Study: High-Tech Job Growth Overwhelmingly Benefits Three California Cities

Silicon Valley Workers
Greg Baker AFP via Getty Images

High-tech sector job growth is overwhelmingly benefiting three California cities, plus Seattle and Boston, while the rest of the U.S. has been left behind in the dust, according to a new study.

The findings published Monday by The Brookings Institution and the Information Technology & Innovation Foundation (ITIF) offer yet another a sign that economic disparities continue to negatively impact middle America.

Major Internet companies like Google, Facebook, and Twitter are headquartered in the San Francisco area, while Amazon is based in Seattle.

“The innovation sector has generated significant technology gains and wealth but has also helped spawn a growing gap between the nation’s dynamic ‘superstar’ metropolitan areas and most everywhere else,” the study concluded.

Just five top innovation metro areas — Boston, San Francisco, San Jose, Seattle, and San Diego — accounted for more than 90 percent of the nation’s innovation-sector growth between 2005 and 2017, the study found.

These metropolitan areas have increased their share of the country’s total innovation employment from 17.6 percent to 22.8 percent. By contrast, the bottom 90 percent of metro areas (343 of them) lost one-third of the nation’s innovation jobs.

“Such high levels of territorial polarization are a grave national problem,” the study said.

The negative consequences include spiraling home prices and traffic gridlock in those superstar metropolitan areas. The rest of the country must contend with brain drain as college-educated workers cluster in a handful of cities, leaving large swaths of the nation victim to underdevelopment.

The Brookings Institution warned that free markets alone won’t solve the problem, recommending that the federal government create eight to 10 new regional “growth centers” across the American heartland.

“Many conventional economists will argue that any push to promote regional equity will come at the expense of efficiency,” the study said.

“However, the negative externalities of the current imbalances and the positive ones of catalyzing new growth in new places each suggest that intervention can benefit the nation’s total welfare and global competitiveness.

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