cities that welcome newcomers have higher wages, stronger economies
|January 9, 2007||Posted by Staff under Progress Report, The Progress Report|
Human Freedom versus Man-Made Borders
Studies show that cities that welcome newcomers have higher wages, stronger economies
Which should have more rights, a human being or an inanimate object?
Many of the same powerful interests that seek free, easy movement for goods and money across national borders are trying to prevent humans from having similar rights.
Communities that prefer freedom find many benefits, however.
Here are some excerpts from a recent news report that appeared in the Austin American-Statesman (Texas).
by Mark Lisheron and Bill Bishop
When Mitsubishi Corporation asked Laszlo Belady to help start four technology laboratories in Cambridge, Mass., in 1991, he kept his house in Austin.
In fundamental ways, Belady is a stereotypical immigrant to the United States, full of admiration for this country’s opportunity and freedom. He is, in addition, a political refugee and an internationally respected computer pioneer who has lived and worked with ideas in six countries on three continents.
Ideas, he says, are the products of individuals who work best where constraints are fewest.
Immigrants of all nationalities, education and economic backgrounds continue, overwhelmingly, to settle in the gateway cities of New York, Los Angeles and to a much lesser extent, San Francisco, Miami and Chicago. Their reasons for coming are as old as the colonization of North America.
However, immigrants, particularly those with education and financial wherewithal such as Belady, are making their way to a new kind of American city. These cities have economies driven by a creative class of people who traffic in ideas: the writers of software, music, management plans and novels.
In these 20 cities of ideas, which include Austin, research by the Austin American-Statesman has found faster population growth, higher average yearly wages, higher patent production and a creative class a third larger than in traditional U.S. cities. In short, economies of these cities of ideas are the most vigorous in the country.
Immigrants are a crucial part of the equation, according to demographers and economic development officials. The cities of ideas are welcoming places for both foreign-born residents and creative workers.
According to research spearheaded by Robert Cushing, a statistical consultant to the Statesman, the residents of the cities of ideas are more open to other cultures than are residents in slower-growing, less innovative regions.
In 1990, foreign-born residents made up 12 percent of the population of the cities of ideas, while they represented just 7 percent of the population in American cities that were less innovative.
William Frey, a demographer with the Milken Institute and a professor at the University of Michigan, has written extensively about how cities with robust immigration are in ascendance while those that cannot attract immigrants are in decline.
“They (immigrants) revitalize the regions they move to and enrich them culturally with their tastes in music, food and entertainment,” Frey wrote recently in American Demographics magazine. “The regions that do not attract (immigrants) have often experienced a prolonged economic decline, or they lack the natural or cultural amenities that many migrants seek.”
As many as a fourth of all technology businesses created over the past several years in Austin were started by immigrant entrepreneurs, estimates Johnny S. Butler, chairman of the Department of Management in the Red McCombs School of Business at the University of Texas.
Joel Wiggins, director of the Austin Technology Incubator, and David Gibson, director of research programs for IC 2 , say Austin has attained international standing as a fertile place to start a business, particularly in high-tech. Wiggins and Gibson host dozens of foreign business delegations each year.
“They come to find out how Austin did it,” Gibson says. “Austin is seen internationally as a magnet for entrepreneurship. Austin has always been a magnet for talent and brainpower.”
“I tell people who come here,” Wiggins adds, “that there is only one Fortune 500 company (Dell) in the area. I tell people we’re not a corporate town, we’re an entrepreneurial town.”
And according to recent study by AnnaLee Saxenian, a professor of regional economic development at the University of California-Berkeley, many of these entrepreneurs have extended their businesses to their home countries.
Rather than a brain drain from a developing economy to an advanced economy, Saxenian says Silicon Valley has established a pattern in high-tech communities of brain circulation. Not only do these entrepreneurs bring culture and diversity to their American outposts, they return to their native countries sophisticated in the ways of doing business, Saxenian says in her study.
At IC 2, Wiggins has just finished a 50-minute conference call with business people from New Zealand. While most of the visitors to the technology incubator are Chinese, Indian and Korean, he has recently had conversations with Russians, Poles and Armenians. Their preoccupations with Austin fall into three general categories, Wiggins says.
“They know we have the business infrastructure,” he says. “They believe we have a friendly and cooperative culture. And they find that Austin is still of a manageable size to make things seem possible without too many complications.”
The mix of cultures, the different foods, the variety of goods are attractive to immigrants and creative workers.
People in the cities of ideas are less involved with traditional American institutions than residents of slower-growing regions, but they are more interested in other places and cultures, the Statesman’s study of polling done from the mid-1970s through 1998 found.
Meanwhile, ethnic groceries, restaurants, churches and social organizations provide amenities that allow foreign business founders to remain connected to their native cultures, Flauto says. The university, in turn, graduates a steady stream of inventive people who now have the choice to begin a business in Austin, he says.
This cycle has helped Austin and a handful of other creative cities attain a patina of success that immigrants recognize, says Angelos Angelou, formerly a foreign exchange student from Greece whose great ambition was to succeed in the United States.
Angelou, the former head of economic development for the City of Austin, took his expertise private when he started Angelou Economics, a company that focuses on economic development in the field of technology.
“Austin has become one of the few places in the country where people come to live by choice, for all it has to offer,” Angelou says. “From the immigrant point of view, if you smell success this is the place for you. Austin is such a place.”
For all of this change, there is a constant. Freedom is the most necessary ally of invention. Just months after Belady earned his master’s degree in aeronautical engineering from Budapest Technical University in 1956, the democrats and patriots of Hungary rose up to challenge the Soviet Union in Hungary. The Soviets rolled tanks through Budapest, killing thousands and driving 200,000 Hungarians out of their country.
When Hungary was freed with the fall of the Communists, Belady returned to help businesses get started. He joined the Hungarian Academy of Sciences. He bought a house in Budapest.
His home, however, is in the United States. Austin has become a kind of symbol of the reason Belady came and the reason he believes Austin has such a promising future.
“Any meaningful process, any inventive process is the work of the individual,” he says. “Most people, myself included, invent better, create better in places like this. I’m an individualist; that is why I love this country.”
What is your opinion? Tell The Progress Report!