Cities need to become 'Talent Magnets' in the race for success
"In Michigan Future we have been working for 20 years researching what in the US are the core characteristics of areas enjoying greater economic success, " says Lou Glazer, President of the think tank, Michigan Future, when I speak to him recently.
Birmingham and Detroit, Michigan, both share histories built on manufacturing. And like Birmingham, Detroit and the wider Michigan State have faced tough competition from low cost economies.
"The Michigan economy enjoyed a 100 year run, thanks to Ford and associated high paid factory work which led to the creation of a broad middle class. But this economy is no longer viable as a route to creating aspirational lifestyles," says Lou Glazer.
"In the US today a few areas are prosperous because of energy production - largely oil and natural gas because of high energy prices. Michigan is not one of these. All other economically successful areas in the US have at their core --
1) Jobs and wages over concentrated in knowledge economy and
2) the highest proportions of adults with 4 year degrees or post graduate qualifications
"We have come to the conclusion that the places with the greatest concentration of talent are the places that are doing best today and will be the places doing the best going forward.
"In terms of subject skills areas we have found that it is not occupation or degree specific. A lot of people think of the knowledge economy as high technology in focus, but this turns out to be way too narrow a definition.
"The focus for the US Knowledge Economy is around the education; healthcare;
financial professional and business services and information, media, IT and communications sectors. It is this broad set of sectors that are driving the US economy today.
Features of mobile talent
"One of the things we've learned in doing this work is that what matters in economic terms is not where you go to school but you where live and work after you graduate. Increasingly, at least in the US, young talent, that is before they have had families, is moving and is the most mobile talent.
"They seem to be settling in urban situations, with 24/7, high density, mixed use, high amenity and activity areas, that are walkable with good infrastructure. They gather in vibrant neighbourhoods where you don't need a car to get around. Those are the places that have become the 'talent magnets' in America.
"Higher Education has a role in creating talent. There is an earnings premium for those with advanced college degrees. You're not only far more likely to have a job but your wage premium is going up to $1m plus for four year degrees over your lifetime compared to those with high school qualifications, and for advanced degree holders the premium rises to $2m plus.
"This group is the only group in the US today who are more employed than they were at the start of the recession. For those with technical degrees their employment levels are the same as they were in 2007 and for those with less than high school qualifications the job changes have been -10%.
"In the US we have some worldclass universities; some are research-based, like the University of Michigan which are creating new knowledge and new industries. All are, in general, doing a good job in producing graduate skills around employability and a broad set of non-cognitive skills.
These include --
Flexibility and adaptability
"Because technology continues to change what companies need from their workers, flexibility and the ability to keep learning and acquiring new skills, remains important to them.
"Where we are facing some challenges in the US is within our primary and secondary schools, particularly in our central cities. They don't understand and they are not building a broad enough cognitive and academic skills base needed to get young people into four year degree programmes. For us in the US that's where our real challenge lies.
"We need educators who understand what the world is going to be like for today's kids and that it's going to be different from the world they live in. And the best way for them to learn that is from connections with employers.
"But then for communities there has to be this understanding that just because you went to school somewhere doesn't mean that you're going to work there. We are finding that our communities need strategies around retaining and attracting talent. At least in America where mobile talent wants to live and work is increasingly 'quality of place' based. This is the key challenge and the key determinant of future economic success.
Beverley Nielsen is Director Employer Engagement, Birmingham City University