rate? Is it really a problem? Iowa's version:

Most states experience "brain drain," where college-educated students leave the state immediately after finishing their education. For Iowa, however, the situation is more frustrating, as the state has no problems attracting college students, but struggles keeping them after graduation.

Nationally, Iowa is in the top five states in terms of importing college students, and ranks No. 1 in the Midwest for the category, according to statistics included in the Generation Iowa Commission's December 2008 status report. After graduation, however, Iowa's loss of educated people is the nation's fourth worst, behind Florida, Pennsylvania and Arizona.

I included the first paragraph just so you could bear witness to the newspaper brain drain in Iowa. It's an editorial. I read it five times and I still have no idea what his point is.

The explanation for the "exodus" is a lack of "high-paying positions in their field of study after graduation." In Iowa, wages are relatively low even when controlling for cost of living. There appears to be a lot of slack in labor demand. Iowa simply can't absorb all those graduates. The brain drain isn't the problem. It is just a symptom.

Thursday, March 26, 2009

Pittsburgh Building Boom

I'd like to be able to track how this AP story about all the construction going on in Pittsburgh's downtown propagates:

While bigger cities like Miami and Phoenix struggle with mass foreclosures and stalled housing projects, Pittsburgh is enjoying something of a renaissance as developers pour some $4 billion into its downtown.

Roberta Brandes Gratz, author of two books on urban development, including "Cities Back from the Edge: New Life for Downtown," said Pittsburgh's development is "really genuine" and leads to long-term success.

"Those cities that leveled a major portion of their downtown for a single mall have more of a problem in this economy and for the next at least five years," Gratz said. "The reality is that Pittsburgh is something of a model." ...

... Since 2001, when Pittsburgh began actively working to bring residents downtown, the population has more than doubled, from barely 2,500 in 2000 to 5,174 in 2008, according to the U.S. Census Bureau.

I don't know if Gratz is from Pittsburgh, but she made her name in New York City (where she currently resides) and has impressive credentials as a leading urban thinker. She isn't just another booster claiming that Pittsburgh is a model of success.

I'm not sure how long it will take for the rest of the country to catch on and if the recent, albeit modest, success might lend itself to another term for the boy mayor who continues to muddle his way through his current reign. But I doubt even Steelerstahl could screw this up. It is not a question of if Pittsburgh will grow, but one of how much. Better leadership could fuel a boom. Or, will "good enough" still hold sway?

Talent Pipeline Pittsburgh

Brains coming to Pittsburgh from NYC, via Binghamton:

The 20-year-old junior from Queens chose Binghamton because of its academic reputation and affordability. Wills considered majoring in music until science classes made her realize that medicine was the right track. The biochemistry major’s decision is paying off: She spent the summer of 2007 working in Jamaica Hospital in Queens and took part in a Research Experience for Undergraduates program last summer at Carnegie Mellon University.

“That (REU) experience really enhanced my critical-thinking skills,” she said. “I loved it so much — just being in a different city and learning about Pittsburgh’s culture.”

REU is a clever way to poach talent from other regions and build new in-migration pathways.

Distribution Center Pittsburgh

More good news for Southwestern PA:

A Dallas developer will build two large industrial buildings near Pittsburgh International Airport in hopes of making the region a distribution center. ...

... Airport Authority Executive Director Brad Penrod says while air cargo business has declined because of the economy, Pittsburgh is well-positioned to become a distribution point for the Midwest and Northeast.

The project represents a $90 million investment. I guess if there aren't enough people to ship, the airport might as well handle more stuff. Nice to see greater recognition of Pittsburgh's strategic location.

Pittsburgh Versus Syracuse

As economic disparity increases within the Rust Belt, I expect intra-regional migration to grow. Since the grass is no longer greener in the Sun Belt, at least for the time being, the talent churn between postindustrial cities becomes more important. Case and point, Pittsburgh's gain is Syracuse's loss:

A California company has opened a window manufacturing factory near Pittsburgh instead of a Syracuse suburb because it took New York officials too long to approve tax incentives for the project, the company's top executive said Wednesday.

Kevin Surace, president and chief executive officer of Serious Materials, of Sunnyvale, Calif., said the company decided to put the manufacturing operation in Vandergrift, Pa., after New York state officials took several months to review the company's application for Empire Zone benefits for a site under consideration on Morgan Road in Clay.

Serious Materials opened the plant in a former window factory in Vandergrift two weeks ago and held a ribbon-cutting ceremony at the plant last week with Pennsylvania Gov. Edward Rendell. The plant employs 35 people, and the company expects to employ 150 at the facility by the end of the year as it ramps up production, Surace said. ...

... Monday, President Barack Obama praised the company for reopening the Pennsylvania plant, which had been shut down by a previous owner last year. When the plant closed, more than 100 jobs were lost in Vandergrift.

"Today, that factory is whirring back to life, and Serious Materials is rehiring the folks who lost their jobs," he said in an address to about 100 clean-energy entrepreneurs and researchers at the "Investing in the Clean Energy Economy" conference in Washington, D.C. "And these workers will now have a new mission: producing some of the most energy-efficient windows in the world."

I don't think most people appreciate the significance of the labor migration that occurs within the Rust Belt. The popular myth is that everyone is heading south. Take a look at Chris Briem's map of Pittsburgh out-migration:

Youngstown attracts more Pittsburghers than Charlotte, NC does. Atlanta is as an important destination as Cleveland or Columbus. Winning jobs from neighboring states can substantially influence migration. I speculate that someone living in Buffalo, short of staying put, might move to Pittsburgh instead of Tampa given the dearth of opportunities in cities hit extremely hard by the economic crisis.

The Serious Materials story highlights how Rust Belt states are locked in a zero-sum game, seriously undermining any shrinking city's ability to compete with the likes of Austin:

Four years ago UT, the Greater Austin Chamber of Commerce and the Austin mayor's office flew to South Korea to help persuade Samsung to situate a second flash memory chip factory in its area, a project worth $3.5 billion. The state of New York was offering $500 million in tax abatements and other subsidies, twice as much as Austin. Juan Sanchez, vice president of research at UT, started talking about his $500 million annual r&d budget, which funds a software laboratory that churns out a consistent supply of computer minds. But it was the people in the photos he brought with him that broke the ice with Samsung. Many of the students in the pictures were from Korea, and by the way, Sanchez was sure to add, there are more students from Korea at UT (933 out of 47,334 total currently) than from any other foreign country. "I am sure on an emotional level that probably helped catch their attention," said William Cryer, a public affairs counsel for Samsung who attended the meeting.

Given the human capital shortcomings, Rust Belt states are left out-bidding each other with subsidies that companies such as Samsung value less than they do a talented workforce. Richard Longworth would point out that this is a losing proposition and the same stale thinking that has hobbled the Midwest for decades. Greater critical mass of innovation is required to compete globally and why initiatives such as the Tech Belt make a world of sense.

Wednesday, March 25, 2009

Talent Battleground: Ontario

Those of you living in Pittsburgh ... When is the last time you remember seeing or hearing a campaign aimed at stealing local brains? Did it escalate into a war of words? From Ontario:

Premier Dalton McGuinty shrugged off concerns today that Saskatchewan's cash-infused efforts to lure graduates west will exacerbate Ontario's economic woes by poaching its best and brightest.

McGuinty insisted that Ontario still has 100,000 jobs it can't fill, even though the province has lost about 160,000 jobs since October and its unemployment rate is at a 12-year high.

"My competition is not the rest of Canada," he said.

"My competition is New York, Michigan, Massachusetts, even California. And we are not going to take our eye off that ball."

McGuinty seemed unconcerned that Saskatchewan Premier Brad Wall is headed to Ontario next week to offer college and university graduates up to $20,000 if they move to his province and stay for at least seven years.

The offer is being made to graduates across Canada, but Wall is making the pitch himself in Toronto – his second Ontario recruitment drive in seven months.

Wall hasn't been shy about his efforts to storm Ontario for skilled labour.

Earlier this month, he hosted a lunch for 86 Ontario families who moved to Saskatchewan following his government's recruitment push last fall.

Last summer, his ministers led two delegations of Saskatchewan employers to London, Ont., and Windsor – a city where the jobless rate sits at a painful 12.6 per cent.

Manitoba is also setting its sights on Ontario and other hard-hit provinces this spring with a $2-million TV ad campaign to entice disheartened workers to relocate.

Both Saskatchewan and Manitoba have managed to escape the worst effects of the recession and are among the few provinces expected to see growth this year.

Ontario, on the other hand, has fallen to have-not status and is expected to unveil a budget Thursday that will include a massive deficit of about $18 billion over two years.

McGuinty grew testy when pressed about Saskatchewan's recruitment drive, even suggesting that he can't blame Wall for trying to poach the "innovative" workers who live in the province.

But it's no compliment that Ontario has fallen so far that other provinces are able to tempt the jobless with promises of cash bonuses, said NDP critic Peter Kormos.

Workers are already leaving Ontario because they can't find jobs, and the brain drain will only worsen if the government doesn't give graduates more incentives to stay, said interim Progressive Conservative Leader Bob Runciman.

"This is a serious situation when our best and brightest could be lost to us forever," he said.

"Once someone gets into a position like that, marries, has a family, they tend to put down roots, and we have lost those people."

Ontario needs its smart and talented workers to stay in the province to kickstart its sluggish economy, said James Milway, executive director of the Institute for Competitiveness and Prosperity, a government-funded research organization.

"It's one of those things where once an economy loses (those people), it starts to spiral out," he said.

"If your economy starts to slip and you can't get it back, it will be hard to get yourself out of that cycle of doom."

If McGuinty wants to keep those graduates in Ontario, the government should pour money into graduate education to retain its brightest students and attract investment by cutting business taxes, Milway said.

I pasted the contents of the entire article because I don't want to lose this gem to pay-per-view archives or a dead link. The companion piece deserves the same treatment:

Saskatchewan politicians will again swoop into a recession-ravaged Ontario to entice as many workers as they can to go west, their second attempt in six months.

"We may not have a professional hockey team, but then neither do you," Regina Mayor Pat Fiacco says with a laugh. "I'm just kidding."

Last time, the politicians tried to woo Toronto's ethnically diverse Thorncliffe Park with a barbecue during the Ramadan fast.

Now Saskatchewan is targeting university and college graduates across the country, offering up to $20,000 if you move to Saskatchewan. The catch? You have to stay there – for at least seven years.

The initiative is an expansion of a pre-existing graduate retention program designed to pay back tuition and reverse the flow of educated workers from Saskatchewan.

Rob Norris, the province's minister for advanced education, employment and labour, said: "For the first time in a very long time we're seeing population growth in Saskatchewan."

Fiacco, along with Premier Brad Wall and Saskatoon Mayor Donald Atchison, will be in Toronto next week to attend a job fair with Saskatchewan companies.

Atchison noted that their province has managed to avoid the worst effects of the recession.

I want anyone paying attention to understand the lengths some are willing to go to attract talent, during an economic crisis. Actually, the above story should be quite familiar. I expect the next Bill Toland story to be about Winnipeg.

Tuesday, March 24, 2009

Smarter Pittsburgh

Update: New Geography did publish my article, Rust Belt Outliers.

Edward Glaeser does some speculating as to how the economic shock might drive migration. I submitted a reaction to New Geography, which may or may not publish it. So, I'll tap the words of Ryan Avent as a way to enter Glaeser's observations into my blog record:

Unsurprisingly given the sectoral bias of the recession, low unemployment is strongly correlated with the stock of human capital. Glaeser notes that low unemployment in this recession is actually correlated with the stock of human capital in the 1940s, which mainly shows the persistence of concentrations of human capital. As he has noted in previous research, human capital levels have actually diverged over time, with smart cities getting smarter and vice versa.

The story of shrinking cities is one of brain drain, the out-migration of human capital. The Rust Belt is full of dumb cities getting dumber. Glaeser's conclusion:

During the recessions, thousands fled the Dust Bowl. In the 1970s and 1980s, there was a massive exodus from the Rust Belt. Today’s recession will also prompt mobility, probably toward more skilled, more centralized cities with less historical commitment to manufacturing.

I think this bodes well for Pittsburgh. Surprisingly, the Steel City is a smart city getting smarter. Quoting Bill Testa:

In considering educational attainment of the populations, the [table below] displays the ranks of Great Lakes metropolitan areas among 118 metropolitan areas in 1970 and 2006. The two local leaders in 1970 college attainment, Columbus, Ohio, and the Twin Cities also experienced the fastest employment growth. While Pittsburgh ranked low in college attainment in 1970, its gains in this metric since then have been the most rapid. Perhaps not accidentally, Pittsburgh’s growth in per capita income also outpaced other cities in the region.

As good as that might make Pittsburghers feel, it hasn't translated into population gains via migration. However, I don't think something structural is keeping Pittsburgh from growing like Glaeser might expect. Unemployment is relatively low and Pittsburgh may be on the cusp of getting on the mental maps of talented outsiders. It all depends on the region's ability to shake its "historical commitment to manufacturing."

Monday, March 23, 2009

Gaming Industry in Pittsburgh

No, I'm not offering an update on the new casino. I merely want to point out the connections between Pittsburgh and the United Kingdom in the high-tech entertainment industry:

amBX has already licensed the technology to many content developers and publishers in the gaming sector and the sponsorship of Carnegie Mellon University highlights the ongoing commitment of amBX investing in the future of world class game development talent.

amBX, if you haven't already determined, is located in the UK. As for CMU, its Entertainment Technology Center (ETC) has quite the global reputation:

“This opportunity places state-of-the-art amBX technology in the hands of entertainment creators of the future and redefines the way entertainment is experienced. We’re really pleased to be able to work with such a prominent institution as ETC to develop the capabilities and application of amBX technology.”

The ETC innovation cluster is remarkable. Thanks to VisitPittsburgh, I was able to tour the ETC facility, which happens to be a neighbor of the Pittsburgh Technology Council. As someone who has experience teaching university level courses, I was most impressed with the design of the training program. The ETC successfully breaks down disciplinary barriers and fuels creativity. I was part of a multi-disciplinary graduate training program at the University of Colorado. Conversations between the social scientists were almost impossible. I'm thankful for the exposure to other theories and research methodologies, but I never witnessed any functioning collaboration. ETC has managed to pull off what my program only proported to do.

Back to amBX ... I've read on numerous occasions, over the past two years, stories about the UK talent shortage in the virtual gaming industry. Surely, amBX is hoping to benefit from its relationship with the ETC by landing top graduates from that program. Right now, Pittsburgh doesn't have the capacity to grow all the ETC spinoffs. But eventually, companies like amBX will see the value of locating operations near the ETC campus in order to benefit from knowledge spillover.

The ETC is one of the best reasons I am bullish on Pittsburgh.

Worse Than Rhode Island?

Since standards for measuring brain drain don't exist, I'm often left wondering if bold claims of excessive out-migration are true:

The state and municipalities have taken multiple development initiatives. Yet Connecticut’s economy has failed to create more jobs in 20 years. Worse, high-wage, high-skill jobs are disappearing; low-wage, low skill jobs growing. And, Connecticut has seen no increase to the number of its business establishments — the poorest performance in the nation. The result is that Connecticut has the largest out-migration of young professionals in the nation.

Just a few weeks ago, I read that Rhode Island looks at Connecticut with envy. This report indicates that Connecticut does well in attracting the highly-skilled and educated. Given the explanation of the out-migration of young professionals, that's a remarkable feat. Twentysomethings moving to New York City is a crisis?

Young professionals testing the waters in a world-class city is a good thing. Graduates streaming to global talent centers is a testament to the success of Connecticut's education. I smell a boondoggle:

The state invested billions in Connecticut’s public educational system — significantly increasing the share of our best high school graduates staying in Connecticut for college.

Ah, the good ole days when ample spending kept Connecticut brains at home. The suggested relationship is absurd and indicative of how policymakers use brain drain hysteria to justify spending initiatives. That's not to say that the idea the director of the Connecticut Center for Economic Analysis at the University of Connecticut is promoting is a bad one. Just that his analysis doesn't make much sense.

Sunday, March 22, 2009

Can Winnipeg Save Pittsburgh?

Path dependence, along with the proximity rule, can make predicting migration patterns rather easy. The difficulty is the anticipation of pioneering relocation. Iceland's economy is in full-blown meltdown. That's good news for Winnipeg:

As in 1875, the next Icelandic wave is just what the doctor ordered for Manitoba. Then, the province needed hardy pioneers who would not shrink from cruel weather or hard work. That's who arrived from Iceland. Now, the province needs skilled and educated workers. Once again, that's what Iceland has on offer.

A sign of the newest Icelandic wave in Manitoba rose just after the collapse of the Icelandic banks last fall, when an architectural firm in Manitoba made it known in Iceland that it wanted to hire Icelandic architects. Two of three partners of Batteriid Ltd., a conculting architectural firm, responded and went to Manitoba in December. They travelled to Manitoba again in January along with an engineer from the engineering firm Almenna Verkfraedistofan Ltd. for further discussions and are planning the third trip soon.

When desperate for talent, there is no need to remake the wheel. Cultivating new migration flows is notoriously difficult. But once established, it can serve a region for generations. Pittsburgh should remember its Irish heritage because Ireland is undergoing another wave of emigration.

But there are other types of path dependent migrations. Domestic boomerang migration to the Rust Belt is of increasing significance. Networks are in place to better enable this talent pipeline. Russia is beginning to explore this opportunity in order to address a shrinking population:

Moscow has spent $300 million in the past two years to get the repatriation program started, and officials estimated that more than 25 million people were eligible, many of them ethnic Russians who found themselves living in former Soviet republics after the Soviet collapse in 1991.

I think of all the money thrown down the brain drain that could have been spent on something like Russia's approach to deal with its unfavorable demography. Millions of dollars are wasted every year on retaining people and no one seems interested in the effectiveness of these initiatives. Instead, the same mistakes are repeated and well-known realities of migration are ignored.

Saturday, March 21, 2009

Spatially Imbalanced Growth

The economy is bad all over. However, dramatic geographic variance still exits and relocation is a viable solution. One of the most striking examples of this disparity exists in Canada:

Much of the province seems to be shutting down. Finance Minister Dwight Duncan will table the Ontario budget on Thursday, but he has already set expectations by delivering in advance the worst news: an $18-billion deficit across the next two years. How that number breaks down will determine whether the deficit cracks the record of $12.4-billion set in 1992-93, although the economy is a lot bigger now than it was back then.

In advance of budget day, Mr. Duncan has a broad base of bad news to consider. This week, Doug Porter, deputy chief economist at BMO Capital Markets, issued a report with a table that ranked the top 10 large metropolitan areas, nationally, that have seen the highest increases in unemployment in the past five months. Nine of the 10 are in Ontario. What's more, the province's jobless rate has surpassed that of Quebec for the first time in at least 30 years.

In the past four years, Ontario has lost fully one-quarter of its manufacturing jobs - a drop of 272,000 from a peak in the summer of 2004. "No other province has seen as broad-based a deterioration as Ontario has seen in the past year or so," Mr. Porter says of the economic engine that through most of the past decade contributed more than 40 per cent to the nation's gross domestic product. Today, he adds, "Ontario stands alone."

All of Canada is in recession, but almost anywhere is better than Ontario. Migration patterns are beginning to reflect the uneven downturn. Canada is undergoing a dramatic demographic reset.

Ontario's economic collapse provides an opportunity to test Richard Florida's ideas. The Creative Class is officially on trial:

Ontario's minister of economic development is in his office at the Whitney Block, just across Queen's Park Circle from the provincial legislature. Michael Bryant is a rapid-talking lawyer with the build of a bantamweight (he is a recreational boxer) who had a high-profile run as the province's youngest attorney-general, a shorter sprint through aboriginal affairs, and was handed his current portfolio in a cabinet shuffle last September.

There was little time to get acclimatized. In December, his department was the unhappy recipient of a woeful research report on the economic impact of the Detroit Three. Worst case - if the U.S. auto manufacturers cease production here - employment in Canada will contract by 323,100 jobs, more than 280,000 of them (85 per cent) in Ontario. ...

... Mr. Bryant wants to make one thing clear. "People say are you going to prop up the 1972 version of auto. No. We're not doing that. Are you going to assist auto in transforming itself? That's the reset that we're trying to participate in." ...

... To understand Mr. Bryant's thinking, it's important to know that since taking on the portfolio he has spent considerable time in the company of two men: Richard Florida and Roger Martin, whom he calls "great tutors." The mentorship of Prof. Martin, dean of the Joseph L. Rotman School of Management at the University of Toronto, goes back some years: "Before I got into government, I was in his office and he was sending me books. It was the education of a young MPP."

Ontario is gambling that Florida is right and that his observations will translate into a reversal of fortune for the ailing province. Sean Safford might tell the Toronto brain trust that it is making a grave mistake and that Florida is a fraud. Even if the plan works, most of Ontario will be very disappointed with the results. As I work my way through the World Bank report about economic geography and development, I realize that one of the primary themes is that any sort of spatially balanced growth policy will fail. The choice for the unemployed in Sudbury, or perhaps even Hamilton, will be between moving to Greater Toronto or Greater Winnipeg. Toronto will continue to prosper, but the rest of Ontario won't like what the "reset" entails, dramatically greater brain drain.

Friday, March 20, 2009

Rust Belt Immigration: Hamilton

The economic downturn is taking a toll on the Rust Belt in Southern Ontario, making Atlantic Canada seem attractive by comparison. Hamilton is taking an unusual approach to dealing with the problem. Instead of trying to protect local jobs for local people, the community is attempting to better assist its highly-skilled immigrants and attract new talent:

The council, modelled on the Poverty Roundtable and Jobs Prosperity Collaborative, will create the immigration strategy.

Though encouraged by the initiative, [Ines Rios (executive director of St. Joseph's Immigrant Women's Centre)] fears the economic downturn will make it even more difficult for Hamilton to attract skilled immigrants. She believes the city would be wise to market itself as an educational hub.

Even in a recession, Madina Wasuge, executive director of the Hamilton Centre for Civic Inclusion and co-convener of the council, believes Hamilton must push ahead with its strategy. Waiting, she warns, could mean being left behind.

Canada is well ahead of the curve when it comes to recognizing the talent shortage looming on the other side of the current depression. As for American Rust Belt cities, this story from Pittsburgh is distressing:

[Dr. Shalini Devi, a PhD from the Indian Institute of Technology, Kanpur (one of the premier engineering institutes in India),] had been a Post Doctoral student at the University of Pittsburgh but lost her job five years earlier, and subsequently lost contact with her family and friends. No one knew of her status. She had saved $46,000 while working and she used that money to stay in her apartment in Shadyside for five years until her money was depleted. She even stopped taking the bus so that she could stretch her money further. Her sole activity was to go to Oakland to the Indian grocery store and carry bags of grocery back to her apartment.

Educated immigrants fall through the cracks all the time and Rust Belt cities, struggling to attract foreign born migrants, appear ambivalent about the situation. This is a mistake. The ability to fight off the rising populist sentiments will pay great dividends once the recovery begins.

Unfortunately, stopping brain drain is the more common response to shrinking talent pools. The Tech Belt has some tremendous assets in place to lead the charge for a more proactive talent management strategy. But these few voices need more support if we are to revive the economies of our shrinking cities. Can Hamilton save Pittsburgh?

Thursday, March 19, 2009

Stuck in Pittsburgh?

With the latest US Census data out, migration stories abound. The news continues to be declining geographic mobility:

As a result, rust-belt metro areas such as Buffalo, N.Y., Pittsburgh and Cleveland stanched some population losses, and Boston, Los Angeles and New York saw gains. Well-to-do exurbs around Washington D.C. saw growth declines as people weary of costly commutes moved closer to federal jobs in the nation's capital.

"It's the bursting of a 'migration bubble,'" said William H. Frey, a demographer at the Brookings Institution think tank who analyzed the numbers. "Places that popped up in migration growth in the superheated housing markets earlier in the decade are now just as quickly losing their steam."

"It's the constraint of not being able to buy or sell a home that is keeping people from moving long distances," he said.

Looking for a ray of hope in a decimated job market, Charlotte takes heart:

Some are optimistic, and predict the region will still grow, though at a slower rate. One theory is that the jobless won't leave Charlotte because the recession is so widespread there are few economically healthy places for people to move.

“Where are they going to go? The problem is there is no Promised Land,” said Joel Kotkin, an author who writes extensively about social and economic changes in American cities. “In every recession there were two or three places that were doing better. That's not the case now.”

As quoted, there is an important distinction between Frey and Kotkin. Frey claims that the real estate collapse is undermining out-migration. Kotkin doesn't see enough economic variation to justify moving. Regardless, the point seems to be that less people are leaving Buffalo, Cleveland and Pittsburgh for Sun Belt boomtowns such as Charlotte.

Since the migration data only reveal net migration rates, we don't know if there are excpetions to the trend. However, I did notice some interesting differences between the above three Rust Belt cities. Chris Briem continues to hint that in-migration is increasing to Pittsburgh. From 2000-2008, the net migration rate per 1000 is -2.1. But for 2007-2008, it is only -0.3. The same numbers for Buffalo are -4.8 and -2.3; Cleveland coming in at -5.9 and -5.7. As an aside, Pittsburgh is still experiencing natural decline while Buffalo (marginally) and Cleveland have more births than deaths.

Even if the out-migration rate is decreasing in Pittsburgh, it isn't a result of bad mortgages. The housing markets in Cleveland and Pittsburgh couldn't be more different. Pittsburghers are more likely staying put because the job market is so much better at home than in Charlotte.

I doubt that less out-migration really explains the dramatic change we're witnessing in Pittsburgh. The rates of people leaving have been relatively low for quite some time. The in-migration numbers were downright pathetic. My money is on more people moving to Pittsburgh as explaining the shrinking negative net migration.

Wednesday, March 18, 2009

More Accolades for Pittsburgh

Update: "Can Pittsburgh save Detroit?"

Pittsburgh is still a relative bright spot in the gloomy economic landscape. CNN is turning to Pittsblog for the story behind all the good news. Actually, here is the scoop:

Cooper is scheduled to do his show, "Anderson Cooper 360," live tonight from here. It's his latest stop on a five-city, five-day trip to see how Americans are being affected by the economic crisis.

The show is broadcasting tonight from J.B. Bamboozles at 7280 E. 12 Mile in Warren, across from the GM Tech Center.

According to the show’s Web site, CNN’s Randi Kaye is doing a piece tonight on lessons Detroit could learn from Pittsburgh. It also said a producer has visited a Detroit neighborhood where some artists are trying to bring in other creative types and create green energy homes. The effort was recently described in an essay that ran in the New York Times.

The visits are part of a big push by CNN called "Road to Rescue: A CNN Survival Guide." The cable news network is devoting a week of programming to the global economic situation and involving all of its shows, anchors and correspondents in the effort.

"It is unprecedented," said Cooper. "And it is a sign of what a major story we think this is."

Once again, Pittsburgh will be a model of how to turn things around. I'll be interested to see how the Mike Madison interview fits into that narrative, if CNN decides to air it. Regardless, tonight's show will be a major publicity coup for Southwestern PA.

I expect the usual Burgh skeptics to roll their eyes at all this boosterism. No doubt, Pittsburgh has its shortcomings. But that's true for any city. Tonight will be Pittsburgh's global coming out party, deservedly so.

Edit: I forgot to add the link to the NPR blog post about Pittsburgh. Thanks to Janko for the heads up.

Tuesday, March 17, 2009

Fetishized Geographies

Cities, suburbs, and villages each have their boosters. I grew up in the burbs, fearing the urban and idealizing the rural. Above all, I hated my world of cookie cutter housing and oppressive social conformity. Nowhere could possibly be more banal.

I got over both my romantic attachment to countryside (sheep are the scourge of the earth) and my metrophobia (the urbane are more territorial than suburbanites). But I remain steadfast in my disdain for bedroom communities. How we value various landscapes is very telling. If you want to know something significant about a stranger, then ask her for directions.

City, suburb, or village? Those geographic archetypes are useful for understanding many of the blog debates I encounter on a daily basis. Enter suburban champion Joel Kotkin:

In the new scarcity politics, access to land also may be sharply limited. New land regulation, ostensibly for climate-change reasons – already in place in California and being discussed as well in Washington state – could force almost all new development to follow a high-density, multi-family pattern. Over time, single-family homes – the preference of a vast majority of Americans – will become once again, as they were in the past, the privilege only of the upper classes in some metropolitan regions.

"Class warfare", he cries. Richard Florida-land is the province of elites, vibrant CBDs at the expense of the more upwardly mobile sprawl. Ryan Avent's retort:

Now, this isn’t true — California’s land-use law is about making it easier to build in dense places, not preventing anyone from living in Riverside. This means, of course, that if developers aren’t interested in building in dense places, if the demand isn’t there you know, then they’ll go right on building single-family homes. But I love, love, love, the implication that this scarcity, as embodied by the denial of the opportunity to realize the American Dream in the Inland Empire, could retard economic recovery. Where does Kotkin suppose these foreclosure capitals of the country are, exactly? They’re not in Santa Monica, I’ll tell you that.

I'm not one to judge whether or not "Kotkin understands scarcity". I'm not an economist. But I do know how Kotkin is vilified. Remember, suburbia is evil or soulless. Personally, I appreciate what Kotkin is trying to say. I've begun to question the accepted wisdom that spawl is bad and density is good. Spiky World, a.k.a. urban geography of globalization, is the epitome of economic inequity.

On the other hand, I tend to agree with Avent about marketizing water. The legal geography of the Interior West does few favors for blue-collar workers. In fact, it informs lower-class exploitation. Cheap labor (usually undocumented) plus subsidized water (thanks to senior rights) equals billions for agrobusiness. In Colorado, this regime hurts suburbs that are often under junior water rights. It actually further privileges "elitist" Boulder over the sprawl communities to the east. A greater irony is that unleashing the market on water would undermine big agrobusiness and fuel suburban growth in the Front Range. Few people seem to understand that agriculture trumps residential when it comes to water use.

"Scarcity" might actually be a good thing for blue-collar Americans. We just have to get beyond the fetishized geographies.

Monday, March 16, 2009

Incentivize Migration

Domestic and international migrants tend to make good entrepreneurs and help to stimulate the economy. Another human capital key to development is a better educated workforce. Smart people attract good companies. They also start businesses. How might your region collect a critical mass of the geographically mobile? One idea is to use targeted tax incentives:

I am also increasingly of the view that targeted tax cuts might work on the personal side of the house as well. If you want to grow the animation industry, give a $4,000 tax credit each year for three years for each person who moves to the province to work in animation or who starts a career in animation here. That would incentivize the workforce in this sector and help offset some of the costs of relocating here for migrants. I am not 100% sold on this notion (it is used in Quebec to stimulate the financial services industry) - but it is worth a close look.

A closer look would start with Quebec. Apparently, tax incentives don't impress Anglophonic talent. The linked article details native English speaking out-migration, but I'd bet that in-migration of the same demographic is failing to offset the talent losses. I'm deeply skeptical of the claim that tax incentives can inform a long-distance migration (i.e. province to province or state to state).

I also doubt that twentysomethings really care about tax credits. Young adult migration might be the very definition of economically irrational. Who else would move to Manhattan for an internship? How about slumming it in Austin because you really enjoyed the SXSW experience? Chew on this:

Sixty-four percent of college-educated young adults have told us in national surveys that first they choose the city they want to live in. Then they look for a job.

Geographers > Economists

Sunday, March 15, 2009

Appalachian Pittsburgh

Pittsburgh is a confused city. Midwestern? Northeastern? Great Lakes? Try Appalachian:

[Center for Appalachian Network Access (CANA)] was co-founded in 2003 by Bruce Maggs, associate professor of computer science [at CMU], and Pittsburgh investment banker John Whitehill. Its purpose is to bring the Internet to Appalachian communities like Glenville, in Gilmer County, and raise the literacy and economic profile of the region.

In September 2003, the Appalachian Regional Commission (ARC) and the Claude Worthington Benedum Foundation gave researchers at CANA $250,000 to implement two new wireless broadband networks in Appalachia, a 200,000-square-mile region along the spine of the Appalachian Mountains from southern New York to northern Mississippi.

After they complete the pilot projects in Gilmer and Bedford counties, CANA expects to extend the project to other rural communities in West Virginia, Southwestern Pennsylvania, and ultimately the entire Appalachian region.

A CANA project showed up in one of my morning news searches and it reminded me that Pittsburgh belongs to at least three regions. This trans-regional identity is an asset. Pittsburgh will not end up as a cul-de-sac for the national or global economy.

On the contrary, Pittsburgh is a great broker for investment opportunities in undervalued areas such as Appalachia or America's Urban Frontier. The Burgh Diaspora only enhances this position. Only a matter of time before Pittsburgh is poaching talent from Chattanooga.

Diaspora Economic Geography

Despite the economic contraction, the search for top-notch talent continues. Regions might learn something from the scouts, who use innovative methods in order to stay one step ahead of the competition:

So, this summer, Gensler is bringing a new twist to its internship program. A major goal involves hiring students from United States universities who grew up in Brazil, Argentina, India, China or the Mideast and might eventually want to return to their native countries later in their careers. The hope, says Diane Hoskins, one of three executive directors running Gensler, is that these interns can eventually play important roles in helping Gensler build its overseas offices.

Historically, Gensler has expanded in a gradual, impromptu way, opening most of its 31 offices when major clients want work done in new locations. But Gensler’s new effort to nurture transnational architects reflects a more deliberate matching of future talent and future strategy, by clustering gifted people together.

This approach pays homage to one of the firm’s most successful hires. In 1991, an American-trained Chinese immigrant, Jun Xia, joined Gensler’s office in Denver and thrived there, winning awards for a regional airport job. He had planned to settle in the United States, but after a visit to Shanghai in 1998, he urged his bosses to open an office there, so Gensler could play an important part in China’s building boom. The firm did so.

Mr. Xia is now Gensler’s design director in Shanghai. Last year, he and his team won an architectural mandate to create Shanghai Tower, a 2,074-foot colossus that is expected to be China’s tallest building when completed in 2014. Finding young architects with the potential to do something similar for Gensler has become a strategic priority, Ms. Hoskins says.

This approach to talent management is another version of the Google Diaspora, but in reverse. When exporting your best talent, I suggest targeting growth markets that should benefit your region thanks to greater connectivity with a boomtown. Economic synergies between the two locations is also ideal. Furthermore, try to attract superstars from that area and increase brain exchange.

How do you send your talent to a preferred destination? Use your regional diaspora network. Of course, you'll have to organize it first.

Saturday, March 14, 2009

From Barstow to Wawa: Hitchhiking Tar Pits

What's worse than talent leaving your region, never to return?

How about being stuck in a state with no job prospects? That's the story in Michigan, where the unemployed don't know where to move in order to find work:

Due to the worsening job market in the rest of the country, Kenneth Darga, the state's demographer, said he expects Michigan's net migration rate, now the worst in the nation at -9.2%, to show some improvement in the short term.

But Michigan isn't unique, he said. Around the country, more people are staying put.

Yet growing numbers of unemployed people stuck in Michigan also could hurt the state, increasing crime and boosting the need for food aid and other types of social assistance.

The main problem, as I see it, is an extended employment network in all the wrong places. Texas is still trying to attract teachers from hard-hit California. Other places to job hunt are along the Pittsburgh-DC axis and Virginia Beach. That's about it. Traditional Rust Belt relocation destinations, such as Phoenix and Charlotte, aren't much better than Michigan. If you know anyone in Texas, then I suggest giving them a call.

I can't stress enough the value of geographic mobility for workers:

[Indermit S Gill, director of WDR and regional chief economist for the World Bank's Europe and Central Asia region,] pointed out that as education was an aspiration that cut across all regions, migration towards centres of economic concentration would follow. ''You can't be for more education and against more migration,'' he said in response to a question on the social fallout of large-scale internal migration.

For the looming talent shortage, recruiting is much more important than retaining. Trying to get locals to stay is the same thing as denying them the education they need to succeed. On the whole, brain drain policies are destructive. And, the push for higher education for more people will inevitably exacerbate out-migration. Policymakers don't seem to grasp the paradox.

Despite the stubborn adherence to outdated approaches to workforce development, some regions have launched innovative initiatives to deal with a shrinking population and shortage of talent:

Launched in Newry today by the Southern Regional College (www.src.ac.uk) engaging with Dundalk Institute of Technology (www.dkit.ie) IQ360 Cross-Border Brain Gain also seeks to encourage internationally mobile entrepreneurs and locally-based 'would-be' entrepreneurs in knowledge-based sectors who commute daily to Belfast or Dublin to set up businesses in the expanding cross-border "corridor."

The campaign is being kick-started by an intense cross-border marketing and advertising campaign and a powerful internet site which will showcase the help available online and face-to-face in Newry and Dundalk.

"A programme of this kind has never been offered before," says Kieran Fegan, manager of Greenshoots Incubation and Innovation Centre in Newry (www.greenshoots-newry.com) which is a joint initiative with the University of Ulster. "A key aim of IQ360 is to attract expatriates with new or existing business ideas and new intellectual property to this cross-border region."

Sean MacEntee, manager of the Regional Development Centre at Dundalk Institute of Technology says, "Business incubation is a process, not just a place. Supports such as mentoring, special advice, access to researchers and networking are far more important than bricks and mortar. These supports will be available online to expatriates from anywhere in the world, as well as face-to-face in Newry or Dundalk."

The programme is aimed mainly at the engineering, software, ICT, creative and digital media, as well as renewable energy and assistive living sectors. Operated from the two colleges, it has been funded by the Department of Employment and Learning in Northern Ireland and covers counties South Down, Armagh and Louth.

Building such a network is one way to derive a return on the investment in people who leave. But communities first have to recognize the value of out-migration and make peace with the shifting economic landscape. In fact, I think successful out-migration would attract more in-migration as others learn about the network and the opportunities it provides. We've seen a similar relocation pattern between urban centers and the surrounding suburbs, which are out-migration factories. Suburban schools do a great job of increasing geographic mobility, which is why so many talented adults with children want to live there.