Education and city growth

It is no secret that talent is the most important driver of growth in the 21st century and that talented people are essential to innovation (Kepner, 2008, p. 62). Particularly in an era of rapid globalization where most financial assets tend to move freely around the world, while the mobility of human capital lags behind.

In that sense, the case of the United States is quite alarming. There is a growing demand for high-skilled workers, while the quality and supply of education are not improving at the same pace, resulting in a sharp rise in the inequality of wages (Autor, 2010, p. 1). Also, there are increasing job openings in both high-skill, high-wage professions, and low-skilled, low-wage positions, while employment possibilities are diminishing in both middle-skill, white collar administrative, and sales occupations, and in middle-skill, blue-collar manual jobs (Autor, 2010, p. 1). Additionally, jobs creation is occurring further away from where people live, especially the poorer population, limiting their possibilities for job search, particularly while unemployed (Kneebone & Holmes, 2015, p. 9).

However, cities are the right places to tackle this vicious circle of a diminishing supply of skilled workers, companies moving to different locations, unemployment, weak tax collection, inadequate school systems, low supply of skilled labor, and so on.

First of all, in the short term, cities with increasing unemployment need to strengthen programs to improve the technical skills of individuals finishing high-school (Kepner, 2008, p. 76). Additionally, cities can promote, through tax rebates, that local firms invest more on on-the-job training, very much in a similar way that South Korean cities did (Pagés, 2014). This case is interesting because the government helped firms develop training cooperatives for small and medium enterprises, that increased the skills of the workers along the added-value curve.

Second, in the long-term, cities should invest in early childhood education, as well as the quality of their colleges, paying close attention to the human capital that firms need now, as well as in the future (Kepner, 2008, pp. 71-84).

Finally, cities should promote that their young professionals stay. One way to do this is by fostering entrepreneurship with matching grants or by facilitating the connection with private investors (Kepner, 2008, p. 82).

However, cities must also pay close attention to the automation paradox. As Rotman (2013) illustrates, "technological progress is eliminating the need for many types of jobs and leaving the typical worker worse off than before." In that sense, cities must implement technology watch programs to be aware of technological changes taking place, so that they can act accordingly.

Sources

Autor. D. (2010). The polarization of job opportunities in the U.S. labor market. Retrieved from: https://learn.bu.edu/bbcswebdav/pid-4374104-dt-content-rid-15118042_1/courses/16fallmetua704_d1/The%20Polarization%20of%20Jobs.pdf

Kepner, R. (2008). The talent imperative of Older Industrial Areas. The American Assembly.

Kneebone, E., & Holmes, N. (2015). The growing distance between people and jobs in metropolitan America. Metropolitan Policy Program. Brookings Institute. 

Pagés, Carmen (2014). El ejemplo de Corea: tres claves para emular al tigre. IADB. Retrieved from: http://blogs.iadb.org/trabajo/2014/05/15/el-ejemplo-de-corea-tres-claves-para-emular-al-tigre/
Rotman, D. (2013, June 12). How technology is destroying jobs. MIT Technology Review. Retrieved from https://www.technologyreview.com/s/515926/how-technology-is-destroying-jobs/