SXSW Interactive: Through the Economic Development Looking Glass

April 11, 2014

By: Jon Roberts, Principal & Managing Director, TIP Strategies
March 11, 2014, marked the last day of this year’s SXSW Interactive. Austin’s premier tech event has grown steadily since its inception in 1994. One notable mark of its reach, that may be overlooked by the standard measure of badges sold and tourism dollars generated, is the heightened presence of economic development organizations at the festival.
The industry’s interest in SXSW was apparent from the number of US states and cities, as well as foreign cities, regions, and countries, that set up shop at SXSW, all vying for one of the most desired of economic development targets: tech start-ups and young entrepreneurs. No doubt about it, this tactic represents a sea change in what counts as credible economic development. Where in the past the profession’s holy grail was the relocation of a major manufacturing company, we now see a shift to technology and high growth start-ups (though manufacturing is still seen as the primary objective in many parts of the US). We’ll leave for another time a more thorough discussion of how successful these efforts are. (The short answer: it varies widely.) At one end of the scale is the possibility that bringing companies to SXSW will only speed their exodus from less tech-savvy regions to (you guessed it) Austin. At the other end is the ability to connect with and recruit entrepreneurs to new markets. My panel, “Start-up Grind: What Makes Austin a Startup Hub,” touched on these issues, as well as the question of what made Austin successful in the tech space.
Clearly, industry recruitment and expansion is not the stated objective of SXSW Interactive, nor is it likely to be the primary draw for most participants. As suggested by their mission statement—encapsulated in three values: creativity, innovation and inspiration—SXSW Interactive is about stepping outside your intellectual comfort zone. At a minimum, spending time in the presence of so many creative companies and individuals gives you an opportunity to rethink assumptions behind your business—even, and especially, at a fundamental level. From an economic development perspective, for example, this rethinking of assumptions raises the question of whether measuring success by jobs created is the best way to grow our economy. Abandoning this gold standard is, in some ways, analogous to growing a business without worrying about profitability. It’s a radical notion, and one that, on the face of it, makes no sense. Just don’t tell that to Amazon or to Facebook.
But testing one’s assumptions is not the whole of the SXSW experience. The real power of SXSW lies in what Tony Hsieh, of Zappos fame, calls collisions—connections that occur spontaneously and bring together individuals and companies that might never have connected before. The sheer number and variety of panels, speakers, and registrants makes this goal relatively easy to accomplish. It can be as simple as colliding with the AT&T team during the Ping-Pong tournament (and, in my case, losing to them) then learning what AT&T is doing, what their talent strategy is, and what their new product line will look like. If I’m busy “recruiting companies,” I miss out on these chance encounters; my agenda gets in the way of making real connections. Sometimes an indirect approach is the surer path towards one’s goal.
And even if you weren’t able to experience the randomness of SXSW, you couldn’t fail to miss this year’s driving theme. It was already apparent on the first day and gathered steam throughout the event: Internet privacy. First Julian Assange, via Skype from the Ecuadorian embassy in London, then Edward Snowden from an undisclosed location in Russia (routed through multiple ISPs). Whatever one’s political attitude towards Assange and Snowden, their message is coming through loud and clear and is being fully embraced by the tech crowd: privacy matters.
The question of Internet privacy has numerous dimensions. It is not exclusively governmental. It extends to transactional privacy with corporations and to the question of who owns our personal data (our Internet identity). The default answer should not be that this information is “owned” by corporations or the government (or health care providers). We—it is being argued—have an absolute right to our personal data and we ought not to be giving it up (or having it taken from us) without our informed consent. This, of course, is a discussion that requires a much larger platform. At a minimum, however, SXSW is signaling a shift in how we think about our use of the Internet. I’ll venture to say it signals a sea change, one whose implications may be profound.
Among the immediate insights that arise from taking a privacy perspective on data are the following:

  1. Bitcoin is interesting far beyond its effects on financial institutions. The way to think about Bitcoin is as a means of ensuring transactional privacy. What could only be done with cash, can now be done electronically with the same advantages – and, as we have discovered, some of the same risks.
  2. Our health records are ours, and do not belong to a health care system or the government. The realization that our health records tell our personal story and that their ultimate value belongs to us and needs to be managed by us is still a startling fact.
  3. Every online transaction, from simple browsing to Internet (and credit card) purchases, reveals information about us that we have the right to control. Commercial transactions, by definition, are between at least two parties. E-commerce exponentially increases the parties involved in each transaction. Data collected during the initial transaction becomes a commodity in itself, which can be shared and sold many times over. Whether we explicitly agree to this extension of our transactions or not, we are entitled to know which of our data is kept and how it is being used.

These points—and many more like them—could have enormous business and social implications. It is immediately apparent that they relate to one another and foreshadow a changing relationship to the data and metadata that increasingly define who we are. In fact, we can expect to see a new wave of disruptive technologies related to managing our on-line activity. We are already beginning to note distinctions where before there were none: distinctions, for example, between privacy and security, and what it means to own our digital identity. Add in social media (in its multiplicity of forms), and every on-line activity is subject to a major re-thinking.
SXSW has a way of making small ideas very big. This was true of Twitter, and it may be true of a new wave of privacy-related companies. Stay tuned.

Office And Administrative Support Occupations Make Up Nearly 16 Percent Of U.S. Employment, May 2013


Via: U.S. Bureau of Labor Statistics

In May 2013, office and administrative support was the largest occupational group, making up nearly 16 percent of total U.S. employment. The next largest groups were sales and related occupations and food preparation and serving related occupations, which made up about 11 and 9 percent, respectively. Seven of the 10 largest occupations were in one of these three groups.

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The smallest occupational groups included legal occupations and life, physical, and social science occupations, each making up less than 1 percent of total employment in May 2013.
The highest-paying occupational groups were management, legal, computer and mathematical, and architecture and engineering occupations. Most detailed occupations in these groups were also high paying. For example, all 19 computer and mathematical occupations had average wages above the U.S. all-occupations mean of $46,440, ranging from $50,450 for computer user support specialists to $109,260 for computer and information research scientists.
The lowest-paying occupational groups were food preparation and serving related; farming, fishing, and forestry; personal care and service; building and grounds cleaning and maintenance; and healthcare support occupations. Annual mean wages for these groups ranged from $21,580 for food preparation and serving related occupations to $28,300 for healthcare support occupations. With few exceptions, the detailed occupations in these groups had below-average wages. For example, occupational therapy assistants and physical therapy assistants were the only healthcare support occupations with mean wages above the U.S. all-occupations mean.
Among 665,850 employed persons in the District of Columbia in May 2013, there were about 3,370 political scientists—accounting for 50.6 out of every 10,000 jobs in the District of Columbia. In all of the United States there were 5,570 political scientists employed out of a total of 132,588,810 employed people—meaning less than 1 (0.42) out of every 10,000 jobs in America were political scientists. The ratio that compares the concentration of employment in a defined area (in this case, the District of Columbia) to that of a larger area (the United States) is referred to by the Bureau of Labor Statistics as the “location quotient.”

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The location quotient of political scientists in the District of Columbia is 50.6 divided by 0.42 (the location quotient of political scientists in the United States), which equals about 120.5—indicating there are about 120.5 times as many political scientists per 10,000 total employed people in the District of Columbia as in the United States as a whole.
These data are from the Occupational Employment Statistics program. To learn more, see, “Occupational Employment and Wages — May 2013” (HTML) (PDF), news release USDL-14-0528.

KABA Speaker: Companies Must Keep Up With Shifting Norms, Advancing Technology

April 4, 2014

By: James Lawson
Via: Kenosha News

Jon Roberts, of TIP Strategies, delivers the Keynote speech during KABA’s annual meeting at UW-Parkside on Wednesday. (Kenosha News Photo by Sean Krajacic)

Companies that do not keep up with rapidly advancing technology can find themselves on the path to failure.
As a result, the communities in which they reside could be left with fewer jobs and an outward flow of skilled labor talent, according to Jon Roberts, keynote speaker at Wednesday’s Kenosha Area Business Alliance annual meeting.
Although Kenosha County’s population has grown since 2005, the income gap is widening because skilled talent is leaving the area for communities in other regions of the country, Roberts said told the more than 300 in attendance.
Roberts, a principal with TIP Strategies, an Austin, Texas-based consultant, said many of the people who have left the area over the past several years have not only moved to warmer climates, but to areas where advanced technology jobs are more readily available, such as southern California, Arizona, Texas and Florida.
Those who left the Badger State earned more than those who came into the state, he said. According to Internal Revenue Service statistics, the outbound income per capita was $21,100, and the inbound income per capita was $19,300 in 2010.
Economic plan
Roberts’ firm was hired in 2008 to assist in developing an economic development strategy plan for Kenosha County.
The plan, “Kenosha First: An Economic Development Strategy for Kenosha County: The Next Phase” incorporated input and ideas from various parties throughout the county. It was a response to KABA’s desire to learn how public and private entities could help stimulate private investment and employment.
A TIP study revealed that Kenosha County has a high concentration of manufacturing, retail trade, corporate management, administrative and waste services, educational services, health care and social assistance industries. It also has a high concentration of accommodation, food services and pubic administration jobs.
Meanwhile, Kenosha County has a low concentration of professional and technical services, finance and insurance, transportation and information services jobs.
Rapid changes
He said that nationally, manufacturing jobs have dropped from 26 percent to 9 percent over the past 30 years.
Technology is changing so fasted, Roberts said communities that want to diversify and maintain a steady, balanced economy have to attract other types of companies to retain and attract talented employees.
Disruptive technology, rapid industry and product changes that render some products and processes obsolete can have a negative impact.
“It can affect the supply chain, social norms and the labor pool,” he said. “In the supply chain, entire business units cease to exist, and secondary providers disappear.”
He related how many watch manufacturers went out of business when the digital watch come onto the market.
All of the old technology behind the traditional watch would not suffice anymore.
Meanwhile, one company, Omega, created a niche.
Changing norms
Social norms can change, he said. “There’s culture shock around traditional behavior and trusted institutions.”
He gave an example of how when he was a young man, he treasured his ’65 Mustang. “Today, kids don’t care about cars like that.”
The labor pool changes because there can be a “massive disruption in the number of workers and skill sets they require,” he said.
He asked, “What does disruption mean for economic development? If productivity doesn’t bring job gains, what are we incentivizing?”
What’s next for Kenosha?
Roberts suggested a rethinking of economic development.
That means creating a brand for Kenosha by linking place to talent and innovation, creating a culture of change, embracing technology, rethinking entrepreneurship and improving urban linkages.