Contrary to technology’s image as an equalizer, digital service jobs in United States have clustered and concentrated in a select few metros.
This post is part of a CityLab series on power—the political kind, the stuff inside batteries and gas tanks, and the transformative might of mass movements.
From the “world is flat” to the “rise of the rest,” we consistently hear the meme that technology is the great leveler and that new players across the country and world are gaining steam in high-tech industries.
But the reality is that high-tech jobs remain distinctly concentrated in a few American metro areas. That’s the takeaway of a new analysis from Mark Muro and Sifan Liu of the Brookings Institution’s Metropolitan Policy Program. The story of tech demonstrates what ails the divergent American economy.
The map below by Taylor Blake of the Martin Prosperity Institute (MPI), based on the Brookings data, shows just how spiky high-tech job growth has been across metros in the United States. The Brookings analysis defines high-tech jobs as four key digital services industries—software publishing, data processing and hosting, computer systems design, and web publishing/search.
Nearly half of all high-tech digital service jobs in the U.S. (46 percent) cluster in just 10 of its largest metros, which mainly span the San Francisco Bay Area and the Boston-New York-Washington Corridor. My own analysis shows that these areas account for more than half of all venture capital-financed high-tech startups.
San Francisco topped the list in high-tech job growth—adding some 31,500 jobs from 2013 to 2015. Nearby San Jose—home to Silicon Valley—added 27,500 jobs, followed by New York with 24,200 jobs. Dallas-Fort Worth added about another 15,400 jobs; and Boston, Austin, Seattle, Los Angeles, and Chicago each added about 10,000 tech jobs or more over those three years.
Conversely, Pittsburgh, typically cited as an example of the “rise of the rest,” added just 3,200 tech jobs, a tenth of San Francisco’s total; Detroit added 3,400; Philadelphia added about 2,500 tech jobs; and Nashville and Raleigh in the North Carolina tech triangle added 1,800 each. Even Washington, D.C., added about 7,600 new tech jobs, roughly a quarter of San Francisco’s total from 2013 to 2015.
The chart below from the Brookings analysis shows the leading and lagging metros in terms of the change in the share of all high-tech jobs across the nation between 2010 and 2015.
The top three are the well-established tech hubs of San Francisco, San Jose, and Austin. Those three—along with Dallas and Phoenix—accounted for more than a quarter of tech job growth from 2010 to 2015. In fact, just 14 out of 100 metros accounted for any significant share of national growth at all. While some smaller metros like Indianapolis, Charlotte, Madison, Raleigh, Provo, and Pittsburgh did increase their share of national growth, their share of overall national growth remains quite small compared to San Francisco or San Jose. At the very bottom of the list is a notable outlier: Washington, D.C. While it added tech jobs from 2013 to 2015, budget cuts to the defense sector dramatically reduced its share of tech jobs from 2010 to 2015.
But what factors might help us account for and better understand the uneven and concentrated geography of high-tech jobs? To get at this, I asked my colleague Charlotta Mellander to run some basic correlations between the absolute change in high-tech jobs between 2013 and 2015 and key features of America’s metro areas. (As usual, I remind readers that correlation does not in any way imply causation but simply points to associations between variables.)
For one, high-tech jobs are a product of larger, denser metros. The change in high-tech jobs is positively correlated with both the size (.59) and population density (.56) of metros. The growth in high-tech jobs is also positively associated with the share of workers who use public transit (.65)—a proxy measure for density—and negatively associated with the share of workers who drive to work alone (-.62)—a proxy for sprawl.
High-tech job growth is also a feature of highly-educated, knowledge-based metros, being positively associated with both the share of adults who are college grads (.52), the percent of the workforce who work in knowledge, professional, and creative class occupations (.50). Conversely, high-tech job growth is negatively associated with the share of the workforce in blue-collar working class jobs (-.32).
When it comes to high-tech industry and jobs, the rich really do get richer. High-tech job growth is positively associated with per capita income (.51), wages (.67), and productivity, measured as economic output per person (.56),
While the Trump administration continues to try to clamp down on immigration, our analysis finds a close association between high-tech job growth and the level of immigration, with positive correlation to the percentage of the population that is foreign born (.53).
High-tech job growth is associated with some of the challenges of today’s urban areas, which make up what I call The New Urban Crisis. High-tech job growth is positively associated with high housing costs (.52), and higher levels of wage inequality (.54).
The power of high-tech industries in America remains spiky. From an empirical point of view, the notion of the “rise of the rest” remains wishful thinking.