Wednesday, June 29, 2011

Small Market Migration

Bigger is not always better. Every year, people flee from alpha global cities in droves. I'm fascinated with this talent migration. Where do they go? Why? The Martin Prosperity Institute looks at the case of musicians in Toronto (big market) and Halifax (small market):

Traditional investigation emphasizes the influential roles that natural endowments, geographic location and access to markets play in shaping growth trajectories, but this research underscores how the social dynamics of city-regions may influence migration outcomes. In so doing, the research identifies the growing challenge that Canada’s largest city has in retaining creative workers who are increasingly attracted to smaller, more affordable and more inclusive scenes such as Halifax. Further, the research highlights the central role of civic capital in explanations that musicians give for the choices that they make. As a result, at a time when independent musicians are adopting new strategies to pursue their avocation, socially cohesive communities may gain an advantage in attracting and retaining talent.

Toronto's loss is Halifax's gain. This relocation tale reminds me of the talent flow from San Francisco to Portland:

Recently, Sun Microsystems was trying to decide whether to close a plant in Portland or in California's Silicon Valley. The company asked employees from both places if they would relocate.

"And the responses were night and day," Kaylor says. "The skilled California workers they wanted to keep were enthusiastic about relocating their families to the Portland area. The Portland employees who were skilled indicated that they would quit rather than relocate in the Bay Area."

The quality of life is better. The cost of living is less expensive. Not mentioned is the Big Fish, Small Pond dividend. MPI's research gets at that oversight. (See the graphic associated with the article summary.) The world is flat.

The point (i.e. spike) is that Halifax can offer something to musicians that Toronto can't. The MPI helps to explain why artists would leave New York City for Cleveland:

The couple used to live in New York, but they were drawn to Cleveland by cheap rent and the creative possibilities of a city in transition. "It seemed real alive and cool," said Mr. Di Liberto.

There are a gut of places that are significantly cheaper than New York. Few offer the "creative possibilities" you can find in Halifax or, dare I write it, Cleveland. The competitive advantage concerns the development of people. That, not better public transit or some other urban/rural amenity, is the attraction. Placemaking strategies will not save the Rust Belt.

2 comments:

Steve said...

Recently, Sun Microsystems was trying to decide whether to close a plant in Portland or in California's Silicon Valley. The company asked employees from both places if they would relocate.

"And the responses were night and day," Kaylor says. "The skilled California workers they wanted to keep were enthusiastic about relocating their families to the Portland area. The Portland employees who were skilled indicated that they would quit rather than relocate in the Bay Area."


I only have anecdotal evidence for this but if you did an East Coast version of this for a tech company replacing Portland with Pittsburgh and Silicon Valley with DC you would get the same results. I know the plural of anecdote isn't data but I work in the tech industry in DC. It's surprising how often Pittsburgh has come up in conversation, and Pittsburgh has a very positive reputation even among those who haven't been there. It seems like a lot of tech people would make the move from DC to Pittsburgh if given the opportunity just like the Sun Microsystems people want to move from SV to Portland but not the other way around.

There are also side issues such as how the DC area has become a transportation disaster that provides another reason to move to Pittsburgh.

Not mentioned is the Big Fish, Small Pond dividend.

The "Big Fish, Small Pond" dividend is even more striking between Pittsburgh and DC. In DC no matter the size of the pond, politics is always the "big fish". This includes politicians, bureaucrats, various non-profit orgs, etc. In DC most everything is about the federal government and unless the capital moved, that's the way it's always going to be.

The only reason there's such a large tech industry in DC is because the federal government has such a large need for tech products and services. The majority of the tech jobs are located in places like the Dulles Tech corridor which is basically being as far away from DC as possible while still being in the DC area. That's not a total coincidence. It's an attempt to create a "section of the pond" where the big fish don't go usually.

Since things are never going to change in the DC area (because the federal government isn't moving), then why not move to the smaller pond of Pittsburgh if you're in the tech industry and the opportunity presents itself?

Steve said...

There are a gut of places that are significantly cheaper than New York. Few offer the "creative possibilities" you can find in Halifax or, dare I write it, Cleveland. The competitive advantage concerns the development of people. That, not better public transit or some other urban/rural amenity, is the attraction.

This is true in the DC vs. Pittsburgh case. However, I would hope that when the migration to Pittsburgh begins in earnest, building public transit is a priority and has already started in a major way. Public transit isn't going to attract anyone as you point out. But in the DC area it's lack (or really the lack of good transportation planning in general) is felt.

While a lack of public transit won't push anyone away, I can see it being the straw that broke the camel's back when it comes to a person in DC considering whether to move to Pittsburgh or not. That's great for Pittsburgh, but what about in the future some other place is rising like Pittsburgh is now? Investing in public transit and proper transportation planning now and in the near future is something that will help Pittsburgh in the long term, decades from now.