Tech jobs are concentrating in a handful of “superstar cities” including Seattle and San Francisco, dispelling predictions that the opportunity afforded by the innovation economy would ultimately be dispersed across the country.
That’s according to a new report by Brookings Institution Fellow Mark Muro, prepared for the American Enterprise Institute. Muro discovered that the top 10 tech hubs in the nation continue to grow their share of digital services jobs while most other cities show slow or stagnant growth.
“While tech’s superstar cities have captured the lion’s share of job creation in digital services, their immoderate success has not triggered any sort of self-regulating equilibrium process by which the nation’s stark geographic divides might begin to ease,” Muro wrote in his report.
The Seattle metropolitan region is among the top 5 cities for growth, adding 53,579 digital services jobs between 2010-2018. Digital services jobs include software publishers, data processing, computer systems design, and other information services, according to the report.
A sizable chunk of the tech job growth in Seattle is due to Amazon, which has grown from about 5,000 employees in the Seattle area in 2010 to more than 53,500 employees in 2019.
Greater Seattle is also home to Microsoft, mid-sized companies such as Zillow and Tableau, and hundreds of startups.
The picture isn’t entirely dim for heartland cities. Charleston, S.C., Charlotte, N.C., Lakeland-Winter Haven, Fla., Boise, Idaho, and Wichita, Kan. saw job growth in digital services increase 7 percent per year or more over the decade.
But overall, the numbers paint a picture of growing concentration despite efforts to spread tech industry prosperity beyond coastal tech hubs. Because the trend is toward a “winner-take-all” economy, Muro recommends federal action to balance the scales.
“The tech economy is unleashing forces that benefit only select group of elite regions, often to the detriment of everyone else,” he writes. “These dynamics are circular, cumulative, and massively scaled. Therefore, they call for a nation-scaled response.”
The Brookings findings on tech concentration, by the numbers:
- The Seattle region’s share of digital service jobs nationwide grew to 5 percent in 2018.
- San Francisco added more than 10 percent of the nation’s new digital service jobs over the past decade and nearby San Jose accounted for 8 percent of them.
- The mega-region created by San Francisco and San Jose added 200,000 digital service jobs since 2010, capturing 17.7 percent of the decade’s new tech employment.
- The top 10 regions for digital services captured 44.3 percent of the nation’s jobs in that industry in 2018.
- Nearly half of the nation’s new tech jobs were added in those same top 10 regions over the past decade.
- Outside the top tech hubs, just 21 cities increased their share of digital services jobs between 2010-2018 — and the gains were less than one-tenth of a percentage point. 63 regions saw their share of the sector decline.
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