Just five U.S. cities have 90% of the growth in tech jobs, new study finds

San Francisco and four other U.S. cities saw 90% of the tech job growth for 12 years until 2017, leaving out hundreds of other cities. Researchers want Congress to fund jobs growth in up to 10 heartland areas to improve innovation nationwide. (Pixabay)

U.S. technology sector jobs are overwhelmingly concentrated in just five U.S. cities, creating a “grave problem” of regional inequality and lost opportunity in the heartland, according to a new study.

The five cities with 90% of the innovation-sector job growth from 2005 to 2017 were Boston, Seattle, San Francisco, San Jose and San Diego, according to the study by researchers at Brookings Institution and the Information Technology & Innovation Foundation.

Of the 256,063 jobs created in that 12-year period, only 10% went to 343 other metro areas. Washington DC is expected to benefit by Amazon’s decision to locate 25,000 tech workers for a second headquarters in Arlington County, Va., over the next dozen years just across the Potomac River from Washington.

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The researchers argued “it is time for the federal government to take aggressive steps to counter the epidemic of regional division and avoid ceding its innovation lead to China. Congress should establish a major new initiative to select a set of promising metro areas to receive a major package of innovation inputs and supports that would help these areas accelerate, transform and scale up their innovation sectors.”

The researchers counted 13 high tech and advanced industries in the innovation sector, including chipmakers and fabs. The report’s authors said innovation has declined nationally because tech companies increasingly move activity from the high-cost U.S. tech hubs to medium-cost foreign hubs. The five tech hubs have higher housing and living costs, homelessness and problems with congestion and limited access to some resources.

The study suggested the U.S. should create eight to 10 new regional growth centers across the heartland with each metro area getting R&D funding worth $700 million a year for 10 years. Overall, it could cost the federal government $100 billion, but the study argued that cost is substantially less than the 10 year cost of U.S. fossil fuel subsidies.

Mark Muro and Jacob Whiton of Brookings and Rob Atkinson of ITIF conducted the research. The executive summary is posted online as well as the full report.

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