No Brains = Brain Drain

"The University of Chicago economist and Nobel laureate Robert Lucas declared that the spillovers in knowledge that result from talent-clustering are the main cause of economic growth. Well-educated professionals and creative workers who live together in dense ecosystems, interacting directly, generate ideas and turn them into products and services faster than talented people in other places can. There is no evidence that globalization or the Internet has changed that. Indeed, as globalization has increased the financial return on innovation by widening the consumer market, the pull of innovative places, already dense with highly talented workers, has only grown stronger, creating a snowball effect. Talent-rich ecosystems are not easy to replicate, and to realize their full economic value, talented and ambitious people increasingly need to live within them. 

Big, talent-attracting places benefit from accelerated rates of “urban metabolism,” according to a pioneering theory of urban evolution developed by a multidisciplinary team of researchers affiliated with the SantaFe Institute. The rate at which living things convert food into energy—their metabolic rate—tends to slow as organisms increase in size. But when the Santa Fe team examined trends in innovation, patent activity, wages and GDP, they found that successful cities, unlike biological organisms, actually get faster as they grow. In order to grow bigger and overcome diseconomies of scale like congestion and rising housing and business costs, cities must become more efficient, innovative and productive. The researchers dubbed the extraordinarily rapid metabolic rate that successful cities are able to achieve “super-linear” scaling. “By almost any measure,” they wrote, “the larger a city’s population, the greater the innovation and wealth creation per person.” (Emphasis Mine.)

The quote is from page 2 of a fascinating article written by Richard Florida in this month's The Atlantic. The author's previous article in that magazine was about the clustering of the "educational elite" in fewer cities than before, a trend he saw as having an enormous economic impact. I read that article back in October 0f 2006 and discussed its findings and reasoning with several colleagues. With the current economic crisis, the ability to overcome downturns is paramount, and sadly, it's an ability Puerto Rico has long declined to develop.

Anyone who spends at least a day in Puerto Rico doing business will encounter the two-word poem "brain drain." That it has been a staple of Our vocabulary since the 1960s will tell the person that We have been lugging that particular baggage for a very long time. Simply put, "brain drain" has kept Us from taking advantage of Our best resource--almost certainly Our only world-class resource--and thus We have allowed Our economy to stagnate rather than to innovate.

What "brain drain" represents is not just the exodus of educated people, it represents major failures in three distinct areas:

1) Education: Obvious, but not really understood. Highly-educated people are often highly-mobile as well. Puerto Rico failed to develop its educational system to keep people on the Island and to attract highly-educated people from other places. The universities in the U.S. of part of A., England, Germany and other countries are magnets for talent. Our schools and universities are more often magnets for thieves.

2) Politics: Hypocrisy about education and the economy has dominated Our politics for six decades. The next politician who spouts that "Children are Our future" should be shot in the present. Year after year, since the mid-1960s, politicians of every stripe have consistently acted to undermine, sabotage and ruin Our educational system by seeing it as simply another political playing field, where the whims and prejudices of "ideology" mean much more than respect for Our future. And constant kowtowing to Uncle Sam's wallet has caused Us to switch Our focus from Our brains to his butt.

3) Law/Regulations: As I write this, the legislature is spewing another flurry of bills aimed at adding regulations and permits to a wide range of products and businesses, from cell phones and MP3 players to inflatable playhouses and beauty salons. The average start-up period in Puerto Rico is amongst the longest in any democracy, and is actually longer than some former Soviet satellite nations. And to top it off, the tax structure is about to become a bigger burden as these same vermin cough up more bills to try to sustain their cancerous leech-hold on Our wallets.

Take these three failures as a group and you have an economy that (a) disrespects talent and knowledge (of course it does: politicians lack both),  (b) strangles business owners with red tape and unnecessary costs, (c) which in turn denies innovation and (d) thus impedes growth.

The opposite of what Richard Florida discusses in his two articles.

The best level of comparison between Puerto Rico and the U.S., based solely on numbers, is not "P.R.-State" but "P.R.-City." Our size has much more in common with the average U.S. city than with any State, and by that token, Puerto Rico's roughly 4.01 million people would rank as the second-largest city in the U.S. Now I ask you, My Fellow Puerto Ricans, would you rather be second-largest or 49th of 51? And shouldn't We really be measured by Our people rather than by Our landmass?

We should. But We haven't cared about "Us as a whole" more than some people have cared about "Us as a group." And so, despite a population density that favors the kind of highly-connected economic hub that Richard Florida describes, despite a hybrid sociopolitical standing straddling two languages and two continents, despite a workforce that evolved into one anchored in high education, despite being the center of economic attention for two decades and hell, despite having gorgeous weather and warm sandy beaches galore, We are now on the level of an average small city in the U.S., a Tupelo or Titusville, wondering where "they" are going, wondering what will happen to Us and trying to understand what happened to get Us into this mess.

I don't know about Tupelo or Titusville, but I just told you about Puerto Rico.

The Jenius Has Spoken.