[ I was privileged to deliver the keynote address at the annual meeting of the IndyPartnership on Tuesday. They are the regional economic development agency for Indianapolis. I want to share with you one portion of that address dealing with talent. Earlier segments addressed the other important matters of demographic and economic growth. You can read coverage of the event in the Indianapolis Business Journal. ]
Lastly, I want to talk about getting serious about human capital. Harvard economist Ed Glaeser studied what made cold weather cities successful and found that it could overwhelmingly be explained by only one and only one variable, the percentage of adults with college degrees as of 1960. Now there’s actually nothing magical about that date. You could pick 1940 and get basically the same result. The key is that college degree attainment is overwhelmingly determinant in urban success.
An organization called CEO’s for Cities crunched the numbers to find out what it would mean for cities if they could increase their college degree attainment by just one percentage point. They call the resulting economic impact the “Talent Dividend”, a term you may have heard before. For Indianapolis, the Talent Dividend is $1.3 billion dollars a year. That’s right, Indianapolis would receive an economic benefit of $1.3 billion every year if the region increased its college degree attainment by just one percentage point.
Now if I had put up a chart of college degree attainment nationally earlier, Indianapolis would have been in the middle of the pack. Not bad, but not great either, and certainly not where it needs to be to compete in the industries it is targeting. So despite that big inflow of people, there is still plenty of work to do.
It is imperative that Indianapolis increases its educational attainment across the board. This means a mix of both educating its current residents – not just in traditional university, but also K-12 education, vocational-technical training, corporate training – and also attracting new residents. I’ll leave education for another day, and will focus on attraction. How do you attract residents, particularly top talent and people with college degrees?
Attracting people is no different from attracting businesses. To attract business you need a good business climate and aggressive recruitment. It’s the same for people. You need a good “people climate” and aggressive recruitment.
What makes a good people climate? In some ways, it’s the same things that make a good business climate. All things being equal, low costs and easy living beats high cost and hassles any day. Indianapolis is great here. It’s the lowest cost big city housing market in America, and has a strong economy as we saw before. That’s great.
But with cities all things aren’t always equal. Choosing a city to live in isn’t like buying laundry detergent. It’s more is like buying a house. It’s an emotional purchase. I’m guessing most of you aren’t living in the cheapest house you could find. More likely the opposite – you live in the most expensive house you could afford, in the best neighborhood, with the nicest amenities, the best schools, etc. Yes, price was a factor, but it wasn’t the only factor. When it comes to cities it’s not just about the price, it’s also about the product.
Indianapolis has to be selling a product that people will want to buy on its own merits, not just because it is the cheapest on the market. Cities, like houses, need to have curb appeal. They have to have amenities, they have to look good. That’s particularly true in Indianapolis, where it’s flat, there’s no beaches and no mountains, and the weather is what it is. The built environment, what we create, counts for more here. So we have to get it right.
The great news is that the city is already doing good things here. We are seeing it in things like the Cultural Trail, which is first class in addition to being is totally unique and innovative. And the new airport terminal, which is the best in America. And don’t just take my word for that, take the traveling public’s word for it. That’s what JD Power and Associates did when their consumer survey ranked Indianapolis International the best airport in the entire United States. Staying with our house analogy, the new airport is an entryway the city can be proud of. This is what we need to be building.
That doesn’t mean the city should forget about costs. Indianapolis has to keep a keen eye on the bottom line. This isn’t New York City. People aren’t going to pay any price, bear any burden for the privilege of living and working here. But often it is more a matter of will than of money. The Cultural Trail isn’t costing a penny of local tax money. You may have saw it just got a $20 million discretionary federal stimulus grant. Without doing that project, this community would not have seen one penny of that money. A new airport terminal would have cost a billion whether it was any good or not. Indianapolis is already spending money on projects, the key is to get the value out of them. Indianapolis must bring a focus and commitment to excellence in design and maximizing the value per dollar to everything it does. Look at the airport terminal. Make sure the city achieves the same level of quality, excellence in design, and attention to detail every time out on the field.
But once you’ve got that product, how do you sell it? You have to have a good story to tell. You have to create an aspirational narrative of life in this city that people who don’t live here yet can imagine themselves being a part of. Think about New York City. TV shows like Seinfield, Friends, or Sex and the City have created an image of what it is like to live in New York, even for people who’ve never visited it. What comes to mind when you think of Portland? You think people out hiking the mountains, hipsters riding their bikes, people drinking microbrews. What does Indianapolis bring to mind? What’s the unique story about life in this city that’s different from everywhere else? That’s the narrative the city needs to create, and figure out how to get out there into the world.
This is where my previous suggestions help. Think about setting a high competitive bar. Smart, talented, ambitious people, people with big dreams and plans for themselves want to live in a city where the civic aspiration matches their personal aspiration. The labor force of the 21st century is in demand. Top scientists, top researchers, and internet entrepreneurs have choices about where to live. When you set a high competitive aspiration for your city, you’re sending them a powerful message that this is place where important personal and professional ambitions can be realized. That’s the anchor for your narrative.
There’s one other narrative that needs to be created. This one is for local consumption and it is one that almost every city overlooks. Since the benefits of attracting the college degreed are so high, cities tend to focus on that. But what about the people without degrees? Less than 20% of adults in Indiana have a college degree. What about the other 80%? What’s it in for them in these progressive urban policies? Many of them are hurting right now, and I think they have a right to be skeptical about policies that seem to be focused on the most privileged in society. So we have to show the benefit to them and answer the questions.
Why should we be investing millions of dollars in Conexus and Biocrossroads? Why does it matter that corporate executives can have a steak dinner and a good time downtown? Why should we be investing millions of dollars in pharmacy education at Butler and Purdue, to produce graduates who will earn six figures the minute they walk out the door? Well, if you are a single mother in Clinton County with a high school diploma who can get a good job as a technician at Medco, it matters to you, that’s why.
That’s the type of story we need to be able to tell. To make it real to people why these forward looking policies are good for all Hoosiers. These stories have to be told, told loudly, and told often. The good news is that Indiana has a story to tell. Unlike some other places, where there are lots of high value jobs, but little else, Indiana can create a broader spectrum of jobs and build a real middle class economy for the 21st century.
Quality product, high aspirations, narrative, cost, jobs, and quality of life. Those are a few of the things that go into creating a good people climate.
As for recruitment, clearly almost no city puts even half the effort into people recruitment that they do into business recruitment. This gives Indianapolis an opportunity to step up, claim a leadership position, and get really, really aggressive about bringing talent to town.
Left to Right: Ron Gifford, CEO of the IndyPartnership, Yours Truly, and Mark Miles, CEO of the Central Indiana Corporate Partnership
I can’t resist posting this photo I got taken with the Lamar Hunt Trophy the Colts were awarded as AFC champions. Every year the Colts are committed to competing and winning at the highest levels, and also to doing it the right way as a class organization. They show that it is possible to both aim high and embody the best of Hoosier values. That’s exactly what the city as a whole should commit to in everything it does.