The Latest in Economic Development
This week’s blog discusses a new report focused on the recent (and future) performance of the Great Plains, the Boston Consulting Group’s take on the skills gap, an example of the “knowledge problem” with regard to incentives in Oregon, and preparing your city for millennials. Comment below or send to email@example.com.
Get the last edition of “The Latest in Economic Development.”
A new report by Joel Kotkin takes on the role of America’s Great Plains in the 21st century. Many observers (those on the coasts) had predicted the region’s downfall, but in reality, the Great Plains have done very well: “Paced by strong growth in agriculture, manufacturing and energy – as well as a growing tech sector – the Great Plains now boasts the lowest unemployment rate of any region.” Three factors will continue this trend: 1) natural resource wealth; 2) technological advancement; and 3) demographic changes. Download the full report here.
The Boston Consulting Group says that the “skills gap in US manufacturing is less pervasive than many believe.” This statement follows the consulting firm’s continued predictions of a resurgent US manufacturing sector. BCG notes that the shortage represents less than 1% of all US manufacturing workers and less than 8% of highly skilled manufacturing workers. Furthermore, “only seven states – six of which are in the bottom quartile of US state manufacturing output – show significant or severe skills gaps.” That said, the report notes that a skills gap could be a growing problem down the road, particularly as high-skilled manufacturing workers begin to retire. The release also highlights a few programs designed to close the gap, including Quick Start in Georgia and the Austin Polytechnical Academy in Chicago.
Salesforce.com’s recent decision to open in office in Portland, Oregon, highlights the murky environment of economic development attraction, where imperfect information often places officials between a rock and a hard place. Utah was also trying to land the firm and was purportedly preparing to offer a multi-million dollar package, but no deal materialized. On the surface, the end result makes Oregon look foolish for offering generous terms when with no real competitor, but the idea that Oregon was pre-emptively preparing for an incentive war is probably misguided; the Oregon Business Development Department said that its offer wasn’t based on what Utah was or wasn’t offering. It “weighted the value of the Salesforce jobs against the cost of incentives.”
At Governing.com, Bill Fulton prophesizes that “just like baby boomers, the preferences of the millennials will drive our society for two generations. They’re making location decisions based on their idea of quality of life. And they’re going to make all those decisions in the next few years – by the time they’re 35.” Fulton reckons that if cities want to attract these up-and-comers, decision makers and planners only have a few years to set the tone. But he likes what he is seeing; from Omaha, Nebraska to Rochester, New York, second tier cities are developing urban cores to cater to millennial tastes.
*** The “Latest in” will go on a short hiatus and return in December.