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How Midsize American Cities Can Leverage ‘Brain Gain’ From Larger Cities Post-Pandemic

How can business owners in cities with an influx of new residents take advantage of the 2020 "brain gain"?

2020 HAS SERVED as a significant inflection point in America, mostly due to the coronavirus pandemic that has plagued the country since early spring.

We will all look back on the incredible challenges we’ve had to overcome individually and as a society: the immense hurt from losing hundreds of thousands of fellow Americans, entrepreneurs and employees losing their businesses and jobs, and the social isolation the pandemic has wrought on us in so many ways. But some positive may come out of it as well.

“Brain drain” and “brain gain” have in the past generally been used to identify the shift of highly trained and intelligent people from one country or region to another.

But according to data from USPS, nearly 16 million Americans have relocated during the pandemic, with many moving away from larger cities and metropolitan areas to less densely populated areas due to a number of factors. I expect these factors include people wanting more personal space in case of more lockdowns, slowing down the pace of their lives and looking at what truly matters, as well as the greater acceptance of remote work allowing people not to be chained to office desks. Brain drain and gain are now aptly describing this shift from one city to another.

According to the USPS data, of the cities that have experienced brain drain the most, New York City and the outer borough of Brooklyn hold the top spot. This area saw an exodus of a combined 153,984 people as of July 31. Chicago saw 31,347 people leave the area, while San Francisco and Los Angeles saw 27,187 and 26,438 people leave, respectively.

To where are these people relocating? The majority of them have planted new roots in the suburbs of Houston and Dallas. Others have left for midsize cities such as Austin, Texas; Denver; Atlanta; Seattle; and Charlotte, North Carolina.

Many of those relocating likely have the ability to do so for a number of reasons — they could be entrepreneurs or employees high enough up on the professional ladder that they are entrusted to be able to work remotely. Conversely, they may be just getting started in their careers but haven’t yet established roots in one city or another. Many may be on the younger end of the spectrum, possibly without kids to care for, or even without a partner or spouse. In other words, these populations likely consist of innovative and highly skilled talent, potentially with a lot of disposable income and with the freedom to take a chance.

While larger metropolitan areas like New York, Chicago and Los Angeles are losing their residents, the opportunities for less densely populated areas and midsize cities are vast — only if properly identified. And as more younger folks, Gen Zers and Millennials, leave these large metropolitan areas for smaller cities, we will likely continue to see more accelerated change and growth in these areas.

How can these cities with an influx of new residents best take advantage of this brain gain?

There are a number of steps business and civic leaders can take to cultivate this talent.

First, cities should invest heavily in leveraging this new talent and convergence of fresh ideas by implementing startup incubators and accelerators. Some cities are already ahead of the curve. Austin, a hub for entrepreneurs and startups, is the home of both Capital Factory, which pairs Texas’ best entrepreneurs with investors, mentors, employees, and customers; and SKU, an accelerator for innovative startups, including early stage consumer product companies, such as consumer packaged goods (CPG).

Other cities also offer similar programs. Whether they already exist or not, midsize cities experiencing brain gain should aim to turbocharge these programs now. If they’re not already doing so, I believe they should begin heavily marketing toward these new residents through social channels, such as Instagram and Facebook, through ad campaigns or contests through which talent can pitch their ideas, perhaps in a “Shark Tank”-type fashion.

These accelerators and incubators should also begin actively scouting new talent in the same way record label A&R reps scout musicians — by going into the community, whether that consists of venturing into the digital ecosystem or in-person events (post-pandemic, of course).

For instance, in a Lyft or Uber to the airport, talk to your driver. Perhaps, they have the next big idea for a tech startup. At your local restaurant or bar? Talk to the bartender or server. Most likely these are younger individuals who may have just moved to the area and are looking to plant their roots.

City governments should seek to increase their programs and funding earmarked specifically for entrepreneurs, as well. This can be through grants, low-interest small business loans, and other ways of financially incentivizing entrepreneurs and skilled talent to operate in a lower-risk environment. This funding can be made direct to startup entrepreneurs and be designated to those nongovernmental or commercial entities or programs nurturing and cultivating talent themselves.

Marketing departments for these cities can ensure local CPGs proudly emblazon their city’s name on their packaging, in the same way that you will often see “Produced in Austin, Texas” on a bottle of Tito’s Handmade Vodka or “AU*TX” on a can of Rambler Sparkling Water, for instance. This helps create a culture of pride in the city and helps reach other startups and entrepreneurs who want to belong to the same in-crowd.

Also, do not forget the importance of angel investors and venture capitalists. Make sure you are equally fostering relationships with them. Angel investors and VCs are generally very savvy with regard to scouting talent themselves.

For businesses, recruiters and human resources professionals should seek to host virtual or in-person career fairs, obtain referrals or leads from trusted partners such as Indeed or Glassdoor, market their companies on LinkedIn or Medium, offer competitive salaries and benefits, and provide employee training to nurture talent along the way.

Every crisis America has ever endured and overcome has led to new advancements within our society. 2021 and beyond will offer business leaders and civil servants new opportunities to grow private business sectors, but only if they get in front of it now to properly shepherd it with excitement and foster a greater sense of community spirit, development and partnerships.


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