Posts Tagged ‘human capital’

Urbanophile and People Attraction

July 9th, 2010

Attracting and retaining people is a hot topic in the community and economic development fields today. I first started thinking about it years ago after reading a study titled “Natural Amenities Drive Rural Population Change” by David McGranahan (1999).  That interest was kicked up a notch when Richard Florida released The Rise of the Creative Class, identifying a clear connection between the ability of a community to attract knowledge workers and economic growth.

Although I have a love-hate relationship with the ideas put forward by Florida in The Rise of the Creative Class and in subsequent work, I do wholeheartedly embrace its basic tenant that the economies of our communities today are being driven by talented, creative people.  In his light, communities would do well to make themselves places where talented people want to live. 

Recognizing that talent attraction matters to economic growth is pretty easy and benign.  But a closer look reveals more complexity.  First, most of the creative class theories are dedicated to urban areas.  Do the principles of talent, technology, and tolerance serve as important attractor roles in rural areas like they do in urban areas?  Second, people attraction strategies consume financial resources that could come at the expense of traditional economic activities like business recruitment.  Doesn’t it make more sense to invest in creating jobs than community amenities?

Those and others are pretty big questions that I hope to spend more time addressing in the near future.  Today, I want to share a post that helped clarify some matters related to the jobs vs. amenities debate.

 

Introducing the Urbanophile

If you are interested in community development, rural or urban, you need to check out Aaron M. Renn and his Urbanophile blog.  Although his outlook for rural communities is not as rosy as I would like, he offers incredible insights into what makes cities tick.  Elements of this are very relevant to rural communities, even when it’s stuff we don’t want to hear.

Recently I found one of his posts titled “Does Anyone Really Believe Human Capital Is Important” to be very helpful because it clarified some ideas about people attraction strategies.  I think they are worth sharing.

 

Does Marketing Matter? 

The first issue Renn tackles is the notion that marketing your community for people attraction is a waste of money because “what really attracts people is a good economy, quality public services, and efficient government.”

In laying out a defense for marketing, Renn offers two comparisons.  First, he describes the value of marketing for businesses selling to customers.  He writes:

In real life, as we know, corporations spend gigantic sums on sales and marketing. Clearly they wouldn’t do this if it didn’t work. That’s not to say that every dollar spent on these activities is effective…. But it is also critical to build awareness of your product in the marketplace, to effectively communicate its brand promise and value proposition, and to induce someone to make a buying decision.” (source:  Aaron M. Renn, “Does Anyone Really Believe Human Capital Is Important”, Urbanophile, June 13, 2010)

Second, he argues that if communities are willing to market for business attraction, why wouldn’t they market for people attraction?

I agree.  Especially about the importance of brand awareness.  In fact, I’d wager that brand awareness is a bigger issue for rural communities than urban. 

That said, I hope communities don’t look at this as a carte blanche endorsement to rush out and spend large sums of money on advertising.  I think there are a lot of steps to complete before a community is ready to advertise.  And there’s a lot more to marketing than advertising.  (If I had limited resources, I’d invest a lot more in building relationships.)

 

Do jobs follow people or people follow jobs?

The second and more important topic that Renn addresses is the “chicken or egg” issue of whether jobs follow people (as the creative class theory advocates) or the vice-versa.  This is an issue that has constantly tripped me up.  Although I accept the premise that talented individual are both more likely to choose location over job and create new job growth, I’ve never been able to say definitively that one is more important than the other. 

The real value in the argument Renn presents is that he calls on communities to think more deeply about “specific niches or segments of population” with their recruiting efforts.  In this regard, people attraction efforts are no different than any other marketing exercise. 

Renn goes on to say that communities should match labor and employment needs as they determine specific population niches to recruit and the civic investments they make. 

This is all good advice, and it should cause those of us in rural communities to think more deeply about how we build communities that are attractive to talented people.  It also suggests we have a great deal more to learn about the people we hope to recruit.

We can start this learning process by going back and looking at the research by McGranahan and others about the role natural amenities in rural population movements.  We should also use the Appreciative Inquiry method to understand what has attracted new residents to our communities in the past. 

There’s bound to be a lot of differences in what communities learn from this type of exercise.  After all, “if you’ve been one rural community, you’ve only been in one rural community.“  But it’s an important step if we hope to be effective at recruiting new residents. 

If your community has already started a process like this, I hope you’ll share it with us.

 

Photo credit: Derek Purdy – Flickr

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When to begin investing in human capital?

May 5th, 2009

“Pay now or pay later.”  That’s the advice Suzanne Morse issued in a recent post in which she advocated for greater support of early childhood education.  Morris, President of the Pew Partnership for Civic Change, connects her readers to research that suggests a 16% return on investment for early childhood education. 

I realize that many of our readers won’t expect early childhood education to fit into the purview of ReImagine Rural, but it does.  Let me explain.

First, there’s the theory of human capital (which I wrote about last week) that argues investing in education and training is vital to developing local economies. 

Second, quality child care and education is vital for communities interested in a people attraction strategy.  (That’s what led us to create a licensed child care center in Howard before we began focusing on job creation strategies.)

I could go on, but I’ll leave that to Morse who provides links to several other resources that further explain how investing in early childhood education brings benefit to a community’s economic and social development.  They are well worth your review. 

Connecting back to my post from last week about the importance of investing in human capital; I can’t help but wonder if the process for training rural children to leave begins in the early childhood stage or if it’s a phenomenon that doesn’t take shape until later in life (see post here for more). 

 

Photo Note:  Sam Brown, President of Knight & Carver Wind Group, visits with children at the Children’s Care Corner.  Having quality childcare in Howard, SD helped influence Knight & Carver Wind Group to locate in the community, and Knight & Carver has supported the center through donations.

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It’s time to invest in people

May 1st, 2009

It is always a good time to invest in human capital. 

Today, we are reminded of the economic importance of this statement as South Dakota State University celebrates Theodore W. Schultz’s winning of the 1979 Nobel Prize for his work in elevating the importance of ”human capital theory” in economics. 

Schultz, a native of Arlington, South Dakota, believed that investing in the education of individuals in developing countries is key to economic growth.  His work elevated the importance of human capital to that of the other forms of capital (financial, land, and labor) within classical economics.  

Many people have recognized, however, that investing in the education of rural students across the U.S. is not paying dividends.  For instance, rural students in our part of the country typically perform very well on educational tests, but the economies of rural communities continue to decline.

No doubt part of the problem rests with rural parents and residents who encourage the “best and brightest” to move away.   (for more, click here)  But I think we need to look deeper into our educational system for answers. 

As I reflect on the issue, I begin with the question, “What responsibility does our educational system have to provide the skills and training necessary for young people to live successfully within the community where they grow up?” 

As a former educator, it appears to me that most educational efforts go into training young people to live successfully in other places – namely urban areas. And if there is a local responsibility then what needs to change in the educational system to make that a reality? 

Dr. Schultz recommended vocational and technical training within developing countries. Entrepreneurship might fit that category today as well.

Undoubtedly, both are part of the equation, but I suspect there’s a lot more.  It’s an issue I wish I more people would focus on.

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Posted in Economic Development, In the News, Rural, Youth | Comments (4)