Boston's economic growth needs to be slowed. Brookings

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stellarfun

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Mods, I'm starting this thread in this sub-forum, given the premise in the Brookings report that Boston tech growth, and the ensuing boom in lab and office space is coming at the expense of the rest of the country. Feel free to move.

The explosion of top-tier tech jobs has clustered in a handful of coastal hubs, expanding the wealth and innovation differential that’s draining talent from the rest of the nation, new research shows.

Just five metro areas — Boston, San Diego, San Francisco, San Jose and Seattle — snapped up 90 percent of the 256,063 tech jobs created from 2005 to 2017, according to a joint report released Monday from the Brookings Institution and the Information Technology and Innovation Foundation. The remaining 10 percent was divvied up among 377 urban areas.

The share of those jobs shrank dramatically in would-be hubs such as Chicago, Durham, N.C., Philadelphia, Dallas and Wichita, researchers found, with the bottom 90 percent of U.S. metro areas collectively losing one-third of these positions in the same period.
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The research by Mark Muro and Jacob Whiton of the Brookings Metropolitan Policy Program, and Robert Atkinson of the Information Technology and Innovation Foundation, looked at employment in 13 “innovation industries,” which they defined as fields where at least 45 percent of the workforce has STEM degrees and where research and development investment per worker is $20,000 or higher. The industries range from aerospace to chemical engineering to software and data processing.

These positions make up just 3 percent of U.S. jobs, but they generate 6 percent of gross domestic product and a quarter of exports. A third of innovation jobs are concentrated in just 16 counties, the report found, and half are compressed in 41 counties. The concentration is tied to the nature of technology: Progress and productivity increase more quickly in small areas with a wealth of resources and talent.

“These places enjoy the benefits of what economists call cumulative causation,” the report says, “through which their earlier knowledge and firm advantages now attract even more talented workers, start-ups, and investment, creating a gravitational pull toward the nation’s critical innovation sectors while simultaneously draining key talent and business activity from other places.”
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The study's authors posit that this concentration is not a good thing, and want the government to invest in tech centers in 'flyover ' country.

Study report here:
www.brookings.edu

The case for growth centers: How to spread tech innovation across America

The future of America’s economy lies in its high-tech innovation sector, but it is now clear that same sector is widening the nation’s regional divides—a fact that became starkly apparent with the …
www.brookings.edu www.brookings.edu

See also
A state unemployment rate of 2.9 percent doesn’t quite capture how tight the job market is in Massachusetts.

“I’ve never seen anything like it — and I was in the tech industry during the boom of the late 1990s,” says Chris Robinson, the chief talent officer at Third Rock Ventures, a Boston firm that provides capital to biotech companies. “And this is much greater than that one, as far as companies’ need and the lack of people with the right skills.”
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www.bostonglobe.com

Mass. biotech and technology companies are scrambling to fill open jobs - The Boston Globe

Some biotech firms are paying for new employees’ moving expenses, temporary housing, and other costs, while tech companies are allowing people to work out of state.
www.bostonglobe.com www.bostonglobe.com
 
Unfortunately, there's no straightforward way to create this kind of activity in places where it doesn't already exist. It's not as simple as dropping a new university campus or lab in the middle of nowhere. The cities that are winning have the infrastructure to support this rare class of talent: they're good places to live and raise families, they are research nodes for many other disciplines, they offer attractive amenities for the high-maintenance workforces required to make this industry go (all of why it's imperative that we press our advantage and keep our foot on the gas--we need to expand our transit infrastructure, keep spending money on our excellent schools, etc.).

Any mayor who wants this to happen in their town needs to be honest about how attractive they're making it for the kinds of people who'd need to relocate there.
 
I sort of agree with the title but disagree with the reasoning.
 
This is a misleading thread title. The Brookings report does not call for slowing of growth in the coastal high-tech markets to be slowed, but rather for investment from the Federal Government to create growth centers in the cities left behind.
 
awood91 said:
This is a misleading thread title. The Brookings report does not call for slowing of growth in the coastal high-tech markets to be slowed, but rather for investment from the Federal Government to create growth centers in the cities left behind.
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One of America's strengths vis-a-viz the "Old World" is that people have always moved to where the opportunities are. If cities are being left behind, that's how history works. People should be ready to relocate, and cities with opportunities should be densifying to accommodate them.
 
awood91 said:
This is a misleading thread title. The Brookings report does not call for slowing of growth in the coastal high-tech markets to be slowed, but rather for investment from the Federal Government to create growth centers in the cities left behind.
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This is where there should be bipartisan consensus on moving Agencies out of DC, and using them to seed innovation in other places.
  • The Populist/Trumpian case = reward flyover/rural states
  • The Conservative case = subsidiarity / be close to those governed / be more locally-representative
  • The Progressive case = government jobs are a force for good (and make agencies 2-senators harder to kill)

The Volpe DOT lab, for example, should go to Pittsburgh or Cleveland or St Louis to bolster CMU, CWRU, or Washington U

UMd became a fine computer science hub supplying local talent to NSA (Ft Meade) and the Social Security Admin (Baltimore)

My rules: don't co-locate with the lobbyists (e.g. don't move the SEC to NYC or DOT to Detroit) but do co-locate with "second degree" connections (e.g move the SEC to Philly, which has fine lawyers). Other rule: must have an airline hub (major or Southwest focus)

Energy - Detroit
DOT - Pittsburgh
Veterans - Milwaukee
Agriculture - Kansas City
Education - Indianapolis
Interior - Denver
Labor - Cincinnati
Trade Rep - Chicago
HHS - Cleveland
Commerce - Minneapolis
EPA - St Louis
SEC - Philly
DHS - Memphis
IRS - Atlanta
Census - Dallas

etc.
 
I remember the late 80's and early to mid 90's when everyone was leaving Boston, NYC, etc and moving to Phoenix, the Southwest, etc. It was supposedly the end of the Northeast with all that open space, tax breaks, sunshine and lower taxes. People and companies flowed that way for a while, but it has turned the other was again.

Sadly for many, the future lies in STEM-based careers and in those regional clusters mentioned in the report. History is littered with funded, well-intentioned and well thought out "innovation hubs" that have gone absolutely nowhere. I have done out-licensing valuation work for tech transfer offices / innovation hubs at state universities in the midwest and even when there is really solid IP, it just doesn't matter, because... Kendall Square, South San Francisco, La Jolla/Torey Pines.
 
The problem is that these five cities have reached 'critical mass', and extracting STEM-related economic growth from these cities and dispersing it elsewhere is now very difficult to do. This report looked at 256,000 jobs created over a 12 year period, that's about 20,000 jobs a year. The U.S. economy, in a good month, will add 250,000 jobs.

I only glanced at the report, but I believe I can fairly say that nearly all these 256,000 jobs were private sector. And that Volpe, Livermore, Ames (the three government R&D centers that would be in/near these five cities) had little or no job growth. Big Pharma has not rooted itself in Boston because of Volpe, nor did Apple locate itself in Cupertino because Ames was nearby. And yet the report would have the government create, operate, and finance these new tech centers in 'flyover country' in the hope that the private sector will follow.

.
 
This is obliquely a consequence of the dearth of housing supply in Boston and the greater region's transportation woes.
 
Moved this here for now. If we get a policy forum shortly, this would fit in there.
 
KentXie said:
Good. Maybe people in flyover country can move into major cities where the population makeup is more diverse and work with people from a variety of backgrounds.
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Brookings is not talking Topeka, here.

Just *NOT* Boston, San Diego, San Francisco, San Jose and Seattle (the tech leaders)
Further, I'd add not NYC or WAS or LA or Miami (which are doing fine off Finance, Gov, and Media, and LatAm Everything, respectively)
Further, probably not fracked energy cities in Okla or Tex, either

Most of these "second tier" / non-coastal cities are big (call them metro areas 10 to 30) typically 2m to 3m people and are plenty diverse, e.g., most have considerably more African-Americans than Boston or Seattle, and many have drawn from surprising other migrations (e.g. Hmong in MSP, Arabs in Detroit).

What they're missing is a winner-take-all champion in some kind of global market that happens to have created a local center of excellence.
 
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Also, play with Michael Porter's site on Clusters.

Clusters | U.S. Cluster Mapping

clustermapping.us clustermapping.us

Personal Fave: Prosthetics, where 50% of the USA's artificial joints (and 33% of global) come from within 30 miles of Warsaw Indiana. It is the "Detroit" of implanted hardware. Even if you aren't HQ'd there (3 of the top 5 are) you have to have a lab or a procurement office there, just like every global automaker has to have a presence in Detroit.

Second Fave: Rochester NY, with the Optics-and-imaging hub between Kodak, Xerox, and Bausch & Lomb and University of Rochester.

I don't think we're asking Facebook, Amazon, Qualcomm, etc to disperse or move to the boondocks. But we should think about what each place is good at, and move some investment that places like Boston "dont need"

Imagine moving the Volpe Center to Pittsburgh (rather than rebuilding it here). The employees would have a lot higher standard of living (cheap housing) and Cambridge could build a mix of residential and office to serve better what we're good at.
 
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