-
Save the date for SSTI's 2024 Annual Conference
Join us December 10-12 in Arizona to connect with and learn from your peers working around the country to strengthen their regional innovation economies. Visit ssticonference.org for more information and sign up to receive updates.
-
As the most comprehensive resource available for those involved in technology-based economic development, SSTI offers the services that are needed to help build tech-based economies. Learn more about membership...
-
Subscribe to the SSTI Weekly Digest
Each week, the SSTI Weekly Digest delivers the latest breaking news and expert analysis of critical issues affecting the tech-based economic development community. Subscribe today!
New data tool shows distribution of businesses, employment in high-tech sector
The U.S. Census Bureau in February released a new experimental data product designed to better measure the business dynamics of innovative firms (BDS-IF). The new Business Dynamics Statistics of U.S. High Tech Industries provides measures of business dynamics for what the Census classifies as high-tech and non-high-tech industries, defined by science, technology, engineering and math (STEM) occupation intensity. A Census analysis on the data reveals that high-tech industries are concentrated in five coastal metro areas.
The figures show the quantity and proportion of employment in high-tech industries around America. The bigger the dot, the more people are employed in those high-tech industries, quantitatively. The darker the dot, the bigger the proportion of high-tech employment in that area.
The Census Bureau released a list of North American Industry Classification System (NAICS) codes used to qualify industries as “high-tech” for the statistics. The Bureau used the concentration of STEM occupation employment as described by Goldschlag and Miranda in their article "Business dynamics statistics of High Tech industries" that appeared in the Spring 2020 Journal of Economics & Management Strategy, applying the STEM method to 11 years of industry-occupation data covering the 2007 Economic Census to the 2017 Economic Census. In each year, 2017 NAICS vintage industries with a STEM employment share at least five times the national average were identified. Industries were classified as High Tech for the BDS-HT experimental data products if they met this threshold in at least six of the 11 years.
The new analysis finds that San Jose, Boston, and New York City saw a decrease in high-tech employment intensity since the 1980s, while Washington, D.C., and San Francisco saw increases, more than doubling in the case of San Francisco. These five metropolitan statistical areas (MSAs) are among the largest in high-tech employment.
The study shows that while the firm entries in the high-tech industry overall has decreased, the share of high-tech companies among new entrants in metropolitan areas has increased, with the size of new high-tech business entrants in San Jose quadrupling in size from 1978 to 2020.
Despite the share of entrants in metropolitan areas being high tech increasing, the rate of tech-tech company entry has been on a steady decline. This geographic distribution, shifting intensity and increasing share of incumbent establishments may have consequences for innovation and economic growth.