10 Years…and Counting!

By Kathy Young, Director of Operations - on behalf of the entire Market Street team.

This month marks Alex Pearlstein's 10th year with Market Street. In the decade since he joined the firm, there have been weddings (including his own), babies born (including one sweet girl of his own), and many other celebrations as both our team and client list has grown.

Our growth and accomplishments as a firm have all benefited from Alex's involvement and passionate interest in making every community we work in an even better place. One of Alex's first projects as a researcher was on the first Opportunity Austin process, which has become the standard that many other communities look to as they undertake their own work. In total, Alex has worked in dozens of communities of all sizes, in all parts of the country, and each with their distinct challenges and opportunities. From his work in Halifax County, Virginia to Coachella Valley, California and Sioux Falls, South Dakota to Nashville Tennessee - and so many others in between - Alex's project experience helps inform all of the work we do.

We look forward to the next 10 years with Alex, and hope you'll join us in celebrating his first decade with Market Street.

When it Comes to Data, Beware the Oversimplified Headline

By Matt DeVeau, Project Associate.

We’ve been on a run of positive economic news lately. New home sales are rising, jobless claims are falling, and consumer confidence is at a five-year high. Things are looking up, it would seem. But when I talk to friends and family, many of them still have their doubts. In some ways, that’s understandable. The Great Recession and the long, slow recovery from it have been unlike anything most of us have experienced in our lifetimes. But I also get the sense that we may also have a “headline problem.” Consider this one from USA Today on April 7:

“Drop in labor participation rate is a distress signal.”

The first few paragraphs of the story elaborate: While the national unemployment rate declined by 0.1 percentage points in March, it “fell for the wrong reason.” The labor force participation rate – that is the number of people working or actively looking for work – fell by 0.2 percentage points to 63.3 percent a 34-year low.

Oof. That sounds really bad, right? Well, maybe. But it’s not quite that simple.

The labor force participation rate (LFPR) has a lot of moving parts. People may exit or enter the labor force for a variety of reasons – good, bad, and indifferent. But as far as the top-line LFPR metric is concerned, an individual who has retired to a comfortable life of playing golf and spoiling grandchildren is counted the same as someone who wants to work but has given up all hope of finding a job and has stopped looking. To its credit, the latter part of the USA Today article does explore the issue in a bit more depth, but to the person who consumed this news via Twitter or a 20-second television or radio segment, the story was simply: “The unemployment rate was lower, but only because people gave up looking for work.”

But in reality, LFPR is heavily influenced by other factors. One notable example is demographics. Consider the following chart from Valeo Financial, an Indianapolis financial planning firm:


Source: Valeo Financial; U.S. Bureau of Labor Statistics (Click to enlarge.)

This chart shows the profound impact that the Baby Boom generation has had on the labor force. The LFPR began to ramp up when the first members of this generation turned 25 and reached historic heights during the years in which all of this generation fell between the prime working ages of 25 and 54. As Baby Boomers began to age out of the workforce, the LFPR began to fall – forming a graph that sort of resembles a Bell Curve. Said David W. Stelsel of Valeo in the accompanying post: “Though it is difficult to forecast the future direction of the U.S. civilian labor force participation rate, demographics are an important factor to consider.”

But what of people who want to work but have given up? The Bureau of Labor Statistics calls these individuals “discouraged workers” and tracks them through its Current Population Survey, which is also used to calculate the LFPR. The BLS defines a discouraged worker as someone who has searched for a job in the previous 12 months but not in the previous four weeks due to reasons such as: “thinks no work available, could not find work, lacks schooling or training, employer thinks too young or old, and other types of discrimination.” The following graph shows discouraged workers as a percentage of the total population 16 years of age and older who are not in the labor force from January 1994 to April 2013: 

Not surprisingly, the proportion of discouraged workers surged during the Great Recession and remains far above pre-Recession levels. But if you were to smooth out the monthly peaks and valleys, the percentage of discouraged workers has been falling in recent years. Between February and March – the month-to-month time period highlighted in the USA Today article – the number of discouraged workers decreased from 885,000 to 803,000. In short, the decline in LFPR mentioned in the article was not driven by people “giving up” in the traditional sense of the term. 

This is not to say that everything is just fine. The times certainly remain hard for many people. And even if the falling LFPR is primarily a consequence of demographics, that’s not necessarily a good thing either – we could soon be faced with a lot of retirees and a relatively small pool of taxpayers in the workforce to finance things like retirement benefits and health care. 

Instead, the point – as always – is to consider the full context of the data before drawing a final conclusion. The above is just a brief exploration of the issue. The full context can’t be provided in an 800-word blog post, let alone a headline.

New Report on Where People Want to Live

By Jim Vaughan, Senior Fellow.  

Advocates for compact, mixed-use, walkable communities will be encouraged by the results of a report released by the Urban Land Institute on May 15. 

America in 2013, based on a nationwide survey of 1,202 adults conducted earlier this year, suggests that compact, in-fill and less car-dependent residential development is preferred by growing demographic groups, particularly Generation Y, African Americans and Latinos. 

“Gen Y—the largest generation—is the generation that is likely to have the most profound impact on land use,” ULI said in a release announcing the report. “Fifty-nine percent of Gen Y said they prefer diversity in housing choices; 62 percent prefer developments offering a mix of shopping, dining and office space; and 76 percent place high value on walkability in communities.” 

But even among all respondents, compact and less car-dependent is preferred. “Sixty-one percent said they would prefer a smaller home with a shorter commute over a larger home with a longer commute,” the ULI said. “Fifty-three percent want to live close to shopping; 52 percent would prefer to live in mixed-income housing; and 51 percent prefer access to public transportation.” 

If the respondents act on their preferences, another study suggests they will be rewarded financially. 

The New Real Estate Mantra: Location Near Public Transportation, a report by the American Public Transportation Association and the National Association of Realtors, found that homes near public transit retained their value better during the Great Recession than their counterparts in auto-dependent areas. 

Joan Mooney, writing earlier this month in UrbanLand, quotes the APTA’s Michael Melaniphy, “When homes are located near public transportation, it is the equivalent of creating housing as desirable as beachfront property.” 

Walkability is another factor in determining where people want to live—so much so that cities, neighborhoods and real estate firms are using “Walk Scores” as a marketing tool and communities with low inventories of walkable places have begun to take notice. 

In Gwinnett County, Georgia, the community and economic development initiative, Partnership Gwinnett, holds an annual Redevelopment Forum to generate interest and support for the kind of livable, walkable development that is attractive to the young professionals the county is trying to attract. 

“As we work to encourage redevelopment in our communities, we must understand that the next generation has different expectations for their community,” said Michael Paris, President and CEO, Council for Quality Growth. “Housing options, walkability and locally owned businesses are each crucial factors attracting this demographic and must be considered in Gwinnett’s redevelopment efforts.” 

In addition to the annual Redevelopment Forum, Partnership Gwinnett organized a Redevelopment Bus Tour in August that attracted more than 75 officials who toured two successful mixed-use developments in the Metro Atlanta area. 

These and other urban development initiatives make it clear that Partnership Gwinnett understands the shifting real estate preferences detailed in the ULI survey and is making a concerted effort to position the county to capitalize on them. 

Other key survey findings in the America in 2013 report: 

• “In general, the lure of homeownership remains strong: Seventy-one percent of all respondents said buying a home is a good investment, despite the housing crisis and ensuing home price declines. 

• “The quality of public transit is acceptable, where it’s available: Of those with access to buses and trains, 75 percent rate the quality as satisfactory. However, half of those with no access to buses and trains were dissatisfied by this situation. Fifty-two percent of the population said that convenient public transportation was important to them. 

• “Safety and high-quality schools top the list of most sought-after community attributes: Ninety-two percent of all respondents ranked neighborhood safety as the most important attribute; good schools ranked as the second highest (79 percent). 

• “Having space and proximity are equally important: In seemingly contradictory responses, 72 percent of the survey participants said having space between neighbors is a priority; yet 71 percent placed a high value on being close to employment, schools, and healthcare facilities, and 70 percent rated walkability as a key attribute. 

• “Seventy-seven percent of the respondents reported using a car, truck or motorcycle nearly every day. However, 22 percent said they walk to a destination almost daily, and 6 percent said they take public transit.” 

Triple Bottom Line

By Ranada Robinson, Senior Research Associate.

Last week, Market Street staff participated in a webinar about the Triple Bottom Line tool rolled out by the U.S. Economic Development Administration. The webinar facilitators explained how the tool can help economic development practitioners and those who are applying for EDA grants by giving a demo and answered questions. It was presented by Jack Cobb of EDA, Janet Hammer of Portland State University’s Initiative on Triple Bottom Line Development, and Brian Kelsey of National Association of Development Organizations.

The Triple Bottom Line tool is a framework for identifying and evaluating the economic, environmental, and social impacts of investments. The tool is intended to:

• Talk about, measure, and evaluate projects beyond primary metrics such as added jobs and total investment;
• Support partnerships between federal and state agencies, such as the Partnership for Sustainable Communities; and
• Help those interested in sustainability beyond LEED certification and clean tech initiatives

Ultimately, this tool is for any project manager pursuing short-term economic gains and long-term prosperity while bringing sustainability into the picture. There are three types of data analyzed within this tool: location, industry, and user-defined. The tool calculates scores for projects based on three areas: natural resource stewardship, economic vitality, and community well-being. The justifications for the scores can be viewed at the aggregate level by category, which can be drilled down to finer detail. A cool feature of the tool is the Due Diligence list that is provided based on user inputs after analysis, which alerts the user about items the he or she should pay close attention to such as pertinent employee information (e.g. necessary licenses) and geographic warnings.

Another interesting feature of the website is its inclusion of case studies. There are 18 case studies about communities who have embarked on economic development projects with sustainability as a major component. These studies include rural, suburban, and urban projects. These are definitely worth browsing through.

To date, the tool has been used by over 6,000 unique users, of which close to 250 have completed a project and received a score. We are always on the lookout for new data tools. This one is most beneficial to practitioners who would like a robust evaluation of potential projects.

College Graduation – Cost and Return

By J. Mac Holladay, founder and CEO.  

Many of us have watched in dismay as state after state have raised the tuition charged for both technical colleges and four-year institutions. These increases have topped 30 percent in many states over the past five years. When you couple that with flat wages and millions of lost jobs, it makes the dream of a college education even harder to obtain. South Carolina has increased their tuition 24 percent since 2006 and now it takes 52 percent of the average per capita income in the state to send a child to college each year. In a state already with low college graduation rates and weak educational attainment across the board, that is clearly the wrong direction and the wrong policy. But South Carolina is by no means alone – every state in the country increased tuition in recent years, many to near-unaffordable levels. Michigan and Vermont also have tuition-to-PCI ratios above 50 percent, and between 2006 and 2011, and public four-year tuition in Arizona increased 43 percent.

The Great Recession has had a dramatic effect in almost every part of the country. In some regions, the recovery remains difficult and slow. It is interesting that while young people ages 18-24 have had an especially hard time that is not true of college graduates, according to a May 4 New York Times article by Catherine Rampell titled “College Graduates Fare Well in Jobs Market.” At the worst time in the Great Recession (November 2010), college grads had an unemployment rate of 5.1 percent. By April of 2013, that number had dropped to 3.9 percent while the overall workforce unemployment rate was 7.5 percent. The number of college educated workers with jobs is up 9.1 percent since the beginning of the recession while high school grads with jobs are down 9 percent. Those without a high school diploma have lost 14.1 percent of their jobs. Those with some college are at the same number of jobs they were when the recession began. So, ALL the net jobs gains have gone to college graduates. The story is the same for those in their 20’s. In 2011 college grads in their 20’s had a 5.7 percent unemployment rate while those with a high school diploma or GED were at 16.2 percent.

The number of people over 25 years old with college degrees has risen to 32 percent from 22 percent 20 years ago. While it is true that many recent college graduates have not been able to find a position in their chosen field, they have found work. The median weekly earnings have dropped very slightly for college graduates from $1,163 in 2007 to $1,141 in 2012, after adjusting for inflation. Today, the full time worker with a bachelor’s degree earns 79 percent more than a worker with a high school diploma, up from 73 percent in 1992 and 48 percent in 1962, though as a recent policy brief from the Brookings Center on Children and Families suggests that this premium varies by major choice.

So in spite of the pain, the time it takes, and the additional cost, the return on investment for having a college degree is very powerful . The Hamilton Project at the Brookings Institute estimates that the average annual return is 15.2 percent. The report states that return is double the stock market investments since 1950 and five times home ownership.

Since we know the number one issue in economic development is the quality of the workforce, it follows that every community should be working on increasing the number of young people that go on to two- and four-year institutions. Those that finish are the number one asset any community can have.

Where Do Jobs Come From?

By Jonathan Miller, Project Associate.

Have you had the talk? And I don’t mean the one about the birds and bees. In economic development, part of the fundamental challenge is to understand where and how jobs are created – that’s the talk I’m talking about. Ostensibly, jobs can be created three ways: 1) from companies relocating to a community; 2) existing companies expanding; or 3) entrepreneurs opening new businesses. It would be great if these activities each created a similar share of jobs, because then organizations would be able to focus on these activities equally. However, this is not the case. 

The Edward Lowe Foundation’s YourEconomy.org seeks to answer the question posed in the title of this blog post and thus help communities and economic development professionals understand their job creation (and destruction) dynamics. The website provides establishment and employment data for a range of geographies (down to the county level) and details how jobs are created – from company relocations, expansions, or openings/closings. 

At the state level, it turns out that the majority of jobs are created by companies already existing in the state. The graph below shows the net number of jobs created between 2000 and 2010 by companies expanding/contracting, the number of jobs from companies moving in/out, and the number of jobs coming from companies opening/closing. The one constant is that every state derived more jobs – far more – from existing companies than from relocations.

Note: the graph is sorted by total job creation (the largest to the left) 

The two states that tend to be diametrically opposed in the battle for jobs – Texas and California – show quite different trends. California only created jobs, on net, from expanding businesses, while Texas, on net, had positive jobs from relocations and from expansions. On net, California lost 95,903 jobs to relocations (ostensibly some went to Texas), between 2000 and 2010. However, when it comes to businesses expanding, native California firms created 745,517 more jobs than those in Texas. So, while Texas is often rated as “business friendly” and California is not, the dynamics of job creation add depth to the reality. 

Looking at only raw numbers, the difference between jobs derived from expansions and those derived from companies moving into a state are even more staggering. Of the 50 states, the average ratio of jobs from expansions to jobs from companies moving in was 18.3. That means that between 2000 and 2010, within each state, almost 20 jobs were created by existing businesses for every job that moved in. The smallest ratio was in Delaware, where expansions still created five times more jobs than relocations. 

What does this mean for practitioners? Well, it means that proportionally, investment in business retention seems like a surer bet than investment in recruiting. This is not a total indictment of recruiting, because it is a source of jobs– just not as many as those coming from existing businesses.

Gone Dry: An Update on the Debate Over Public Data

By Evan Robertson, Project Associate.

At a time when massive amounts of information are readily at our finger tips, it is difficult to fathom that – at the same time – we are also slowly losing access to local information. The slow demise of local information is being pressured by two primary sources: the decline of local news media and the continued pressure via Congress to hamstring the U.S. Census Bureau. Yet again, Congress has entered a new bill into the house called the “Census Reform Act of 2013.” Everyone likes reform, I’d particularly enjoy it if the Census reformed its web-based interface…but that’s another blog altogether. The first line of the bill should give you a clue that by reform they mean “abolish”: “To repeal the authority to conduct certain censuses, and for other purposes.” The bill will essentially eliminate the American Community Survey (ACS) as well as the Census of Governments, the Economic Census, and any Census related to Agriculture. This is after the house voted to defund the American Community Survey. Ellen Cutter, our Director of Research, wrote a fantastic call to arms regarding the vote as well as the highlighted the importance of the ACS. The current bill sits in committee while the vote to defund the American Community Survey was defeated (thankfully) by the Senate. But, having just experienced Big Data Week Atlanta 2013, it raised a particularly interesting question: are we losing access to local information?

Full disclosure: I don’t intend to answer this question.

My cause for concern is twofold: local news media outlets are struggling across the country and budgetary pressures are forcing our politicians to question the value of local, timely data. The decline of the local news media industry is well documented with 2009 being dubbed “The Year The Newspaper Died.” If you are a more visual person, this site run by the St. Louis Post-Dispatch’s social media editor offers a good grasp of the number of newspapers closed in recent years. Admittedly, a Pew Research Center for the People and the Press study found that only 43 percent of Americans say that losing their local newspaper would hurt civic life in their community “a lot.” So, it is unclear whether we actually care about the loss. But, without access to timely information in some centralized form, it is difficult to gain information regarding things that potentially impact your local area. That new retail development going into your neighborhood? With a little more information, you might find out you don’t want it in your community.

On the other side of the equation is the continued fight over the American Community Survey (ACS). While it doesn’t help that the U.S. Census Bureau is currently without a Director, this battle will continue to the foreseeable future. Qualms over the American Community Survey range from government intrusion to security. Some of the concerns are understandable; Jeff Duncan’s – the bill’s sponsor – home state of South Carolina was victim to the nation’s largest state agency hacking crime. All told, over 4 million taxpayer social security numbers and 387,000 credit/debit cards were stolen. Security aside, the other complaint concerns the compulsory nature of the survey and the associated fine (up to $5,000) as well as the frequent accompanying phone calls that survey respondents receive. Speaking from my personal experience with the survey (my parents were given an ACS survey in 2012), the U.S. Census Bureau and we in the economic development profession could do a better job informing the public about the importance of the ACS, what its data is used for, and why the compulsory fine is much needed. I’d be surprised if most Americans would question the value of the American Community Survey if they realized that it helps inform decisions regarding road/public transit construction, school location, and private investment (there is a reason that grocery store is located on that particular corner, in that particular neighborhood) among others. The use of the data is all encompassing, I am constantly surprised were it pops up.

Devil’s advocate: let’s say the American Community Survey does go the way of the Dodo and local news media continue their downward spiral, is there anything that can replace it? In terms of news media, there is a strong argument for informed and passionate community leaders/bloggers rising up to meet the challenge. As a recent Twitter adopter, I am constantly amazed at its ability to disseminate information quickly and in an easily digestible format. While social media could serve as a potential replacement for journalism, it would require very passionate people with a lot of time on their hands to lead the investigation and disseminating of the information they collect. Depending on the community size, it could easily escalate into a full-time gig.

A replacement for the American Community Survey is less clear. With the absence of a national survey, it would fall upon state and local governments (or private companies who will give you access for a fee) to collect the data they need to make informed public investment decisions. This would likely be a mess. Without common standards, each state could potentially form their own methodologies (see: dropout rates in years past) and, thus, data would be hard to compare across states and the nation. More likely, in the harsh state budgetary environment, it’s easy to see states forgoing data collection altogether. On a long enough time frame, the rise of inexpensive sensors and proliferating use of GPS phones will reshape the way we collect and view public data. Local governments could obtain more fine-grain, real-time information on daily migration patterns, commute times, population, economic activity, and all the other things that the American Community Survey currently tracks. But this is far, far into the future.

As public information stakeholders, it’s up to us to ensure that we retain access to vital sources of public information. It is also up to us to use this public information in neat ways that inspire public debate and lead to informed public investment decisions. And, on the off chance you run into an ACS skeptic, just tell them that Google, Microsoft, Target, Wal-Mart, Comcast, AT&T, and Visa have way more intimate information on you as a person than the federal government. That smart phone they’re holding has been keeping tabs on their location since it was turned on; the apps it connects to also know where they’ve been. With access to their Google searches alone, medical marketers can probably make a good, educated guess at their medical history which is why they always see online ads that hit startlingly close to home. Why we are comfortable surrendering extremely private information to companies only interested in profit and less private information to our government is beyond me.

A How-to Guide: Starting the “Big Data” Conversation

By Evan Robertson, Project Associate.

Last week, Atlanta hosted its first ever Big Data Week. During the week’s festivities, cities across the globe celebrate and contemplate big data’s social, political, technological, and commercial implications. As a diverse group of entrepreneurs, professors, and business leaders gave their big data insights, I kept facing the question: What role do local governments and chambers of commerce play in the “Big Data” discussion? But I am getting ahead of myself, first a little background.

Over the course of a normal day, the average human generates voluminous amounts of information. Thatinstagramed picture of your cute kitten? Well, that is saved on a server somewhere in the world. Once everyone wants to save multiple pictures of their cat...it starts to add up. A 2010 McKinsey and Company study found that consumers in that year would generate six exabytes of data. For those not familiar with an exabyte (I admittedly wasn’t either), six exabytes equals 6,442,450,944 gigabytes. If you wanted to store that amount of data on a 500GB hard drive, you’d need 12,884,902 of them. To top it all off, companies are finding new ways of collecting consumer information every day.

Progressive Insurance rolled out its “Snapshot” program in 2010. Drivers who sign-up for the program allow Progressive to install a data recorder in their car which records basic telemetry information (braking, acceleration habits) as well as what time of day they drive and for how long. As a consumer, if your driving habits fall within the threshold of what progressive deems “safe,” you get a discount. In exchange, Progressive gets a massive amount of information on its consumers’ habits which can give them an edge over their competition. Think about it, insurance companies make money by not paying claims. If Progressive deduces from their data that people who slam on their brakes, drive an average of 22 miles per day, and drive between 12:00am and 4:00am once a week are the least accident prone, then the company can build a strategy on recruiting these drivers or changing driving habits of their existing customer base. Fewer claims equal more money.

Progressive isn’t the only one collecting data to gain greater insight into consumer preferences. Cox Communications is in the process of rolling out cable boxes that record customer remote control clicks. Their long-term vision is to supplant Nielsen (the company that produces the TV ratings) with their own internal system which can better inform advertisers to which demographics are watching which shows and at what times. By collecting this data, Cox Communications gains insight into their customers’ habits. Once again, this data adds value to business operations and provides a level of insight not easily matched by their competitors. That is the major selling point of big data: it grants insight over your competitors, a competitive edge if you will.

Big data is essentially the combination of many types of data which are then analyzed using statistical and mathematical algorithms. In Progressive’s case, big data would not only entail their drivers’ data but would also involve merging that data they gather with other information. For instance, combining driving habits with the drivers’ payment history and Google Search history is what big data is all about. By combining these data, Progressive could potentially figure out that people who slam on their brakes, make their payments on time, and search for the term “I brake for squirrels” might be less accident prone than someone who slams on their brakes, pays on time, but searches for “symptoms of road rage.” Big data is the merger of the voluminous data you put out (tweets, updates, grocery store purchases, etc.) into a common format that a company can analyze to deduce insights.

So, what role do local governments and chambers of commerce (LGCC) have to play?

First, a caveat. In the big data discussion, it is critical for tech-savvy entrepreneurs, Chief Information Officers, and other business community members to lead the discussion. You can think of the big data entrepreneurs and business owners as an independent community that needs to be internally self-sustaining and driven by the private sector. An outside voice attempting to guide the process may adversely impact the community’s ability to rapidly adapt to change, a critical factor in the success of communities centered on emerging technologies. We all want to be leaders, but in this case LGCCs have more important roles: connecting and convening.

One observation from Big Data Week Atlanta 2013: there exists a disconnect between business leaders (C-level executives), their technology workers, and big data entrepreneurs. Simply put, C-level executives are wary of “big data” because they’ve already spent millions upon millions of dollars building business intelligence datacenters that didn’t meet their expected return on investment. Now their IT workers are pushing them to purchase more equipment and software required for big data storage and analysis. Executives are rightly skeptical about shelling out more money on cutting-edge technology, especially because big data’s insights aren’t readily apparent to leadership and it’s hard to separate valuable insights from the mundane. Executives need a proof of concept. They need to see big data in action in order to fully piece together 1) what big data is and 2) how it will give their company an edge over others.

A few potential strategies developed by audience members during a Power in Numbers: Growing Atlanta’s Data Science Talent breakout session led by Hans Utz (Deputy Chief Operating Officer at the City of Atlanta) touch on talent development, connecting talent with the broader business community, and getting the conversation started:

1) Hold a technology showcase at a local event space: Allow technology entrepreneurs (assuming they’ve already protected their intellectual property) to demonstrate their products to local business leaders.

2) Create a big data technology challenge: This entails asking a large company to identify a particular challenge they feel big data could solve, and offering a cash prize (internship, job offer, scholarship, venture capital, etc.) to the team that solves it first. This could take the form of a week or day long hackathon.

3) Create big data entrepreneurial zones: Zones would essentially be co-working spaces at local companies, or public-sector facilities that would allow big data entrepreneurs access to subsidized, collaborative space. Zones should be open to everyone interested in big data and promote interdisciplinary interaction wherever possible.

4) Give entrepreneurs access to public data: Cities generate massive amounts of data, and are a treasure trove for entrepreneurs interested in big data. Govathon hosted by the City of Atlanta and Start-up Atlanta is an excellent example of getting entrepreneurs excited about and used to working with big data.

In the 2010 Big Data study, McKinsey and Company estimated that there will soon be a big data talent shortage between 140,000 to 190,000 technology workers who collect, store, and analyze big data with an additional 1,500,000 managers and analysts who will need to be well versed in big data and who can leverage its findings effectively. LGCCs play a crucial role in ensuring that your local community can supply the workers that big data demands. Local governments and Chambers must work hand in hand with the business leaders and higher education institutions to ensure that the community is turning out workers with a broad, but deep, set of skills including computer programing, mathematics, statistics, design, and visualization.

A few lessons from Big Data Week:

1) Before developing new big data talent, focus on what you already have: Those C-level executives who spent countless millions on business intelligence infrastructure and hiring workers to support that infrastructure? Well, they’d probably like to be able to repurpose those investments to meet their big data needs. Worker retraining (given the complexity of educating individuals in the broad set of skills demanded by big data) is the most expedient way to meet the talent shortage.

2) Create “data” labs for young entrepreneurs at mid- and large-size businesses: As pointed out by Seth Ryan during “What’s the Big Opportunity of Big Data?” discussion, young big data talent graduating from local universities are increasingly attracted to tech start-ups. This leaves a dearth of talent for mid-size businesses (who are still hesitant to invest in big data) and large-size firms (who can invest in the infrastructure but don’t have the talent to run it). One way to attract young talent to these types of business is to give them a “start-up” feel. Data labs would allow big data entrepreneurs to access and more easily experiment with large data sets.

3) Foster a culture of big data collaboration: Big data requires skill sets from a variety of fields. Fostering relationships across knowledge sectors will help to expand the local workforce’s capability. This culture of collaboration could begin at local universities, focusing on forging relationships between design, computer science, mathematics, management, and public policy departments. Of course, you should also focus on forging interdisciplinary teams throughout the local private and public sectors.

Admittedly, big data is another ambiguous term that has popped up in the job creation debate. So, let me kill the hype: big data probably won’t serve the basis of another industrial revolution that will ensure America’s future prosperity for generations to come. However, in an increasingly competitive marketplace, it will allow companies to better leverage their information and consumer knowledge giving themselves an edge in the rapidly evolving global marketplace.