Why City Branding Fails

The National League of Cities put up an interesting post recently about city branding campaigns. These have been tried for years, but they often don't work, mostly because few cities are willing to be known for something, and would rather be known for everything.

The all-things-to-all-people craze right now is tied to biotech and greentech, in the late 90s, it was just “tech”. But whatever the flavor of the month is in economic development, developing distinctive messages is not an industry strength. The NLC article mentions Milwaukee's “Freshwater Hub of the World” slogan, which is an unusually focused message, and also promotes the idea that the city is a place for trade. This is the sort of point that does not come across well when you try to sell yourself as a “Cool City” and your governor holds a “Creating Cool” conference.

Connecticut is also promoting a trade corridor around Bradley Airport, with tax incentives for companies that can prove they need to ship goods out of the airport. What's smart about this is the defining trait of successful regions right now is not how many Bachelor's degrees citizens have, or how much money their state's forked over to high priced speakers and consultants, but their presence in industries where America is a net exporter.

As I pointed out a few weeks ago in the Seattle vs. Portland post, Seattle's done much better in the recession than its neighbor to the south, largely because it has two large exporting industries based locally. Portland, on the other hand, has won more praise from urban pundits than just about anyplace in the country, yet has above average unemployment. It has plenty of overeducated slackers who are the envy of Jennifer Granholm, and according to Richard Florida, attracting such people should be the focus of economic development, even if they spend all day pouring coffee and skateboarding.

I'm curious to see what the NLC comes up with next in their discussion, because it would be a major advancement in economic development if cities and states started talking up the products they can export, and stopped pandering to people they're trying to import.

San Mateo County Expects to Hit 2007 Job Levels in 2015

San Mateo, the northern (and largely software) half of Silicon Valley, expects to get back to its 2007 job count by 2015. The county economic development agency, which decided to buy a vowel when it chose the acronym of SAMCEDA (San Mateo County Econ Dev Association), sees a slow recovery over the next few years.

So in this county, which is home to Oracle and Genentech, is a stone's throw from Google, Yahoo, and Intel HQ, and receives 10-12% of all venture capital invested domestically, what do you expect are the growth industries? Well, according to SAMCEDA, it's professional and technical services, retail trade, government, hospitality, health care, social assistance and manufacturing. Basically, the leading growth professions in the county that sits between San Francisco and San Jose are the same as everywhere else.

I've said that for just about every region outside of Silicon Valley, Boston, and maybe Austin/Seattle, that VC is no longer part of any sensible economic development strategy. And if you're Cleveland, or KC, or Lansing, and you wonder whether this applies to you, just look at VC's increasingly niche role in the middle of the San Francisco peninsula.

Top 10 Regions for Biotech

Most industries with high fixed costs and low variable costs tend to cluster in a handful of areas, while those with low fixed costs and high variable costs can go anywhere. An example is semiconductors, an industry which is heavily concentrated in a few places, while technology consultants can be found just about anyplace.

As a high fixed cost/low variable cost industry, biotech is clustering too. I don't like using NAICS codes to determine industry concentrations, because they're often slow to adjust to new company categories, so to figure out the top 10 regions for biotech, I did some indeed.com searches for biotech and biotechnology jobs. Results are below, with each region's share of total U.S. biotech job openings. Now, in the spirit of the recent NCAA conference shifts, where "10" can mean 11, 12, 14, or whatever makes sense for the TV deal, I've actually included the top 12 regions, because there is a big dropoff after #12, with region after #12 accounting for more than 1% of U.S. biotech positions. Sales jobs, many of which are for remote offices across the country, are excluded.

1. Boston 19.25%
2. San Francisco/San Jose 12.85%
3. NY/NJ 8.90%
4. Philadelphia 7.24%
5. Washington, DC 5.99%
6. Los Angeles/Orange County 5.39%
7. San Diego 3.83%
8. Chicago 3.03%
9. Raleigh/Durham 2.53%
10. Indianapolis 1.80%
11. Seattle 1.48%
12. Minneapolis 1.47%


These 12 regions account for 74% of all biotech openings. The clustering is very strong, almost as strong as semiconductors, where the SF Bay Area comes in at close to 30% of all national job listings for that industry.

I Saw The Sign

Remember that South Park episode where they find the Ice Man guy who's been frozen since 1996? In order to re-orient him they have to play 1996 music, including the painfully bad Ace of Base hit "The Sign". I think the Ice Man must have worked in Economic Development, because so much of the industry is acting like it's still 1996.

There's still a lot of talk about "tech" jobs, venture capital, and of course, "knowledge workers". Somebody is going to have do something to kill that terrible term along with the equally awful "human capital". Just hearing these things makes me feel like I'm back in 1996 in a product marketing meeting.

In the 2010s, with female-dominated professions like nursing, teaching, and social work continuing to grow, having a vagina will be a greater advantage for many workers than having an advanced education.

One of the things I read many times back in the 90s was how species that survive aren't the strongest, but the most adaptable. Think Alvin Toffler or some other futurist pundit came up with that. Well, if that's true, then it's time to bring economic development into the 2010s, and move it past the world of venture capital, overeducated slackers riding light rail trains in Portland, and panicking that if your city doesn't promote itself as some sort of "tech" hub, it will be falling behind. Computers have made many companies exceptionally productive, and automated and outsourced so many employment opportunities. As a result, many tech sectors, including specialties within greentech and biotech, hold as much promise for future job creation as pets.com.

Where the Jobs Are – DC's Maryland Suburbs and Portland

Going to try and make this a regular feature. Part of the problem with economic development hype about biotech, greentech, whatever tech is that it obscures reality. So what I'll do here is run some indeed.com searches, and report back what employers are actually hiring for, not what's being promoted in economic development brochures.

First stop, the 20814 zip code in Bethesda, MD, home to NIH, which is the leading funder of medical research in the country, investing about $15 billion annually in research grants.

Expect a big biotech showing here? Within 10 miles, 3,322 jobs mentioning “SQL Server”, 165 mentioning “biotech”. So in NIH's backyard, back office database skills are in greater demand than biotech by a 20:1 ratio.

10 miles within 20814, "Nurse" gets you 2,949 job listings, or about 18x biotech. 587 listings for “Social Worker” in that same search, or about 3.5x biotech.

Let's move it up a few miles to Gaithersburg, MD 20878 – MedImmune headquarters, do a 10 mile radius, and see what we get.

SQL Server drops to 420, but biotech's still just 143. “Nurse” gets you 390, or about 2.5x biotech – in MedImmune's hometown.

Head across the country to Portland, 97201. They claim to be the leader in green technologies, so let's do a job search within 10 miles of the downtown zip code for “green”. 198 results. Take it out 25 miles, and you get 375. “Solar” at 25 miles gets you 164, “wind” 111. In the same geography, “Nurse” produces 1,678 listings. So in the alleged center for green employment, employers ask for a nurse 5x more frequently than they mention the word green, and 10x more frequently than they mention solar.

The Vagina Economy

Many economic development incentives are a waste of taxpayer money. They often involve a lot of handouts so one city, county, or state can make the same "leadership in biotech, greentech, whatevertech" claim as 47 other places. And while there are all kinds of clever studies talking about multiplier effects, the fact remains that far more people, even in regions like Boston and the SF Bay Area, work as nurses, teachers, or retail clerks, than as biomedical engineers. And most of the people doing these jobs spend more money on tampons than on jock straps.


Girls Gone Wild
One of the consequences of the rising costs of education and health care is that money is being directed out of the techie-finance economy that existed in the late 90s to professions like teaching, nursing, social work - all of which are needed everywhere, and are done mostly by women.

According to Bureau of Labor Stats and Nat'l Education Association Data, 80% of teachers, 81% of social workers and 94% of nurses are women. Women comprise nearly a third of all doctors, up from 7% in 1970. These professions that involve caring for people continue to grow while banking, computer programming, and other predominantly male professions continue to get squeezed by productivity gains and outsourcing.

3rd Grade Teachers Don't Have to Double their Productivity every Four Years
While states and counties are falling all over themselves to attract new greentech manufacturing plants, greentech manufacturing is heading out of the country to find cheaper labor, while increasing the productivity of the workers remaining in the U.S. Four years ago, First Solar generated about $300,000 in revenue per manufacturing employee, today it produces over $600,000. Hiring is never going to come anywhere close to the increase in product shipments. Yet this hasn't stopped econ development officials from competing against one another for a plant that might employ 200 people if market conditions remain strong, all while the company building it feels a strong pull to head out to a cheap labor market like the Phillipines or Malaysia, where SunPower and First Solar are building new plants.

Teachers, nurses, and social workers don't get outsourced to the Phillipines, nor do they work for companies under intense financial pressure to increase productivity. 30 years ago teachers didn't have 80% fewer kids in the classroom. And even though social workers and nurses can be pressured to handle a lot of cases, they aren't about to get automated out of existence like many manufacturing workers. As a result, their numbers are poised to keep growing, regardless of how technology advances.

By my estimate, at least 30 states think they are in the top 10 for biotech or greentech. But can anyone name a place that's leading innovation in social work practice? nursing? teaching?

The reality is that many jobs of the future will be in fields dominated by women, and they'll provide a lot more stability and growth than a solar manufacturing facility. Moreover, no one has staked the claim as a leader in recruiting these professions, providing plenty of opportunity for one place to be known as the leading region in these personal services professions. Econ dev authorities would also do themselves a favor if they ditched all their traditional stock photos of science workers, and replaced them with MILFs and recent female grads - that would do a lot more to attract men than pictures of lab coat people staring at test tubes.

Where the Biotech Jobs Are

The image of a lab technician staring at a test tube has become economic development porn. The first time you see one of these pictures it's interesting, but after awhile they all start to look the same. Nonetheless, from Michigan to Mississippi, states, counties, and cities are falling all over themselves to attract companies who make their employees wear safety goggles. But unlike failed attempts to win Internet companies from Silicon Valley in 1999, current efforts to recruit biotech companies aren't linked to fads or an overheated stock market, and are likely to continue for years. But is it really worth it?

The current craze to recruit companies in the sophisticated science sector has led to at least 10 states being in the top 5 for biotech jobs, if you believe all you hear about the industry. It's kind of like how there are 15 cities in the country with the most bars & restaurants per capita, at least according to people I used to visit when I was in college.

The reason economic development propaganda has outdone simple mathematics is that econ dev officials like to choose from any one of a number of metrics that put them in the best light, so we often hear about VC dollars raised, PhDs per capita, patents filed by local companies, but none of these has proven to correlate closely with commercial success. As we learned in the late 90s, raising money from a follow-the-herd venture capitalist is quite different than earning revenue from a paying customer.

The best measure of economic development is not an academic degree or a me too investment in a hot industry, but economic activity. And the best way to measure that is jobs. For example, here in the DC area, we have more satellite jobs than metro San Francisco, NY, and Boston combined, according to indeed.com. We're the leader in this industry that shuns publicity and doesn't attract much VC, mostly because government's its #1 client. But that doesn't mean it's "multipler effect" is any lower, in spite of its limited ability to generate test tube photo ops. I've also heard that we're #1 in biotech due to Montgomery County's "science hubs", although I've never met anyone who drives to a "hub" everyday for work.

According to indeed, there are over 800 biotech openings within 25 miles of Fenway Park, but fewer than 300 within 25 miles of the White House. The numbers don't change if you center your search on Bethesda's Medical Center metro stop. MIT and the Boston medical industry have done far more to create biotech jobs than Johns Hopkins and NIH, in spite of the latter being a leader in research grants. University of Washington has also been a leader in winning research grants, but there are only around 100 biotech jobs within 25 miles of the South Lake Union biotech center Microsoft co-founder Paul Allen has been developing in Seattle.

There are over 800 biotech jobs within 25 miles of Genentech's South San Francisco headquarters, but fewer than 200 near Amgen's Thousand Oaks HQ near Los Angeles. San Diego actually beats out LA for biotech jobs, although all the PhDs at UCSD and Scripps aren't enough to put that region in the same league as Boston or the I-78 pharma corridor in New Jersey. Once you get outside these coastal areas, the numbers fall off substantially, with many of the available jobs limited to sales & BD.

But even in Boston, just 2% of all indeed listings contain the keyword "biotech", fewer than the number mentioning C++ or Java, and nearly four times less than the number asking for SQL skills. But in spite of these figures, don't expect a disheveled programmer to replace the lab coat guy on your state's economic development website.