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Monday, June 7, 2010

How's Cleveland's Human Capital?

Posted By on Mon, Jun 7, 2010 at 2:54 PM

If you don't know what the term 'Human Capital' means or how it relates to big cities, don't worry, nor did I until recently. Basically, it's the concentration of educated people in one area. This is important because a large concentration of highly-educated people all living in one area tends to improve that area and kickstart economic development.

The Atlantic summarizes the idea nicely:

Clusters of smart people of the highly educated sort that economists refer to as "human capital" are the key engine of economic growth and development. Jane Jacobs argued that the clustering of talented and energetic in cities is the fundamental driving force of economic development. In a classic essay, "On the Mechanics of Economic Development," the Nobel prize-winning, University of Chicago economist Robert Lucas formalized Jacobs' insights and argued that human capital, or what can be called Jane Jacobs externalities, are indeed the key factor in economic growth and development. Still, the standard way economists measure human capital is to take the percentage of people in a country, state, or metropolitan area with a bachelor's degree or higher.

On his blog, Rob Pitingolo, a young guy who was going to college in Cleveland, examined where Cleveland and other big cities ranked in terms of clusters of educated people. Specifically, Pitinglo examined how many college degree holders there were per square mile, important he says, because living that close implies collaboration, or at least the possibility of collaboration, and thus economic development.

degreedensity_cities.PNG

Cleveland's pretty low on that list.

Pitingolo's blog covers all manner of economic, biking, urban technology and transit news. It used to be mainly about Cleveland, his town. But it will be shifting focus soon, as Pitingolo has moved away to Arlington, VA. He's the exact sort of educated, ambitious, and talented young person Cleveland hopes to attract — the kind of person we're lacking in the above breakdown of human capital.

He wrote an open letter to Cleveland about why he left. Here's a short excerpt.

College Grads Need a Reason to Stay
Most Clevelanders will cite "great universities" as one of the region's greatest assets. It sounds great on paper, for example, to say that Cleveland has the #1 top rated school in the whole state of Ohio and some of the top-ranked universities in the country. The problem is that there are far too many people who come to Cleveland, study for four years, and then skip town. It's a viscous cycle that's made worse by the fact that people form social circles here, and as people in their circles start to break apart and people move away, it gives everyone in the circle less reason to stay. True, there are many people who go to college in Cleveland and they stay, because it's easier to stay than to go. But there are also far too many people, myself included, who haven't found that compelling reason to stick around when opportunity calls elsewhere.

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