Do High Technology Policies Work? High Technology Industry Employment Growth in U.S. Metropolitan Areas, 1988-1998

Abstract

Since the 1970s, federal, state and local governments have launched an array of new high technology development programs. Researchers and policy-makers disagree about the relative merits of these policies. We address the effects of seven of these policies on high tech industry employment growth in metropolitan statistical areas in the United States between 1988 and 1998. A conditional change score design shows that technology grant/loan programs and technology research parks have direct effects net of location and agglomeration factors. Five of seven programs positively interact with existing agglomeration advantages to create growth in high technology industry employment. Technology development programs compensate for deficits in agglomeration resources. Our results suggest that high-technology development can be planned by designing programs that magnify existing local growth advantages.