As urbanisation accelerates worldwide, Allan Schweyer writes that a handful of cities in each continent will succeed based in attracting the most talented workers
As urbanisation accelerates worldwide, Allan Schweyer writes that a handful of cities in each continent will succeed based in attracting the most talented workers
Throughout the developed world and across large parts of the developing world, the most important ingredient in our economies is, by far, skilled workers. Right now, we might be forgiven to think it is oil or another commodity. In fact, there is enough oil in Alberta, Canada alone to supply North American and European demand for the next 75 years. The problem is Alberta is short at least 100,000 of the skilled and semi-skilled workers it needs to extract that oil – despite offering some of the highest wages and lowest taxes in North America.
The demand for talent has reached pandemic levels across much of the world. Yet, there is and will be no shortage of people. Worldwide, population growth is nearly as steep as it has ever been. According to the United Nation’s mid-range projections, the world will support more than 9 billion people by 2050. There is an obvious but important distinction between the thin layer of talent worldwide that can contribute to our increasingly global economy and ‘labour’. The distinction is often lost when we talk about across the board labour shortages and general demographics.
To illustrate, consider knowledge workers (commonly defined as those with bachelor’s degrees or better) in the United States. Today, unemployment among this group is around 2 per cent, essentially meaning that anyone who wants a job can get one. Even during the last US recession, roughly between 2001-2005, unemployment in this group never went above 4 per cent, which is the rate economists consider full employment.
The global talent market is already tight and getting tighter. All the while, we unrelentingly raise the bar for talent. As economies, business, social problems and science as well as health and security issues become more complex, and as our knowledge and information society becomes more globally integrated and sophisticated, ever greater skills and knowledge are required. Without a doubt, the countries, and more to the point, the city regions, that can develop, attract, mobilise and retain talent will be the “places to be” in future – for workers and businesses.
In this regard, the work of Dr Richard Florida is among the best known and most cited. Florida ranks cities worldwide against a variety of factors, mainly centring on their diversity, openness and the share of “creative jobs” in their economies. Florida believes that the combination of these things makes them magnets for talent. In the US, his top 10 cities in order are: San Francisco, Austin, Boston, San Diego, Seattle, Raleigh Durham, Houston, WashingtonDC, New York and Minneapolis. On the bottom of the list, unsurprisingly, are places like Pittsburgh, Detroit and Buffalo.
Globally, Florida’s top 10 list includes cities in Canada, Australia, New Zealand, Europe and Scandanavia. Florida and others have identified migration patterns toward “cool” cities. In the US, Florida says:
“Talented, educated immigrants and smart, ambitious young Americans congregated, during the 1980s and 1990s, in and around a dozen US city-regions. These areas became hothouses of innovation, the modern-day equivalents of Renaissance city-states, where scientists, artists, designers, engineers, financiers, marketers, and sundry entrepreneurs fed off each other’s knowledge, energy, and capital to make new products, new services, and whole new industries – cutting-edge entertainment in southern California, new financial instruments in New York, computer products in northern California and Austin, satellites and telecommunications in Washington, DC, software and innovative retail in Seattle, biotechnology in Boston.”
Just like organisations, cities and countries will thrive or stagnate in the 21st century based on the quality of their talent. Due in part to globalisation, we are in the most competitive economic environment in history. The talent that will drive the future for a city – create new ideas, even whole new industries (the next Microsoft, Ikea, Dell, Google or TATA) – will be conceived and built by talented people. Statistics show that these people are likely to come from the critical, university-educated, 25 to 34-year-old age group (often referred to as the “Young and the Restless”). No city can afford not to attract and retain this demographic. In the US, almost 50 per cent of college graduates will relocate to a state or country other than that of their birth. However, once they enter their 30s, get married and start families, they are far less likely to move.
CEOs For Cities, a US-based not-for-profit says, “The immediate challenge for cities is to attract young, college-educated workers who, more than any previous generation, have greater mobility – and who use it more than any previous generation – moving to cities with the assets, ethos and opportunities that they seek.” The winners are city-regions that due to their culture, arts and music scene, open spaces and broad creative career opportunities, attract talent.
No city or country will thrive if it has a parochial attitude and isolated position in the world. Worldliness and a cosmopolitan flavour are some of the important intangibles that give a city its soul and its “buzz”. Beyond that, openness and connectivity to the world stimulates trade opportunities, a more diversified economy and the influx of new ideas. In modern history, there has never been a great and enduring city that has not also been classified as a global city.
As urbanisation accelerates worldwide, a handful of cities in each continent will be the winners. They will succeed based on the choices of talented workers who will discriminate based on a city region’s creative outlets, its tolerance, its diversity and the degree to which it is globally integrated.
Allan Schweyer is executive director of the Human Capital Institute.
