Menus Subscribe Search

Burgh Diaspora

dubuque

Downtown Dubuque, Iowa. (Photo: Dirk/Flickr)

Move to Dubuque, Not San Francisco

• January 14, 2014 • 3:31 PM

Downtown Dubuque, Iowa. (Photo: Dirk/Flickr)

In Silicon Valley, the cost for talent is too high—and climbing. Will smart technology companies start moving to smaller markets? Behold the brave new economic geography.

The Innovation Economy is dying. And by that I mean the economy centered in Silicon Valley is converging. And by that I mean the cost for talent is too damn high. Looking under rocks in Dubuque, Iowa:

Dubuque was a city on a downward spiral. With the collapse of the farm economy in the 1980s, the city watched as the Dubuque Packing Co. closed up shop, and then as John Deere—still the city’s largest single employer—sliced its workforce by about three-quarters from its peak. Everyone in town, it seemed, either lost his job or had a relative who had. All told, Dubuque lost 10 percent of its population.

Then IBM moved into an empty Depression-era department store. The shoppers who had once filled its nine stories had long since taken their business elsewhere. The morbid joke locals tell about downtown was that it was so dead, you could shoot a cannon down Main Street and not risk hitting anybody. …

… When the IBM project surfaced, Dubuque was able to convince the company that its culture of working together to identify and rectify problems wasn’t just happy talk, but something the company could rely on. When IBM expressed concern about the local talent pool, Greater Dubuque downloaded and printed off 600 relevant resumes aspirants had put in its job-search database. During an early conference call, the city gathered nearly two dozen individuals from both its own agencies and the private sector to answer any questions the company might have. One of its competitors in the South, by contrast, had the mayor handle the call by himself on a cellphone with spotty service.

Emphasis added. Thanks to its manufacturing past, Dubuque has a talented workforce that is relatively cheap. That’s true for a lot of legacy cities from Springfield, Massachusetts, to Muncie, Indiana. The industrial wealth meant well-educated children who had the wherewithal to get far, far away did exactly that.

Dubuque’s reversal of fortune isn’t news to me. In 2009, the IBM-to-Dubuque deal was a sensation in the ephemeral way that social media has redefined stories years in the making into a lucrative weekend trip to Las Vegas. Dubuque wasn’t an instant success, but an indicator of a larger trend:

Dubuque, Iowa (population 57,000) is wooing and close to landing a 1,300 person IBM IT facility. They are offering $52 million in incentives but that is not interesting part. Look at how they approach the issue of workforce availability. …

… The truth of the matter is that most of the big ICT players in North America from Microsoft to Google to IBM (don’t forget RIM) have been putting large facilities in relatively small markets in recent years. This goes a bit counter to traditional cluster theory but the logic is actually quite simple. These large firms do in effect ‘raid’ top talent from other smaller ICT companies in these communities.

How did Dubuque approach workforce availability? It wasn’t the surplus of prospective applicants referenced in the first story cited above. Unfortunately, the Internet ate the newspaper article that explains. Luckily, I archived it:

The proposed International Business Machines Corp. project is so large and the company so well-known that IBM plan proponents believe information technology workers and students in a 100-mile radius around Dubuque are well within reach.

In addition to the local colleges, the University of Wisconsin-Madison, the University of Iowa and the University of Northern Iowa fall into that region.

With the ongoing recession pushing national unemployment rates ever higher, Greater Dubuque officials believe that the IBM jobs could draw workers from as far as Des Moines, Omaha, Neb., the Twin Cities, Milwaukee and Chicago.

Iowa Workforce Development data found that there are 22,000 potential information technology workers in that 100-mile radius around Dubuque, a figure that didn’t surprise City Manager Mike Van Milligen.

Behold the brave new economic geography. The game in San Francisco is an upward spiraling ping-pong match between higher priced real estate and talent. The safety valve is Dubuque. The talent cache for Dubuque is just as good, if not better, than the one attracted to Greater Silicon Valley. It’s also much cheaper. Smart companies such as IBM are cashing in on the geographic arbitrage. You should, too.

Jim Russell

A weekly roundup of the best of Pacific Standard and PSmag.com, delivered straight to your inbox.

Recent Posts

September 1 • 1:00 PM

Television and Overeating: What We Watch Matters

New research finds fast-moving programming leads to mindless overeating.



September 1 • 6:00 AM

Why Someone Named Monty Iceman Sold Doogie Howser’s Estate

How unusual names, under certain circumstances, can lead to success.



August 29 • 4:00 PM

The Hidden Costs of Tobacco Debt

Even when taxpayers aren’t explicitly on the hook, tobacco bonds can cost states and local governments money. Here’s how.


August 29 • 2:00 PM

Why Don’t Men and Women Wear the Same Gender-Neutral Bathing Suits?

They used to in the 1920s.


August 29 • 11:48 AM

Your Brain Decides Whether to Trust Someone in Milliseconds

We can determine trustworthiness even when we’re only subliminally aware of the other person.


August 29 • 10:00 AM

True Darwinism Is All About Chance

Though the rich sometimes forget, Darwin knew that nature frequently rolls the dice.


August 29 • 8:00 AM

Why Our Molecular Make-Up Can’t Explain Who We Are

Our genes only tell a portion of the story.


August 29 • 6:00 AM

Strange Situations: Attachment Theory and Sexual Assault on College Campuses

When college women leave home, does attachment behavior make them more vulnerable to campus rape?


August 29 • 4:00 AM

Forgive Your Philandering Partner—and Pay the Price

New research finds people who forgive an unfaithful romantic partner are considered weaker and less competent than those who ended the relationship.


August 28 • 4:00 PM

Some Natural-Looking Zoo Exhibits May Be Even Worse Than the Old Concrete Ones

They’re often designed for you, the paying visitor, and not the animals who have to inhabit them.


August 28 • 2:00 PM

What I Learned From Debating Science With Trolls

“Don’t feed the trolls” is sound advice, but occasionally ignoring it can lead to rewards.


August 28 • 12:00 PM

The Ice Bucket Challenge’s Meme Money

The ALS Association has raised nearly $100 million over the past month, 50 times what it raised in the same period last year. How will that money be spent, and how can non-profit executives make a windfall last?


August 28 • 11:56 AM

Outlawing Water Conflict: California Legislators Confront Risky Groundwater Loophole

California, where ambitious agriculture sucks up 80 percent of the state’s developed water, is no stranger to water wrangles. Now one of the worst droughts in state history is pushing legislators to reckon with its unwieldy water laws, especially one major oversight: California has been the only Western state without groundwater regulation—but now that looks set to change.


August 28 • 11:38 AM

Young, Undocumented, and Invisible

While young migrant workers struggle under poor working conditions, U.S. policy has done little to help.


August 28 • 10:00 AM

The Five Words You Never Want to Hear From Your Doctor

“Sometimes people just get pains.”


August 28 • 8:00 AM

Why I’m Not Sharing My Coke

Andy Warhol, algorithms, and a bunch of popular names printed on soda cans.


August 28 • 6:00 AM

Can Outdoor Art Revitalize Outdoor Advertising?

That art you’ve been seeing at bus stations and billboards—it’s serving a purpose beyond just promoting local museums.


August 28 • 4:00 AM

Linguistic Analysis Reveals Research Fraud

An examination of papers by the discredited Diederik Stapel finds linguistic differences between his legitimate and fraudulent studies.


August 28 • 2:00 AM

Poverty and Geography: The Myth of Racial Segregation

Migration, regardless of race, ethnicity, gender, or sexuality (not to mention class), can be a poverty-buster.


August 27 • 4:00 PM

The ‘Non-Lethal’ Flash-Bang Grenades Used in Ferguson Can Actually Be Quite Lethal

A journalist says he was singed by a flash-bang fired by St. Louis County police trying to disperse a crowd, raising questions about how to use these military-style devices safely and appropriately.


August 27 • 2:00 PM

Do Better Looking People Have Better Personalities Too?

An experiment on users of the dating site OKCupid found that members judge both looks and personality by looks alone.


August 27 • 12:00 PM

Love Can Make You Stronger

A new study links oxytocin, the hormone most commonly associated with social bonding, and the one that your body produces during an orgasm, with muscle regeneration.


August 27 • 11:05 AM

Education, Interrupted

When it comes to educational access, young Syrian refugees are becoming a “lost generation.”


Follow us


Subscribe Now

Your Brain Decides Whether to Trust Someone in Milliseconds

We can determine trustworthiness even when we’re only subliminally aware of the other person.

Young, Undocumented, and Invisible

While young migrant workers struggle under poor working conditions, U.S. policy has done little to help.

Education, Interrupted

When it comes to educational access, young Syrian refugees are becoming a “lost generation.”

No, Smartphone-Loss Anxiety Disorder Isn’t Real

But people are anxious about losing their phones, even if they don’t do much to protect them.

Being a Couch Potato: Not So Bad After All?

For those who feel guilty about watching TV, a new study provides redemption.

The Big One

One in two full-time American fast-food workers' families are enrolled in public assistance programs, at a cost of $7 billion per year. July/August 2014 fast-food-big-one

Copyright © 2014 by Pacific Standard and The Miller-McCune Center for Research, Media, and Public Policy. All Rights Reserved.