Bacon's Rebellion

James A. Bacon


 
 

I don't know, and I don't care!

Blundering in the Dark

 

How competitive is Virginia at attracting the innovators and wealth creators who drive the economy forward? We don't know. And we don't even know how to find out.


 

It’s 2003.

 

Do you know where your children are?

 

When young people in your town/city/burg complete their college educations, where do they go? Do they come back home, confident they can build a future there? Or do they scatter to the four winds, seeking the bright lights and career opportunities of cities like New York and Atlanta?

 

It should come as no surprise that many young adults – especially those who are well educated and enjoy a broader range of employment options – decide to see more of the world. So, here’s a follow-up question: Once they leave, do they ever come back?

 

Undoubtedly, you can recount some anecdotes based on the experience of your own kids, a nephew, a niece or the child of a friend. But in all likelihood, you don’t have a good handle on what’s happening to the community as a whole. I sure don’t, and I’ve spend a fair amount of time reading and thinking about it.

 

The questions I just posed sound more like the topic of a sociologist’s Ph.D. dissertation than a subject that local civic and political leaders would address. But if we want our communities to prosper in a knowledge-driven economy, in which human capital is the most important economic resource, we had better start getting some answers. Policy makers can spit out basic data – average level of education, the number of high school students graduating this year, etc. – but they can’t tell you who’s coming and who’s leaving, where they’re going to and coming from, or why they’re doing what they’re doing.

 

If we can’t measure human capital, we can’t manage it. By fixating on conventional economic development metrics such as capital investment, we will miss opportunities to retain and recruit talented members of the so-called “creative class,” the gifted artists, scientists and entrepreneurs who drive innovation and wealth creation in our society today.

 

The unfortunate reality is that most communities are losing human capital, suffering a “brain drain,” if you will, of their brightest and best educated youth. Rural areas, where the phenomenon is particularly severe, have been acutely aware of the problem for years. Virginia’s metro areas have never grappled with the issue, however, presumably because no one regards the out-migration of educated young people as an source of concern. But as it becomes increasingly evident that human capital is the critical variable in regional competitiveness, community leaders will be forced to take the matter more seriously.

 

Of the 331 metropolitan areas in the United States, only 34 show a definite brain gain, according to a recent study by Kevin Stolarick, a professor at Carnegie Mellon University in Pittsburgh. Another 30 metro areas are holding their own in human capital, while the other 267 metro areas – metro areas, mind you, not rural counties – are experiencing a brain drain!

 

Metro areas notable as magnets for creative talent include Atlanta, Denver, Dallas, Washington, D.C., San Francisco, Seattle, Silicon Valley, Kansas City, Indianapolis, Stamford and Charlotte. Regions suffering brain drains include Buffalo, Rochester, Detroit, Pittsburgh, Las Vegas, Miami, Riverside and Sacramento, according to a summary of the study published in Creative Intelligence, a newsletter associated with the Richard Florida Creativity Group. Florida, author of The Rise of the Creative Class, has documented a strong link between the presence of the "creative class" and economic performance. (The newsletter did not specify the performance of any Virginia MSAs.)

 

Florida’s core thesis is that the U.S. is in the midst of a massive migration of talented and creative people to communities that provide the career prospects, lifestyles and ambience in line with their personal priorities and values. Winning regions – those that succeed in retaining and attracting creative people – will prosper. Losers will stagnate economically or decline.

 

According to Stolarick, there are two aspects to the migration of human capital: (1) a region’s ability to retain members of the creative class, in particular those who are educated locally; and (2) the ability to recruit creative people from elsewhere. His “Brain Gain/Drain Index” compares the percentage of the workforce (25 and above) with at least a bachelor’s degree to the percentage of the population currently attending college. A value greater than 1.0 indicates that the region is doing a good job of keeping its graduates and attracting those from other places. A value of less than 1.0 suggests that the region is exporting talent.

 

The Brain Gain/Drain Index is fascinating as a conversation starter, but it does have limitations. Most obviously, as Stolarick himself concedes, it punishes regions, like Boston and North Carolina’s Research Triangle, blessed with strong universities! A college town can get a lower score because students represent a large percentage of the total population and skew the ratio. But any reasonable theory of economic development would deem universities a major asset: They bring talented, creative people into a region. Even if many of them leave, more are likely to stay than if the university didn't exist.

 

My point is not to criticize Stolarick, who has made a creditable first stab at measuring a crucial phenomenon that no one has bothered to quantify before. Rather, my suggestion would be to refine his methodology, develop metrics for Virginia’s major regions, and then factor the findings into the economic development strategies of the Commonwealth and its localities.

 

There’s no sense in trying to develop a human capital strategy until you know what the facts are. Virginia communities need to ascertain those facts or they will wind up basing its strategies on guesses and hunches of dubious value.

 

Trouble is, there is no commonly accepted set of metrics for defining a region’s human capital. Here, I would suggest, are some things that would be helpful to know.

 

  • Percentage of graduates who pursue post-secondary education. As many educators note, it’s possible to pursue a remunerative career as a technician or tradesman without earning a college degree. But it is equally true that the artistically, scientifically and entrepreneurially creative people who contribute most to economic growth earn college degrees and, in many cases, post-graduate degrees.

  • Destination of high school graduates pursuing higher education. Those who learn close to home are more likely to stay at home. Those who leave the region to study are more likely to move to another city.

  • Universities as talent magnets. How many students do local colleges and universities recruit from outside the region? Of particular interest are the more prestigious institutions admitting the brightest students. The University of Virginia, Virginia Tech and the College of William and Mary "import" between 30 to 35 percent from other states or overseas.

  • Destination of college graduates. Where do college kids go after graduation? Do they seek jobs locally or leave the state? Are students with certain degrees -- business,  engineering, computer programming recruited more aggressively by out-of-state companies and more likely to relocate?

  • Preferences of college graduates What factors go into their decision-making on where to move after college? How well do Virginia communities match up with those criteria? No hard data exists. But a well-designed survey could lend some insight.

  • Preferences of different life stages. Peoples' priorities change as they advance through life: getting married, having children, becoming empty nesters, retiring. How open are they to relocating at each stage? What are their priorities, and how well do Virginia communities match up with those priorities?

  • Lifestyle clusters. Creative people are not all the same. They express their creativity in different ways. Some like the symphony; others prefer jazz clubs. Some like running on the treadmill; others prefer hiking through the mountains. What are the major lifestyle clusters of creative people, and how well do they align with the assets of Virginia communities?

It adds up to a massive research project. Indeed, there's probably fodder for a dozen sociology Ph.D. dissertations. But it's hardly beyond the capabilities of the social scientists and marketing gurus at Virginia's leading universities, should they choose to take on the project.

 

Armed with solid research data, state and regional leaders can do two things. First, they can target their human-capital recruiting campaigns to creative people whose life stages and lifestyle clusters best match up with local business and quality-of-life assets. Second, they can funnel their public and philanthropic investments into building assets with the greatest appeal to those members of the creative class they most want to attract.

 

There's more to developing human capital than blindly pouring billions of dollars into K-12 and higher education and praying for the best. Virginia needs to move to the next level: working systematically to recruit and retain the best and brightest. That's the frontier of economic development in the knowledge economy. And if we don't get started right away, we can be sure that our competitors will.

 

-- July 28, 2003

 

 

Bring Home the Bacon

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You can berate Bacon at jabacon@

baconsrebellion.com

 

Or read his profile here.

 

 

 

Sidebar: A Love-Hate Relationship

 

Alina Massey, who graduated from college this spring, interviews a dozen of her contemporaries on what they like and dislike about their home town of Richmond.