Florida or Kotkin?

Christian Gibbons who initiated the concept of Economic Gardening in Littleton, Colorado asked his email group of ED people

“Interesting article in The American Enterprise (July / August 2005) by Joel Kotkin. For those of you following the Richard Florida / Joel Kotkin debate, you know that Florida favors creative urban environments and Kotkin argues for low cost places to do business, among other things.

What’s interesting about this article is that Kotkin points out that the upper plains states (NE, ND, SD, IA) have the highest scores in national tests, the highest number of students taking upper level courses, the highest graduation rates and the highest percent in college.

This is not new info, but Kotkin argues there is a new movement called “home shoring” (as opposed to off shoring). Some quotes:

“For generations, much of the educated young talent from the Great Plains and the Mountain West has bled away to more promising locales on the coasts or to large regional centers like Dallas, Chicago, Denver or Minneapolis. For the most part these migrants never returned.”

“But that’s now beginning to change. Remarkable young people more often stay or come home again. Others, including some immigrants from abroad as well as families fleeing the crowded coastal regions, are heading into these new comfortable economic hotbeds, bringing with them fresh energies and ideas, and an appreciation for the wholesome values that people in these places hold dear.”

“A backlash against overseas “help” desks, with which many Americans have had unhappy experiences, is demonstrated by a little-known decision by Dell Computers. One of the early pioneers of off shoring, Dell recently home shored its business-tech support center to Twin Falls, Idaho. Many other similar operations have been set up in the vast, largely uncrowded, low-cost “Mormon belt” which runs from Boise down to the Utah heartland.””

Several people weighed in on the subject. Here was my response to Wayne Pantini who very nicely mentioned my book in a positive light during the discussion.

Wayne: Thanks so much for mentioning my book. I published it in 2004 after spending 3 years researching what I and a number of other researchers see as a third wave of migration back to small towns. I call them agurbs®, but people like Rich Karlgaard, publisher of Forbes calls them the booming boonyacks. My book focuses on towns below 52,000, while his Life 2.0 is geared more toward towns of 50,000 to 100,000.

Currently, I’m having a ball traveling around the USA touring incredible towns and giving talks on the vibrancy of small town America. By the end of this year I’ll have been to almost 200 towns in almost 40 states, seeing some awesome towns. An example is David Myers of Ponca City, OK who has posted in this email thread. He is doing some incredible work in transforming a “one horse town” completely dominated by Conoco Oil into a thriving, diversified place.

I’ve read both of Florida’s recent books and also Kotkin’s city book and several of his recent articles. I have to tell you that I initially was very impressed with Florida’s work, but the more that I’ve seen as I’ve traveled around the country and looked more deeply into his top cities, the more that I come down on Kotkin’s side.

Let me give you a couple of quick examples: If you take Florida’s top 50, Karlgaard’s top 50 and my top 100 towns and look at what has happened in their populations from the 2000 census until the most recent estimate done in 2004, you find that Florida’s grew by only 1.9%, Karlgaard’s by 2.7% and mine by 7.0%. Most interesting is that both Florida’s and my towns with populations from 50,000 to 100,000 grew the fastest with Florida’s growing at 4.1% and mine at 11.1%.

Another interesting comparison for me was to look at Florida’s big cities. His top 10 big cities that were hip and happening actually grew slower than his bottom 10 big cities from 2000 to 2004.

My take is that we are in the midst of what Karlgaard calls the “cheap revolution” and that the cities that are hip and happening are pricing themselves out of the market, driving those who want to settle down and start families out of town. I’m seeing it in virtually every town that I visit. Entrepreneurs are cashing out of the high cost cities and returning to their roots to start new businesses. Technology is allowing them to start operations in out of the way places that wouldn’t have been feasible even a few years ago. Examples are: Home Movies.com in Winthrop, WA (population 300); Dakota Cabin Quilts.com in Hettinger, ND (population 1,300); and Bless My Bloomin Cookies.com in Enderlin, ND (population 947). Each does their business over the internet, focusing way beyond their community’s normal trade zone. There are numerous other examples that I’ve found which I report on daily on my daily blog (http://boomtownusa.blogspot.com/).

One final comment is that I often counsel towns to push their young people out of the nest, encouraging them to move to Austin, SF, NYC or some other hip city when they are young. But, when the time comes for them to settle down, raise a family and perhaps start a family, don’t forget to come back home. And, by the way, bring another entrepreneurial friend with you.