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How to Create Middle Skill Jobs: Can Phoenix Become a "Brain Hub"?
How to Create Middle Skill Jobs: Can Phoenix Become a "Brain Hub"?

In browsing through Tuesday's (11/29) Wall Street Journal, an article about job creation caught my attention. Titled Recipe for Middle Class Jobs, the article had two major points:

1. Highly skilled entrepreneurs start businesses that hire lesser educated workers.
2. Cities with high educational attainment attract highly educated people and young, start-up companies that create middle class jobs.

Unemployment rates in cities like Austin and Raleigh, with expanding economies and notable growth in "brain work" rather than production work, are below the current national average of 9.1 percent. The unemployment rate in Austin is 7.4 percent; Raleigh's is 8.7 percent.

After reading the article, I began to wonder whether Arizona is missing an ingredient in its recipe to attract business and companies to the state. While I'm not an expert on economic development strategies, from news accounts it would appear our efforts have been largely aimed at attracting "production" companies, with less emphasis on those associated with "brain work." That's certainly understandable since we have a competitive advantage in things like solar energy. We also have a sizable cluster of high tech companies engaged in manufacturing of computer chips and companies that support it. And our bio-science industry also shows promise.

But, what does it take to become a full-fledged brain hub - where new, innovative companies cluster to explore new technologies and work processes? After all, Arizona has three great universities, two of which are among the top research universities in the country. ASU's investment in Sky Song is aimed at being an incubator for start-ups and new ideas. So what gives? Why does Austin's brain hub create middle skill positions at twice the rate of Phoenix?

Well, apparently smart attracts smart. Entrepreneurs and innovators are attracted to communities with high educational attainment. Communities with universities tend to score high on educational attainment, particularly if the universities are well-funded and able to retain graduates within the local economy.

So, I thought I'd do a little research on my own examining educational attainment levels for the Phoenix and Tucson metropolitan areas. Here's what I discovered reviewing data compiled by the U.S. Census Bureau, American Community Survey for 2010 and reported in Governing Magazine:

- Percentage of adults (over 25) with at least a bachelor's degree:

  • Phoenix: 27.2 %
  • Tucson: 30.0 %
  • Austin: 39.4 %
  • Denver: 38.2 %
  • Seattle: 37 %
  • Portland: 33 %

A similar breakdown can be seen when comparing the percentage of adults with a graduate or professional degree. The data shows Phoenix and Tucson lag behind other cities in the region in educational attainment.

That might not be so bad if our collective brain could grow. This, however, would require funding higher education in Arizona at adequate levels. Unfortunately, the State's investment in its universities has declined rather than increased. According to the Arizona Joint Legislative Budget Committee, general fund appropriation to the three public universities has decreased by almost 11 percent over the past 10 years. Community colleges (which are a gateway for student entry into universities) have been hit even harder with funding decrease of 48 percent over the same time period.

So, can Phoenix or Tucson become a brain hub a la Austin, TX and create middle skill jobs? Maybe yes; maybe no. The chances are slim, however, without a strong commitment to invest in higher education in Arizona.


Written on Wednesday, 30 November 2011 10:30 by Gary Yaquinto

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