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Tuesday, November 18, 2003
Population growth not prosperity's guarantor
Commentary By Neal Peirce
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For as long as anyone remembers, Americans have made rising population a proxy for prosperity. We take it for granted -- the more people flood into a city, region or state, the more successful the place is.
But is ``grow or die" still smart gospel? No -- the world changed in the 1990s. Many Sunbelt cities spurted in population but languished in income growth. And, rather amazingly, cities with more rain and colder weather enjoyed more growth in residents' income.
Take Bakersfield, Calif. It rated second among the country's top 100 cities in population growth (plus 35 percent), but 96th (minus 7 percent) in income growth. By contrast, Cincinnati was a leader in income growth but near the bottom in population growth. Only three cities (Austin, Colorado Springs and Charlotte) managed to be leaders in both income and population growth.
Why the population-growth disparity? It's simple, report economists Robert Weissbourd of RW Ventures and Christopher Berry of Harvard University in a new study unveiled at a Chicago meeting of CEOs for Cities:
``While better weather attracts population overall, college graduates tend to go to places with worse weather. If there's a silver bullet, it's education. The more an area adds college graduates, the greater its prosperity. Cities do not need to grow big to grow wealthy, and growing big won't necessarily lead to wealth.''
The point, they add, isn't that bad weather actually generates growth, but rather that the knowledge economy, a sunny clime and raw numbers of new people aren't the magic formula that economic boosters and the media have almost invariably assumed.
The findings explode oft-heard claims that virtually all new big-box retailers, or assembly-line factories, or strings of motels and other franchises, are good for an area. The game, instead, is to add wealth -- and thus life choices -- for existing residents.
That, in turn, means gearing up for the new knowledge economy. Topping the list must be strategies to retain and attract college graduates. And that means full graduates -- having a high school diploma without completing college doesn't raise incomes appreciably, say Weissbourd and Berry.
So a smart region, they suggest, will undertake an annual survey of people moving in and out. It will check movers' age, education, family structure to see what motivates their shifts (jobs, schools, environment, urban quality of life, for example).
A clever region will then use that information to shape local policy -- tax, fiscal and zoning practices, infrastructure investments, work-force training, incentives for livelier downtowns or neighborhood centers. Or perhaps focus on attracting highly educated immigrants, who add diversity, a cosmopolitan mix and new skills.
The focus has to be regional, since city and suburban fortunes are closely intertwined and the metro area represents the true economy.
Regions' economies do vary immensely, counsel Weissbourd and Berry. The most promising success paths vary from developing and commercializing new ideas to full business services to sophisticated manufacturing specialties.
Another new trend: Rich cities are getting richer, success is breeding success. Affluent regions like San Jose, San Francisco and New York, for example, started the '90s with high incomes and then led in wage growth over the decade. With university concentrations, information technology and innovative business networks rising in importance, the luckier regions seem to be ``locking in'' paths to success.
So what's the answer for less-fortunate regions? Can they find a niche, a place in the knowledge economy? Yes, these economists suggest. But only if they (1) focus heavily on drawing and retaining college graduates, (2) do their homework to figure why people are coming and going, and (3) strategize carefully to identify their special strengths and niches, then shift local policies to exploit them.
The good news for adaptive metro regions is that urban environments -- featuring as they do cities' face-to-face contacts, dense business networks and shared resources -- are ideal places to innovate and prosper.
Maybe the public grasps that. Twenty, even 10 years ago, many people despaired for cities. ``Smart'' people, said some, would escape with a laptop to a Colorado mountain or quaint small town, electronically connected but physically aloof from the metro messes.
No longer, pollster Celinda Lake reported to CEOs for Cities. A national survey she conducted shows Americans are now significantly more favorable to cities, willing to spend time or live in them, than in the mid-1990s. People increasingly believe, she found, that strong cities, with their concentrations of universities, health care providers and critical industries, generate environments that attract more young qualified workers and are a key to national prosperity.
A bottom line here: Even in an Internet age, place matters. The incredible assets of cities and regions are coming into focus. But success isn't automatic; it requires strategy smart enough to see that it is personal wealth, not population growth, that ultimately matters more.
Neal Peirce's e-mail address is nrp@citistates.com.
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