by Ryan Streeter on May 20, 2012. Follow Ryan on Twitter.
My Indianapolis Star column today argues that attracting talent to your city or state is more important than trying to keep talent from leaving. And, to understand what attracts talent, you have to understand the basics: jobs, cost of housing, schools, etc.
Business leaders, educators and policymakers in the Midwest perennially wring their hands over our vexing “brain drain.” We send more young people to college to improve our workforce quality, only to have them leave for another state after graduation.
Fighting the brain drain is a losing battle. We should focus instead on “brain gain” — how do you get more talented people to move to your city? If you answer that question, the brain drain takes care of itself. Talent begets talent, too, and usually creates jobs for those of us who aren’t as talented.
One school of thought says talent attraction requires focusing on the “cool” stuff: music venues, outdoor cafes, upscale shops, converted warehouse condos. As an urbanist, I like my walkable neighborhoods and sidewalk eateries as much as the next (urban) guy. But if you want to understand what attracts talent, it’s best to take counterintuitive lessons from reality.
An analysis of Census data shows that whether you’re a professional in your 30s or a retiring baby boomer, you’re most likely to move to a place that gets the basics right — schools, job quality, housing prices, cost of living and access to decent leisure amenities. Most “cool” places, such as cities where movies are set, are hemorrhaging population. Their high taxes, onerous regulations and annoying ruling elites drive sensible people away.
To understand where talent is moving, it’s best to look at places that are attracting lots of people. A Sagamore Institute study I recently completed with demographers Joel Kotkin and Mark Schill shows where counterintuitive reality is at play in the Midwest. Of the 40 largest Midwestern cities, only 12 experienced positive migration in the past half-decade. Three of the 12 are in Indiana: Indianapolis (second), Lafayette (fifth), and Bloomington (ninth).
These, and other Midwestern cities like them, are knowledge centers that combine new economic realities with old-world fundamentals. Understanding them is key to understanding talent-based growth in the future.
Start with schools. Indianapolis arguably has the best metro school environment in America. In a previous ex-pat life, I lived in Chicago; Atlanta; Washington, D.C.; London, England; Stuttgart and Heidelberg, Germany; and, for short stints, bizarre places like the Bay Area and Dubai. They were all fun, but none offers Indianapolis’ competitive schooling options and none of them are growing at Indianapolis’ rate, either. Our charter schools, magnet programs and reasonably priced private schools give parents options in and outside the city. It’s unusual for urban public schools to pull students in from the suburbs, but that’s now happening at places like Herron High School (full disclosure: I recently joined Herron’s board).
Why does this matter? Because focusing on schools is a better talent attraction strategy than building sidewalk cafes. Let’s look at a few other counterintuitive realities we found in our study.
Old-world industry updated with knowledge-intensive jobs forms a talent magnet. Cedar Rapids, Iowa, and Peoria, Ill., are among the fastest-growing Midwestern cities in both manufacturing jobs and bachelor degrees. In the new Midwest, brains plus brawn yields wealth. Cedar Rapids is part of a tech-and-manufacturing corridor with Iowa City, home to the University of Iowa, and Peoria uses an increasingly educated workforce to fuel its more than 200 manufacturing companies. Because of this, Cedar Rapids and Peoria are among the four fastest-growing Midwestern cities ranked by household income.
Both cities are also among the 12 Midwestern cities with positive migration — which is more than population drains like New York, Chicago, Los Angeles or Boston can say. The latter cities may be cooler and richer, but they are increasingly cool mainly for the very rich who have already seized opportunity, not those who are seeking opportunity.
Now, Cedar Rapids is unlikely to become a vacation destination anytime soon, but that’s not the point. The point is that talent is moving to places that get the basics right. In fact, 27 of the top 30 cities with the best job growth nationwide have fewer than 1 million inhabitants. Our famous urban titans are not the centers of opportunity we often think they are.
In conclusion, for us in Central Indiana, it’s worth revisiting an earlier point: Talent begets more talent. Getting the basics right greases the skids, but we still need to hunt for talent, buy it, incentivize it and occasionally drag it here kicking and screaming. Once here, it will stay. The faster we get more of it here — to our universities, to our established companies, to our startups — the better off we all will be.
Streeter is distinguished fellow for Economic and Fiscal Policy at the Sagamore Institute.