Friday, February 27, 2015

University as Real Estate Developer

Property value displaces tuition as a revenue stream for higher education.

Theme: Eds and meds economic development

Subject Article: "UC Berkeley studies international education campus in Richmond."

Postscript: Concerning revenue, higher education is enduring trying times. Concerning regional economic development, universities are at the center of a new global economic era. We're not paying enough attention to higher education. But when we do, we are asking the wrong questions. I'll be writing a lot more about these issues in the near future.

Wednesday, February 25, 2015

Lisbon, the Bangalore of Europe

The call center boom in Lisbon, Portugal, provides another example of how brain drain promotes economic development.

Theme: People develop, not places.

Subject Article: "Lisbon call center boom draws EU 'guest workers.'"

Other Links: 1. "The Great Creative Class Migration."
2. "Brain Drain Is Economic Development."
3. "The Geography of Melancholy."
4. "Imagining Rooted Cosmopolitanism."
5. "Young ‘ex-pats’ worth luring back home, conference attendees told."

Postscript: Just when I think policy is catching up to migration patterns, along comes "NY economic czar nominee says retaining youth is key to Long Island's future":

"We're losing young people," Zemsky told about 100 people at a meeting of the Long Island Association business group. "If you lose young people, unless you can change the laws of biology, you have population decline."

Stick a fork in New York State if Zemsky becomes the economic development czar. He's not qualified for the position.

Monday, February 23, 2015

The Geography of Divergent Immigrant Fortunes

In Britain, Bangladeshis fare better than Pakistanis. The intensity of inbreeding homophily explains the difference.

Theme: Immigration and economic development

Subject Article: "Breaking out: In Britain, Bangladeshis have overtaken Pakistanis. Credit the poor job market when they arrived and the magical effect of London."

Other Links: 1. "Perception, Policy, and Migration."
2. "Geography of Isolation."
3. "Inbreeding Homophily."
4. "Migrant Networks and the Spread of Misinformation."

Postscript: From "Armenian and Azerbaijani Migrants in Turkey Both Want to Make Money":

Salomoni has also focused on the plight of Armenian and Azerbaijan migrants in Turkey and his latest paper on the issue is entitled “Just Beyond the Border: Azerbaijani and Armenian Migrants in Turkey.” ...

... One difference is that the bulk of Armenians are located in Istanbul, whereas Azerbaijanis are scattered throughout the country. Of course, there are Armenians in Antalya, Izmir and Ankara, but very few. On the other hand, while there are many Azerbaijanis in Istanbul, there are also many in Izmir and especially Igdir and Kars.

I'd be interested to learn if the Armenian migrants are doing better economically than the Azerbaijanis, which may bolster the argument The Economist is advancing (i.e. geography is destiny).

Friday, February 20, 2015

Silicon Valley Is Already Dead

Waterloo's tech boom went bust, revealing the rise of the intangible economy.

Theme: Economic restructuring

Subject Article: "The Battle of Waterloo: The life, death, and rebirth of BlackBerry’s hometown."

Other Links: 1. "Software Stepping In Where Steel Left Off."
2. "Rust Belt of Silicon Valley: San Jose Is Dying."
3. "The Rise of the Intangible Economy: U.S. GDP Counts R&D, Artistic Creation."
4. "An introduction to the economy of the knowledge society."

Postscript: From "An Introduction to the Economy of the Knowledge Society":

A related characteristic of economic growth, that became increasingly evident from the early twentieth century onwards, is the growing relative importance of intangible capital in total productive wealth, and the rising relative share of GDP attributable to intangible capital (Abramovitz and David, 1996; Abramovitz and David, 2000). Intangible capital largely falls into two main categories: on the one hand, investment geared to the production and dissemination of knowledge (i.e. in training, education, R&D, information and coordination); on the other, investment geared to sustaining the physical state of human capital (health expenditure). In the United States, the current value of the stock of intangible capital(devoted to knowledge creation and human capital) began to outweigh that of tangible capital (physical infrastructure and equipment, inventories, natural resources) at the end of the 1960s.

The two main categories of intangible capital aptly describe the two pillars of the legacy economy, eds and meds. In Pittsburgh, the production and dissemination of knowledge underwrites the current economic boom. In Cleveland, the sustaining the physical state of human capital is propelling Northeast Ohio down the same path Pittsburgh has tread. In Boston, the global center of the legacy economy, both categories of intangible capital thrive in world class institutions.

Wednesday, February 18, 2015

Globalization Giveth and Globalization Taketh Away

French cuisine is dying. Don't blame globalization.

Theme: Globalization and innovation.

Subject Article: "Bitter times for French haute cuisine: Globalisation knocks the home of Michelin off the throne of good food."

Other Links: 1. "New York state plans to spend $28 million to create nanotechnology lab in Salina."
2. "Ross Perot’s 'giant sucking sound” coming from the corporate drain.'"
3. "Gannon University: Engineering and Business."
4. "Gung Ho (1/10) Movie CLIP - Japanese Board Meeting (1986)."
5. "Good News: Globalization Crushing Family Farms."

Postscript: I initially intended to point out how the subject article conflated globalization with migration. But the culinary dominance of Tokyo confounds that narrative. Migrants aren't pouring into Japan and sparking food innovation. The pathways are forged in the other direction, the historic diffusion of Japanese culture via out-migration. In terms of knowledge transfer, migration is a two-way street even if the flow of people is predominantly one-way.

Tuesday, February 17, 2015

Perception, Policy, and Migration

The psychogeographies of immigration misplace efforts to help foreign-born populations.

Theme: Mesofact geography

Subject Article: "As Immigrants Settle Beyond City Limits, Help Is Hard to Find."

Other Links: "LI’s best days are yet to come."

Postscript: I mailed it in after introducing the relationship between the psychogeography of white suburbanites and perceptions of migration. I could write a book filled with different examples. That prospect overwhelmed me and I gave short shrift to the Long Island efforts to retain millennials. I chalk it up as another missed opportunity to push the conversation in a new direction.

Friday, February 13, 2015

Job Growth Is a Poor Measure of Economic Health

In a global era of demographic decline, the quality of employment trumps the number of jobs.

Theme: Ironic demographics

Subject Article: "Survey: 'Livability' attracts few people to Pittsburgh."

Other Links: 1. "Pittsburgh's Hidden Economic Boom."
2. "Unlike state, Pittsburgh region gains in relocations."
3. "How Local Assets Become Global Assets."
4. "Impact of Migration on the Pittsburgh Workforce."

Postscript: This week, I've been revisiting the idea that real estate markets and labor markets function in similar ways. A major caveat to the models of real estate markets pointing out how regulations bid up prices concerns neighborhood substitutability. If you live in a neighborhood that wouldn't pass muster with someone living in a wealthy enclave, then building more housing for the wealthy won't make your housing cheaper. Likewise, if there is a shortage of software engineers bidding up salaries, then only local labor that is substituable for such jobs counts as supply. A glut of software engineers won't depress wages in other sectors of the labor force.

Wednesday, February 11, 2015

How Local Assets Become Global Assets

Separate a real estate market into two parts: investors and occupiers.

Theme: Globalization and real estate.

Subject Article: "Miami condo-buyers aren't homeowners. They're traders."

Other Links: 1. "Property advisers scale up to challenge dominant global players."
2. "5 intriguing trends to track in the multifamily housing game."

Postscript: Strict zoning can push up land values. So can speculative real estate investment. Yet the former is held up as a major concern, the latter dismissed as a natural feature of a market. Speculative real estate investment is demand that distorts a market just like zoning distorts a market by inhibiting supply. Market urbanism will not make housing more affordable. It will make a bad situation, worse. Such ideological thinking does not deserve a seat at the policy table.

Wednesday, February 04, 2015

Wisconsin Governor Scott Walker on Economic Development

Governor Scott Walker's plan to reform public higher education in Wisconsin will undermine state economic development.

Theme: Eds and meds economy

Subject Article: "A New 'Wisconsin Idea' for Higher Education."

Other Links: 1. "Is Scott Walker getting ready to run for president?"

Postscript: Gov. Walker intends to do a lot more than starve higher education of funding. He wants to redefine its mission:

Walker quietly altered the cherished policy in his budget, striking key parts about outreach to the state, the pursuit of truth and the improvement of the human condition in favor of language that defines the campuses more narrowly as agents of workforce development.

Over the last few months, I've been researching how universities can drive economic restructuring (think Pittsburgh and manufacturing). I learned that talent production (i.e. college graduates) doesn't move the needle on the educational attainment rate of the workforce. What does is R&D expenditures at the university. Furthermore, universities suck at tech transfer. Any success story is certainly the exception, not the rule. Open knowledge production is the cause of Pittsburgh's revitalization. Obviously, Scott Walker doesn't know this. He is poised to screw his own state.

Monday, February 02, 2015

When Leaving Home Is Good for the Hometown

When brain drain isn't economic development.

Theme: Migration and economic development

Subject Article: "Indirect Learning: How Emerging Market Firms Grow in Developed Markets."

Other Links: 1. "Guns, sex and arrogance: I hated everything about America — until I moved here."
2. "Diaspora Networks and the International Migration of Skills: How Countries Can Draw on Their Talent Abroad."

Postscript: People develop, not places. So what? I'm attempting to approach talent migration as an open question. Brain drain isn't bad or good. How can places generate economic development benefits from the inevitable out-migration?