They say who you know is as important as what you know. But University of Maine economist Todd Gabe has turned this slogan on its side. His research is based on the premise that what you do is a reflection of what you know. What you know is as important as how much you know. And all of this is as important as — and can dictate — where you are.
Knowledge isn’t just a factor that drives the economy, it is the economy, say Gabe and his colleagues in their recent “Knowledge in Cities” study, released by the Federal Reserve Bank of New York and the Martin Prosperity Institute.
While many reports point to educational attainment as an indicator of a region’s economic activity, that’s only part of the picture. Gabe, whose recent work includes collaborations with creative economy guru Richard Florida’s think tank, argues that the types of knowledge people possess are as critical as the percentage of college graduates in a given area.
“With the shifting economy, all you hear is, ‘You need a well-paying job. You need a college degree.’” Gabe says. “This goes beyond that. Maybe not all degrees and types of cognitive skills are created equally.”
The median salary for a recent engineering graduate is about $25,000 more annually than that of a liberal arts major, according to an annual survey by UMaine’s Office of Institutional Studies. The skills a marine biologist needs to graduate are far different from those required by a fine arts major. And there are certain well-paying occupations — plumbing comes to mind — that don’t require a college degree at all.
To complicate things even further, two regions may have a comparable percentage of residents with college degrees, but those places may have very different strengths. There’s a reason why aspiring actors flock to Los Angeles or New York City and software geniuses move to Silicon Valley.
By using new occupational data — and redefining traditional measures of human capital — Gabe’s research on the knowledge economy is changing the way people view regional economic activity.
“Todd Gabe is among the most facile people in the world in handling occupation data and relating that to regional economic outcomes,” says Florida, director of the Martin Prosperity Institute at the University of Toronto and author of The Great Reset and The Rise of the Creative Class. “His work is providing a serious, economic investigation into the value of occupations on economic output.”
To give a clearer picture of how the skills of a region’s workforce affect economic development, Gabe and his colleagues Jaison Abel, Adrienne Ross and Kevin Stolarick created regional knowledge profiles in their “Knowledge in Cities” report. There are Making Regions, such as the manufacturing hub of Detroit, Mich., and there are Teaching Regions, such as the college town of Athens, Ga. Portland, Maine, counts as a Thinking Region because people there have high knowledge about the arts, humanities, IT and commerce.
“This work gives regions an idea of the strength of their niche in the economy and how it contributes to productivity and economic activity,” Gabe says.
Image Description: Occupations Attract