The year 2011 was certainly the year of mobile.  The apps world exploded, and many developers are thriving in that space.   It was also the year in which content consumption and even online shopping shifted dramatically in favor of mobile devices, primarily tablets.  I have become accustomed to all my reading on my iPad – from the WSJ and Economist to my library of books.  Choosing to read in print this week a book that interested me but for some reason was not available in any ebook format was not a welcome experience.   Barnes & Noble is a great place to browse, and the Nook is a fabulous device, but its current big box category killer stores are doomed in my opinion.

A particular article in this morning’s WSJ on the immobility of the labor force caught my attention and resonated with a number of personal experiences this past year.   I’ve “borrowed” its chart above since links to WSJ content expire quickly for nonsubscribers.   Here’s a classic quadrant grid, but one where you do not want to be in the upper right box.  The article speaks to the inability of the labor force to relocate to where it is needed because of underwater mortgage loans.

Classically when one was applying for jobs in corporate America, checking the box labeled “willing to relocate” moved you way up the priority list.   Now many are willing but not financially able.   And, there’s a limit to which corporations can cover relocation expenses when someone applying for a $150K job may be $300K upside down in a house.  

Gowalla here in Austin was very recently acquired by Facebook, and its team has already moved to the Valley.   Neither the Valley nor Austin appear on the accompanying chart, but judging by the dots for Dallas, Houston and San Francisco, I’m supposing that move was financially practical for most of those employees.  Facebook can afford to pay them enough to offset much higher housing prices and those California state income taxes.   There’s also a considerable reverse flow from the Bay Area to Austin; about half the residents in my development are California transplants.  

Meanwhile, there is a considerable talent shortage in Austin for software developers and technology oriented creative types.  And, I know personally of suitable resources in Atlanta and Orlando that could do that work.   So what are some possible solutions to removing this “friction” in the labor markets:

1.  “On-shoring” certainly works for many companies.  We seem to have perfected the art of putting call centers and software development shops in distant continents, but those price advantages are eroding, and US cities with deep pools of technical talent would do well to organize their efforts of importing work from cities where that talent can be utilized.   We have long had the technology tools to make telecommuting practical, and, in particular, cities like Atlanta and Orlando have easy air service to just about every location where in-person appearances might be needed.  (That’s one knock on Austin; air service here too often requires hops through Dallas, Houston or Atlanta.  The local airport is lovely; even the dining is destination quality; but it’s just not that big.  It will be interesting to see how the Formula 1 spectators from so many international destinations get here in November next Thanksgiving week.)

2.   Management teams can even function remotely for earlier stage companies.   Ventures can form around scattered key people if the core operations are in the right location for investment, customers, and other strategic resources.   Management by Walking Around involves a little more flying around from time to time, but I’m seeing this model work.  Better leadership teams become available when the net can be cast a bit farther and relocations are not required.

3.   HomeAway is a local success story in the vacation rental market, and I wonder if companies like that might be able to remove some of the housing friction by enabling people more easily to lease their primary homes in order to pay rent or a mortgage in a new job location.  The WSJ article quotes one person as saying he has no interest in maintaining a rental property 2000 miles away, but that model certainly is common in vacation rentals and has spawned an industry of property managers to handle all the maintenance and leasing headaches.   They get their cut, of course, but they generate cash from otherwise idle real estate.

4.  Is there a way to create a housing exchange market?   Being able to swap your underwater home in Vegas for one with similar numbers in Phoenix might make sense if you means you get a better job, but the current morass of rules and regulations and the brokerage processes present considerable impediments to that idea.  I don’t plan to work on that opportunity, so it’s yours if you want it.

There are many reasons other than mortgages why workers are immobile, and I can appreciate those.  I know of two medical professionals now who have considered relocating but are highly constricted by varying state licensure rules.  The same applies to lawyers who have to qualify for the bar state by state.   And, there are the very important family concerns like being near an aging parent, not displacing kids from schools where they are comfortable, especially during the teenage years, and just plain liking where you live and the current friends you have.

But, unemployment will be the centerpiece issue of the 2012 elections, and it behooves us all to think of more creative ways to address this when so many of the contributing factors are different from past eras of job losses.

I chose to move in 2011.  I had the flexibility to do so and was able to move to a city where I had family and friends.   It has turned out great for me, and I’m about 60% of the way closer to this year’s Georgia Tech bowl game.   However, the remaining 40% will be traversed on my couch by TV viewing. 

<image from WSJ attributed to Moody’s Analytics; CoreLogic>