Since the Great Recession, the U.S. workforce has been changing markedly. Economists and business strategists debate what’s the cause and what’s the effect.
A smaller percentage of us is in the labor force, and we’re more diverse, grayer, and tend to spend more time out of work looking for employment if we lose a job. The economy is changing.
It continues to employ more people in service jobs, while the goods-producing sector–mining, logging, construction and manufacturing–loses traction. A Pew Research analysis notes:
The number of goods-producing private-sector jobs has fallen by 1.8 million since December 2007; over that same period, the economy added 10.5 million service-sector jobs. The health care and social assistance sector was the biggest single contributor to that growth, adding 3.6 million jobs for a gain of 22.7%. Professional and business services gained 2.8 million jobs, while accommodation and food services added 2.1 million. On the other hand, there were 1.3 million fewer manufacturing jobs in October than there were at the start of the recession (although the sector has added 1 million jobs since bottoming out in early 2010).
We assume that the changing geography of jobs glacially pushes out from the heartland of the nation to its respective east, “south,” and west coasts. That has begun to change.
Flyover country, long the after-thought of strategists engineering the technology and data-driven new economy, is squarely on the radar of investment focus, and, for residential developers and builders, opportunity.
The big allure, of course, is a blend of increasingly well-educated workers and affordable housing, not to mention geographies steeped in the entrepreneurial animus that gets so much attention when it’s a tech company in Silicon Valley or the Route 128 Tech corridor.
New York Times technology correspondent Steve Lohr writes:
But local entrepreneurs and big investors are scouting the Midwest for start-up investments that range up to tens of millions of dollars, far more than local angel and venture investors. And they are beginning to attract venture capital from Silicon Valley for follow-on rounds of funding.
The rationale for investing in the Midwest combines cost and opportunity. A top-flight software engineer who is paid $100,000 a year in the Midwest might well command $200,000 or more in the Bay Area. The Midwest, the optimists say, also has ample tech talent, with excellent engineers coming out of major state and private universities in the region.
But they also point to technology shifts. As technology transforms nontech industries like health care, agriculture, transportation, finance and manufacturing, the Midwest investors argue that being close to customers will be more important than being close to the wellspring of technology.
Fitting that today, as Steve Case, perhaps the godfather of all technology’s unicorns, will reveal the investment composition of his $150 million Rise of the Rest fund, which as it seeds startups that marry legacy, value-based goods and services–in education, healthcare, food, transportation, and, yes, construction etc.–with big tech and big data–on the day he keynotes our Hive conference in Los Angeles.
New York Times Dealbook editor Andrew Ross Sorkin notes:
On Tuesday [today], the fund, called Rise of the Rest, will disclose its investors, which has turned into a Who’s Who of American business. Among them: Jeff Bezos, the founder of Amazon and now the world’s richest person; Eric Schmidt, chairman of Google’s parent, Alphabet; Howard Schultz, chairman of Starbucks; Tory Burch, the fashion mogul; Ray Dalio, founder of the hedge fund Bridgewater Associates; Dan Gilbert, the founder of Quicken Loans who has remade Detroit; Henry Kravis, the co-founder of KKR; David Rubenstein, the co-founder of Carlyle Group; Michael Milken, the financier and philanthropist; John Doerr, the venture capitalist; Jim Breyer, one of the first investors in Facebook; as well as members of three wealthy families: the Waltons, the Kochs and the Pritzkers.
Also on the list are Sean Parker, a former president of Facebook; Sara Blakely, the founder of Spanx; Jeff Vinik, the Florida billionaire and sports franchise owner; Byron Trott, Warren Buffett’s favorite banker; and Adebayo Ogunlesi, the lead director of Goldman Sachs and a large infrastructure investor. All told, it may be the greatest concentration of American wealth and power in one investment fund.
Taylor Morrison CEO and Chairman Sheryl Palmer.
For an exclusive insight into what Steve Case is up to and how his initiatives aim to change the geography of jobs, capital flow, and new residential development and home building opportunity in the United State, you can hear that first-hand, up-close, and from Steve himself. He’ll be talking one-to-one with Taylor Morrison ceo Sheryl Palmer this afternoon at Hive.
