Researcher says talent big driver in economic development
Cheap labor, low cost of living not a winning lure in fostering local growth
Spencer Levy, America’s head of research for real-estate firm CBRE, says talent is the big driver in fostering greater economic development and that emphasizing a market’s low cost of living or its inexpensive labor pool is not a winning strategy.
He doesn’t advise any metro area to lead with this approach, including Albuquerque, Levy said in a phone interview ahead of his appearance Thursday at the Intersections 2017 commercial real estate conference at Sandia Resort & Casino.
“The future of real-estate growth is not based in countries; it’s based on cities, especially those working hard to diversify their economies, where unique industry clusters can be fostered,” said Levy.
Levy was expected to weigh in today on how changing political and social issues are shaping commercial real estate, and also on ways that Albuquerque can stand out more from the pack.
“You don’t want to distinguish yourself as the low-cost alternative,” he said.
Levy emphasized that top concerns across various industries relate to talent — finding talent, keeping talent and developing talent.
“The most important piece of infrastructure is education. You have to have good public schools or people will leave,” he said.
Universities and community colleges need to have the kinds of “robust offerings” to train and educate the future workforce for marketable jobs in health care, technology and anything that supports and advances Albuquerque’s strong military/government base.
Instead of recruiting call centers and back-office operations, a better strategy, he said, is to increase service jobs, led by health care and education, especially on the research and development fronts. “I expect health care will exceed technology as the No. 1 user of office space in the U.S. soon,” said Levy.
Levy said co-work spaces play an important entry-level role by offering “short-term incubator spaces” before businesses move up the real-estate ladder to permanent digs. “Traditional leasing is never going away,” he said. He said he’s also a fan of “cool local stuff,” such as Albuquerque’s burgeoning craft beer industry, an economic activity that drives the use of commercial space, utilizes unique skill sets, creates jobs and benefits a host of vendors.
Levy said he hopes President Donald Trump creates as many jobs as he has promised but doesn’t think he will be able to deliver on plans to boost manufacturing employment. A lot of production could come back to the U.S. with reshoring, but it will be mostly automated, he said.