Thursday, July 10, 2008

Memphis Is MIA In AeA Study Of Cybercities

Memphis' success in the knowledge economy depends largely on the presence of young, highly mobile, highly educated workers.

We don't have them now, and the bad news for us is that for cities, the rich get richer and the poor get poorer. That's because the ones with these workers attract more of them and ones with these workers attract the jobs that need them.

The truth is that we can't afford to get any poorer, or we will be permanently relegated to the bottom rungs of major U.S. metros.


After all, the harsh reality is that it's not the new superintendent who is third-tier. It's our city that is now lodged in that unenviable position. The harsher truth is that in many cities, it is City Hall leadership that is the fulcrum for the dramatic change that turns the city around, and that seems highly unlikely here.

As we have pointed out before, our city finds itself too often at the bottom of the key indicators for future economic growth. (Actually, in light of some major indicators, it may even be more accurate to say fourth tier but we just can't bring ourselves to say that). Too much of our economy is anchored in low-wage, low-skill jobs, and we have been remiss in attacking the roots of this problem and in creating the kind of workforce that attracts the jobs and industries that we need to strengthen our foothold in the new economy.

In truth, it may be too optimistic to consider it a foothold.

First, You Have To Get On The List

Recently, we were anxious to read a study of the nation's top 60 cybercities by AeA and Nasdaq. We were interested in how we stacked up and in assessing what we needed to work on.

Memphis didn't even get on the list.

While civic leaders in Milwaukee were wringing their collective hands over their ranking of 34th, we were getting yet another warning shot that our economic strategies need to be recalibrated – and fast – if we are to even hit the radar with the kinds of workers that we need.

Just The Facts

The report showed that 51 of the 60 cities added high-tech jobs in 2006, with Seattle leading the nation. It added 7,800 net jobs, and here's the really provocative factoid – the average high-tech employee there earns $129,300 a year, by far the highest in the nation. By comparison, Austin workers averaged $100,536. The average pay for high-tech workers in the U.S. was $77,067.

And if we need a wake-up call about how far we are behind in a race in which we must compete, just consider these employment levels: San Jose (252,900 high-tech workers); Boston (234,800); Chicago (180,400), Washington, D.C. (177,700) and Dallas (176,600). The highest employment growth rate – a category that we could lead if we showed much success at all – are Colorado Springs (77%); San Francisco (65%), Houston (64%), Denver (63%) and Sacramento (57%).

The cybercities report analyzes the nation's largest metropolitan areas, focusing on high-tech employment, wages, establishments, payroll, employment concentration and wage differential. Some cities of interest on the list were Atlanta, Baltimore, Charlotte, Cincinnati, Denver, Detroit, Huntsville (AL), Indianapolis, Kansas City, Nashville, Omaha, Pittsburgh, Raleigh, St. Louis, San Antonio, and Virginia Beach-Norfolk.

Getting The Right Focus

The news release said it well: "These are the types of jobs every city wants. But how to attract and retain them is the key question all mayors, city council officials, and local business leaders grapple with. All of these cybercities compete not only with each other for such critical factors of innovation as talent and capital – they compete with technology centers across the globe. City leaders need to ensure the quality of local K-12 education, particularly in math and science, to prepare children for these high-paying careers. They need to support vibrant research universities from which so many start-up companies are formed. They need to invest in modern infrastructure, including reliable broadband networks that are as critical to economic development today as the electrical grid was a hundred years ago. And lastly, cities must create a business-friendly environment that attracts venture capital and cutting edge companies."

AeA is a trade association, so it can be forgiven this top-down approach, but based on our work helping cities attract 25-34 year-old college-educated workers, cities also need to be magnets for the talent that the companies chase. There's no argument that jobs follow people, and it's equally clear that these talented workers are congregating in cities where they can find more people like them. They say they are looking to live and work in cities that are clean, green, safe and where they can live the life they want to live.

Memphis has some major ground to catch up in all of those categories, and if we want to attract these young, talented workers, it's not about expensive marketing or extensive branding. First, it's about getting the basics right, and second, it's about getting the buzz right in the key demographic we're seeking. Top-down communications will have little traction, because this generation is the most skeptical in history. They've heard it all before, and they don't believe most of it. They do, however, believe what their peers tell them about cities, and more times than not, they decide where to move based on this kind of postcard information.

People With Options

And, they do want to live in cities where they have other options if they are laid off or decide to change jobs. That said, they are the most mobile in history, and there's the general attitude – unlike previous generations – that they aren't taking a job that's going to last a lifetime anyway. If it doesn't work out or if they don't like the city where they moved, there's always plenty more.

The challenge for Memphis is to get on the list of cities that they are willing to give a try.

Right now, we're not, and if that doesn't change, our relative position on the bottom rungs of key economic indicators will only worsen

Losing Another One

All of this struck home again this week as we were reminded of how far we have to go as we watched Austin Lord, the talented young son of a good friend, get ready to leave Memphis in search of employment. (He's not lost his sense of humor, however. He tells us that he's willing to apply for one of those ghostly jobs mentioned on The Pyramid's still functioning website highlighted in yesterday's post) We enjoy his website, particularly the his daily Toasteds (find at the banner of the website). He seems to be exactly the kind of person we need to be attracting and retaining, but he leaves in search of thicker job markets.

We've said before that the real test for Memphis' progress is when we will invest the futures of our children in it. It begins by our city getting the basics right, but in addition, it begins by getting our economic growth priorities right in a knowledge economy that will take no pity on cities that procrastinate.


Anonymous said...

every child every day college bound.

do you want fries wid dat?

Anonymous said...

It's not encouraging to me that anectdotally I'm seeing many kids from here not even consider coming back here after college. We're exporting our best and brightest to the benefit of other cities and to our detriment. We're doing a good job keeping the dropouts and marginally employable here, though. I'm wondering how long before Fedex throws in the towel on Memphis.....

Anonymous said...

It is already too late. In aviation there is something called an "unrecoverable attitude" and Memphis is in it. I've just been told our company is pulling the eject handle. We're in a growth phase that can't be sustained here. So, we're moving to the Dallas area. That's basically 30 tech and design jobs leaving town.

Zippy the giver said...
This comment has been removed by the author.
Zippy the giver said...

Nice article and you hit a few nails on the head.

Here's an Axiom; By attraction, not promotion.
That's how the capable find their new digs. Memphis is not attractive.
The atmosphere was and still is cultivated by every "thing" that is done to "fix it all".
Demographic shmemographic, you have NO, ZERO NILL, talent pool because your basic education is based on loss avoidance. Aiming at "not losing" is not the same as aiming at "winning" and it's been going on so long that no one HERE knows how to succeed anymore. We need help. BIG help, from outside.
Not once was aiming at excellence an operating context of Memphis education system. Not once did Memphis have a plan for success. Our cows are home.
Look at inmates and ex-convict populations in Memphis, they are astronomical, but the plan is:
Lock them up, don't retrain or educate them or get them decent jobs after doing those things, it's pay for more incarceration, pay for more police, pay for a bigger jail, and pay the victims of new crimes pay for more incarceration and when we don't we get blight where we put them.
It's a human atrocity.
It's a misuse of funds, a misuse of time, a misuse of manpower, and it creates many bad microeconomies and urban blight, yes, vacant neighborhoods. Property value decline here is because we have reached critical mass and we are imploding right now. Our projects wouldn't have contained it either. Giving money to them doesn't work either.
The only thing that separates civilization from the jungle is education. Quality education breeds opportunity and qualified candidates for industry and education. Judging be the way that Memphis doesn't like to let things from outside in, I'd say it got scared and pulled the blanket over it's head.
We can't avoid loss anymore, we are losing everything because of it. It's a mechanical principle.
Lying to ourselves about how good we were when we suck didn't pay off, did it?
Time to plan to succeed.

Gregg Smith said...

At what point are computers introduced to kids in the MCS (non-charter schools)?

Google calls us "isolated" in the CA article today about Memphis missing the streetview service while it's available for Jackson, MS, Little Rock and Nashville. Google is the ultimate data company and doesn't make random moves like this (i.e. Jackson v. Memphis). They know the ROI on the thousands the streetview service costs (in advertising revenue) and they chose locations based on that.

Jackson has Cellular South and some remnants of the telecom/MCI/Worldcom debacle. Little Rock has Alltel (soon to be Verizon though). Jackson has a few startups--see Bomgar(not sure about LR).

Memphis has FedEx, which from a typical point-of-view is a low tech company, but they are as advance in IT as any top 10 well known tech firm, except Google. Visit their Emerge Memphis lab and see what they are creating.

Harrah's IT department is here. One of the great technology stories out there.

Our health care company, Lifesigns, is focused on preventing disease. The future in this business is solid, reportable data. We are spending as much on IT as we are on equipment to help our patients manage their risks. We've hired a couple of great people here.

There are significant IT success stories in Memphis, but they aren't your typical hot "web 2.0" or startup or entrepreneur stories.

Sorry for the ramble...