TIP Strategies is a privately held Austin-based economic development consulting firm committed to providing quality solutions for public and private‑sector clients.
This blog is dedicated to exploring new data and trends in economic development.
At the IEDC Leadership Summit in Orlando this week, Jon Roberts will continue the conversation he began a year ago with his Future of Jobs Ignite presentation. The presentation discusses three perspectives (individual, firm, and policy) from which the term “job” can be defined to offer a historical context for our present conversation. In short, the term “job” as we understand it today suggests a specific employer-employee relationship that developed during the Industrial Revolution and has persisted over the last century.
Our notion of a “job,” however, assumes a relationship that is dissolving. Despite the gradual deconstruction of the employee-employer relationship, economic development professionals still use jobs as a metric for economic growth. If job creation is our objective, then whose job is it to create jobs? What roles should the public and private sectors play in job creation?
Jon argues that we are asking the wrong question. We should be asking: does a healthy economy even require jobs? No. Productivity is required, and that has been increasingly divorced from employment over the past 50 years. GDP per capita has more than doubled since 1960, while at the same time the share of the working age civilian population contributing to that GDP growth has increased only 4% overall in 50 years. Since 2000, the labor force participation rate has declined from its peak at 67.1% to its current rate of 63.7%.
If no one is responsible for creating jobs, and productivity is possible with fewer and fewer jobs over time, then we should ask: what are the conditions under which jobs are created? Or, more accurately, what are the conditions under which value is created? What does it mean for economic development organizations to support the creation of value? How should our evolving understanding of the labor market shape the practice of economic development?
Catch the Does a Healthy Economy Require Jobs? panel on Tuesday, January 29th, 11am-12:30pm.
Moderator: Raymond Gilley, Executive Counsel/Director, Thompson Wesley Wolfe, LLC, Orlando, FL
• Maureen Collins-Williams, CDM, Director – Entrepreneurship Outreach and Regional Business Center, University of Northern Iowa, College of Business Administration, Cedar Falls, IA
• Steve King, Partner, Emergent Research, Lafayette, CA
• Heidi Pickman, Communications Director, California Association for Micro Enterprise Opportunity, San Francisco, CA
• Jon M. Roberts, Managing Director, TIP Strategies, Inc., Austin, TX
The Iraq and Afghanistan Veterans of America (IAVA) is the first and largest nonprofit, nonpartisan organization for Iraq and Afghanistan veterans. IAVA’s programs are designed to empower a community of over 200,000 member veterans and supporters online and offline through Smart Job Fairs, the New GI Bill Calculator, and Community of Veterans, a veterans-only social network.
In addition to daily interactions through social media and other platforms, IAVA also conducts an annual member survey. This year, 4,278 members responded to 120 questions.
Key findings from the 2012 member survey include:
|•||IAVA members’ unemployment rate was almost 17% —significantly higher than the 12.1% average unemployment rate for Iraq- and Afghanistan-era veterans in 2011.|
|•||Almost half (49%) of unemployed members did not feel that employers were open to hiring veterans.|
|•||More than 50% of IAVA members are interested in starting a business in the next 3–5 or 6–10 years.|
|•||35% of IAVA members are already taking advantage of their New GI Bill benefits, and almost 50% plan to use it for themselves or their families.|
The 2012 survey also demonstrates the profound impact this cohort of veterans will have on the national workforce in the near future. Of the members who self-identified as “active duty,” 86% expect to separate within the next 3 years. The survey also indicates that 44% of this group plan to get a job, and 34% plan on going to school after separating from service.
Understanding the current and future labor force is an important first step in any economic development planning process. Workforce profiles add value in three ways: (1) a skilled labor pool is an asset that will aid in attracting companies to the community; (2) training programs can be tailored to specific local needs; and (3) talent retention and recruitment efforts should reflect identified gaps in the existing labor pool.
In order to support defense communities who seek to better understand their labor pools, TIP developed the Veterans Inventory in partnership with the Heart of Texas Defense Alliance (HOTDA). The primary objective of the Veterans Inventory is to characterize and catalog the post-military intentions, educational levels, skills, and desired employment of military personnel separating from service. It also captures the skills and desired career fields of military spouses. This information is valuable because it can be used as a tool to recruit companies to an area by highlighting local talent. It is also used to match existing employers with a qualified local workforce they might not have otherwise identified.
The short survey can be administered as part of the Transition Assistance Program (TAP), now mandatory for all military personnel separating from service. For business recruitment and workforce training purposes, the tool is most useful when administered longitudinally, as trends can be identified, and community leaders can respond accordingly.
Case Study: The Fort Hood Region Veterans Inventory Initiative
In 2006, the Greater Killeen Chamber of Commerce, TX, with support from the Central Texas Workforce Board (CTWB) and the Heart of Texas Defense Alliance (HOTDA), engaged TIP to conduct an economic diversification strategy. The Veterans Inventory Initiative was a key recommendation of the resulting Operation Economic Transformation plan for the Fort Hood Region. Since 2007, the survey has been administered consistently and HOTDA publishes quarterly reports summarizing the findings. Selections from the Fort Hood Region Veterans Inventory Initiative (April to June 2011) are highlighted here to demonstrate the valuable information that can be gleaned from such an exercise.
Intentions of Staying in the Region
From April to June 2011, 38% of departing Soldiers reported they intend to remain in the area. In addition, another 21% indicated they would stay if desirable employment was available. Over the past 15 months, 1,655 (36.5%) respondents intended to remain in the Central Texas region and another 945 (21%) respondents said they would stay if their desired employment was available. This data clearly demonstrates that desirable employment opportunities within the MSA is a driving force in retaining Soldiers following their service in the military.
Military Occupation Specialities (MOS)
Departing Soldiers represented 138 different Military Occupational Specialties in Q3 of 2011. However, 85% (745/880 respondents) can be grouped into seven general areas: Logistics/Transportation, Combat Arms, Maintainers/Repairers, Medical, Information Technology/Communications, Engineers, and Military Intelligence. This is the fifth time that Military Intelligence was ranked as one of the top reported specialties of departing Soldiers.
In May of this year, Monster published the second in an ongoing series of reports designed to highlight the gap between the requirements of employers and the needs of transitioning service members. The reports shed light on the forces behind the high unemployment rate in the veteran population and provide recommendations to help transitioning service members and employers address these issues.
Data for the Veteran Talent Index is driven by the activity of over 10 million Military.com members and the 3.2 million military professionals that visit Monster each month. Military professionals, HR professionals, and hiring managers are also surveyed as a part of the study to present a snapshot of hiring activity and preferences.
One section of the Index compares the top 25 job titles (by volume) of veteran job seekers compared to employer postings. The side-by-side lists (with positions that occur in both lists in bold) illustrate the wide gap between the roles targeted by veteran job seekers versus those advertised by employers, with many veterans targeting roles that are not in high demand.
In a culture preoccupied with Top 10 lists, it is not surprising that places are now scored, ranked, and promoted as “family friendly,” “great for singles,” and even “weird.” What is the value – if any – of these inventive metrics, and what do they mean for economic developers?
We’re [all] Number One!
Traveling across the country and meeting with hundreds of officials every year, we have become anesthetized to the “quality of life” pitch we receive from cities. It turns out that every community has the best quality of life in America. But before you laugh, it’s worth being reminded both why we hear this and – amazingly – why it is true. We hear it because people are proud of where they live. They are proud even while their industries are leaving and their populations are declining. It is not a paradox because that statement is true for them. If they did not believe in the quality of life of their city, they would not be there. In other words, quality of life reflects the values they hold dear, their reasons for calling their city home. What the phrase does not do, however, is critical to the entire economic development enterprise.
So where does “quality of life” fall short? What does it fail to do? The answer to that question is the answer to why people move, and especially why young people move. Quality of life does not speak to the values of the non-resident. It does not speak to the restless and the adventuresome. Quality of life does not capture what is unique about a community, what makes it different from other communities. It is for this reason that we began using the phrase “quality of place.”
A “Place” for Talent
While the importance of “place” is nothing new to planners and urban theorists, it was slow to be embraced by economic developers. The term gained currency in the late nineties, with increasing references by Richard Florida and Rebecca Ryan. In 2004, Joe Cortright published “The Young and Restless” in which he tried to capture some of the factors that attract young professionals to a community.
What these writers and speakers have in common is a desire to understand why people choose to relocate to a particular city. In the larger context of traditional economics, this is the “labor” part of the land, labor, and capital model. The greater mobility of Americans in general, combined with structural changes in the economy, make location decisions of skilled workers especially important. When you combine this with the demographic changes we know will occur as the baby boom begins leaving the workforce in large numbers (beginning in 2012 and accelerating thereafter despite the recession), the hunt for a talented workforce will be foremost on the minds of community leaders.
So what have we said so far? First, we need to evaluate the appeal of a city by how outsiders see it. Second, quality of life is no longer a useful measure of whether a community can attract or retain young people. And third, the importance of attracting talented workers will become more important than ever.
Evidence in Economic Vitality
If you accept these points, and certainly not everyone does, you are still left with the question of what is quality of place. Can it be measured? And is it the right way to think about how you can attract people to your community? We have to accept that a popular turn of phrase is not a term of art. In other words, it’s not something on which we can all agree (like how to measure the area of a circle). We can run opinion surveys, we can draw correlations based on regression analyses, and we can measure results based on in- and out-migration. But none of these will satisfy. They won’t tell us what is what cause and what is effect. They won’t tell us what changes over time (try asking about “connectivity” in 1990). And they won’t capture many of the intangibles that create buzz in a city. That means that as scientific and rigorous as we’d like to be, we’ll fall short.
What we can do, however, is draw correlations between economic vitality and quality of place. Where those correlations hold true over time, we can make assumptions. Then we can test those assumptions on the talent pool we hope to attract. Quality of place defines opportunity for non-residents. It is what outsiders can recognize as unique, inviting, and having the potential to involve them.
Although it is hard to measure quality of place directly, indicators of economic vitality such as in-migration, education, new business formations, and civic engagement are good proxies. They suggest that (1) a place is attractive to new residents and (2) there are a wide range of opportunities for existing residents to invest in their community.
As for “weirdness,” we won’t claim to have a corner on the market here in Austin. If that appeals to you, you’re welcome to join us.
Jon Roberts, TIP Strategies
by Jon Roberts
In my view, planning for recovery from the current recession involves three primary tasks. Task one is to assess and educate. This involves an objective and non political identification and evaluation of local assets and liabilities. It also involves educating yourself (as an economic developer) and your local leadership team about the global, national, regional, and local economic environment. How is it affecting your local economy? Which of your local sectors, individual businesses, and organizations are most vulnerable to economic pressure? Which are best positioned to weather the crisis or even do well? Focusing on existing business should be the heart of any economic development strategy. This is especially true in light of current economic conditions.
Task two is to appraise and prioritize infrastructure. This extends to both physical infrastructure and human capital, including the social networks increasingly driven by technology. What is successful? What is sustainable? What must be maintained versus what should be abandoned? What new infrastructure must be developed to position your community for recovery?
Task three is to identify and pursue business development opportunities. Once a community understands the competitive environment and the assets required to compete, it can then look at business development in a fresh light. Current opportunities may be found in the federal stimulus package, national or regional business consolidations, counter-cyclical sectors (e.g., discounters, repair, refurbishing, energy efficiency), and non primary sectors (e.g., healthcare, education, security, tourism). Specific strategies and actions for pursuing these opportunities must be devised and priorities must be set. In order to implement the plan, local resources and leadership will have to be committed and the public engaged.
Whether it is updating an existing plan to current conditions or starting a plan from scratch, now is the time to bring your local leadership team together to rethink how to support existing businesses and to attract new investment, people, and jobs. TIP Strategies has assisted communities and regions throughout the country, both in good times and in bad, to establish a clear vision for economic growth. We offer a fresh approach that integrates community development principles with an understanding of more traditional economic development practices to help communities maximize their potential.