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BBA Economic Digest

A New Urban Crisis?

Yes, Virginia, there is good life in small-town America.

It's true that 25 metros account for more than half the country's economy. But a recent report by the economic analysis firm Emsi shows there is life beyond the superstar coastal metros.

Much of it has to do with the cost of living and the cost of doing business. What Richard Florida, the co-founder of CityLab, is calling a "new urban crisis" is prompting a talent shift away from the coastal superstar cities to smaller and more affordable places.

Emsi ranked every county in the U.S. based on job growth, migration flows, education and job openings for skilled work. It looked at big counties (with more than 100,000 people), small and medium-size counties (with between 5,000 and 100,000 residents), and very small, micro-counties (with fewer than 5,000 people).

Of the top 10 big counties, only two -- Riverside County, Calif., and King County, Wash. -- would be clumped with the superstar, coastal cities. The rest are in the interior, including two from the Dallas metro area -- Denton and Collin counties.

Of the top 10 smaller counties attracting talent, Emsi found three were in Texas, two in Georgia, and one each in Louisiana, Oklahoma, Tennessee, Ohio and West Virginia. The oil and gas industry is the big driver in many of these communities.

While the superstar coastal cities still retain the deepest bench for tech talent, and can be viewed as knowledge hubs, some smaller communities are getting better at telling their stories on why they are a superior choice to live and work, offering many of the same amenities -- coffee shops, live music among them -- as their big city brethren.

Also many of us simply want a less hectic living and work environment. Last year, Gallup found that while roughly 80 percent of people live in urban areas, many yearn for rural life. (That hit me a few weeks ago seeing a starry night atop a mesa near Blanco,Texas.)

A 2018 study by NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health reported that in spite of economic and health concerns, most rural Americans are fairly happy.

No One Gets A Free Pass

Economic developers take note: No one will be immune to the shockwave that artificial intelligence will bring to the workplace. And it will affect your community.

"AI will be as central to the white-collar office environment as robotics has been to the production economy," said Mark Muro, senior fellow at the Brookings Institution. "They'll fundamentally change what work is and what humans do. And no one gets a free pass."

The dominant prediction has been that automation will most impact "routine" functions like factory-floor and cashier work. But a new analysis by Brookings found that better-paid jobs may come under the most pressure. Among the findings:

• “Holders of bachelor’s degrees will be the most exposed by education level, more than five times as exposed to A.I. than workers with just a high school degree.”

• “A.I. will be a significant factor in the future work lives of relatively well-paid managers, supervisors, and analysts.”

• And business, technology and finance sectors will be particularly exposed.

"There are a lot of high-skilled tasks that will be affected by machine learning, and that's going to be very disruptive," says Erik Brynjolfsson, director of MIT's Initiative on the Digital Economy.

These Walking, Talking Boots

Here's the deal: Me and my hand-made cowboy boots need to spend some quality walking and talking time in your community if we're going to do any sort of meaningful economic development consulting work for you. No two ways about it.

I recently had a telephone conversation with community reps who asked me to submit a proposal for a target industry analysis. But their RFP was awful (most are) and would limit me in such a way that I wouldn't be able to do good work for them.

They essentially wanted me to identify target industries based solely on desktop research with no boots on the ground. As President Richard Nixon once said, "We can do that, but it would be wrong."

I told them, "Look, we have the labor analytic tools to determine the quantity and quality of your workforce. That’s no problem. But we're going to have to do a SWOT analysis, which means spending time in your community asking questions. It's the needed bedrock. If we marry our SWOT with labor analytics, now we're cooking with gas."

But wait, there's more, says I. We'll also give you periodic listing of prospective companies within the target sectors. We won't lie to you and say they have hot, that is impending projects. Anybody that tells you that, watch out. But based on our research, these companies should be a good fit.

Fit is important. You get a pair of boots that fits just right, man, I'm telling you.

Fast and Furious and Fuzzy

LinkedIn message: "Hi Mr. Barber, I am a Master of Science in Economic Development at USM. Thank you for speaking to our class tonight. I took away loads of valuable information!"

My response: "I did bring a dump truck to which I unloaded. I hope it was not too much in one sitting."

The above exchange cam after me speaking via Skype to a class of 16 graduate students at the University of Southern Mississippi, who are studying to become future economic developers.

The instructor, Chad Miller, left it up to me as to what to speak about. Here were my main points to "Fast and Furious and Fuzzy":

• We're in the early stages of a technological revolution that is fundamentally changing the way we live, work, and relate to one another.

• We do not yet know just how all of this will unfold, but artificial intelligence will be disruptive and will create a more polarized labor market with clear winners and losers.

• There exists two Americas, created largely by a digital divide. One doing quite well, the other struggling to maintain.

• To unlock the full potential of rural America, people and businesses must have the digital tools they need to compete. That entails access (broadband) but also literacy (coding).

I ended my talk with one final point, which I hope they took to heart -- that economic development is ultimately about helping people and giving them opportunities to better their lives. It's about lifting people up.

"You are the hope givers. Never forget that."

A Dream Out of Reach

I wouldn't be doing economic development consulting if I didn't believe in the American Dream, which is built on optimism and hope.

But I'm not so naive to believe that it has worked for everyone. A new report from Brookings shows that 53 million Americans -- 44 percent of all workers between the ages of 18 and 64 -- have low-wage jobs. This significant portion of the nation’s labor force is earning median hourly wages of $10.22 and median annual earnings of $17,950.

Another sobering fact: The National Center for Health Statistics recently revealed that male life expectancy in the U.S. fell for the third year in a row in 2017 (the latest year for which there is public data), to 76.1, a drop of four months since 2014.

We are the only "rich" country in the world where this is happening. Those most vulnerable are prime aged males out in places where both jobs and population are hollowing out, which also have the highest levels of per capita opioid use.

The lack of hope -- deaths of despair through drug overdoses, suicide and liver disease from alcoholism -- is a grim reaper.

The bottom line to economic development as I see it is to help people help themselves. It's about giving hope, and lifting people up. No one in this country should be left behind and no life cut short for the lack of opportunities.

Hoosier Power Play

A group of economic developers from Indiana came calling in Dallas last week, and I went to listen because that's how I learn about them and they learn about me.

They called themselves the Indiana Power Partnership, which makes sense because it made up of representatives from seven electric/gas utility companies and 10 different communities and/or regions within the state.

Having lived in Indiana, I've always thought of Hoosiers as being a modest, honest, hardworking bunch. But when we had "scotch tasting" before lunch, I had to wonder if there was another side to these people that I somehow as missing.

If there is a secret life of Hoosiers, I could not detect it. But I did learn or relearn some valuable things. Among them:

• Indiana is a logistics hub. It is first in pass-through interstates, and has the second largest FedEx hub worldwide. It also ranks third for total freight railroads.

• There are 50 colleges and universities and more than 100 campuses in the state. Among them, Indiana University, Purdue University, and the University of Notre Dame. Ivy Tech Community College, focused on technical training, is the largest accredited statewide community college in the nation.

• Indiana has the most concentrated manufacturing workforce in the nation. (Nearly 400,000 manufacturing jobs in 2018.)

• Indiana is currently is making a big push to attract data centers and has fashioned sales tax exemptions for that purpose. Local entities can offer property tax abatements with no time limit.

• Scotch in the morning is not so bad after all.

What We're Reading

The Jungle Prince of Delhi The New York Times

Dark tourism, explained: Why visitors flock to sites of tragedy

The Washington Post

Alphabet's Dream of an 'Everyday Robot' Is Just Out of Reach Wired

The Last of the Great Explorers 1843 Magazine

I Bought an Elephant to Find Out How to Save Them Outside Magazine

The Future of Food McKinsey

Parting Thoughts: Finding Chika

From the Detroit Free Press: "In 2013, author and Detroit Free Press columnist Mitch Albom admitted a young girl named Chika Jeune into the orphanage he operates in Port Au Prince, Haiti.

"Little Chika was born three days before the massive earthquake of 2010, and miraculously survived it, despite her cinder block house collapsing. Albom said she was “born tough.”

"Then, when she was 5 years old, Chika was diagnosed with DIPG, an inoperable Stage IV brain tumor. Mitch and his wife, Janine, brought Chika to the U.S. in hopes of better medical care and an eventual return to Haiti. Instead, it became a two-year, around-the-world journey to find a cure.

"Along the way the trio found something else: they had become a family.

"Albom's book -- “Finding Chika” -- was released earlier this month with all proceeds going to the Have Faith Haiti Mission & Orphanage."

To learn more about this amazing little girl, click here.

Three Chords and the Truth (Click and Ye Shall Find.)