According to new research from the Brookings Institution, about 90% of growth in high-tech jobs was concentrated on five cities: Boston, San Francisco, San Jose, Seattle and San Diego. The Washington, D.C.-based think tank found that these metropolitan areas accounted for nearly all of the nation’s innovation-sector growth from 2005 to 2017.
Brookings noted these cities have increased their respective shares of the nation’s total innovation employment from 17.6% to 22.8%. One-third of the nation’s innovation jobs now reside in just 16 counties in the United States
Brookings defines these jobs as those in science, technology, engineering and math – the STEM fields that often lead to high-paying, career-length positions. These are also the jobs that contribute to overall faster wage growth in their respective regions, but also result in secondary employment from the jobs created to help serve those in the innovation fields.
The study described this trend of high levels of territorial polarization as being a grave national problem. This can include spiraling home prices and traffic gridlock in the so-called “superstar hubs” to a problematic “sorting” of workers. This is where those college-educated workers may cluster in the star cities, and leave other large metro areas without the talent reservoirs to fill needed STEM positions.
Whole portions of the country could even fall into “traps” of underdevelopment as a result of select cities tapping such a large portion of qualified talent. So-called “bottom-up” economic development efforts are also unlikely to change the patterns by themselves, simply because the resources that other states and cities can provide are limited.
Creating Growth Centers
Brookings also called upon the creation of eight to 10 new regional “growth centers” across the nation’s heartland, which could in essence become a 21st century update of the “growth pole” strategy of the 1960s and 1970s, which emphasized regional economic planning that called for a focused transformative investment on a limited number of locations. These could be a catalyst for the region and then the nation.
The central idea of the growth pole was that economic development would not be uniform over an entire region, but could take place around specific poles. Such growth centers in the heartland could help balance the amount of talent that is now focused on the coasts – notably on the west coast of California.
Brookings suggested that the government should, “assemble a major package of federal innovation inputs and supports for innovation-sector scale-up in metropolitan areas distant from existing tech hubs.” Central to such a package would be up to $700 million a year of direct R&D funding in each metro area for 10 years.
The government would need to establish a competitive, fair process for selecting these growth centers, Brookings notes. Such a process would need to employ a “rigorous competition” that would be characterized by RFP-driven challenges, goal-driven criteria and an independent selection process.
The Next Innovation Centers
The study further suggested the candidate locations to become the growth centers are located in multiple regions across 19 states – notably in the Great Lakes, Upper South and Intermountain West. These include “up-and-coming” metro areas that also have the potential capacity to bring tech-based development closer to the nation’s left-behind places.
This could include cities such, Madison, WI; Albany, NY; Provo, UT; Detroit, MI; and Kansas City, MO.
The study’s authors added that spreading tech innovation could help address the issues of having it concentrated in just a handful of markets, but to make it happen will require what they described as robust policy steps.
“As we allude to in the report, these five regions have locked up a disproportionate share of job growth in the Innovation sector due to their specializations in some of the fastest-growing, digital services industries included in our definition like software publishing, data processing and hosting, other information services including web publishing and search, and scientific R&D,” said Jacob Whiton, research analyst for the Metropolitan Policy Program at Brookings.
“While productivity growth has continued in the advanced manufacturing industries, they have in many cases experienced ongoing job loss,” Whiton told ClearanceJobs.
“As a result, metros that are specialized in, say, semiconductor, chemical, or computer equipment manufacturing lost job share in the sector over our period of analysis,” he added. “Moreover, service industries are much more reliant on access to a trained technical workforce, which the top regions have in abundance. As high wages continue to attract the highly educated to these labor markets, their advantage is further entrenched vis-à-vis less educated metros.”