Local economies need to be ‘nimble’ to survive what’s coming: expert

Computer programmer Bryan Foster on his laptop at co-working office space WORK in Petaluma, California on Thursday, December 10, 2015. (Alvin Jornada / The Press Democrat)

JEFF QUACKENBUSH,

NORTH BAY BUSINESS JOURNAL

The attractiveness of the North Bay as a place to live needs to be coupled with “nimble” community planning for the region’s economy to grow fast during an unprecedented upheaval in the employability of the workforce long term, according to an economic analyst speaking to a group of construction industry professionals.

Proximity to Silicon Valley and temperate weather make the North Bay an attractive location for economic growth, said Mark Lautman, keynote speaker at North Bay Business Journal’s Construction industry Conference in Santa Rosa on May 12.

“Most people we talk to in the country would kill to have what you have,” Lautman said.

Lautman founded the Community Economics Lab in Arizona in 2007 and has been speaking to economic-development groups nationwide about preparing for a post-baby boomer society.

“The biggest constraint on construction in every community except a few is the lack of a qualified workforce,” Lautman said.

Economies need two types of jobs: economic-base jobs and service-sector jobs.

“If you do not have enough qualified workers, you can’t grow,” Lautman said.

Three major reasons for the workforce shortage in many areas of the nation are the falling birth rate, education being decoupled from the needs of the workforce and going off the “wage cliff,” according to Lautman.

Education’s shift several decades ago from shop classes to college preparation wasn’t a problem when there were more children coming up through the ranks, he said.

“When boomers flooded the job market, who cares if you graduate 100 anthropology majors, if you only needed two,” he said.

The “wage cliff” has created a significant proportion of the population for whom getting off public assistance is financially challenging, as the cost of doing so with child care and loss of benefits isn’t offset by the wages of entry-level jobs, Lautman said.

The worker shortage has been exacerbated by rapid emergence of technology in manufacturing, medicine and a number of industries that has automated away many jobs, he said.

“We underestimated how fast jobs would be wiped out,” he said.

Artificial intelligence is expected to arrive in force by 2050 with individual AI in smartphones giving way to “general AI” of machines repairing each other to “super AI” of machines merging with human minds and bodies. That final moment has been called by futurist Ray Kurzweil as “the singularity.”

One of the economic shifts communities need to plan for is the rise of “solo work,” Lautman said. Called telecommuting or remote working for employees logging hours outside of the company’s physical addresses, this type of work now also includes the “gig economy,” or remote workers for more than one employer at a time.

“The biggest barrier to the solo-work revolution is having centers for such employees sponsored by the community for economic-development purposes,” Lautman said.

Residential contractors can also get in on the solo-work revolution by building high-speed data service to developments and wiring homes as workplaces, he said.

Nimble economies also need to be fixing the employability cliff that’s coming with robotics and AI, Lautman said. He pointed to middle schools that have seen dramatic successes in teaching physics to sixth- to eighth-graders by weaving it throughout natural-sciences curriculum. One school that had 95 percent of its students receiving lunch-assistance saw demand and aptitude for advanced-placement science and math classes increase 300 percent after taking this approach.

“It takes $25,000 per school to outfit it to do this,” he said.

Jeff Quackenbush (jquackenbush@busjrnl.com, 707-521-4256) covers construction, commercial real estate and wine.