The next evolution of economic development is underway, and three significant factors are affecting its primary focus – job creation – at the tactical level.
First is the fact that as of April, there are more job openings nationwide than unemployed workers. Second is the skills gap. We’ve certainly experienced it here, as higher-paying jobs go unfilled due to a shortage of people with the necessary skills. Third, a slowdown in population growth has intensified competition for jobs and talent, making a community’s vibrancy and sustainable population growth paramount.
While business attraction, expansion and startup always have revolved around meeting the metrics of the company involved – such as utility costs, available real estate and workforce – these are no longer the only significant data points. Employers now also insist on seeing the infrastructure of a talent pipeline before they will commit to expanding or locating in a region.
But a well-built pipeline alone is not a silver bullet. I recently heard this talent challenge likened to the difference between cooking in a slow cooker and a microwave – and we need a microwave solution. Our region must grow more rapidly.
Our local unemployment rate is 2.7 percent, according to the U.S. Bureau of Labor Statistics. The national rate has dropped to 3.8 percent, the lowest rate since 1969, and the level of those falling out of the workforce has surged. The number counted as not in the labor force is now a record of nearly 96 million, a 21 percent rise over the past decade. Baby boomers have been retiring, and while there’s a surge in millennials, they’re all currently in the workforce. In addition, there are 20 million fewer members of Generation Z following behind, according to the Census Bureau’s American Community Survey.
In other words, this challenge isn’t going away for decades.
One of the most important facets of job creation is meeting the demand for skilled talent.
We can’t attract new jobs or help existing employers grow quality jobs unless there are people with the skills needed to fill those jobs. Right now, employers are strongly indicating this imbalance is stopping new job creation.
One potential solution is the underemployed or unemployed people in our community who need better jobs. Voter approval of the recent Ozarks Technical Community College ballot initiatives will certainly position us well to remove barriers to these opportunities. But even if we do that successfully with those who already live here, it still doesn’t satisfy our workforce needs. We need a larger working population.
A robust talent pipeline – one that includes development of our own talent in addition to attracting and retaining workers – must be paired with strong, sustained population growth. We’ve seen this as an increasingly important local metric for employers and their site selection consultants.
Population growth has slowed both nationwide and locally. Our growth trend is concerning.
From 1990 to 2010, the Springfield metropolitan statistical area rate of growth was 3.3 percent each year, according to the U.S. Census Bureau. From 2010 to 2017, the annual rate of growth was just 0.8 percent. That metric alone could disqualify us as a potential location for existing businesses to grow or for new employers to locate. Other midsize cities, such as Des Moines, Iowa, or Fayetteville, Arkansas, are growing at 3 percent each year and can demonstrate a growing workforce.
To win the competition for job creation, Springfield’s population has to grow at a more competitive rate for employers to feel a real sense of confidence in our workforce pipeline. This is what we’ve seen on our Community Leadership Visits to other successful communities like Boise, Idaho, and Nashville, Tennessee. These cities are strategically focused on investments that make them desirable places to live and work, and then translate that population growth into a job creation asset.
Simply, to grow quality jobs and our economy, we still need a good business climate, excellent infrastructure, available real estate, strong K-12 and higher education systems, and a skilled workforce. But in addition to nailing all those other fundamentals of economic development, we must put additional focus on population growth.
Ryan Mooney is senior vice president of economic development for the Springfield Area Chamber of Commerce. He can be reached at firstname.lastname@example.org.
Austin, Texas-based Kendra Scott LLC made its Springfield debut; Lost Boys Barber Co. LLC relocated; and Wilson Logistics Inc. opened its corporate headquarters in Strafford.