Jobs - An Economic Benefit of an Educated Population?

Yesterday, Blaine sent me a CNBC story listing the easiest and hardest cities in which to find a job as reported by the online job search firm Juju (http://www.cnbc.com/id/34620027/).  As I scrolled through the top ten best and worst cities (Orlando is listed as the tenth worst with 8.92 unemployed individuals per advertised job - Detroit is the worst at 20.76 unemployed individuals per advertised job), it occurred to me that the best cities (DC, San Jose, Baltimore, Boston, NYC) seemed to track closely with higher educational attainment levels, in data that was recently published by The Brookings Institution in its State of Metropolitan America report (http://www.brookings.edu/metro/StateOfMetroAmerica.aspx).  So, I decided to do a quick plot of the top ten best and worst cities to find a job against those cities' respective educational attainment levels as represented by the percentage of their age 25+ populations holding graduate degrees, which looks like this:

As I had suspected, all but two of the best job markets (again, measured by unemployed individuals per advertised job) ranked in the top 20 metros for graduate degree attainment; Salt Lake City (6th best job market) checked in at 39th and San Antonio (10th best job market) checked in at 77th).  In a similar vein, none of the ten worst job markets ranked higher than 36th (St. Louis) in graduate degree attainment, with Orlando (80th), Las Vegas (91st), and Riverside (93rd) all residing toward the bottom of the ranking.  (Unfortunately, it doesn't seem possible to do a direct comparison across the largest 100 metro markets, as Juju only tracks the top 50.)

So, what does this plot mean?  It seems clear that well-educated communities are faring better in today's economy; either they have less unemployed people, more job opportunities, or both.  Is this a function of the types of industries located in those communities; industries that perhaps rely on educated people?  Or is this a function of those communities attracting smart people to their environs who then create job opportunities for themselves and those around them?

Whatever the case, I suspect that having a highly-educated workforce will remain a competitive advantage, even as the general U.S. economic environment improves.  What do you think?

Struggling With Sunshine In The Sunshine State

Some interesting commentary today by St. Pete Times columnist Robert Trigaux regarding Florida's commitment at the state level to renewable energy (http://www.tampabay.com/news/business/energy/lack-of-state-leadership-kills-tecos-big-solar-plant-project/1099525).  Basically, Trigaux describes the continued failure of the Florida Legislature and the Governor to deliver renewable energy legislation that would require (and subsidize) major utilities in the state to diversify their energy sources by using renewable energy sources such as solar.  As such, Trigaux reports that a significant TECO energy-led solar project is now dead, and he calls into question this state's ability to attract additional solar opportunities given the lack of state leadership on this issue.

Here in central Florida, as detailed in yesterday's Florida Today (http://www.floridatoday.com/article/20100602/BUSINESS/6020327/1006/NEWS01/Intersil+donation+enables+UCF+solar+energy+research), our economic development folks are working on a "major project" that would leverage the University of Central Florida's solar energy research capabilities and create hundreds of new jobs related to the solar industry in our area.  Let's hope our state leaders can come together and make sure that Florida has a renewable energy policy that can support this project...it seems to be more urgent than ever...

My Gift To The Governor; A Kiplinger's Subscription

Two seemingly-unrelated news item struck me this morning as being inextricably linked and of significant consequence to Orlando's innovation economy.  First, the Orlando Sentinel reported that Governor Charlie Crist is considering using his veto power to nix $20 million in funding for the University of Florida's life sciences academic and research building that would be located next to the Sanford-Burnham Institute for Medical Research in Lake Nona's Medical City (http://www.orlandosentinel.com/news/education/os-uf-research-center-05-27-2010-20100526,0,1700103.story).  Second, Kiplinger's released its list of the "10 Best Cities For The Next Decade" - a list that is dominated by cities (the top five are Austin, Seattle, DC, Boulder, and Salt Lake City)  harboring smart people clustered around educational and scientific assets (http://www.kiplinger.com/magazine/archives/10-best-cities-2010-for-the-next-decade.html).  So, on the one hand, Florida's Governor is suspect of the economic value created by establishing an academic and research outpost in Orlando from one of the country's largest research universities.  On the other hand, one of the nation's top business magazines tells us that we should be moving to cities with large concentrations of smart people networked with academic, scientific, and entrepreneurial support systems.  What gives?

I surmise that Governor Crist is reacting to some of the sketchier legislative appropriations to universities that have come to light in the past several years; combined with a tight state budget, his caution is certainly warranted.  However, there is now a growing body of research telling us that supporting our universities is one of the most effective ways to boost our economy and grow our jobs base over the coming years; for those of you with an interest in this research, you might find a recent SUNY-Albany report entitled "A New Paradigm for Economic Development:  How Higher Education Institutions are Working to Revitalize Their Regional and State Economies" particularly relevant (http://www.rockinst.org/pdf/education/2010-03-18-A_New_Paradigm.pdf).

When viewed in this light, investing in our university system, especially in educational and scientific assets located in metropolitan areas where smart people are already clustering (such as Orlando's University Corridor), makes eminent sense for any politician looking to create a prosperous economic future for his or her constituents.  Therefore, please consider letting Governor Crist know that adding UF to the potent academic, scientific, and entrepreneurial assets already here in Orlando will only serve to further advance our economic prosperity (and perhaps put Orlando on Kiplinger's top ten list next year).  Of course, you can also let him know that our other choice might be to move to Austin...

Great Places Yield Great Jobs - Orlando Sentinel My Word Column

For those of you who missed it, here is the My Word column that ran in today's Orlando Sentinel containing my response to Beth Kassab's flawed framework for growth espoused in her 5/17 column.  In case you are wondering, I did not forget about the modeling and simulation industry that is so prevalent in the University Corridor - the industry was a victim of light editing by the Sentinel due to space constraints.  It will be interesting to see if Beth continues the conversation in a future column...

"Jobs first, then a demand for new neighborhoods." Such is Beth Kassab's framework for managed growth in her column in Monday's Sentinel ("Innovation Way East disguised as jobs creator.")  In most parts of Central Florida, Kassab's analysis would be correct, as we have long gorged on what turned out to be a growth Ponzi scheme that failed to produce sustainable jobs. But, perhaps unknown to Kassab, this particular part of Central Florida is different, rendering her framework as misguided and misinformed.

Anchored by the University of Central Florida and Orlando International Airport, the university corridor stretches from Oviedo and Winter Springs to the medical city at Lake Nona. It's Central Florida's primary participant in the emerging innovation economy. Already home to 450,000 talented people, many of whom are employed in knowledge-based industries such as optics and photonics, digital media, life sciences and space, the corridor is competing for talent globally against such innovative communities as Austin, San Diego, Boston and San Jose.  It's in an all-out race to attract smart, entrepreneurial people to its environs — the types of people who can create new jobs and enhance those jobs we have retained.

How do we win this talent race? In today's technologically advanced world, entrepreneurial people can choose to live wherever they want; research finds they decide on a location and then look for a job. Thus, they are lured to areas that provide a high quality of life — great places where they can enjoyably live, learn, work and play. In fact, a recent research study by the Harvard Kennedy School suggests that "the best economic development strategy may be to attract smart people and get out of their way."

For Central Florida, that means creating a network of great places in the university corridor, allowing for collaboration and innovation in and around important activity hubs like UCF, the Central Florida Research Park, the medical city and OIA.  I believe that Innovation, the community envisioned by real-estate affiliates of the Mormon Church, can be another great place in a networked university corridor, particularly with its emphasis on transit systems, sustainable community design and environmental protection.  Furthermore, its attraction to smart, entrepreneurial people will be heightened by the embedded second phase of the Central Florida Research Park, and Innovation's proximity to OIA (and its high-speed-rail hub) and the medical city.

Therefore, let me suggest to Kassab a new framework for growth in the university corridor: "Great places yield great jobs." In that case, Innovation fills the bill.

Jim Spaeth is president of Remora Partners, LLC, a real-estate development and consulting firm that is active in east Orange County.

Copyright © 2010, Orlando Sentinel

Innovation Statement

For those of you who missed my comments to the Orange County Board of County Commissioners late last night, I have posted them below.  After almost eight hours of consideration, the Board agreed to postpone a decision on the Innovation project located in the center of the County's innovation corridor until June 22nd.  It is not clear what discussions will be taking place between now and then but I can tell you that I have never witnessed a better presentation than what the owner of Innovation delivered last night.  Here's my statement and we will all need to follow the future of this project quite closely.

"Good evening, Mr. Mayor and Commissioners. Thank you for this opportunity to speak. My name is Jim Spaeth, I live in Avalon Park, and my address is 3307 Morelyn Crest Circle, Orlando, FL 32828. I am an owner in an office and retail complex on South Alafaya Trail, my wife is a former and probably future teacher in Orange County Schools, our son attends Avalon Elementary, and my parents and my in-laws make their home in Avalon Park. I have also spent countless volunteer hours over the past eight years working to realize the vision of a high-tech corridor in East Orlando, and I was one of two principal authors of the first East Orlando Visioning Study back in 2003. When it comes to betting on the future of this corridor, you might say that I am "all-in."

Today, you have the opportunity to take a huge step toward the vision which the Mayor so effectively captured in his Innovation Way concept, and which is crucial to the realization of a new economic ecosystem in Central Florida. I have listened carefully to those who suggest this is the wrong time to move forward - that the housing market is already overbuilt, that this project will not create enough jobs, and that this and similar projects threaten the health of the Econlockhatchee River. All of these concerns are worth discussing. But with all due respect, they miss the larger question. That is, in a highly competitive global marketplace for talented and creative people, can we afford not to move forward with projects such as the one before you today?

In the new economy emerging from this Great Recession, our economic future largely rests on our ability to attract talented, creative people from all over the world - the kinds of people who will create new, sustainable jobs for our area, and also enhance the jobs we have retained. There is a vast body of research that helps us understand how to do this. The research tells us that talented people are drawn to quality places where they can creatively interact with their peers, where education is treasured as the only sustainable competitive advantage, and where the infrastructure exists to rapidly move people, goods, and ideas. This is the challenge before you today - not to save your housing market by desperately clinging to the model of the past, hoping that what some economists have called a growth ponzi scheme can resume. It won’t, nor should it. Rather, the challenge you face is to prepare this community to compete globally for creative and talented people by creating the quality places of tomorrow.

Some may say – fine, we agree that we need such quality places, but don’t create them in an environmentally-sensitive area on the banks of what has been described as the dark and mysterious Econ River. Most planners would argue that creating any greenfield developments today should be undertaken only when other redevelopment and in-fill options in the community have been exhausted, especially when such a development is located in an environmentally sensitive area.

But, unfortunately, unless you plan to relocate your major metropolitan research university, your world-class research park, your newborn medical city, and your international airport (which will double as your high-speed rail hub), you really have no choice. As it is, 450,000 talented and creative people have already chosen to locate around these assets in the corridor from Winter Springs on the shores of Lake Jesup to Medical City on the shores of Lake Nona, powering a budding innovation economy in which one of every five jobs in the corridor is already related to education or technology. Clearly, this community's best opportunity to attract talented people is to place them within this creative corridor.

Thankfully, we have shown that careful planning can place man and nature in balance in the corridor. My own house in Avalon Park sits a mere 1700 feet from the Econ River, providing a vibrant array of wildlife in my neighborhood that enhances my family's daily life. We enjoy great walking trails, top-performing schools, walkable retail, and houses of worship, all in a beautiful natural setting.

So it can be done. In fact, our biggest challenge has been connecting the quality place where I live with other quality places in the corridor, as we are reliant on the badly-broken Alafaya Trail, a rural road that attempts to service an urban area, to move people, ideas, and goods through the corridor. Of course, you have the dual opportunity to begin solving that mobility challenge with the project before you today.

You have heard a variety of views today regarding the appropriateness of this project. Doing big things is hard. There are many competing interests that should and must be heard. But please, Mr. Mayor and Commissioners, don’t lose sight of the vision. We are blessed with incredible assets already in place that can power all of us into the future – UCF, the research park, the Medical City, and OIA. You have the right vision to move us into the new economy. The time is now to build a new economic ecosystem in Central Florida. A global competition for the creative and talented people that must be at the heart of our Innovation Way vision is well underway. I urge your support for this well-planned project. Thank you."

- Delivered to Orange County Board of County Commissioners on May 11th, 2009

Mike Thomas...Round 2 (sort of)

Some of you may remember that I took umbrage at an 10/29/09 Mike Thomas column in the Orlando Sentinel.  Well, it turns out that today is Round 2, as Mr. Thomas has written a very provocative column on the potential retooling of Florida's education system by the State Legislature (http://www.orlandosentinel.com/news/local/os-mike-thomas-education-reform-030710-20100306,0,2024470.column).  The only problem with Mike's column is...he's right.

The types of reforms being bandied about in the halls of Tallahassee are long overdue.  In fact, many of these reforms have already seen successful implementations in progressive school systems around the nation, catching the eye of the Obama administration along the way.  As Mr. Thomas correctly points out, the momemtum (and logic) behind these changes is overwhelming.

Now, here's the rub - as Mr. Thomas hints in his column, these reforms are not without significant cost.  If we are going to hold our educators up to the scrutiny of constant performance measurement, we must be prepared to pay them for their good performance (just as we must be willing to let go of those who are poor performers).  We must also be willing to provide them with the resources necessary to perform their duties; no more teachers scrounging for paper, no more teachers buying supplies on their own dime, etc.  In the same way that an investment banker (another pay-for-performance profession) would never be without a computer and the resources required to transact deals, so must we equip our teachers.  After all, in a knowledge-based economy, is there a more important profession than educator?

I'm not convinced that the Florida Legislature fully grasps the costs of passing these reforms; in the past, their track record on funding education has been spotty, at best.  It could be that they have no intention of fully-funding education in Florida.  If so, these reforms will serve to further emaciate our publc education system as good teachers flee the state for environments where they are given the resources needed to affect positive student performance.

Time will only tell if these contemplated reforms will be paired with the necessary financial resources to redefine public education in Florida.  Until then, I stand with Mr. Thomas on commending the Legislature for pushing to improve Florida's education system.  Nice column, Mike.

Getting What We Pay For

"Where has our current road taken us? To the satisfaction of some, the road of incentivized growth sees the state of Florida with the lowest per-person state tax burden of all but three states. In return, what have we received?" - Michael Abels, Instructor in the University of Central Florida's Department of Public Admininstration, in a February 12th, 2010 Orlando Sentinel guest column (http://www.orlandosentinel.com/news/opinion/os-ed-mike-abels-021210-20100211,0,5900291.story)

Great question, Professor Abels, and I would recommend that we all take a moment to consider some of the solutions offered in the balance of his column.  In fact, the good professor has hit upon the central question facing Floridians today; how are we going to compete in today's new innovation economy given the huge education and infrastructure deficits present in our midst?  And for those of us in the heart of central Florida, ground zero for innovation in the state, the answers become even more pressing, as we seek to keep up with the likes of other creative communities.

Unfortunately, just as Tinker Bell's magic wand is ultimately an illusion, so too are any easy answers.  Ultimately, we will need to prioritize our needs and then allocate our resources appropriately.  And, in an innovation economy, education shoots right to the top of the list.  That would be a good start in the right direction.