US tech jobs bypass metro Detroit and new report explains why

John Gallagher | Detroit Free Press

Sandy Baruah, CEO of the Detroit Regional Chamber, this month called metro Detroit's lagging educational attainment our "flashing red light" in an otherwise upbeat State of the Region report.

I'd like to go Sandy one better here. Metro Detroit's sluggish educational achievements are our flashing red light accompanied by alarm bells, klaxons, whistles, sirens and every other kind of warning signal.

We've had plenty of indicators before that southeast Michigan badly lags leading metro regions in producing graduates capable of meeting the demands of modern life. Most recently, Amazon denied metro Detroit a spot on its short list of candidates for its second headquarters, citing an insufficient talent pool here.

Many have rightly criticized Amazon's headquarters search as largely a scam, and the $4 billion in tax incentives that Detroit and Michigan offered as part of our bid for Amazon's HQ2 to be way over the top. But you don't have to agree with that criticism to see that Amazon's critique of our talent pool was painfully correct.

This uncomfortable truth jumped out at me again in recent days in the pages of a new report called "The Case for Growth Centers: How to spread tech innovation across America," from the Brookings Institution and the Information Technology and Innovation Foundation (ITIF) think tanks in Washington, D.C.

The point of the Brookings report is not education itself but the location of tech jobs in America. The report laments the "winner-take-all" economy in tech where five metros in the U.S. — Boston, San Francisco, San Jose, Seattle, and San Diego — accounted for more than 90% of the nation’s innovation-sector growth during the years 2005 to 2017.

Indeed, those five metros have snagged 90% of all the new technology jobs in recent years, too. Meanwhile, hundreds of other cities have gained few tech jobs or even lost some, as in the case of metro Detroit, which actually saw a slight loss in the number of technology related jobs here between 2005 and 2017.

The authors of the Brookings report call for a far-reaching federal program to build up the tech talent base in 10 to 12 other metros. He suggests that a high-level competition be held among the most likely 35 areas, including metro Detroit, for such a program.

That's an interesting idea. But what really jumped out at me from the data cited is how poorly metro Detroit fares in educational attainment compared with the 34 other metros cited in the report's list of the most likely candidates for tech gains.

Metro Detroit ranks second highest in population on that list, behind just Chicagoland, and the number of patents per 100,000 residents is quite respectable here, ranking sixth out of 35 metros. That's no doubt because of the auto industry and its numerous mobility related innovations.

But when it comes to our educational achievement, it's gloomy. Our percentage of residents with a bachelor's degree, 31.1% in 2015, ranked 28th out of the 35 metros, trailing places like Minneapolis-St. Paul (41.7%), Portland, Oregon (40.3%), and Albany, New York (37.2%).

That's a problem. "There’s no doubt that weak educational attainment, and a thin STEM worker pool, will hold the metro back," Mark Muro, a senior fellow at Brookings and one of the authors of the report, told me in an email. "Almost nothing predicts regional tech strength and income levels (better than) BA attainment, and technical degrees."

Then, too, only 3.4 residents of southeast Michigan residents out of each 100,000 hold doctoral degrees in science, technology, engineering or math. That ranks 29th out of 35, and compares unfavorably with 80.8 per 100,000 in Madison, Wisconsin, 24 per 100,000 in Akron, Ohio, and 23.6 per 100,000 in Knoxville, Tennessee.

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And the percentage of metro Detroit's jobs that can be classified as "innovation sector" jobs stands at just 1.7%, ranking 25th among the 35 metro areas.

"Tens of millions of citizens are currently being seriously disadvantaged with respect to job opportunities, income possibilities, happiness or mental health outcomes simply by virtue of living in one region rather than another," the authors write.

"Such distance deprives millions of workers in the 'wrong' places from the enhanced opportunities associated with ... growth in the 'right places.' "

Clearly, the authors see the winner-take-all phenomena favoring coastal hubs as a problem for America. With technology innovation so important in our modern economy, we need more than a handful of cities to enjoy the boom in new tech jobs.

That's true. And boosting the tech success of mid-America urban regions can involve lots of different strategies.

But the pathway for metro Detroit is surprisingly clear. It is education, first and last. We've got to get better at preparing our young people for the world they'll inherit.

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep. Read more on business and sign up for our business newsletter.