How the Presence of Talent in Cities Could be Worth $124 Billion
\r\n\r\nUrban policy is generally understood to include such things as housing, neighborhood revitalization, and poverty...
Urban policy is generally understood to include such things as housing, neighborhood revitalization, and poverty alleviation. While all of these are important to the success of cities, even in combination they don't come close to equaling the importance of talent to the success of cities.
Talent-defined as the percentage of college graduates in a city's population-explains almost 60 percent of a city's success as measured by per capita income. To wit: If urban policy does not include the development, attraction, and retention of talent, it doesn't have a prayer of making a real difference for cities. But this truth isn't easily absorbed by urban leaders.
But if we could increase college attainment by just 1 percent in each of the top 51 metro areas-areas with 1 million or more residents-the nation will realize an additional $124 billion in personal income. We call that the "Talent Dividend."
Break that number down locally and it becomes even more impressive. In Indianapolis, for instance, a 1 percentage point increase in college attainment would result in a $1.3 billion annual increase in personal income. According to the city's leaders, that is roughly equal to the local payroll of the city's largest employer, Eli Lilly.
If local leaders believed they could recruit a business that equaled the size of their city's largest employer, what would they do? They would fire up the corporate jets, put together an aggressive package of tax incentives, stage lavish dinners, put the governor on call, and put the mayor out in front of the effort. That is essentially what is at stake with a relatively small increase in college attainment among a city's population.
There are three ways to increase talent:
You can attract talent.
You can develop talent.
You can retain talent.
For many cities, attracting talent seems like a cheap shortcut to solving the problem. It doesn't require the expensive, hard slog that developing talent requires. But if talent only moves from one place to another, that means no net gain of talent to the nation. Besides, it's not a winning proposition for most cities. Only 16 of the top 50 metro areas gained 25-to-34-year-olds from 1990 to 2000, and they are the best-educated, most mobile part of the U.S. population. (Just to complete the math, that also means 34 metro areas actually lost 25-34 year-olds in that decade.)
There's only one sustainable way to increase talent in most communities, and that is to develop it. It means we're going to have to do the work all along the education spectrum to make it happen.
But the goal is by no means out of reach. We've found that in all 30 of the markets we've studied, if we could simply get 3 to 4 percent of those with some college to complete their degrees, we could achieve the Talent Dividend.
Jim Collins admonishes CEOs to "get the right people on the bus" if they want to build companies that last. Cities must do the same thing. But unlike companies, cities don't have the luxury of hiring and firing their citizens. Instead, they have to work with what they have. And that means turning the city into a talent-producing machine.
Which city will step up to the challenge first? The one that does, wins.
Carol Coletta is the President and CEO of CEOs for Cities, and the host of the nationally-syndicated public radio show, Smart City.