Worst Spot for U.S. Brain Drain Gets Hope as Vaccine Hub

(Bloomberg) -- The old factory town of Kalamazoo, Michigan, has become a center for Covid-19 vaccine manufacturing. That may help the area’s economy turn a corner after some tough years.

Ranked highest in this year’s Bloomberg Brain Drain Index of population loss of top talent, Kalamazoo has struggled like the rest of the U.S. with the job-crushing pandemic. But the city got some hope when Pfizer Inc.’s factory in adjacent Portage recently became a key distribution point for the vaccine. The drugmaker and German partner BioNTech SE plan to deliver 200 million doses to the U.S. by July.

Still, the pandemic hit Michigan hard. Payrolls stood at 4 million in November, down 9.4% from a year earlier for one of the steepest drops among states, Labor Department data show. The slow comeback from auto-plant closures in spring, though, is now being aided by a slowing infection rate.

Meanwhile, places like Kalamazoo are likely to be helped by a pandemic-driven exodus from big cities that’s drawing more families to smaller communities.

“People are looking for less friction in their lives” and the work-from-home trend illustrates jobs can be effectively performed away from the office, according to Ross DeVol, chief executive officer of Heartland Forward, an institute for urban development.

Kalamazoo also sees economic renaissance in an asset that can’t leave town: land. Local officials are using land banks to acquire abandoned and distressed homes and commercial properties to pave the way for growth to return. The strategy is “take a breath and make up long-term plans,” said Kelly Clarke, executive director of the Kalamazoo County Land Bank.

The U.S. Office of Management and Budget adjusts geographical delineations of metropolitan statistical areas based on economic and social factors in the MSAs over time. Those changes can reflect population shifts, commuting patterns and other factors.

In this year’s index, the Kalamazoo-Portage’s shift in population size was adversely affected by the removal of Van Buren county from that statistical area. Since the government did not change its identification for the metro region, Bloomberg followed that coding of geography in its analysis for consistency.

“The Brain Drain Index doesn’t account for the fact that the definition of the Kalamazoo-Portage MSA changed from 2015 to 2019,” Michael Horrigan, president of the W.E. Upjohn Institute for Employment Research, said in an e-mail.

“In 2015, the MSA included Van Buren county; in 2019, Van Buren county wasn’t included. What this means is that while the index estimated a population decline of 21% for Kalamazoo between 2015 and 2019, the truth is that the population increased by about 2%,” Horrigan said. “The other variables used in the index -- white collar employment, number of advanced degrees, number of degrees in engineering and sciences, and real median earnings of STEM workers –- were also affected by the change in the definition of the MSA.”

Six of the 10 U.S. metropolitan areas that have lost the most brain power over the past four years are in the industrial Midwest, according to the index. Rounding out the top five after Kalamazoo are Decatur, Illinois; Johnstown, Pennsylvania; Lima, Ohio and Elmira, New York.

The brain drain index tracks the losses of talented workers in the four years through 2019, with advanced degrees, science and engineering degrees, and employment in white-collar industries. It also incorporates population change and inflation-adjusted pay changes for science, technology, engineering or math -- the so-called STEM disciplines.

Separately, the Bloomberg Brain Concentration Index, which measures business formation and employment and education in STEM, shows that metropolitan areas that score best are showing remarkable traction. The top spots are science-driven Boulder, Colorado, followed by San Jose-Sunnyvale-Santa Clara, California.

Ann Arbor, home of the University of Michigan, ranks third. Like many university towns, it attracts and retains businesses in new technology, including a Google campus. The top three held the same rankings in 2016.

However, rankings for four areas -- Santa Fe, New Mexico; Manchester-Nashua, New Hampshire; Columbia, Missouri and Champaign-Urbana, Illinois -- fell by double digits.

To access the full data set for the 2020 Bloomberg Brain Drain Index, click here.

To access the full data set for the 2020 Bloomberg Brain Concentration Index, click here.

(Updates to add from the seventh paragraph an explanation of how the Bloomberg Brain Drain Index defined MSA boundaries, comment from Upjohn Institute.)