In the ongoing saga of the “Economy 4.0” series, I have arrived at the topic of building human capital — an issue that barely registers on the public-policy radar screen here in Virginia. Oh, sure, there’s lots of debate about education and training, which are components of the larger task of upgrading the level of skills and education in Virginia’s population, but discussions are narrow and institution focused. And there is next-to-no discussion about recruitment and retention — recruiting economically productive people to Virginia, and then ensuring that they want to stay here.
What Virginia and its regions need, I argue, are comprehensive plans for (1) developing human capital (educating and training the people already here), (2) recruiting human capital, and (3) retaining human capital. No one leg of this trifecta can do the job alone.
As an example of what can happen when only the first aspect is addressed, I cite the example of Massachusetts. Public education in the Bay State is consistently ranked as the best, or among the best, systems in the country. And no state can compare to the concentration of higher education — from Harvard and MIT on down. Massachusetts does, in fact, have among the best educated populations in the country. But between 2000 and 2004, an net average of 42,000 native-born migrants left the state. Folks, that’s called a brain drain.
Currently, Virginia is a net beneficiary of migration patterns. We’re experiencing a modest Brain Gain. That’s an economic positive because the newcomers are more highly educated and make more money than the natives. Insofar as the newcomers are members of the creative class, they contribute disproportionately to artistic, scientific and entrepreneurial innovation as well.
The United States is reaching a new era of chronic labor shortages as Baby Boomers retire and the ranks of younger generations are too frew in number to replace all of them. The battle for economically productive talent will intensify. Inevitably, states and regions will begin competing for top talent, just as they now compete for capital investment. Those regions that start thinking about how to win the migration wars will enjoy a significant competitive advantage over their rivals. Although some Virginia regions have been talking about the “creative class,” the discussion hasn’t gotten very profound or led to anything concrete. We need to get started.
As awareness increases that human capital is the critical driver of economic prosperity, political, business and civic leaders will start paying more attention to creating more livable and sustainable communities as a way to attract and keep economically productive employees. Thus, economic development will morph into community development. As this set of issues comes to the fore, Virginia regions will be compelled to address the dysfunctional human settlement patterns that detract so much from sustainability and quality of life.
I develop this line of argument in more detail in “Brain Gain,” supplemented with some cool internal-migration statistics. For your wonkish pleasure, I have made that data accessible for both the United States and Virginia. I think I’ve drawn some interesting and counter-intuitive conclusions. Perhaps readers can mine this data for more refined insights.
Gray Matter Migration. A chart ranking the 50 states by net in-migration.
Virginia Migration Winners and Losers. A spreadsheet ranking Virginia localities by net in-migration.
(Cut-line: Homer Simpson lives in Springfield. Could he be a Virginian? Image credit: Asymptopia.)
