Voices of Digital Communities

How Communities Can Beat the Jobless Recovery

Today, in your community, you and your fellow citizens can do something to begin taking the “jobless” out of recovery.

by / September 26, 2011

It is a sign of things to come.  According to a June 2011 study from the McKinsey Global Institute, the “jobless recovery” may be America’s new reality.  From the end of the last World War through the 1980s, it took an average of 6 months for employment to recover from recession.  But after the 1990-91 downturn, it took 15 months.  After the “dotcom recession” of 2001, it took 39 months.  If recent trends continue, it could take 60 months -- five years -- for employment to recover from the 2008-10 recession.

Other industrialized nations experience the same pressures.  But because they tend to protect employment more, things play out differently.  In Europe and Japan, high unemployment is concentrated among the young, whose entry into the job market can be delayed for years, and among temporary workers, who make up an increasing percentage of the workforce. 

What’s going on?  Blame is on the changes wrought by information and communications technology (ICT).  Another McKinsey Global Institute study, on the Web’s economic impact, claims that the Internet was responsible for destroying 500,000 jobs in France over the past 15 years while creating 1.2 million new jobs. That’s a good deal for the economy as a whole.  But here’s the thing: the people who worked in those half-million former jobs are not necessarily working today in one of those million-plus new jobs.  They may not have had the skills.  They may not have wanted to relocate.  They may have been seen, and seen themselves, as too old.

ICT has created a global marketplace and is helping us do everything faster, cheaper and better.  But the changes it creates, both positive and negative, are coming so fast that we struggle to keep up.  The McKinsey study of employment estimates that, by 2020, the US will be short 1.5 million university graduates that it needs to fill high-skilled positions.  Nearly 6 million Americans without a secondary school diploma, however, will be jobless. Already today, sixty-four percent of companies interviewed by McKinsey had positions open for which they could not find qualified candidates. 

And it is not just in the industrialized world.  China faces talent shortages, according to executives interviewed by a March 2011 survey.  Over three-quarters expect to increase hiring this year but the same percentage expected it to be hard to recruit top talent, citing a skills shortage in new graduates.  India is in the same boat, despite graduating hundreds of thousands of engineers each year.

So here’s a question: what can you do about it at the level where it counts, the level of the community where you live and work? 

The single most important thing, from our study of Intelligent Communities, is to get your academic community deeply involved with local businesses and institutions.    Whether they are universities, community and technical colleges or secondary schools, they are the local talent factories.  They can only prepare students for the future if they understand that future on a gut level.  And the information they need resides inside the employers of your community.

It is not easy to bring these players to the same table and foster real and deep collaboration.  But the payoff can be extreme.  In Arlington County, Virginia, they have identified the “government-industry-university innovation triangle” as essential to their economy, but also engage secondary school students in structured and intensive internships with local organizations to immerse them in local job opportunities.  In Eindhoven, Netherlands, they call it the “triple helix” and have set themselves to create and maintain the world’s most talented workforce in the specific fields their industries require.  In Suwon, South Korea, government has driven the formation of dozens of research institutes that unite business and universities to accelerate innovation.  In the process, they vacuum up talented students while enriching the curricula of the universities.

If your local educational institutions are not sitting at the economic development table, it is worth a lot of effort to get them there.  We have big, global economic challenges right now, and can only hope that our national leaders are equal to them.  But today, in your community, you and your fellow citizens can do something to begin taking the “jobless” out of recovery

Robert Bell Co-founder of the Intelligent Community Forum

Robert Bell is co-founder of the Intelligent Community Forum, where he heads its research and content development activities. He is the author of ICF's pioneering study, Benchmarking the Intelligent Community, the annual Top Seven Intelligent Communities of the Year white papers and other research reports issued by the Forum, and of Broadband Economies: Creating the Community of the 21st Century. Mr. Bell has also authored articles in The Municipal Journal of Telecommunications Policy, IEDC Journal, Telecommunications, Asia-Pacific Satellite and Asian Communications; and has appeared in segments of ABC World News and The Discovery Channel. A frequent keynote speaker and moderator at municipal and telecom industry events, he has also led economic development missions and study tours to cities in Asia and the US.