US-based entrepreneurs are known for innovating across industries, but a recent study aimed to review whether those innovations are far-flung enough across the country, and the answers may surprise you.
From 2005 to 2017, the 13 highest-growth industries as satellite telecom, computer equipment manufacturing and R&D services appear to have been concentrated in 20 main metro areas. Even more startling, five areas (San Diego, San Francisco, Seattle, San Jose and Boston) accounted for over 90 percent of the innovation-sector growth in the entire country, according to a December 2019 Brookings Institution report called “The Case for Growth Centers.”
About 30 percent of the US’ innovation industry positions are in just 16 counties, the report notes. This certainly propels those regions, but it may be curbing growth in others, leaving them behind from a technological standpoint.
And it’s not all positives in the five standout cities, the report reminds readers. The areas where innovation is booming face sky-high home prices and traffic issues, as college-educated workers flock to the growth cities and leave the non-innovative areas with fewer talented job candidates, the report said.
In addition to the five standout cities noted above, there are 15 more regions labeled “superstar metro areas,” as follows:
- New York
- Los Angeles
- Dallas-Fort Worth
- Washington, D.C.
- Chicago
- Philadelphia
- Phoenix
- Minneapolis-St. Paul
- Houston
- Portland, Ore.
- Atlanta
- Austin
- St. Louis
- Denver
- Miami
Here Are the High Growth Industries
As noted above, there are 13 high-growth industries that are focused on innovation. Those categories generate a full six percent of the country’s GDP, two-thirds of R&D business expenditures and 25 percent of the US’ exports, the report notes. Those industries are:
- Scientific R&D
- Basic chemical manufacturing
- Pesticide, fertilizer and agriculture chemical manufacturing
- Computer/peripheral equipment manufacturing
- Pharmaceutical/medicine manufacturing
- Semiconductor/other electronic components manufacturing
- Communications equipment manufacturing
- Navigational, measuring, electromedical and control instrument manufacturing
- Software publishers
- Aerospace product/parts manufacturing
- Satellite telecommunications
- Data processing, hosting and related services
- Other information services
These verticals “represent a cohort whose R&D expenditures exceed $20,000 per worker and have a STEM-worker share of 45 percent,” the report notes. As these categories are hiring swiftly in the 20 “superstar” metro areas, other US regions are actually losing jobs in innovative industries.
The study authors suggest that the government should bring more R&D activities to a handful of non-coastal cities that already have research universities in them, along with potential workers who have advanced degrees. This would allow those metro areas to also become hubs of innovation, they note.
Among the candidates as potential growth centers cited in the report are Madison, Wis.; Tucson, Ariz.; and Syracuse, N.Y. These “potential growth centers” appear to be eligible for swift innovation, according to Brookings.
