Last week the New York Times ran an article that highlighted a report documenting “the concentration of cutting-edge industries in a few coastal areas.” But, while this represents perhaps bad news for midwestern cities and states hoping to innovate, it may represent good news for Davis.
The Times reports: “There are about a dozen industries at the frontier of innovation. They include software and pharmaceuticals, semiconductors and data processing. Most of their workers have science or tech degrees. They invest heavily in research and development. While they account for only 3 percent of all jobs, they account for 6 percent of the country’s economic output.”
However, the Times adds that “if you don’t live in one of a handful of urban areas along the coasts, you are unlikely to get a job in one of them.”
Boston. Seattle. San Diego. San Francisco. Silicon Valley. They captured nine of ten of those jobs in that industry from 2005 to 2017. The report released a week ago found that five metro regions accounted for one quarter of these jobs, while half of the 382 metro areas in the country – including LA, Chicago, and Philadelphia – lost such jobs.
That concentration, the Times notes, “does not appear to be slowing down.” This is a cause of concern because of America’s deepening inequality.
At least for Davis, this report serves as a reason for hope.
The report from Mark Muro and Jacob Whiton from the Brookings Institution’s Metropolitan Policy Program, and Rob Atkinson of the Information Technology and Innovation Foundation, a research group that gets funding from tech and telecom companies, identified about 13 “innovation industries.”
These include “aerospace, communications equipment production and chemical manufacturing — where at least 45 percent of the work force has degrees in science, tech, engineering or math, and where investments in research and development amount to at least $20,000 per worker.”
Overall, the authors argue “a broad federal push is needed to spread the business of invention beyond the 20 cities that dominate it.”
“Hoping for economic convergence to reassert itself would not be a good strategy,” Mr. Muro said.
However, if we look at the map, we see that we happen to live in the convergence of the first (San Francisco) and third (Silicon Valley) biggest growth areas for innovation.
Moreover, we are already set up to take advantage of the knowledge economy. According to data presented by GSEC’s (Greater Sacramento Economic Council) Danielle Casey in August, 69 percent of Davis’ population with bachelor’s degrees have STEM (Science, Technology, Engineering and Mathematics) degrees. From other data, we see that 57 percent of students who graduate from UC Davis, graduate with a STEM degree.
As she put it, “high technology jobs are STEM jobs related to advanced technology in computing, manufacturing and health care…”
The Times argues that “expanding the knowledge economy across all of America might be a fool’s errand.” But Davis is ready-made and positioned to take advantage of this push.
Moreover, Sacramento itself is a rising star in the startup field. As the Bee reported in June: “Long seen as little more than a government town, Sacramento is rising in the ranks of cities where young entrepreneurs and startup companies want to stake a claim.”
“The once sleepy government town is ripe for new tech companies to take shape here and feed the early-stage startup scene,” analysts at CommercialCafe wrote.
Writes CommercialCafe: “With a 45% increase over five years in the number of jobs in computer, engineering, and science occupations, Sacramento placed first for tech employment growth. Census data showed that the number of residents aged 25 to 39 with a science and engineering bachelor’s degree or more increased by 16.6%, marking the largest percentage increase in tech educated talent pool.”
The Times article is of course focused on expanding the knowledge economy off the coasts.
They note, for instance, that places like Erie (Pennsylvania) and Flint (Michigan) “might never attract the Googles or Apples of the world. However, they note: “But midsize cities like St. Louis, Pittsburgh and Columbus, Ohio, could feasibly transform into hubs of technological entrepreneurship.”
The report by Brookings proposes about eight to ten cities, far from the coasts, “that already have a research university and a critical mass of people with advanced degrees.” They note: “The government would then spend about $700 million a year for research and development in each of them for a decade.”
That sounds like a tough order. But, fortunately for us, we already check all of those boxes and are well on our way to the kind of investment needed to become a technology hub – especially situated where we are.
As the article notes: “Young educated workers will flock to cities with large knowledge industries because that’s where they will find the best opportunities to earn and learn and have fun. And start-ups will go there to seek them out.”
But we already have a lot of that. What we need is a place for start-ups and other companies to go. The rest is already in place.
—David M. Greenwald reporting