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The regional talent issue

The search for talent is a region-specific problem for two reasons. First, unlike other economic factors, such as finance or knowledge, talent is relatively immobile. While commuting distances have risen considerably over the last century, labour remains highly sticky. Highly educated workers are often prepared to travel longer distances, facilitated by for instance high-speed rail and cheaper flights, but this still comes at a cost that most would prefer to minimise. What especially counts, in geographical terms, is the phenomenon of the ‘intervening opportunity’ {}. Given current technological and financial conditions, people are generally able and prepared to cover longer distances. However, when fitting work or business opportunities arise closer to home, the option with less travel time and costs is likely to be preferred. Also, people may change their place of residence to reduce the burden of commuting. More than other categories, highly educated workers are more inclined to move house {}. There is, in particular, a tendency amongst couples of highly educated workers to move to place where both partners enjoy a good labour market accessibility.

Core, peripheral and non-core regions
In time, the overall result of personal and work relocations is that innovative business and talent tend to cluster together. While there is a great diversity in commuting and moving patterns, on balance there is a drift towards the larger agglomerations, and specifically to the large urban hubs, such as London, Paris, München, etc. The outcome is a geography of slow but on-going concentration. All non-core regions are affected by this trend, although in different ways. A basic distinction is made here between three types of regions: peripheral, non-core and core or metropolitan regions.

First, across Europe, many peripheral areas suffer from population and therefore economic decline. Due to outmigration and relatively low birth rates, population densities are falling and it becomes more difficult to sustain public and private services and infrastructures. While the outflow of more talented people obviously poses a serious problem here, it remains a question to what extent such flows should, and can be stemmed or reversed. There are no ways to address, in particular, the lack of good opportunities in higher education and the labour market. Not only will such efforts be highly costly in themselves, it does actually make good economic sense to facilitate the flow of talent to places where talent is more in demand {}. Rather than aiming to attract and retain talent, therefore, these regions should pursue more bespoke strategies fitting local conditions and (affordable) opportunities. This may entail, for instance, specialising in certain forms of agriculture, leisure and tourism, improving residential conditions for the elderly and for ‘distance workers’, amongst others. This may then be accompanied by more general policies of ‘managed decline’ {Cheshire}, helping to alleviate the negative impacts of population decline and to limit, as far as possible, negative feedback effects, breaking the negative cycle between reduction in services and outflow of people.

Second, the talent issue is more critical in the urbanised areas located at a distance from the core urban conurbations. These areas are too big to survive through focused, bespoke measures, cannot afford to undergo ‘managed decline’. Yet they lack appeal and capacity to attract and sustain a sufficient level of thriving economic activities and a superior level of education and training. Here, talent is needed to stimulate innovations in companies and the public sector located in the region, but also to secure purchasing power leading to higher service levels, to strengthen social structures, and therefore to contribute to the general attractiveness and reputation of the region. If nothing is done, regions risk a negative spiral of losing highly educated people and the capacities for innovation, ranging from undertaking cutting-edge research and its commercial valorisation, to improving business practices and attuning business strategies to new opportunities arising in global value chains.

Third, core metropolitan areas are generally more attractive for young professionals, not only because of study and job opportunities, but also because of the vibrant image as opposed to many smaller cities and regions with a more provincial character.

However, there are many reasons for which certain members of this group might be interested in moving to, staying in, or coming back to ‘non-core’ regions. In addition to work opportunities, these can be social ties (family and friends), child care, outdoor activities, other amenities, the presence of a certain (e.g. less hectic) business environment or just simply the cultural identity of the person involved. At the same time, this interest might be frustrated by certain difficulties, such as a lack of possibilities for the partner to find a decent job, or an absence of certain segments in the housing market, accessibility and service provision, or (especially in cross-border situation) institutional barriers.

 

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