A shift is underway in the mission of economic development organizations. Growth has always been the mantra, but now it is becoming about sustainability. Loss of population is now becoming a major economic issue for many cities, regions, and states. Hello West Michigan and Oklahoma City’s Boomerang efforts are only the beginning. How much longer will investors fund business attraction efforts when they are unable to fill the positions currently available?
According to the IRS, from 2014-2015, Indiana had 4,636 fewer net tax returns filed with an average adjusted gross income of $50,762. This represents a loss of $235,286,272 in adjusted gross income. During the same period, Illinois had 26,182 fewer net tax returns filed with an average adjusted gross income of $73,426, for a total of $2,028,581,000 in lost income. Their economic bucket has a rather large hole in it. Here’s the link to the IRS Migration site.
With massive population migrations underway, cities, regions, and states are shifting their focus from business attraction and retention to talent attraction and retention. Indiana has launched a regional cities effort in three regions to improve “quality of place” as part of their approach. This multi-million dollar re-investment initiative is driving change in the cities of Ft. Wayne, Elkhart, and Evansville, Indiana.
“The Talent Wars,” as it has been called, is showing up in many places around the country. The short-term solution to a labor shortage is attracting people with the skills needed, a mid-term play is retreading existing workers with new or additional skills, and the longer-term view is a workforce development effort encompassing pre-school through college, with continuous learning thereafter. All of this is because our birth rate has slipped below replacement at 1.3.
Here at Whittaker Associates, we are about to launch a pilot project to test the use of our proprietary layoff database combined with a social media marketing campaign and talent recruitment to attract people with needed skills. Our theory is that people will relocate when a combination of conditions is met and when the right incentives are put in place. Many years ago, I predicted that someday companies would pay communities for the right to access their workforce. We may be getting closer to that day.
I asked our summer intern (a computer science and math major) what it would take to get him to move to a particular city. He said, first and foremost, would be interesting work to do with a team of bright people. Next, quality of place, including affordable housing downtown, broadband services, and outdoor activities.
So, stay tuned, and I will report back on our experiment from time-to-time.