Tuesday, April 06, 2010

Why St. Louis Can't Compete

Kudos to the St. Louis Post-Dispatch for helping to set an agenda for the region's revitalization. A recent editorial in the newspaper attempts to suggest a few ways forward:

• Time. It’s going to take a while. In 2009, when Pittsburgh hosted the G-20 Summit of Industrialized Nations, the world suddenly noticed that the one-time Steel City had done a remarkable job of making over itself. But Pittsburgh had been working at it for more than 30 years, ever since the American steel industry was overtaken by foreign steel. ...

• Invest in people, not just projects. What about tax breaks for bright college graduates who agree to stay home? ...

• St. Louis, even as it tries to keep its best and brightest, must cultivate the loyalty of those who have left. You can see them on television wearing Cardinals hats at away games; an “alumni club” could spread the word — not only is this a good place to be from; but it also is a good place to be.

There is a laundry list of considerations and I cherry-picked three to make a point. I don't think the author of the piece has a good understanding of what other communities have done and therefore gives bad advice to the readership. The Pittsburgh reference might be rewritten to state that the world took 30 years to notice the city's make over.

More troubling is the policy suggestion for talent retention. Tax breaks? Again? Sigh ...

St. Louis needs to be more aware of what is going on in other regions, other states. Neighboring Iowa is a good guide, having tried just about everything under the sun to deal with brain drain. Also, Joel Kotkin provided an assessment of the St. Louis talent landscape that the leadership should revisit. There are more than a few demographic surprises in the report.

Unfortunately, St. Louis is preparing to go the road more traveled and the excellent newspaper series will be in vain. That's exactly what happened in Cleveland. I expect business as usual in St. Louis.

4 comments:

The Urbanophile said...

I read the Iowa document. What are your takeaways? The high inflow of students is the "steel mill" hypothesis. Iowa is a comparatively small state with significant universities.

Jim Russell said...

My main conclusion is that Iowa's workforce development paradigm is woefully out-dated. The state's economy can't possibly absorb all the graduates, which is indicative of a policy success.

Instead of thinking about higher education as feeding Iowa industry, the state should look at these institutions as an industry. Iowa has a phenomenal brand. Leverage it instead of fretting about graduates leaving.

My guess is that the demographic worm is turning in Iowa like it is in Pittsburgh. Companies are moving to places where the talent is produced.

When I first read the report (it was associated with a great article in an Iowan newspaper), I came away feeling very bullish about the state's future.

Stephen Gross said...

Come to think of it, why would any city policymaker think that individual residents make relocation decisions on the basis of city income taxes, anyway!? I know a lot of people who have moved around the country, and NO ONE has ever included municipal tax code as a factor in his/her decision. Policymakers are crazy.

Jim Russell said...

Most of the bluster about tax regimes and migration is just noise. The Wall Street Journal made a big deal about a report that assessed the situation in New Jersey. The WSJ misunderstood the results and went with a sensational headline that was more than misleading. It was false.