Economic development researchers Richard Florida and Jon Roberts see opportunities for growth in Delaware as long as residents and leaders recognize that the economy has changed forever.
Both spoke today at the EDiS Institute, an economic and industry update event that is held every two years by the Wilmington-based construction and development firm.
Proceeds benefit vocational-technical education in the state.
One key is finding places to live and mingle for the new generation of workers staffing technology and other companies, Roberts said.
Delaware and other states are already seeing a “massive disruption in the number of workers and the skill sets they require,” Roberts noted. This disruption has been accompanied by a tightening labor market.
Roberts’ firm, TIP Strategies has been hired by the Delaware Business Roundtable to draft a report on the economic future of the state.
“We can’t think of Delaware as an island,” Roberts said scoffing at notions that the state should worry about Philadelphia or other areas poaching jobs.
Roberts said, Delaware, a state with its share of suburban sprawl needs communities that attract young workers who are developing technology that is disrupting all areas of the economy. He pointed to the Philadelphia Navy Yard and other developments spring up in Las Vegas, Austin, TX and other areas as an example of trends taking place.
The Navy Yard has already attracted DuPont spin-off Axalta, DuPont’s former automotive coatings business.
Roberts said the 2008 and 2009 recession changed the composition of the labor force in Delaware and elsewhere and warned against efforts to try to return to past glories. “It was a reset of our entire economy,” he says. Manufacturing jobs have gone away and are not coming back, he added.
Roberts’ thoughts on Delaware not being an island were echoed by Gov. Jack Markell. Markell pointed to the state’s $1 million investment in additional rail service to Philadelphia as a factor in the decision by JPMorgan Chase to add, 1,800 jobs in the state.
Markell went on to highlight strong job growth in the Delaware economy, but added that investments will continue to be required in education to prepare the current and future workforce for an economy with frequent disruptions.
The governor went on to take a not-too-subtle shot at Republican front-runner Donald Trump’s hardline immigration stand, claiming that too many people see the issue as a “zero-sum” game that calls out for a wall.
Markell pointed to the owner of a Georgetown-based radio station group who came to this country from Ecuador and now employs 30 people.
Attending the event were students from the state’s vocational-technical high schools. One of the reasons for the formation of Institute was the looming shortage of skilled tradespeople as Baby Boomers and younger people retire.
Richard Florida, an author, professor, consultant and entrepreneur, said Delaware needs to turn away from the view that bringing companies to the state will bring jobs. Instead, the emphasis has to be on an environment that will attract job.
The former professor at Carnegie Mellon University in Pittsburgh said he learned the lesson first-hand when a fast-growing home-grown technology company moved out of the city to Boston. This came despite Massachusetts’ status as a high-tax state. He now resides in Toronto.
The reason for the move was Boston’s workforce and its amenities, Florida said.
Florida said the economy is now being driven by the “creative class” that is clustered in places like Boston and San Francisco.
“Our minds have become our means of production,” Florida said.
Florida said Delaware is in good shape in the size and strengths of its creative class.
“We’re not talking about hipster amenities,” he said of desirable places to live that have vibrant music, entertainment and arts scenes.
Winners in the current environment will be areas that can best unleash human creativity, mentioning the success of craft breweries like Milton’s Dogfish Head and Chester County’s Victory Brewing.
The big opportunity comes in the low-paid area of service jobs. “Those jobs can be turned into creative jobs,” with higher pay, Florida said. He points to Las Vegas-based online shoe retailer Zappos and the energy inside its wall.
According to Florida, Delaware is lucky to being the leader among the 40 mega regions” in the world that are centers of economic and social activity. The state also has the advantage of having creative center in tourism-oriented Rehoboth Beach.
Smaller cities can also excel, he added pointing to Ann Arbor, MI; Boulder, CO and Madison, WI. All have world-class universities and vibrant start-up communities.
Northern Delaware has a big advantage in attracting the creative workforce, thanks to rail access to major cities and affordable housing stock.