Tuesday, December 8, 2009

Geographic Arbitrage Revisted

The Business Journal Daily relates a story about Youngstown being a good place to get the best bang for your buck. Unfortunately, cost of living advantages have had little influence on talent migration. On the contrary, people continue to cram into global cities with little regard for price. (Via TechBurgher) That trend may be changing:

A lot of our uncertainty revolves around money, and our realization that we can't afford to buy a home here. That fact, rightly or wrongly, has become a touchstone for other uncertainties -- about finding a neighborhood we can stay in for the long term; about having good school options for our two-year-old daughter; about making enough money to afford the high cost of living without giving all of our waking hours over to work.

As in many distressed relationships, there's a third-party involved. In this case it's the seductive call of some smaller, more livable city.

I'd note that the article looks at a particular adult life stage demographic, when career opportunities begin to play second fiddle to other concerns (e.g. quality of school district). The typical migration is to the wealthy suburbs of Big City. But the place swap described is a downgrade in the global urban hierarchy. I think this aptly describes the ideal boomerang migrant that would return to Youngstown.

Regarding the coveted young and educated adult demographic, I wrote a post recently about it. The quote of note is from a Christian Science Monitor article:

Demographics will drive change, too. Cities that have expensive housing may find themselves at a disadvantage in attracting young people. “We’re going to be facing what I call the third civil war – it’s going to be a war between cities and metro areas over where young people will settle, because we’re going to have to fill a lot of jobs,” says Barry Bluestone, an economist at Northeastern University in Boston.

Many of these young workers will be going to places where they sense a think-outside-the-box culture. “It’s hard to be a dynamic economy if you’re a culture that does not tolerate risk,” says Susannah Malarkey, who heads a trade group, the Technology Alliance, in Seattle.

Everyone knows that Youngstown is an inexpensive place to live. What few people realize is the risk-taking culture that has taken root downtown. I don't think this would appeal to graduates fresh out of college, but it could attract young talent looking to accelerate a career after cutting their teeth in Big City.

Again, the migration trends overwhelmingly favor attraction strategies. Trying to keep graduates in town or in state is foolish. The research continues to support this critique. The game is to understand how relocation strategies are changing and then position your region to take advantage of them. Building a wall around Ohio is not the answer.

No comments:

Post a Comment

Post a Comment