When the Boomers Bail
Recently the Chamber’s Executive Vice President Ann Hutchison and I attended the annual conference of the Western Association of Chamber Executives. One of the speakers we heard was Mark Lautman. A former economic development practitioner, Lautman is author of a compelling book titled “When the Boomers Bail: How Demographics will Sort Communities into Winners and Losers.”
It’s a compelling read, if you’re interested in how the accelerating retirement of the Baby Boom generation will impact our community, especially the economy.
Following are our notes from the session:
- Economic development is personal. It really matters to people at a very personal level. The jobs it fosters saves families, keeps them together, lets them have the means to accomplish some of their dreams.
- Economic Development = growing your economy just a little faster than population growth with everyone sharing in the prosperity (including those in poverty). Growth must come from primary employment (economic base) versus service industry. Communities cannot grow their economies by just growing the service sector.
- If your community is dependent upon federal government expenditures, you have a problem
- Current recession recovery is an “L” pattern versus the traditional “V” pattern of all past recessions. 20% of economy in 2008 was “fake”. Consumption patterns will not fuel the recovery.
- U.S. is basically energy independent with lowest energy costs of the world.
- Book: “Shop Class as Soulcraft” – Matthew Crawford
- Book: “The End of Competitive Advantage” – Rita McGrath
- Idea: Innovation Units that create the next idea, sell it before it peaks and then start the next idea. Keep the people to keep building the new ideas, sell the ideas.
- There is a growing employment skills mismatch in our country.
- Labor Starvation Scenario: Qualified Workers vs Unqualified Workers vs Dependents – must grow Qualified Workers for success. Must do a better job with mid-career transitions to viable workers while moving younger people into workforce more efficiently.
- Communities used to be able to attract companies by lowering the cost of entry (land, fees, etc). Now you must have a compelling community to bring companies in – attractive community, qualified workers, good quality of life.
- New Program continuum: Economic Development to Workforce to Community Quality (check his website)
- Workforce Trend: solo workers – at home versus in factories/offices. Actual employees or 1099 (back to basics – all products made in cottages)
- You must understand the demographics in your community better than you do today – who is happy, who not, better workforce data, need to see gaps and measure state of readiness of the workforce
- Teach physics in the 5th grade; countries that do so produce technically-wired talent; see what they are doing in Colorado Springs
- Inverted labor supply – Boomers first generation in history of country to not replace themselves then did a poor job of educating the children they did have. The real issue is that we do not have enough qualified workers. In time this will shift power from employers to employees.
- Site selectors for companies are now careful about the issue of availability of future workers; need to be a place where people want to live.
- Lack of available talent means stealing talent from other places; Must think of your community as a talent magnet
- Now must have a compelling community which attracts talent which in turn attracts companies; brings economic development back into the chamber of commerce’s wheelhouse; economic developers don’t understand this.
- Economic Determinism – what Lautman calls “The Gumption Cycle.” It’s basically a community goal-setting cycle. People without the “gumption mindset” see affluent people and assume they inherited their wealth, stole it or won the lottery. Those with a “gumption mindset” know that people can work hard, invest, become successful and have the ability to perpetuate this success cycle.
- Look at his “Predictive Economic Base Job Creation Calculus” system – Population Estimate minus Jobs Estimate minus Attrition of Jobs Estimate = how many jobs your community needs to create. This is the employment gap you need to close. Then follow this with a discussion about industry sectors that fit your assets; then decide what gaps you must address, identify where you have no strategy to go after jobs in sectors where there are gaps.
- You can improve the metabolic rate of organic job creation by improving the business climate.
- Book: “Who’s Your City” by Richard Florida; where you choose to live is the most important decision you make
- Every dime the public sector gets comes from a private sector company