The forces that are driving the nation’s top technology talent to just a handful of cities have intensified in recent years, leaving much of the nation behind as the U.S. becomes a more digital economy, reports The Wall Street Journal (Dec. 13, 2019). Just five metropolitan areas—Boston; San Diego; San Francisco; Seattle; and San Jose—accounted for 90% of all U.S. high-tech job growth between 2005 to 2017.
The nation’s 377 other metro areas accounted for 10% of the 256,063 jobs created during that period in 13 high-tech industries such as software publishing, pharmaceutical manufacturing and semiconductor production. Among the smaller cities that gained tech jobs were Madison, Wis.; Albany, N.Y.; Provo, Utah; and Pittsburgh. The result is increased concentration of high-tech resources in just a few places and a strengthening of economic forces that are dividing the nation.
Tech industries find they are most productive when they have resources clustered in few places, a topic discussed in Chapter 8 of your Heizer/Render/Munson OM text. Such clustering allows for the fast spread of new ideas and a concentrated talent pool from which businesses recruit. But the concept runs counter to the idea that technology might allow people to work from anywhere, even in remote places.
The trend is creating problems for the cities that have these concentrations of workers and for those places that don’t. San Francisco and Boston are becoming increasingly unaffordable as home prices soar, while cities outside of these high-tech hubs are missing out on the dynamism that technology creates. “The superstar places are becoming extremely expensive, choked with traffic and struggling with big social costs like inequality gone wild and homelessness,” said a researcher studying the issue.
Some big cities were left behind. Combined, the Washington, D.C. area; Dallas; Philadelphia; Chicago; and L.A. lost more than 45,000 high-tech jobs between 2005 and 2017. Many small cities across the heartland also lost tech jobs.
Classroom discussion questions:
- What are some other clusters besides tech talent?
- What does it take to create a tech cluster?