Want to Kill Innovation? Fight Brain Drain - Pacific Standard

Want to Kill Innovation? Fight Brain Drain

It's time for cities to free their talent.
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Boston skyline from Student Village II at Boston University. (PHOTO: HENRY HAN/WIKIMEDIA COMMONS)

Boston skyline from Student Village II at Boston University. (PHOTO: HENRY HAN/WIKIMEDIA COMMONS)

Education causes brain drain. The more impressive your terminal degree, the more likely you are to leave. That's been the case in the United States since the late 1960s. Does your community want to keep its kids? Pull them out before they graduate high school.

Anyplace trying to fight brain drain is killing innovation. Lower taxes will help retain talent? That policy is anti-business. Suck it, Tax Foundation:

"Non-competes stifle movement and inhibit competition and we do not want that. The evidence is clear—we are not seeing the kind of spin-offs and starts up at the same rate that previously made Massachusetts an enviable model. Individual career growth is good for the Commonwealth: We encourage our talent to be creative, to be innovative, and to network with other talented people. Furthermore, we encourage employers to recruit talented people. However, we send a mixed message: providing the talent needed to support the kind of explosive growth we want in the innovation economy is considerably more difficult if employees are legally unable to move between jobs in the innovation economy."

Despite all the gas bags in Boston whining about the best and brightest shipping off to New York City or San Francisco, Massachusetts is poised to free the talent. Yes, I understand non-competes refer to firms, not states. I also realize that the magic of Silicon Valley depends on the ability of innovators to move. When people change firms, knowledge flows. Migration begets innovation. Staying put begets the Rust Belt. Fairchild Semiconductor ran circles around Bell Labs.

I've learned that the best talent management practices for businesses work just as well for regions. Letting valuable people go seems suicidal. The best thing a CEO or mayor could do:

When businesses raid competitors, the reaction is often to prevent them from joining the new ranks. Too often, competitors become locked in counterproductive battles over their best talent. What if, against every imaginable business instinct, letting a trusted employee leave is good for your business? Here are five ways you can benefit from setting your talent free. ...

... Be an urban entrepreneur. In the 15th century, the powerful Medicis transformed Florence into a creative hub of artists and inventors such as Michelangelo and Da Vinci. Today, studies confirm what the Medicis intuited: Bring creative and inventive people within one space, and each will become even better. Economists call highly dense areas such as Silicon Valley agglomeration economies. Sure, in cities there is a great risk your talent will leave you for another company, but the density and movement in these regions makes for a virtuous cycle: By drawing more talent, vibrant cities gain the self-reinforcing advantage of deep labor markets.

Density and diversity didn't turn Florence into a creative hub of artists and inventors. Migration did. The passage doesn't say, "By retaining more talent, vibrant cities gain the self-reinforcing advantage of deep labor markets." Yet, that's what city, states, and countries do. Well, unless you are San Antonio Mayor Julián Castro.

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