The future will not look like the present because the present does not look like the past.
Case in point: In 1930, the most populous county in Virginia was Pittsylvania, a reflection of how that county was then an economic dynamo powered by textiles and tobacco. The second most populous was Wise County, because back then coal was booming and was far more labor-intensive than it later became. Both counties were more populous than most of the cities in the state.
Today, both counties are smaller than they were then and neither is in the state’s top 10. In fact, in 1930, the 10 most populous counties in the state were generally in Southwest and Southside: Halifax County ranked third, Roanoke County fifth, Washington County seventh, Mecklenburg County eighth, Tazewell County ninth, Lee County 10th. Fairfax County, our economic and population behemoth today, was back then smaller than Russell County and not much bigger than Smyth County. Today their populations haven’t much changed (Russell a little smaller, Smyth a little bigger) but Fairfax sure has.
My point: Our economic geography is always changing, as certain economies rise – and, yes, sometimes fall. To some extent, we can trace the world’s economy through a changing cast of most populous cities. In 100 B.C., the biggest city in the world was Alexandria, Egypt. In A.D. 200, it was Rome. By A.D. 500, Constantinople. About 935, it was Cordova, Spain. By the 1850s, when the sun never set on the British Empire, it was London. By 1925, as what some called “the American century” dawned, New York was the biggest. Today the world’s biggest city is Tokyo with Delhi (the metro area that includes the Indian capital of New Delhi) closing fast.
All this comes to mind as I read “The Global Startup Ecosystem Report 2022,” an annual economic report by StartUp Genome, a San Francisco-based nonprofit that studies the startup economy worldwide. This has become one of my favorite reads, at least for work-related purposes. I’m under no illusions that any of the localities in Southwest or Southside will ever make this list (think the U.S. News & World-Report college rankings, except these are global rankings for the cities best suited for starting a company). However, there are always lessons that we can glean from these go-go global cities that apply to us, as well. Ultimately, the key driver in all these places is the availability of a skilled workforce, which means the local educational system matters – a lot. So do quality of life and government regulations and the availability of capital, but talent is always the coin of the realm.
Some places in the StartUp Genome rankings remain, as Shakespeare’s Julius Caesar declared, as “constant as the northern star.” Silicon Valley always comes in No. 1 because there is simply no rival for Silicon Valley. New York and London tie for second, Boston comes in fourth. The United States takes three of the top four places, five of the top 10 (Los Angeles and Seattle as the other two) and eight of the top 20 (Washington, San Diego and Chicago are the other three). Further down on the list, though, we see a lot of movement, and most of that upward movement comes from cities outside the United States, a sign of how we increasingly live in a multi-polar world. Berlin moved from No. 22 last year to No. 16 this year. Delhi jumped from No. 37 on last year’s list to No. 26 on this year’s. from Helsinki rocketed from No. 59 on last year’s list to No. 31 on this year’s list. If Berlin, Delhi and Helsinki were songs on the Billboard charts, they would earn a coveted “bullet.” Lots of other cities that would seem unlikely to American eyes and ears – some places that not even a map geek like me has ever heard of – also make the list as rising stars.
So what’s driving these places? There seems to be a common thread running through them: They are all cities with a large population of young adults. Educated young adults.
Here’s what the report has to say about some of them:
Accra, Ghana: “With approximately 57% of the population of Ghana under the age of 25, Accra is one of the world’s youngest cities. This youthful energy, combined with the fact Ghana boasts the fastest internet in the region and the highest mobile phone penetration, is transforming Accra into a vibrant startup hub.”
Kuala Lumpur, Malaysia: “With nearly 40% of Malaysia’s population under the age of 25, the Kuala Lumpur region has a strong pipeline of skilled young talent. Over 330,000 students are enrolled in more than 240 institutions of higher learning.”
Cairo, Egypt: “Over half of the country’s population is under 30, and many of them are multilingual and technically skilled.”
Istanbul, Turkey: “With half of the population under the age of 32, Turkey has the largest youth population in Europe. Many of those tech-savvy young people select Istanbul as a destination for higher education, creating a vast pool of talent for employers.”
Lagos, Nigeria: “The median age in Nigeria is 18 and the country has high smartphone penetration. A 2020 McKinsey & Company analysis described these factors as ‘the perfect recipe for a thriving Fintech sector.’”
Now, here’s how we compare. While 57% of the population in Ghana is under 25, and 40% of people in Malaysia are under 25, the comparable figure in the United States is 32.2%. In Virginia, the under-25 population is even smaller: 31.8%.
The way our Census Bureau tracks age cohorts doesn’t always line up precisely with how other countries do theirs. So while more than half of Egypt is under 30 and half of Turkey is under 32, the best we can say is that 44.8% of the American population is under 34, so even with two extra years, we’re still coming up short.
As for median age, in Nigeria it’s 18 but in the United States it’s 38.8. Virginia’s is right at the median. Utah is our youngest state – the median age is 31.8, still much older than Nigeria. (For the latest median age data, see my column earlier this week about how Lexington is now the youngest place in the country.)
Whatever the numbers, the point is the same: We’re seeing a big age gap between us and some of these other places. We’re getting older, but other parts of the world are getting younger.
What are the long-term implications here? Keep in mind the point here isn’t simply that these other places – places we may think of as developing nations – are younger, but they’re both younger and educated. What will the economic geography of the world look like in, say, 20 years? It does not seem a stretch to imagine some of these places emerging as important business capitals. In fact, StartUp Genome says they already are. The main problems some of these cities face isn’t a lack of a skilled workforce, it’s the lack of a stable, democratic government. (Let’s hope we don’t suffer the same fate.) Perhaps that’s why the report spends so much time chatting up Toronto, or, more specifically, the Toronto-Waterloo corridor in Ontario. The report praises Canadian cities in general as benefiting from “favorable immigration policies” and “social-democratic values,” something some of these other cities lack. But the linchpin of economic success in Toronto-Waterloo, the report says, is that “the corridor’s millennial population is growing at lightning speed – more than 21% per year.” (All those young, tech-savvy workers help explain why one city in that corridor, Mississauga, has a “music strategy,” which I wrote about a few weeks ago.)
So what’s this mean for us in Southwest and Southside? Should Appalachia worry about Accra? Should Lynchburg be concerned about Lagos? Should Tazewell fret about Toronto? Potentially, yes. We live in a global economy, whether we like it or not. I always tell people that the Roanoke Valley had an epiphany sometime in the early 2000s. Before that, Roanoke and Roanoke County quarreled like the raccoons that fight on my back porch every night. At some point, though, they realized that their competition wasn’t on the other side of Peters Creek Road, it was on the other side of the world, and if they wanted to keep up, they’d better get along. Now they get along. All these places mentioned in the StartUp Genome report are our competitors in a way, and if they’re both younger and educated, then the future is on their side. They may never displace Silicon Valley, but in a global economy, they may well have an advantage over parts of Virginia where the population is aging and less skilled.
I’ll have more to say tomorrow about how other parts of the world are out-hustling us on developing a skilled workforce. Today, I’ll just focus on the age part.
We may think it’s natural for rural localities to be older than cities, but that hasn’t always been the case. At a presentation last fall at Longwood University, demographer Hamilton Lombard of the University of Virginia’s Weldon Cooper Center pointed out this: In 1980, the median age in Virginia didn’t vary that much from one locality to another. In fact, that year Arlington and Bath County both had the same median age – 32. Now, Arlington’s median age has edged up to 35.6 (the whole country is getting older), but in Bath County it’s soared to 52.6. And Bath County isn’t even the oldest county in the state. That would be Highland County next door, where the median age is almost 59.3.In 1980, it was 33.
In fact, in 1980, Virginia’s coal counties were some of the youngest counties in the state, if not the nation. The median age in Buchanan County was 26, in Wise County and Dickenson County 28, in Russell County and Tazewell County 29, in Lee County 31. Now it’s 41.6 in Wise, 45.2 in Tazewell, 45.4 in Lee, 45.7 in Dickenson, 46.6 in Russsell, 47.8 in Buchanan. We see the same trends across Southside, just with different numbers. Campbell County in 1980 was a youthful 26; now it’s 43.2. In fact, in 1980, localities in Southwest and Southside were consistently either the same median age as Northern Virginia or younger. Now they are distinctly older. Lombard told his audience last fall that if all the localities outside the urban crescent were their own state, “we’d probably be the oldest state in the country.”
This poses a demographic challenge: All these localities need new residents, specifically younger residents – because young adults fill the labor pool and spend more money than retirees, which helps fuel the local economy. The Bureau of Labor Statistics says that those 25-34 spend more than those 65-74 and far more than those 75 and older. Most rural localities could use a younger population for economic reasons. Businesses now on the edge could stand to have more customers, and more customers likely to spend. Both the Census Bureau and the Internal Revenue Service have documented a modest but still significant trend: More people are now moving into rural areas than are moving out. Still, many of those places will continue to lose population because the age cohorts are out of balance: Deaths far outnumber births – and any net in-migration.
That’s why every locality in Southwest and Southside, in particular, should have a plan for how to attract younger residents. If any don’t, they’re ignoring a major demographic trend sweeping them along. They’re also ignoring what’s happening in the rest of the world – again, our competitors. Southwest and Southside will never be Silicon Valley, nor do we aspire to be. But we do want to be competitive in this new economy. A generation ago, the Rolling Stones made famous the song “Time Is On My Side.” At the time, it was: Their median age then was 22. Now it’s 78 for the surviving members. Time may not be on our side, either, but it might be on the side of Accra and Cairo and Istanbul and Kuala Lumpur and Lagos.