The Cessna jet assembly line in Wichita, Kansas. The city's aircraft manufacturing industry makes it one of the leading advanced industry metros in the nation. Reuters/Jeff Tuttle

These high-tech sectors are also more geographically concentrated than they were a decade ago.

The so-called "advanced industries"—we’re talking tech-adjacent sectors like aerospace, computing, oil and gas extraction and communications equipment manufacturing —are critical to national competitiveness. But according to a new Brookings Institution report, while the U.S. remains highly productive in these fields, its long-held advantage in them may be slipping.

The advanced industries identified in the report (see table below*) include tech-driven manufacturing (pharmaceuticals, car-making, chemicals, etc.), energy (metal ore mining and gas extraction) and service (management and scientific consulting, architecture, software, etc.) industries.

These industries generated $2.7 trillion—roughly 17 percent of U.S. gross domestic product—in 2013, while employing just 9 percent of the workforce, or 12.3 million American workers.

The report, which draws data from the OECD and Moody's Analytics, finds that the output of the advanced industry sector has grown at a 5.4 percent clip since 1980, 30 percent faster than the U.S. economy as a whole. And the sector is responsible for a whopping 65 percent of the new jobs created since 2010.

Jobs in the advanced industries also pay quite well, averaging $90,000 per job in 2013, more than twice the average wage for U.S. workers on the whole. What’s more, these sectors have seen actual wage growth, with salaries ballooning by 63 percent between 1975 and 2013 (after adjusting for inflation), compared with just 17 percent growth outside of the industries.

As the chart below shows, workers in advanced industries benefit from a substantial wage premium—and not just the sectors’ highest skilled workers. Less skilled workers benefit as well.

Workers without high school diplomas in these fields make, on average, 65 percent more than workers in non-advanced sectors. The gap shrinks to 59 percent for workers with bachelor’s degrees, grows to 67 percent for those with master’s degrees, and shrinks again to 31 percent for those with Ph.Ds. Clearly, there are substantive differences between the paychecks of those who work in these sectors and those who do not.                                           

But advanced industries are spiky across the U.S., clustered and concentrated in a relatively small number of cities and metro areas, as the map below shows. In fact, the 100 largest metros in the country contain 70 percent of its advanced industries jobs. The sector has become even more concentrated in the past three decades or so. While 59 of the country’s major metros contained at least a 10 percent share of advanced industries workers in 1980, that number shrank to 23 metros by 2013.

San Jose (the Silicon Valley) leads, with 30 percent of its total jobs in the advanced industry sector. And most of the other leading metros in the top 20 are tech hubs: Seattle, San Francisco, Washington, D.C., Boston, San Diego, Austin, Raleigh and Salt Lake City. But some less likely suspects also dot the list, like Detroit, for its advanced automotive tech focus; the aircraft manufacturing center of Wichita, Kansas; the communications hub of Palm Bay, Florida (home to the Harris Corporation); budding IT star Charleston, South Carolina; and Houston’s energy-enabled complex.

The report notes several implications for U.S. competitiveness. First, the good news: Out of 14 nations with competitive sectors and development in 2010, the U.S. has the second-most productive advanced industry sector in the world, behind only Norway, which profits from its intensive energy sector. As the report notes, “The average American advanced industry worker was about 2.5 times more productive than workers in Hungary and between 50 and 70 percent more productive than advanced industry workers in Italy, Sweden, and Germany.”

On the flip side, the U.S. is less competitive in terms of the size of its advanced industries by employment and its output as a share of the total economy. Between 2000 and 2010, the U.S. saw larger declines in advanced industry jobs than any other comparable country. It now trails nations like the Czech Republic, Germany, Hungary and Finland, as the graphic below shows.

Between 2000 and 2010, according to OECD data, the U.S.’s advanced industry contribution to GDP fell by 2 percent, losing out to sectors in Austria, Germany, Finland, Sweden and South Korea, whose contributions all grew.

As a nation, the U.S. benefits greatly from its advanced industry sector. But as with so much else, these industries are becoming even more uneven and spiky, with their considerable benefits confined to a shrinking number of cities and regions across the country.

*CORRECTION: An earlier version of this story included a graphic with 48, not 50, advanced industries. The graphic has been updated.

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