Tech Industry Helps Local Economies Across U.S., Study Finds

By Cameron Scott 

Technology is growing, not just in Silicon Valley, but across the U.S., and the employment benefits spread out to other industries as well, according to a study released today by the Bay Area Council Economic Institute.

The industry has swelled its payroll by about 11 percent since the lowest point of the Dot Com bust, and unemployment rates among tech workers have been consistently lower than average rates in the U.S. since then.

While Silicon Valley has the largest concentration of tech-industry jobs, other parts of the United States have seen surprising growth in the sector. In Boulder, Colorado, and Huntsville, Alabama, technology now offers nearly as great a percentage of total jobs as it does in San Jose.

Author Ian Hathaway, the council’s research manager, said he was surprised to see how diverse the newer tech hotbeds are, occupying parts of the Rust Belt, the Great Plains and the South.

“Those regions need growth from somewhere. They’ve obviously had tremendous loss of jobs from manufacturing,” he said.

The industry’s latest growth spurt has allowed it to spread out, Hathaway noted, thanks to what Mary Meeker recently called “asset-light generation,” such as mobile apps.

“You don’t need a lot of people to create apps,” Hathaway said. A lot of software engineers are drawn to places like the Bay Area, but not all are.

The report says that workers employed by the technology industry make roughly 17 percent more than the counterparts in other industries.

And, jobs in technology tend to drive jobs in other industries that serve or rely on technology.

“The creation of one job in the high-tech sector of a region is associated with the creation of 4.3 additional jobs in the local goods and services economy of the same region in the long run,” the study concludes.

U.C. Berkeley professor of economics Enrico Moretti, whose methodology was adapted for the study, put it bluntly: “While the average worker may never be employed by Google or a high-tech startup, our jobs are increasingly supported by the wealth created by innovators.”

The study only addresses the “jobs benefits” offered by technology. It does not address some of the potentially negative side-effects of innovation, such as environmental degradation or skyrocketing cost of living in tech hotbeds like San Francisco.