Creating High‐Technology Growth: High‐Tech Employment Growth in U.S. Metropolitan Areas, 1988–1998*

Abstract

Objective. Growth in the share of high‐technology employment is critical to discussions of the postindustrial transition. Do new state and local technology policies create growth in the share of high‐technology employment? This article examines this question along with the effects of location and agglomeration advantages, identifying sources of qualitative growth in the U.S. economy.Methods. We examine change in the share of high‐technology employment in metropolitan statistical areas (MSAs) in the United States between 1988 and 1998. High‐technology employment is measured from the BLS Current Employment Statistics Survey. The scale of state and local technology policies are measured from a comprehensive survey of state and local technology programs. A generalized linear model (GLM) estimates the effects of technology policies along with regional proximity, location, and agglomeration factors.Results. Technology grant and loan programs and research parks have direct effects on the share of high‐technology employment, along with private venture capital firms and military R&D. Research parks also magnify the effects of private venture capital firms, while public venture programs and technology development policies compensate for agglomeration deficits. Rapid population growth provides a more conducive context for these policies but does not directly influence growth in the share of high‐technology jobs.Conclusion. State and local technology policies compensate for and magnify the effects of agglomeration advantages, indicating that state and local government can play a strategic role in high‐technology development.