While still with Hewlett-Packard earlier this decade, Carly Fiorina offered some long-overdue advice to politicians on how to stimulate economic development.
Fiorina, speaking before the National Governor’s Association, basically told the assembled pooh-bahs to forget tax breaks, sweetheart deals, and other traditional inducements for businesses to come or stay. If you want to lure HP to your community, she said, convince us that it’s a place where our workforce will want to live.
I’m hesitant to put too much stock in the opinion of someone who has played prominent roles in two sinking ships – HP (back then) and the McCain presidential campaign (still submerging) – but when it comes to luring young professionals (YPs), Fiorina is on to something.
Rebecca Ryan of Madison’s Next Generation Consulting relayed that anecdote during a recent Webcast, where she explained in detail the findings of a Global YP survey conducted by her firm. The survey not only confirmed the importance of YPs, but also their characteristics and preferences. It is the latter two that communities should pay attention to if they have any hope of building a knowledge economy.
Mobile, moneyed YPs
Next Generation notes that 50 percent of YPs in the communities surveyed are comprised of “transplants,” 18 percent are made up of “boomerangers” (returnees), and 32 percent are lifers (the old high school mafia).
This extreme mobility is no surprise, but there are other aspects to YPs that may shock the powers that be, including their financial condition. Their median income is $56,500, and about 71 percent are homeowners with an average home value of $184,000.
While they have a tight-fisted reputation, YPs actually are philanthropic and involved. Fifty-five percent of them had donated over $250 within the past six months, 94 percent are registered voters, and 77 percent voted in the last election (among the reasons the smart money is on Obama this time around).
Another characteristic – they tend to be fiscally conservative and socially liberal – points to potential for a third party that is philosophically structured along those lines.
They are very well educated – 84 percent have a four-year degree or higher – and they are entrepreneurial. The survey respondents include business owners that created 44,000 jobs with annual revenues of $713 million.
All the more reason to hang on to them, right? One would think so, but too many communities have a worrisome flight risk. Of those surveyed, 39 percent plan to stay in their communities for 16 or more years, but 15 percent plan to stay only one to four years, and four percent plan to leave within the next year.
Next Generation has come up with a formula to calculate the cost of YP flight. It incorporates the $56,500 medium income, a conservative accelerator of 1.2, and the number of YPs (693) that indicated they would be leaving in one to four years. The total impact of this YP flight was $47 million, or an average of $3.9 million per community surveyed.
Again, that’s on the low end, Ryan said. “That [1.2] is a small accelerator, very conservative,” she noted.
What do YPs want?
Perhaps the most important information from the survey is what YP’s value in a community. Among the things that matter most were cost of lifestyle, 98 percent; earnings, 96 percent; vitality, 93 percent; around town (how easy to get around), 91 percent; opportunities for learning, 91 percent; social capital, 87 percent; and after hours (entertainment after 5 p.m.), 87 percent.
It’s not easy to satisfy all these categories, Ryan said. Even the so-called “coolest” cities don’t always make it easy to spend money after hours, but others have scored with “stroll” or entertainment districts.
As for quality of life, Ryan expects gasoline to someday climb to $7 a gallon (the current drop in price notwithstanding), so services like thoughtful bus routes and connected bike paths are coveted by YPs. (Cold climates are no excuse: Madison’s bike paths are plowed before the streets are, Ryan said.)
That would explain a lot to those of us who nearly killed ourselves tooling around Madison in automobiles last winter, but you get the picture.
As Carly Fiorina noted, it’s worth providing YPs with what they seek, and most (if not all) of what they value is not out of the reach of Wisconsin communities. What price would you put on stemming the brain drain?
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