Tech Employment, Rebounding Automotive Sector Drive Advanced Industry Growth

Despite global headwinds, advanced industries expanded in the United States from 2013 to 2015, according to a recent report from the Metropolitan Policy Program at the Brookings Institution. Nearly two-thirds of this growth came from only seven sectors, led by tech services and automobile manufacturing, according to the report. Tennessee, Georgia, and Michigan saw advanced industry employment rise the most from 2013 to 2015.

The report, America’s Advanced Industries: New Trends, by Brookings Fellow Mark Muro, former Research Analyst Siddharth Kulkarni, and Nonresident Senior Fellow David Hart, examines those industries where R&D spending exceeds $450 per worker and where at least 21 percent of workers have STEM-knowledge intensive occupations (the average across industries is 20 percent). As covered by the Digest last year when the concept was first unveiled, the advanced industry sector is comprised of 50 industries, as defined by four-digit NAICS codes, with 35 manufacturing sectors, 12 service sectors, and three energy sectors.

The report notes the emergence of two, broad industries leading advanced industry growth: tech and automotive. Between 2013 and 2015, the authors find that approximately one-half of all advanced industries job growth (307,000 jobs) came from four fast-growing digital services industries: computer systems design, web search and internet publishing, software and products, and data processing and hosting. Additionally, more than 90,000 jobs came from three automotive sectors: motor vehicle parts, motor vehicles, and motor vehicle body and trailers. Although the advanced-energy sector was a significant contributor to advanced industry growth during the 2010–2013 period, it played little role in advanced-industry job creation from 2013 to 2015, according to a press release.

At the state level, Tennessee, Georgia, and Michigan saw advanced industry employment rise the most from 2013 to 2015, while Vermont, Alaska, and Wyoming had the largest decreases in advanced industry employment during the same time period. The metropolitan areas where advanced industries jobs grew the most from 2013 to 2015 were Nashville (TN), San Francisco (CA) and Jackson (MS). New Haven (CT), Tucson (AZ), and Bakersfield (CA) saw the largest declines in advanced industry employment from 2013 to 2015. Approximately three-fifths of regions saw their advanced sector output or employment slow during the period analyzed. State and metro area profiles can be downloaded from the Advanced Industries website.

A complimentary blog post written by author Mark Muro assesses the extent to which American productivity has been historically reliant on advanced industries. Since 1980, Muro finds that sectors included as Advanced Industries have increased their aggregate productivity by about 2.7 percent a year, compared to only 1.4 percent a year for the rest of the economy.

Read America’s Advanced Industries: New Trends here: https://www.brookings.edu/research/americas-advanced-industries-new-trends/