Joel Kotkin, internationally recognized author on global economic, political, and social trends, has written yet another fantastic piece called Little Start-up on the Prairie. Maybe it's that we in the Midwest are just jazzed when someone notices us or that our geometric shape stood out when flying over it, but the bottom line is that our humble agrarian rooted section of the country houses much of the greatest economic growth potential for the future. Kotkin's tale begins in Aurora, Nebraska, a town of 4500. Kotkin states quite simply that,
"Aurora and other places in the American Heartland will provide a critical outlet for the restless energies and entrepreneurial passions of its people. In some senses, such a trend represents a reprise of the region’s role in the evolution of the country and the shaping of its national identity."
In fact, since folks are realizing that on-shoring and in-sourcing are not only economically feasible, but highly desirable, the problems shift from lack of affordable housing...to a lack of any available housing at any price and a dearth of workers.
Kotkin goes on to mention Iowa and specifically Des Moines many times in the piece highlighting that,
"In virtually every measurement, students in key rural states—particularly the Dakotas, Iowa, Nebraska and Kansas—tend to perform better than those in more urbanized ones, as measured by graduation rates, college attendance and enrollment in high-level science and education programs."
The key take aways for me are:
- Be bullish on the Midwest (and specifically Des Moines) economies.
- Iowa has a massive amount of talent and future skilled workers from a robust and respected University system so we must cultivate that talent.
- We must impart upon these young minds that the best for them does not lie 6 hours away to the north and east. Rather, it lies here. There are great reasons to visit other places but even more reasons to build a life here.
- The opportunity to be a bigger fish in a smaller pond can accelerate your path to success. I've lived that coming from Riverside, CA where I was but a simple GPS coordinate on a suburb that extended 250 miles in any direction.
- The talent pool here is immense. It seems every day that I meet someone new that teaches me something.
- The people here are different. There's something deeply rooted in much of the Midwestern population, but it's subtle. It's a pleasant, hard working, almost zen-like kindness that's exuded since years have not been spent strengthening a "coastal exoskeleton."
- Buy as many houses and high rise condos as you can. We will be successful in our quest to convince the next generation (is it Z now?) that staying can be profitable and cool, and someone will need to rent to these people as they flow through the more natural progression of home ownership. The life path of a twenty-something is so very skewed in the large metros where someone graduates college and is faced with the prospect of a $600k starter home 1.5 hours from their job. We can help break the cycle of thinking that this is acceptable by providing a wonderfully fulfilling alternative.
- The ethos does exist that, "If I can't make it on the coasts, I'm a loser compared to my peers that can". This type of thinking is outdated. In fact, if making it means spending 5x on housing and generating debt, then yes, you're a loser. I'll take the label and remain more economically viable.
- Renewable energy is perhaps the most clear example of the power of the Midwest economy. Daily, I read economists and social commentators (I almost used "Socialists") that bemoan the continuing process of discovery and innovation in this area. "We're starving kids in Mexico" and "we'll never have enough land or corn" are the battle cries. Thankfully, few have listened and the process of harnessing the true power of the earth goes on. If we put the brakes on or take one step back in this area, we'll simply hand over the power to those who never stopped believing. Recently, Iowa State lost a $500 million funding opportunity in renewable energy to UC Berkeley and U of I (Champaign-Urbana). Maybe we need a journeyman-actor-Governor to lead our charge? Who would you pick? I'd pick Brandon Routh since Tom Arnold would have a tough time using complete sentences.
Of course when I executed my geographic arbitrage from CA to IA, I really didn't appreciate what I was doing. I knew that I loved what I'd seen and I was drunk with joy over housing prices. It turns out that I'm smack dab in the middle of Ethanol Alley and the heart...of the heartland Renaissance. Michael Landon would be proud.