Thursday, October 28, 2010

Executive Geographic Mobility

If you own a home, then you devalue your education. That's the lesson in a Real Time Economics post:

“Continued weakness in the housing market is undoubtedly the biggest factor suppressing relocation. Job seekers who own a home — even if they are open to relocating for a new job — are basically stuck where they are if they are unable or unwilling to sell their homes without incurring a significant loss,” said John A. Challenger, chief executive officer of the firm.

“Right now, demand for new workers is not at a level that would force companies to bring in talent from outside their region. However, as the local talent pool starts to become depleted as the economy improves, companies will be compelled to cast a wider recruiting net. Unfortunately, the immobility of the workforce may mean that some employers will have to delay expansion plans, thus slowing the recovery,” he said.

For a variety of reasons, talent shortages loom on the horizon. Regions focused on retention strategies will find that they don't have the network capacity to help the economy grow. There is absolutely no gain in trying to discourage outmigration. If anything, regions should encourage leaving.

Facilitating relocation is a tough sell. That's a result of failing to build the capacity to benefit locally from outmigration. The interests of the individual and community are misaligned. The two are often pulling in different directions. Such a dilemma dramatically under-utilizes human capital. In shrinking cities, that's a fatal oversight. Detroit cannot afford to ignore its expatriates because they live hundreds or even thousands of miles away. Distance is no excuse for incompetence or lack of vision.

Talent is emerging as THE currency in the post-recession economy. In economic development circles, conventional wisdom works against this trend. The goals are place-oriented instead of people-oriented. Grab the brass ring and embrace geographic mobility.


Vance said...

Isn't economic development (at least at the regional/local level) inherently place-oriented? How can economic development professionals at these levels support geographic mobility?

Jim Russell said...

Economic development is not inherently place-oriented, at any scale. Economics is a social science. Economic development is inherently about people. The place orientation is a relic of the industrial era when economic geography was all about access to natural resources and transportation networks.

Supporting geographic mobility is easy (e.g. mobility bank). But the first step is getting out of the way of geographic mobility. Let's strike the word "retention" from the discourse.

rootvg said...

If you own a home anywhere but a major metro, I could see the validity of his argument.

However, if you own in Seattle, the Bay Area, Los Angeles, San Diego or in the DC, New York or Boston area (and aren't in foreclosure) you're just fine because those metros have enough depth that the job and housing markets will eventually rebound. They're choice places to live and work and talented people always seek them out in normal times. I'm looking out my bedroom window right now at many, many homes that are still in the sevens and eights.