Posts Tagged ‘human capital’

Richard Florida
by Richard Florida
Wed Mar 16th 2011 at 10:00am UTC

America’s Great Passport Divide

Wednesday, March 16th, 2011

There are Red States and Blue States, rich states and poor states, and Bible and Rust-belt states. But now we must add Globe-trotting and Stay-at-home states to that list too – that is, according to new data on the percentage of Americans who have a passport. The map below – which has been getting a lot of attention on-line (via Grey’s Blog) – charts the trend for the fifty states.

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Richard Florida
by Richard Florida
Wed Jan 19th 2011 at 6:00pm UTC

Where the Brains are Going

Wednesday, January 19th, 2011

Cities and regions across America and the world have made significant efforts to attract and retain young college graduates over the past decade or so.  This has been driven by growing awareness that the ability to attract human capital, as well the ability to attract companies plays a key role in economic competitiveness. And since young adults are the most mobile members of the population – people in their mid-20s are three to five times more likely to move than middle aged folks – the ability to attract them early in life can pay big, lasting dividends.

A new study by Brookings demographer William Frey examines trends in the migration decisions of young adults and college grads (as separate groups) over the years 2007 – 2009. His findings are especially interesting and relevant, since they cover the period since the onset of the economic crisis and reset.

The economic crisis has caused a significant decline in migration, with the mobility of Americans hitting record lows. Young adults and college graduates have not been excepted, Frey finds, with a growing number of them staying put or moving back with their parents. That said, the mobility of both college grads and young adults remains considerably higher than for Americans as a whole, according to Frey’s analysis.

But where have young adults and college grads been heading since the economic crisis?

To answer this, Frey charts the migration trends of both young adults and college grads across America’s 52 largest MSA’s, those that are home to more than one million people, using newly released Census data for the 2007-2009 period.

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Richard Florida
by Richard Florida
Wed Dec 22nd 2010 at 12:00pm UTC

Where All the Smart People Are Going

Wednesday, December 22nd, 2010

Smart people of the highly educated sort that economists refer to as “human capital” are key engines of economic growth and development. More and more, they have been clustering in a relative handful of big cities. A recent post by Aaron M. Renn, who blogs as The Urbanophile, charts the changing density of college educated people across U.S. metro areas. His analysis builds on an earlier analysis by Rob Pitingolo (I blogged about it here) which introduced a measure of human capital density.

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Richard Florida
by Richard Florida
Tue Aug 3rd 2010 at 12:00pm UTC

The Brainpower Map

Tuesday, August 3rd, 2010

The most powerful factor in economic growth is human capital – the level and concentration of skilled, energetic, and productive people. Charting the human capital levels of nations and regions is all the rage today, but Adam Smith long ago argued that human capital constitutes a critical fourth factor of production alongside land, labor, and capital.  Human capital is the key factor in both national and regional growth, according to careful empirical studies.

Most regional economic analyses measure human capital across metropolitan regions. But metro regions – which are made up of central cities and their surrounding suburbs – come in all kinds of shapes and sizes. Some have densely concentrated central cities, like Manhattan in the greater New York region; others are more continuously sprawling like Los Angeles. A while back, a reporter called to ask me about the role of human capital in Milwaukee. He wanted to know whether it made any difference that human capital levels were low in the central city compared to the region as a whole. I responded that I thought it did. Following Jane Jacobs, my hunch was that regions with more concentrated human capital would have some advantage over others where the distribution was flatter or more similar across the metro. When his article came out, a number of prominent economists more or less said the same thing. But we all added that we couldn’t be sure; most studies focus on human capital at the metro level and few, if any, have looked at the distribution of human capital within metros – that is, between the urban center and its suburbs.

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Richard Florida
by Richard Florida
Fri Jul 30th 2010 at 4:30pm UTC

Internet Connectivity and Economic Development

Friday, July 30th, 2010

Across the world, two in 10 households have access to the Internet at home, according to a just released Gallup survey. Internet access at home was far greater in more economically advanced countries: Nearly eight in 10 people (78 percent) in countries where gross domestic product (GDP) is more than $25,000 have Internet access at home. Home Internet access drops off steeply in less affluent, less developed nations, according to the Gallup survey, especially in countries with less than $10,000 in per capita GDP. The survey is based on telephone and face-to-face interviews with approximately 1,000 adults, aged 15 and older in 116 countries, and was conducted in 2009.

The map above, by Zara Matheson of the Martin Prosperity Institute, shows the percentage of households with Internet connectivity, highlighting the top 10.

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Richard Florida
by Richard Florida
Sat May 29th 2010 at 12:31pm UTC

The Density of Smart People

Saturday, May 29th, 2010

Clusters of smart people of the highly educated sort that economists refer to as “human capital” are the key engine of economic growth and development. The standard way economists measure this is to take the percentage of people in a country, state, or metropolitan area with a bachelor’s degree or higher. Jane Jacobs argued that the clustering of talented and energetic in cities is the fundamental driving force of economic development. In a classic essay, “On the Mechanics of Economic Development,” the Nobel prize-winning, University of Chicago economist Robert Lucas formalized Jacobs’ insights and argued that human capital, or what can be called Jane Jacobs externalities, are indeed the key factor in economic growth and development. Still most scholars measure human capital in terms of population, not in terms of its geographic concentration.

So I was intrigued by this fascinating analysis by Rob Pitingolo (h/t: Don Peck) which takes this question head on. To get at the issue of human capital clustering, Pitingolo compiled a neat measure of what he calls “educational attainment density.” Instead of measuring human capital or college degree holders as a function of population, he measures it as a function of land area – that is, as college degree holders per square mile.  As he explains:

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David Miller
by David Miller
Thu Jan 7th 2010 at 10:26am UTC

Will Job Dissatisfaction Lead to More Entrepreneurship?

Thursday, January 7th, 2010

LampLightDeskWorkTechnologyBusiness

Though U.S. unemployment is in the 10 percent range and we continue to hear people are “just happy to be employed,” a new survey from The Conference Board finds that only 45 percent of Americans are satisfied with their jobs. Even greater numbers of those under 25 are unhappy with their employment.

Here is an excerpt from the On Deadline column/blog at USA Today.

Only 45% of American are satisfied with their work, the lowest level ever recorded in 22 years of surveys, the Associated Press reports.

The figure is down from 49% in 2008, says the Conference Board research group, which conducts the survey.

Workers under 25 expressed the most dissatisfaction — about 64% of them saying they are unhappy in their jobs.

That is a pretty large number of young American workers starting their careers in a negative way. One of the key findings was that most workers don’t find their job interesting.

Doing something interesting — creating something new, solving a problem that is important to a group of people, and working in an industry one is passionate about — is a key driver for talented people.

For some of the talented, this wave of unhappiness in the U.S. workplace will lead them to form new firms or become self-employed. This should lead to greater innovation and societal wealth.

Moreover, smart existing organizations will continue to improve what they offer to talent. Even in the depths of a recession, talent must be satisfied with fair compensation, a stimulating environment and challenging work. This dissatisfaction trend, The Conference Board points out, has been growing for decades.

Richard Florida
by Richard Florida
Wed May 20th 2009 at 8:00pm UTC

Class and the Wealth of Nations

Wednesday, May 20th, 2009

Living through the current economic downturn, none of us take economic prosperity for granted anymore. We’re aware now, more than ever, of how important it is to cultivate the things that contribute to long-run economic growth and sustained prosperity as well as to regulate and cope with those which can come to jeopardize that prosperity.

Economists mainly agree that there are two things that power long-run economic growth. Thanks to the Nobel-prize winning work of Robert Solow, we know that technology is one. Human capital is another. Detailed empirical studies by Harvard’s Robert Barro and others show the connection between human capital and economic growth.

But what about class – does it matter? Using data from the International Labour Organization, Charlotta Mellander developed class profiles for nations of the world. The graphs below show the relationship between two main classes – the creative class and the working class – and two common measures of economic growth - gross domestic product (GDP) per capita and total factor productivity (TFP).

The results could not be more striking.

The creative class is strongly related to both GDP per capita and total factor productivity. In preliminary statistical analysis conducted by Mellander, the creative class effect was even stronger than that from the well-established human capital measure.

Now look at the graphs for the working class. Societies with large concentrations of the working class have lower levels of GDP per capita and total factor productivity.

Source of all graphics: Martin Prosperity Institute

Bert Sperling
by Bert Sperling
Tue Dec 30th 2008 at 1:01pm UTC

The Secret of New York’s Success

Tuesday, December 30th, 2008

There’s a great post by Edward Glaeser (in the Economix blog of the New York Times), titled “New York, New York: America’s Resilient City.”

In it, he describes how New York has managed to avoid the decay that has afflicted many large older cities, and, after a brief downturn in the 1970’s, came roaring back as arguably the most influential single city in the world.

His explanation? In a word – “smart people.”

“New York still has an amazing concentration of talent. That talent is more effective because all those smart people are connected because of the city’s extreme population density levels. Historically, human capital — the education and skills of a work force — predicts which cities are able to reinvent themselves and which ones are not. Those people who are continuing to pay high prices for Manhattan real estate are implicitly betting that New York’s human capital will continue to come up with new ways of reinventing the city. “

Glaeser continues, describing why dense cities succeed…

“They thrive by enabling us to connect with each other, which then promotes learning and innovation. The current downturn will only increase the returns to being smart, and you get smart by hanging around smart people. As long as New York continues to attract and connect those people, the city will continue to thrive.”

Now here’s what every city planner wants to know. Is this replicable? Can this success be engineered or encouraged, and are the effects measurable in 10 years, 20 years, a lifetime?

Does anyone have successful examples of campaigns and projects to replicate this resilient infrastructure? Or perhaps, examples of some cautionary unsuccessful attempts?

Best wishes to everyone for a creative and fruitful New Year!

Richard Florida
by Richard Florida
Fri Aug 29th 2008 at 9:28am UTC

Beyond Human Capital

Friday, August 29th, 2008

Most economists believe that human capital – that is, education level – is a key factor in regional development. But it’s now dawning on more and more researchers that the kinds of work people do may be more important than just the overall level of education. This focus on what people do, as opposed to what we learn in school – the conventional economist’s measure of human capital – is what originally set me on to write about the creative class in the first place.

This recent report by Todd Gabe of the University of Maine and Jaison Abel of the New York Fed takes a detailed look at the role of occupations and skill in regional growth. The study finds that “knowledge associated with the provision of producer services and information technology are particularly important determinants of economic vitality in U.S. metropolitan areas.” It also reinforces the findings of my own research with Charlotta Mellander and Kevin Stolarick that specific occupations and job categories are especially important to economic development – management, business and finance, science and technology, and also arts, culture, and entertainment.