Publications

Many shades of gray matter: The young and the brainy flock together
- March 1, 2018: Vol. 5, Number 3

Many shades of gray matter: The young and the brainy flock together

by Mike Consol

An executive vice president from Resource Real Estate pointed out a few years ago that for the first time in human history employers are moving to where the talent is, rather than talent having to move to the employers’ locations. Indeed, is there any doubt Amazon’s search for a second U.S. headquarters is going to be a city already replete with young, bright talent?

The young and educated these days are the millennials, and they are the “most credentialed generation” to pass through young adulthood, according to a research report from The Brookings Institution, and they tend to settle in cities that offer buzz and culture. Brookings has found college-educated millennials ages 25–34 settle in the greatest numbers — at least by percentage — in Boston and Madison, Wis., cities where nearly three out of five millennials (58 percent) are college graduates. Other high-ranking cities were San Jose and San Francisco (55 percent); Washington, D.C., (54 percent); Hartford, Conn., (50 percent); and New York City; Raleigh, N.C.; and Minneapolis-St. Paul (all 47 percent).

Where the young and educated congregate, so do employers — especially in knowledge-based industries — as well as investment dollars, real estate projects and other development ventures. Cities in search of a vigorous future can take note. Many notable cities are simply not making the grade. Brookings points out that in 28 of the largest U.S. metros, fewer than one-third of millennials have college degrees, including Phoenix, Las Vegas, San Antonio, and Riverside, Calif.

CITIES THAT PERFORM

Brookings isn’t the only think tank focused on what makes cities work, so is The Milken Institute, which releases an annual index of best-performing cities based on metrics in nine categories, including growth in jobs, wages and salaries, as well as high-tech fields whose concentrations in a metropolitan area are higher than the national average. Those measurements placed Provo-Orem, Utah, at the top of this year’s list by virtue of its strong tech sector and broad-based job and wage growth. Ranked second on the Milken Institute’s Best-Performing Cities 2017 Index is Raleigh with its comparatively low business costs and thriving research and development-driven industries, followed by Dallas, which has added more than 50,000 high-skill professional, scientific and technical industry jobs during the past five years. Rounding out the top 10 are San Francisco; Fort Collins, Colo.; Sarasota-Bradenton, Fla.; Orlando; Nashville; Austin; and Salt Lake City.

Overall, six Florida and four California cities ranked among the top 25 best-performing cities — including San Jose, which was 2016’s top-performing city but dropped 10 places in 2017 to finish 11th overall.

NEW DESERT OASIS

Two of the most precious fluids in this world are oil and water, and water and oil don’t mix. Certainly not in Abu Dhabi, capital of the United Arab Emirates, where the oil is plentiful and water, the most precious of all fluids, is hard to come by in its nearly moisture-less desert. But a notion occurred to the country’s leadership: If the ground is good enough for the oil that brings the nation so much prosperity, it’s good enough for a water reserve.

Hence, the construction of an enormous desert water reserve, perhaps the world’s largest. The $435 million project consists of 315 underground reservoirs capable of cumulatively holding 6.7 billion U.S. gallons of drinking water. Here’s the visual: That is enough water to fill more than 10,000 Olympic swimming pools. It will stand at the ready as an emergency provision, one large enough to supply 1 million citizens of the United Arab Emirates with 47 gallons per person per day for three months. The country gets a mere 4 inches of rain per year, so fresh water is in exceedingly short supply. It produces its own drinking water at a desalination plant on the Abu Dhabi coast and pumps it via pipeline to the newly completed reservoir.

HOT RAILS TO EVERYWHERE

Having built 15,000 miles of high-speed rail between 2013 and 2017, China is only getting started on its mass-transit ambitions. In the construction pipeline is another $550 billion of railway development, earmarked to expand the country’s rail system by more than 90,000 miles in the next two years.

China is already home to the world’s most expansive bullet-train network, with trains whose top speed is 155 miles per hour, and its billions of new spending will extend this high-speed network even farther.

About 400 million people will have traveled by train over the Lunar New Year, also known as Spring Festival, according to a report by Bloomberg. China’s factories and offices shut down for the weeklong holiday, which unleashes the largest migration of humans on the planet. Many of the country’s 1.4 billion citizens return to their hometowns for family gatherings or, increasingly, are using the opportunity to become tourist at home and abroad. Bloomberg also notes that, while cut-rate airline prices have curtailed use of rail in other parts of the world, it is not the case in China, where train travel continues to rise. The 2017 Spring Festival saw a record 11 million trips in a single day, and for the first time more people traveled on bullet trains than conventional trains.

Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser. Follow him on Twitter @mikeconsol to read his latest postings.

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