Jobs and cool chandeliers.

Photographer: Julie Denesha/Bloomberg

Not All the High-Tech Jobs Are in California

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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Early last year, researchers at the Brookings Institution started tracking the progress of what they dubbed "advanced industries." The idea was to go beyond just the tech sector to other industries that spend a lot on research and development and require lots of scientific and technical knowledge.  The 50 industries they selected, ranging from basic chemical manufacturing to shipbuilding to software publishing, also tend to pay pretty well, with average annual compensation in 2015 nearly double that of other sectors. So if a metropolitan area has a lot of advanced-industry jobs and is adding them at a rapid pace, that's a pretty good sign of economic health.

Today, Brookings added two more years of data, covering 2014 and 2015. I used it to sort out the metro areas where advanced-industry employment makes up an above-the-national-average share (it's 8.7 percent) of total employment and has been rising rapidly since 2010:

Not exactly what you'd expect, right? That's partly because in Nashville, Toledo, Grand Rapids and Louisville, manufacturing of motor vehicle parts is the No. 1 advanced-industry employer. (In Detroit and Greenville it's No. 2, after architectural, engineering and related services.) Making car parts may not strike you as the most advanced thing in the world. It definitely isn't the best-paying, with hourly earnings that since the last recession have fallen below the national average for private-sector workers. And with ever more signs that the post-recession U.S. auto-sales boom has peaked, it may not be a growth industry for much longer either.

But in all the other top-15 metro areas except Charlotte (where management, scientific and technical consulting services is No. 1), the top advanced-industry sector is something with the word "computer" or "software" in it. Yes, tech is huge in San Francisco and San Jose, but it's also pretty big in Kansas City, Madison and other cities where a lot of the more mundane work of software development and computer systems design gets done. E-mails Mark Muro, a senior fellow at Brookings and leader of the advanced-industries project:

There’s a relatively narrow, intense set of “creative hubs” but also a wider network of more day-to-day “installation metros.” In fact, “computer systems design” represents one of the top three job providers among advanced industries in 70 of the largest 100 metros.

Yes, it sounds better to be a creative hub than an installation hub. But that's OK -- in an installation hub you might actually be able to afford a house.

  1. Brookings defines advanced industries as "those in which R&D spending per worker ranks among the top 20 percent of industries and the share of workers with a high level of STEM knowledge exceeds the national average." STEM stands for science, technology, engineering and math.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor responsible for this story:
Stacey Shick at sshick@bloomberg.net