President’s Letter
New Economy is Environmentalists’ New Friend
Why City Hall and the Business Community Need Environmentalists in the New Economy
Justus Baird
CEC President

The new economy may just be the new friend that the environmental movement needs to be broadly effective. The argument is simple and goes like this: Talent is our most limited resource, and studies are showing that new economy talent follows environmental amenities. This argument is the main reason our business community (and in particular the Greater Houston Partnership) has started to pay more attention to local environmental issues: They're having trouble recruiting and retaining people.
Mayor Brown and the Houston Technology Center have been working hard over the past two years to promote high tech in Houston. They would do well to read a January 2000 report prepared for the Mellon Foundation, Heinz Endowments, and Sustainable Pittsburgh entitled Competing in the Age of Talent: Environment, Amenities and the New Economy (see www.nga.org/NewEconomy/rflorida.pdf for the full report). The findings of this year-long study include:

• In the new economy, environmental quality is a prerequisite for attracting talent.
• Natural, recreational, and lifestyle amenities are absolutely vital in attracting knowledge workers and in supporting leading-edge high technology firms and industries
• Knowledge workers prefer places with a diverse range of outdoor recreational possibilities (e.g., rowing, sailing, cycling, rock climbing) and associated lifestyle amenities. Water sports and water-based recreation are of special interest.
• Regions that have been successful in attracting and retaining knowledge workers have aggressively pursued strategies to bolster environmental quality, natural amenities, and lifestyle offerings.
• Improving the amenities of a region is relatively inexpensive and involves marshalling and upgrading resources (such as parks, rivers, open spaces) that already exist.
• Leading high technology firms (AOL, for example) have played and continue to play a leading role in smart growth movements to reduce congestion and limit urban sprawl in Washington DC, Boston, the San Francisco Bay area, and Seattle, among other places.
• For high technology businesses, environmental quality is the top-rated factor in choosing a location, ahead of cost of housing and cost of living, and well above CEO preference (often cited as the leading factor for high tech firms).
• There is no clear relationship between institutional arts/culture and attracting high technology industries to a region, nor between arts/culture and the ability of such industries to attract knowledge workers. There is little relationship between professional sports and high technology workers (think Austin, Seattle).

So what, exactly, do these knowledge workers want?
The study conducted focus groups and found that the amenities knowledge workers desire differ from the amenities that old economy workers want. New economy workers want more casual, open, inclusive, and participative amenities. These would include many opportunities for outdoor recreation (rowing, cycling, or rock climbing) and a range of lifestyle choices (a good music scene, outdoor restaurants, organic supermarkets, juice bars). One of their main concerns is that these amenities be accessible. They express a strong preference for regions where amenities are easy to get to "just in time," with close access by foot, bicycle, or public transportation. They want to be connected to their city and region, and universally see public transportation (a subway system or light rail) as a way to connect. (In their view, a bus system does not provide this type of connectivity.) Focus groups also underlined the importance of water-based activities (sailing, kayaking, rowing) and access to water for outings or night life. Finally, they ranked support for diversity in a region as a very important amenity.

Because knowledge workers switch jobs quickly – on average every 2.7 years – Houston is competing with the entire rest of the country for new economy talent. Any recruiter can tell you that it is becoming increasingly difficult to persuade new economy folks to move down to Houston - and this is not just because the city has a bad image. All a new recruit has to do is pick up a newspaper and read about our battle with L.A. for the ozone crown, or visit the city and see our sprawl, to think twice about that job offer, even with the promise of increased salary.

If we're going to get serious about high tech in Houston, then we're going to have to get serious about the environment and natural amenities. We already have the diversity that knowledge workers want, and with some improvements our water-based recreation and amenities could be great too. But our basic environmental quality (especially clean air), our mobility/accessibility, and non-water-based outdoor amenities need immediate attention.

Houston's challenge to attract talent presents a uniquely aligned situation for the environmental, business, and government communities. Environmental quality and amenities have now become a bottom line issue in a new way. Environmentalists need to urge the corporate foundation community to direct its support more heavily toward environmental projects. And our local governmental agencies need to see the connection between environmental improvement and stimulating the new economy.

Environmentalists, shake hands with your new friend the new economy. This is the bottom line business rationale for quality of life that we've been waiting for.