Rust Belts? Try Tech Belts

A new report reveals hot spots in some surprising places

Philadelphia probably doesn't spring to mind when you hear the words "high tech." But maybe it should. Philly--along with Chicago, Detroit, and New York--was one of the biggest employers of high-tech workers in the 1990s, according to a new study about to be released by the University of Minnesota. Many other rankings of high-tech "hot spots" simply tally up employees at chip, computer, and software companies. This report takes stock of all industries that employ more than three times the national average of scientists, engineers, and computer professionals--including systems analysts and database administrators. By this criterion, Chicago and Washington jump right to the top of the list--followed, in third place, by Silicon Valley.

Produced by Anne R. Markusen, director of the university's Project on Regional & Industrial Economics, the report is good news for Rust Belt regions, and has big implications for universities and government planners in those states. If the local economy is strong in chemicals, drugs, or biotech, for example, then state schools should be sprucing up offerings in organic chemistry--even if it's at the expense of computer science. Cultural and entertainment amenities also matter in high-tech meccas. So instead of splurging on trade schools to spawn more software jocks, city planners might want to build up ski resorts, bicycle paths, or museums and music halls, to encourage tech-minded graduates to stay in the state. "Where skilled people want to live and work makes much more difference than anybody ever thought," Markusen contends.

A BROAD NET. The report doesn't pretend to be a snapshot of cities in 2001. Indeed, much of the raw data analyzed by Markusen and her colleagues are from 1997--the last year in which certain types of regional employment information was gathered. But that doesn't dilute the impact of her findings, according to Edward W. Hill, editor of the journal Economic Development Quarterly. "The 1997 economic census is the best source of data we have," he says. "The trends were firmly established."

In one sense, the Minnesota findings are unsurprising. Chipmakers and software vendors obviously aren't the only ones who create and use sophisticated technology. Manufacturers of paints, polymers, and textiles depend on computer simulations to design their products, from silk-thin surfing suits to antiglare windshields and graffiti-proof ceramics. Ditto, many innovators of complicated financial services. What's more, software power users who populate the research labs and project development teams at such companies often hand-tailor their own applications programs.

Nonetheless, Markusen's findings are bound to be controversial--largely because of the methodology adopted by the director and her colleague, Karen D. Chapple. Relying on Bureau of Labor Statistics and Commerce Dept. data, they cast a broad net over employment of highly skilled workers from 1991 to 1997. When running the numbers, they were careful to exclude lower-level computer support specialists. As in other hot-spot rankings, however, once an industry was classified as high-tech, all workers, from secretaries to CEOs, were included in the regional data.

The upshot: Services from architecture to finance were represented in the final count--and so were petrochemicals and autos. "Our first impulse was to throw out these greasy, dirty jobs," Markusen says. But after talking to engineering experts, the team realized it was foolish to exclude techies who develop a "smart" dashboard for a car or a pollution-control system for an oil rig.

RUFFLED GURUS. The Minnesota team took some other novel steps. Unlike some rankings, this one looked at the absolute number of high-tech jobs--rather than focusing on tech-industry employment as a percentage of the workforce. Why? Researchers believed the usual analysis penalizes Rust Belt cities with diversified economies.

The results don't sit well with some New Economy gurus, such as AnnaLee Saxenian, a University of California at Berkeley planning expert and author of books on high-tech development. While conceding that the report's assessment of tech's broad diffusion is "an important finding," she takes issue with the definition. "If you call everything high-tech, the term loses its meaning," Saxenian contends.

Other academics, however, embrace the findings. "Industrial cities have been pretty successful and pretty vibrant over the '90s," says Michael D. Oden, a University of Texas planning expert. Scratch the surface, and you'll find that many of these regions are big technology innovators. And if Markusen's findings sink in, they won't all be looking West for their future inspiration.

By Stan Crock in Washington

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