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Sports and Human Capital

Mark Rosentraub, author of  Major League Losers: The Real Cost Of Sports And Who's Paying For It has changed his tune a bit lately.  Yesterday at the Sports and Society Conference being held in Green Bay, Wisconsin, Rosentraub gave a talk "How (and why) Cities Needs Sports and Culture for Economic Development."  Here is the abstract of the talk:

Cities and civilizations have built sports and cultural facilities and used sporting events to attract people to cities across several millennia.  Why?  This paper argues that the answer is to be found in the role these institution, facilities, and events assume in the attraction and retention of human capital.  That human capital is what leads to advances in economic and social development.Those areas with the greatest concentration of skilled human capital are the ones that generate the most wealth.  The paper first explores the importance of the attraction and retention of human capital for economic development.  After that analysis, which focuses on classical works from economic and social theory involving theories advanced by  Marshall, Ricardo, Schumpeter, and the urban planner Jane Jacobs, among others, then turns to and exploration of the economic and social forces that have changed development patterns (and why) and the resulting movement of development away from many central cities.  The third part of the paper focuses on the ways in which sports facilities designed as part of urban neighborhoods can revitalize urban areas and change the focus of economic development.  Careful attention is focused on successful development strategies through an analysis of outcomes from projects in Los Angeles, San Diego, Indianapolis, Columbus, and Cleveland.

It's obvious that large agglomerations of talented people demand sports.  But it's not clear that city planning has much, if anything to do with this.  London is a quite successful city, despite the absence of  subsidized soccer  stadiums and integrated sports development, for example.

Rosentraub's presentation is discussed in this story in the Green Bay Press Gazette:

Building residential developments around sports and other entertainment has proven effective, especially in redeveloping downtowns.

"Downtown housing stocks are in demand," he said.

Rosentraub points to Indianapolis as an example of a community that used sports to help rebuild its downtown, investing millions of dollars in homes for the Pacers, the Colts and the NCAA headquarters, and then marketing them to the nation.

"You have to make deals happen. Indianapolis plays a lead role as entrepreneur," he said.

He said communities such as Las Vegas and Orlando have used entertainment to build effective tourism economies, but they aren't attracting the idea generators.

And even university towns, such as Columbus, Ohio, have a hard time battling the brain drain.

I'm  skeptical of this argument. Suppose one concedes the claim that Indianapolis is a successful example of economic development built upon integrated sports and city planning. Can this model be replicated? If so, in how many cities across the land? Is the model scalable downward? I doubt it.  Moreover, the idea of using sports as a magnet doesn't work if every municipality is doing the same thing.

Finally, I don't get the example of Columbus. The Ohio State Buckeyes provide major entertainment for the state of Ohio, along with the city of Columbus and the university itself. Consider this experiment: what would be the impact of Columbus and Cleveland swapping their football and basketball teams? My guess is that the economies of Cleveland and Columbus would tick along just as they have been, although Ohio State itself might take a hit.  The first order impact is likely to be on the asset value of the Browns and Cavaliers, which would take a hit from playing in the smaller market in Columbus.

Rosentraub's new book is "Major League Winners: Using Sports and Cultural Centers as Tools for Economic Development ." I look forward to giving it a read, even though I'm not likely to buy the argument.

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