Montana Voices: Creating more jobs in Missoula

By Bryce Ward

A few months ago, I watched “A River Runs Through It” for the first time since I moved to Montana. It is a classic Montana tale, but perhaps not in the way most people think. Yes, it is a poignant tale of the importance of family, nature, and outdoor recreation. But it is also a story about a kid raised in Montana, getting educated, and, in the end, leaving Montana to find a good job.

This story is far too common. Nearly 65% of native-born Montanans with a college degree live outside of Montana. In part, Montanans leave to pursue opportunities and experiences not available in Montana. In part, they leave to find better paying jobs.

Earnings for college graduates in Missoula are among the lowest in the country. Median earnings for Missoulians with a Bachelor’s degree are $32,000. This is only 63% the national median ($50,500).

The natural question is what, if anything, can (or should) be done to address this? What might be done to create more opportunities for people in Missoula?

In recent decades, the core engine of regional prosperity has shifted. Historically, regional prosperity was primarily linked to natural resources and/or access to transportation networks. Today, while natural resources and access to transportation networks still matter, knowledge drives a greater share of local prosperity. As a result, economists find that places with knowledge-based economies enjoy certain advantages. Specifically, they enjoy faster growth, higher productivity, better quality of life, higher rates of entrepreneurship, and greater resilience.

In theory, a knowledge economy can thrive anywhere. Knowledge work is people-based. It is not innately tied to place. To succeed, many knowledge firms simply need an idea for a good or service, the resources to execute the idea, and the ability to deliver their good or service to markets. With modern communications and transportation technology, knowledge work can be done almost anywhere. In practice, though, it tends to concentrate in places with certain characteristics.

Missoula has two key features that economists argue increase the odds that a place can develop a robust knowledge-based economy. First, it has a large research university. Second, it has a large population of college-educated workers. Forty percent of Missoulians over age 24 have a college degree. This makes Missoula one of the top 25 most educated metropolitan areas in the country.

Unfortunately, Missoula also faces a couple challenges that may inhibit the development of a more robust knowledge economy. First, Missoula is not particularly large. Large, dense cities enjoy advantages (e.g., access to a deeper pool of workers) that make their firms and their workers more productive. As such, knowledge work tends to cluster in large cities. Second, Missoula is somewhat isolated. Greater integration with other, large markets makes it easier for firms to obtain inputs and to sell their outputs.

Thus, to improve opportunities in Missoula, we must figure out how to take better advantage of Missoula’s resources and figure out how to overcome Missoula challenges. Entrepreneurs are essential to achieve both of these.

Entrepreneurs are the people come up with ideas for goods or services that can support successful businesses. They are also the people who have to figure out how to execute that idea in Missoula. As such, they must have the skills and energy to figure out how to overcome Missoula’s challenges and successfully deliver products to market.

However, entrepreneurs do not need to do this alone. The community must continue to build and maintain the capacity (e.g., the skilled workers, the access to infrastructure) that entrepreneurs need to execute their business ideas. The community must work to learn from its entrepreneurs. If entrepreneurs (both successful and unsuccessful) continue to run aground on the same boulders, we want to understand where these boulders are and work to remove them. Finally, the community must encourage and nurture our nascent entrepreneurs. If someone has an idea that might be successful, we want people to pursue it and we want them to understand that the community has the resources and interest to help them succeed.

Missoula is developing a thriving culture of entrepreneurship and has many successful entrepreneurs. However, if we are to create more opportunity for ourselves and our children, we need to continue the never-ending work of building Missoula’s entrepreneurial ecosystem.

Bryce Ward is the associate director at the Bureau of Business and Economic Research at the University of Montana.