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Commentary By Aaron M. Renn

The Other Side of Brain Drain

Cities are rightfully concerned about losing well-educated residents and high-paying jobs. But sometimes, they come back.

I was sitting at home in New York City reading my Wall Street Journalwhen I came across an article about Terra Botanical Gin, a high-end boutique libation from a company called Cardinal Spirits in Bloomington, Indiana. After Googling the name, I found the gin was also recently reviewed in the New York Times. I’m an Indiana native who went to school in Bloomington, and I wondered how a microdistillery in a Midwestern college town managed to grab this kind of top-tier media placement.

The short story is simple. Cardinal partnered with Lior Lev Sercarz, of the Brooklyn spice shop La Boîte, to create the spice blend used for creating the gin. Sercarz is a legend in the foodie world, and his cachet created a hook for elite media coverage there.

The full story is more revealing.

Cardinal Spirits co-founder Adam Quirk is originally from Evansville, Indiana, but moved to New York City in 2004 to work in the digital media business. He met his wife, who is also originally from Indiana, while living in NYC. He became interested in the craft spirits business when Breuckelen Distilling opened in his Brooklyn neighborhood. Though he had no background in distilling, he dreamed of one day opening his own distillery.

“Brain drain—when a community loses white-collar jobs and residents with advanced degrees—is a huge civic concern in almost every city and state.”

Instead, he ended up moving back to Indiana to take a job with a technology firm. But his distilling dream didn’t die. He and his partners launched Cardinal Spirits after raising $850,000 in 2013 from crowdfunding (an effort that also landed national press in CNBC and the New York Times).  

Quirk cold-called Sercarz, who agreed to make a custom spice blend for what became Terra Botanical. Sercarz had partnered with brewers before, but never a distiller. Quirk also signed with a New York City distributor for retail distribution in Manhattan (including at my corner wine and spirits shop), and Sercarz’s star power helped get the spirit onto menus at buzzy restaurants like Daniel. High-end press soon followed.

Brain drain—when a community loses white-collar jobs and residents with advanced degrees—is a huge civic concern in almost every city and state. Bloomberg Businessweek recently launched a “Brain Concentration Index,”  for example, which shows “the 10 leading destinations for the nation’s best and brightest”—a list of shiny boomtowns crowned by Boulder, San Francisco, and San Jose.

On the other end of the index are the brain-drain cities: mostly smaller post-industrial burgs like Muskegon, Michigan, and Lima, Ohio, where advanced-degree holders and white-collar gigs are in full retreat.

In some of these cases, brain drain appears to be real and a loss. But in other cases, brain drain is more like brain circulation: Well-educated young professionals leave town, gain experience, and then return to the sending community.

Quirk is a great example of how a short-term loss can turn into a long-term gain. He left Indiana for the big city. There, he obtained great professional experience and built his networks. He was also changed by the experience—not just be being exposed to and falling in love with the micro-distillery concept, but by also having New York City imprinted into his mental world.

When he returned to Indiana, he brought all that back with him. His improved digital media skills contribute to Bloomington’s local economy, and his microdistillery is enhancing the quality of place on offer in the city and its surrounding areas. But perhaps more importantly, Quirk’s New York City orientation helped him score a press coup for his company and his hometown. Whether strategically or by accident, he sought out a partnership for his spice blend in America’s top global city. Because of his experience there, he knew it and could navigate it. Quirk told me that living in a neighborhood where he would regularly see celebrities helped to make him less intimidated by the prospect of cold-calling top people.

“Sometimes, a short-term loss can turn into a long-term gain.”

Most microdistillers have a local and regional distribution strategy. Cardinal has distribution in nearby cities, but also made the shrewd decision to target New York City both for partnerships and distribution. By establishing a presence in the world’s premier global city, Cardinal was able to build their brand tremendously through the press and word of mouth coming from there. Case in point: this article, which stands as yet another serendipitous benefit of the company’s New York City connections.

Quirk’s story shows that in some cases talent export, especially to top global cities like New York and San Francisco, can end up being a positive for the communities in the Heartland that got left behind. Superstar cities may be magnets for young college grads, but they are fearsomely expensive places to live and raise families in the longer term; many residents cycle in and then move on out. Despite red-hot economies in several coastal cities, only one of the top 15 major metro areas in population growth, Seattle, is on the coasts. Because of their restrictive housing development policies, these cities can’t grow to meet demand, and that ultimately helps push many short-timers out. This is something too often missed in the brain drain debate.

That’s not to say that there is no brain drain. Quirk was originally from Evansville and now is in Bloomington—same state, but different city. A lot of the brain drain that does occur is inside of states, as people pool into the successful economic and innovation regions. And plenty of residents do end up leaving their city and state forever, with the sending community getting little to show for it. The classic digital-age example might be Marc Andreessen, raised in tiny New Lisbon, Wisconsin, and schooled in Champaign, Illinois. When he moved to Silicon Valley to start Netscape, there would be no going back to the Heartland for him.

But such cases get far too much airplay, while the brain circulation examples like Quirk get too little. To compete in a more complex, networked 21st century world, communities threatened by brain drain should start building a more sophisticated talent model—one that acknowledges the role that more affluent and better-educated places can play in ultimately boosting brainpower at home.

This piece appeared at CityLab


Aaron M. Renn is a senior fellow at the Manhattan Institute and contributing editor at City Journal. Follow him on Twitter here.

This piece originally appeared in The Atlantic's CityLab