Saturday, June 29, 2013

End of Creative Class Migration

Silicon Valley is the new Detroit at Pacific Standard magazine.

Theme: Innovation Economy convergence.

Subject Article: "The Metropolitan Revolution."

Other Links: 1. "Is the World 'Flat' or 'Spiky'? Rethinking the Governance Implications of Globalization for Economic Development."
2. "Thomas Friedman And Richard Florida Are Wrong."
3. "Artists fleeing the city: High cost of living, fewer part-time jobs drive them out of New York."
4. "The Ungeography of the Creative Class."
5. "The Brain Gain: The Rise of San Antonio’s Talent Economy."
6. "Why investors & tech startups are flocking to downtown Las Vegas."
7. "The New Geography of Jobs (Enrico Moretti)."
8. "Innovation Economy Is Dying."
9. "Should Cities Professionally Brand Themselves To Attract Workers?"
10. "Debunking Myths About Highly-Skilled Immigration and the Global Race for Talent."
11. "Talent Attraction Crisis."
12. "10 Reasons Why Pittsburgh Owned 2012."

Postscript: Apropos of everything, Bruce Katz (co-author of "The Metropolitan Revolution.") musing about Silicon Valley's decline:

"What's happening now is workers want to be in Oakland and San Francisco," he told Walter Isaacson. Young workers want to live in a city -- somewhere they can ride bikes, shop locally, walk to their favorite restaurants and bars, and live in a dense urban or urban-lite environment with nearby amenities. But Silicon Valley isn't like a city. It's like a suburb. "Silicon Valley is going to have to urbanize," Katz said. "[There is a] migration out of Silicon Valley to places where people really want to live."

I come to a similar conclusion from a different angle. Silicon Valley, the spiky center of the Innovation Economy, is diffusing. Both Enrico Moretti and Richard Florida describe the concentration of brains in a few US metros. The start date for this migration trend is 1970, the beginning of the Creative Class Era. I figure the Innovation Economy peaked in the late 1990s with the Dot Com boom. In the wake of the last recession, some 40-years after the birth of the Creative Class Era, the dominant talent migration pattern began to change. Brains were showing up in Flat World San Antonio. Innovation was becoming less spiky. Companies looking for geographic arbitrage opportunities move to where real estate and talent are cheaper. Silicon Valley 2010 is Detroit 1950.

Thursday, June 27, 2013

London Brain Drain

London is dying at Pacific Standard magazine.

Theme: London's domestic migration patterns prove that brain drain is a positive economic indicator.

Subject Article: "Over 250,000 Londoners left capital for other parts of the UK in a year."

Other Links: 1. "Redefining 'Rust Belt': An Exchange of Strategies by the Cities of Baltimore, Cleveland, Detroit and Philadelphia."
2. "Creative New York: From arts organizations to ad agencies, New York’s vast creative sector is one of the city’s most important, and least understood, economic assets."

Postscript: At the conference I attended in Baltimore, there were two demographic presentations that prompted me to speak up about brain drain concerns. Mark Goldstein worked through the population and migration data. One conclusion, "Stemming domestic out migration is key." With that overview covered, Seema Iyer worked through the neighborhood metrics. To be fair, population change is a standard measure. But correlating that change with other metrics of neighborhood health can lead to erroneous conclusions. Per the London example, net outmigration might gloss over a strong neighborhood with good schools. That part of the city may not be well known, so few people move there. That doesn't mean the neighborhood is distressed. Baltimore could be overlooking healthy neighborhoods because of the focus on retention.

Tuesday, June 25, 2013

Middle Class Boom

Taking on the Rust Belt globalization doomsayers at Pacific Standard magazine.

Theme: Economic geography of globalization and development.

Subject Article: "Too bourgeois to bus tables."

Other Links: 1. "A Must-Read Book on the Midwest."
2. "The rise of the global middle class."
3. "The Heart of Demographic Doom."
4. "People Develop, Not Places."
5. "The Pentagon's New Map."

Postscript: More than anything else, suburbanization ravaged the Rust Belt. Shrinking cities are victims of their own success.

Friday, June 21, 2013

Michael Bloomberg’s Zero-Sum Worldview

Being cool doesn't count at Pacific Standard magazine.

Theme: Critiquing the Creative Class model of talent migration.

Subject Article: "Long Island Brain Drain Targeted by Planners, Developers."

Other Links: 1. "Cities must be cool, creative and in control."
2. "Madison’s Portland Problem."
3. "Field Of Dreams Portland."

Postscript: The blog post title is misleading. I really want to talk about Long Island's latest attempt to plug the brain drain. Bloomberg citing chapter and verse from the Richard Florida bible is a good way to make my point. The Creative Class boondoggle pitch:

Spearheading this effort was Donald Monti, CEO of Renaissance Downtowns LLC, an innovative developer of mixed-used projects in Bristol, Conn., Huntington Station and one just announced in Hempstead. Monti said the young people of LI will stay here if they are provided with the types of “urban nodes in suburbia” that they want, noting that the community in Bristol recently promoted an event called “the pop-up piazza” through social media and drew 20,000 people to the  redeveloped downtown community—an unprecedented gathering. He wants the developing community here to recreate that experience throughout the Island.

“What better rallying cause than helping Long Island’s Millennials?” said Monti. “Young people want cool downtowns with public transportation where they can live, shop, work, learn, and play.”

Anyone else having flashbacks to Marge vs. the Monorail?

Thursday, June 20, 2013

Brain Drain or ‘Outward Mobility’?

Doing the fail at Pacific Standard magazine.

Theme: Benefits of brain drain.

Subject Article: "Thousands more British students to study in China."

Other Links: 1. "Spain Doing The Fail."
2. "Pittsburgh is Rust Belt, But the Rust Belt Is Not Pittsburgh."
3. "People Develop, Not Places."
4. "In Praise of Michigan Brain Drain."
5. "Geopolitics Of Talent: Brazil."
6. "Brain Drain Is Economic Development."

Postscript: The blog post by urban planner Pete Saunders deserves more attention than I gave it at Pacific Standard. I appreciate the matrix of metro migration patterns he developed. We typically look at cities in terms of net migration, whether it is a loser or gainer. That's one column. In the prior two columns, Pete disaggregates the net migration into "Inmigration" and "Outmigration". The quality of the flow is either high or low. That results in six types of cities. Three are net gainers and the other three are net losers. Within each group you have high-high, high-low, and low-low for Inmigration/Outmigration flows respectively. But Pete doesn't stop there. He suggests a representative city for each combination of columns (three columns total). For example, NYC is labeled as "gain" for net migration. It has "high" inmigration and outmigration. I assume Pete is considering domestic and international migration. NYC is a domestic migration loser. Contrast New York with Philadelphia, which has a net "loss" of migrants but also experiences high inmigration and outmigration. In my view, both cities are doing well with excellent churn. Still, better to gain migrants than to lose them.

Wednesday, June 19, 2013

Demographic Deception

At Pacific Standard magazine, Pittsburgh's own civic boosters claim the city is dying.

Theme: How policymakers fudge (or fumble) the numbers.

Subject Article: "Allegheny Conference Imagines Pittsburgh as ‘Field of Dreams.’"

Other Links: 1. "Warning: Your reality is out of date."
2. "Brain Drain Boondoggles: Utica Shale and Youngstown."
3. "Old is as old was."
4. "U.S. shale is a boon to manufacturers but not their workers."
5. "Is U.S. Manufacturing Disappearing?"
6. "Two Brains Running."

Postscript: I have a hard time figuring out, and I'm not sure which is worse, if the local leadership knows whether or not the facts presented are erroneous. Mesofacts are powerful, deceiving people who should have a better grasp of the regional picture.

Saturday, June 15, 2013

Germany’s Demographic Bust

Pondering the implications of Germany's shrinking workforce at Pacific Standard magazine.

Theme: Germany is dying.

Subject Article: "Erasmus generation: To overcome its skills shortage, Germany needs to remodel its society."

Other Links: 1. "Demographic Mesofacts."
2. "Portugal’s Japanese Problem."
3. "Economists Suck At Geography."
4. "The New Geogrpahy of Jobs."
5. "Mobility Matters: Understanding the New Geography of Jobs."
6. "Reinventing the Texas Triangle: Solutions for Growing Challenges."
7. "Urban Geopolitics: Why Chicago Is Dying."
8. "Sympathy for the Luddites."

Postscript: The interview with economist Enrico Moretti is the link to click. Deeper into the rationale of why everyone regardless of educational attainment must move to Big City:

The second point that is missing from our debate is that Apple, Facebook, and other high-tech companies support a growing number of jobs outside high tech in the communities where they are located, and many of these jobs are for workers with a high school education or less. Attracting a scientist or a software engineer to a city triggers a multiplier effect, increasing employment and salaries for those who provide local services. My research, based on data for 8 million workers in 320 metropolitan areas, shows that for each new high-tech job in a city, five additional jobs are ultimately created in local services, both in professional occupations (lawyers, architects, and nurses) and in non-professional ones (waiters, hairdressers, carpenters, and security guards).

Swinging this lens away from the United States and back to the Eurozone, Germany's agglomeration economy won't do much good for the less-educated stuck in Spain. The class inversion of historical migration patterns is deeply troubling. Moretti's anxiety about this very issue is palpable in his book. I'm adding the migration as economic development to the discussion. The people who most need to move, aren't moving. And even if they did relocate, are there opportunities for them in Big City?

Thursday, June 13, 2013

Madison’s Portland Problem

Stirring things up in Madison and Portland at Pacific Standard magazine.

Theme: The folly of taking a Creative Class approach to economic development.

Subject Article: "Madison lagging behind peer cities in economic vitality."

Other Links: 1. "Madison360: A decade later, Madison still makes the 'creative class' grade."
2. "The Fall of the Cre­ative Class."
3. "Slack to the Future: Austin gets older; 'Slacker' stays forever young."
4. "Field Of Dreams Portland."

Postscript: The functioning economic geography of the United States concerns places that produce talent and places that refine talent. The Richard Florida playbook is about attracting talent by turning your city into a Creative Class playground. Madison, a center of redoubtable talent production, should be the best of both worlds. It isn't and the city appears to be seriously struggling. I am shocked by the almost doubling of the household poverty rate for primary and secondary students over the last decade. What's wrong?

For his excellent look at the problems with Creative Class theory, Frank Bures spoke with Penelope Trunk, "a branding expert, a Gen Y prognosticator, and a ruthless, relentless self-promoter":
Four years later, Trunk left town, which seemed odd, given her much-ballyhooed arrival. By then, we had fallen out of touch, and I was never quite clear on her rea­son for leav­ing. So I called her to find out what had gone wrong. Trunk now lives on a farm in south­west Wis­con­sin, (she divorced her hus­band and mar­ried a farmer). On the phone, she was still brash and bom­bas­tic and as she told it, her hon­ey­moon with the city started to end almost as soon as she got there. One day her ex-husband was googling, “sex offend­ers,” and he dis­cov­ered there were four reg­is­tered on their block. Next, she dis­cov­ered that the pub­lic schools were ter­ri­ble. “I started talk­ing to every­one,” Trunk said. “And I said, ‘Hey, aren’t you upset the schools suck? How is every­one send­ing their kid here?’ And peo­ple said, ‘Oh, no, I really love my school. I make sure for my kid it’s all about val­ues.’ I mean the bull­shit that peo­ple were telling me was utterly incred­i­ble. Then it just became like an onslaught. Tons of lies. Madi­son is a city full of peo­ple in denial. Peo­ple don’t leave Madi­son, so they don’t real­ize what’s good and not good.” I asked her if she had any regrets, or if the move was a wrong one, or if she had any advice for other peo­ple look­ing to relo­cate. Or maybe, I sug­gested, life was just messier than research?

“No,” she said. “Life is totally clear cut. It’s exactly what the research is. All the research says go live with your friends and fam­ily. Oth­er­wise, you have to look at why you’re not doing that. If you want to look at a city that’s best for your career, it’s New York, San Fran­cisco or Lon­don. If you’re not look­ing for your career, it doesn’t really mat­ter. There’s no dif­fer­ence. It’s split­ting hairs. The whole con­ver­sa­tion about where to live is bullshit.”

Emphasis added. Trunk is describing what I term "talent refineries". Being a site of talent production is not enough. Madison needs more refined talent from Chicago or, better yet, New York. Retaining college graduates is a bad idea. Attracting recent college graduates isn't much better unless your town can refine that talent. Good luck trying to out-New York NYC. The prize demographic are the real estate refugees from Big City. I'll have more to say about that in a future post.

Wednesday, June 12, 2013

People Develop, Not Places

Latest blog post up at Pacific Standard magazine.

Theme: How place-centrism obscures the economic development benefits of migration.

Subject Article: "The zero-sum trade in people."

Other Links: 1. "Skill Flow: A Fundamental Reconsideration of Skilled-Worker Mobility and Development."
2. "Income per Natural: Measuring Development as if People Mattered More Than Places."
3. "The Problem With Placemaking."
4. "The Heart of Demographic Doom."
5. "Taveras proposes $114M streetcar system for Providence."
6. "Nickerson: Why Providence needs a streetcar system."
8. "Girls on the Move: Adolescent Girls & Migration in the Developing World."
9. "Field Of Dreams Portland."
10. "Pittsburgh, let's wake up and play."

Postscript: The subject article isn't obvious in the post. But consider my writing to be a rejoinder to this paragraph:

We assume that importing countries are attracting labour that they need, and exporting countries are shedding labour that they don't need. Migration of labour from low-wage to high-wage areas is an essential part of the internal devaluation process. For any given job, a worker will wish to receive a high wage, while an employer will wish to pay a low wage. The market-clearing price is somewhere between the two depending on their relative power: where there is a shortage of labour the price will be nearer to the worker's demand, while a glut of labour will enable employers to control the price. (Yes, I know this is a bit simplistic!) Clearly, therefore, the low-wage country has more labour than it needs, and the high-wage country does't have enough. If workers can move from low-wage to high-wage countries, therefore, the supply of labour increases in the high-wage country, putting downwards pressure on labour costs, and decreases in the low-wage country, putting upwards pressure on labour costs. And concurrently, when the cost of moving is lower than the benefit to be gained by relocating in a low-wage country, firms will move into that country. As the demand for labour falls in the high-wage country due to firms relocating, wages fall, and conversely as more firms relocate in low-wage country, wages rise. Eventually the two countries reach equilibrium, wages stabilise, labour stops migrating and firms stop relocating. 

We assume that place matters more than people. Place (i.e. "countries") has agency. A place needs labor. Quite to the contrary, places don't need labor or talent. People need jobs.

Monday, June 10, 2013

American Decline

Sullen Sunday at Pacific Standard magazine.

Theme: Investigating the relationship between changing US migration patterns and American hegemony.

Subject Article: "Risk-Averse Culture Infects U.S. Workers, Entrepreneurs."

Other Links: 1. "Conference on World Affairs."
2. "The Day Before Yesterday: Reconsidering America's Past, Rediscovering the Present."
3. "Sunburn Belt: Legacy Costs Of Sprawl."
4. "The Heart of Demographic Doom."

Postscript: I'm not as glum as the Wall Street Journal. The talent most closely associated with the current economic epoch is still moving around and innovating. I don't see decline. I see more people economically marginalized, stuck in places where the economy isn't diverging.

Friday, June 07, 2013

The Magic of Cities

Friday fun at Pacific Standard magazine.

Theme: Concerning urban innovation and productivity, density versus migration.

Subject Article: "The Real Reason Cities Are Centers of Innovation."

Other Links: 1. "Density Versus Migration."
2. "Urban characteristics attributable to density-driven tie formation."
3. "Launching Low-Income Entrepreneurs."
4. "Bowling Alone Urbanism."
5. "The Emergence of the 'Super-Commuter.'”
6. "America’s Great Job Creators: Immigrant Entrepreneurs - long version featuring the 'app economy.'”

Postscript: Over the last few months, I've been wrestling with the hypothesis that migration matters more than density and population. I'm not weighing issues of sustainability. Why are cities places where "opportunities and ideas and wealth seem to grow at a more powerful rate than a simple sum of all our numbers?" The key seems to be how a city handles the massive influx of migrants, not density in and of itself. More from the Atlantic Cities article:

In some African cities and Eastern mega-cities, innovation and productivity don’t grow super-linearly. Populations grow, but the benefits don’t accrue with them as we would expect. This is likely because transportation infrastructure in those places is so poor that people aren’t able to connect across town to each other. "To live on the west side of Beijing," Pan says, you never go to the east side."

The density is there without the benefits. Parochialism, isolation, acts as a drag on potential knowledge transfer that stems from migration. It's all about the flow, Las Vegas.

Saturday, June 01, 2013

In Praise of Michigan Brain Drain

Latest blog post up at Pacific Standard magazine.

Theme: Common misconceptions about brain drain.

Subject Article: "Detroit Chamber Study: More College Grads Staying In Michigan."

Other Links: 1. "Michigration is Misinformation."
2. "Why the Smartest People in the Midwest All Move To Chicago."
3. "Michigan Talent Economy."
4. "Stamen: Where Does the Money Go?"
5. "Brain drain: See what percentage of recent graduates leave Michigan, and why they relocate."

Postscript: Using Telestrian, I looked at the total change of people with a bachelors degree or higher (2000-2011) by state. Michigan gained over 290,000, which is good enough for 17th best in the entire country. In 2011, Michigan had the 13th most people with a college degree. That's a far cry from exceptionally bad brain drain. Better retention rates won't move the needle all that much. The superficial analysis coming from the Detroit Chamber is shoddy work.