Where Are You on the Talent Map?

Think about the companies that have relocated to the talent meccas, such as Gateway Inc., which moved its headquarters from Sioux Falls, South Dakota to San Diego. Many of the startups that we incubate at Carnegie Mellon relocate because of the perceived talent shortage in Pittsburgh. The classic example is Lycos, which was a Carnegie Mellon spin-off that was acquired by CMGI Inc. and then moved to the Boston area. Talent-rich places such as Austin and Boston are talent magnets: They attract other talented people.

2. To become talent magnets, cities must have something for everyone.

Cities differ considerably in their ability to attract and retain great human capital, and the companies that those people power. And it turns out that talent hasn't spread evenly across the landscape. It has clustered in such areas as Atlanta, Austin, Boston, Denver, Minneapolis-St. Paul, San Francisco, Seattle, and Washington DC.

Talent is flocking to three types of new-economy hot spots. First, there's the traditional, high-tech industrial complex: Silicon Valley, Research Triangle, and northern Virginia. Then there's what author David Brooks calls the "latte town": high-energy places with easily accessible outdoor amenities, such as Austin and Boulder. Finally, there are new urban technology centers cropping up, such as Pioneer Square in Seattle.

So we're seeing a trend back to urban locations that have high amenities. But that's not the only trend. I would be remiss to say that every high-tech company is going to move into a Greenwich Village or a SoMa. In high tech, more of the hardware companies tend to be located in suburban areas, while the creative-content side is located in urban areas. In the end, the regions that provide the most options will be the most successful.

3. It's not just about stock options. Talent wants job options.

New-economy workers think of their careers as portfolios of experiences. When they size up a region, the first thing that they look for is a thick labor market -- a wide variety of employment opportunities that will sustain a career in the high-tech field.

These workers say to themselves, I want a place where there are lots of opportunities, because my experience will enable me to take on many different jobs and projects. I might decide to have a long tenure at one company, but my assumption going into the job is that my connection to work is insecure and temporary -- partly because that's the nature of the new economy, and partly because I have watched my family members get laid off, and I know that corporations aren't loyal.

4. Forget the country-club set.

Talent seeks inclusivity. Cities used to think about creating places that had low barriers to entry for firms so that those companies would relocate there. In a talent-driven economy, a place makes itself competitive by creating low barriers to entry for human capital. This is the type of place where talented people -- whether they're Indian, Korean, gay, or alternative -- can plug in and be accepted and not be looked upon as weird. We hear it all the time in our focus groups and in our interviews: Diversity is the surest sign that communities and companies really get it.

That's why there is such a high correlation between cities that are making it in the new economy and those that have a significant gay population. High-tech recruiters tell us that 8 out of 10 job candidates always ask a prospective employer whether the company offers domestic-partner benefits -- not because they need the benefit, but because it shows that the company is a true meritocracy that supports talented people from all walks of life.

The surest sign that a company or city doesn't get it is when you visit, and you're taken to a private club. It's like, "You just told me that this is the kind of place where I don't want to live."

5. In a world where time is the only nonrenewable resource, talent seeks out places that conserve time.

People look for the same things in a city that they look for in a company: energy, amenities, and a sense of fun. They want to see roller bladers and cyclists out on the streets. They want to have a place nearby where they can go rock climbing. Now, when we ask them if they mountain bike or rock climb, many times the answer is no. But they want those activities to be available, because someday they might want to do them.

There's another thing going on here that the data doesn't capture, but that's an important component of a new-economy region: A place that has all of these amenities is very efficient. You save time when you live there. A high-amenity place is one where you can get anything you need instantaneously. If you're pulling an all-nighter, you can get takeout at 2 AM. When your dry cleaning piles up, there's a place down the street that will take care of it. If you need to blow off steam, there's a rock-climbing wall nearby.