Education, research, jobs oh my

Today the Chronicle of Higher Education had yet another provocative article on the link between education and jobs, here in the context of @ElonMusk and his decision to relocate @TeslaMotors battery manufacturing to Nevada, where there is a deficit of research and engineering support, instead of Arizona or California, where there is a surfeit.

The common wisdom goes that it makes a lot of economic sense for research-driven industry such as battery manufacturing to be located near a tech/education hub so as to capture that expertise in all aspects of production, rather than be located far from such resources. Simple enough. Yet, Musk chose an isolated location in Nevada for his manufacturing site, largely on the basis of the $1.3 billion in tax breaks that the state of Nevada bestowed on his company. The decision was said to revolve around the facts that a) the Nevada site is largely devoted to manufacturing, not R&D, and b) cost. As a State of Arizona economic advisor said “A company is always going to manage cost and return on capital first, talent second­—and that’s never going to change,” Mr. Broome said. “When you’re investing $5-billion, you’re going to make a cost decision first.”

So does Elon’s decision amount to a betrayal of the long-held belief that investing in science is crucial to economic success in today’s world? I don’t necessarily think so. Now way does Musk get to where he’s at without the benefit of the huge US investment in STEM. But does that imply he needs to build his manufacturing plant near an education or research hub to ensure success? Probably not – there are plenty of engineers and scientists willing to relocate and I do believe, and suggest that the evidence is overwhelming, that tax breaks and a smaller bottom line will always sway the industrialist, even one who claims to be as enlightened as the man behind Tesla’s wheel.

What are your thoughts on California’s competitiveness in this regard? Is it responsible to give away $1 billion in tax breaks (your money) or should that be invested in the welfare of its residents?

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