Metropolitan Innovation in the New Economy

This paper analyzes the high-tech economies of 350-plus metropolitan areas across the U.S. during 2010. Attention is given to 20 different production attributes—including the age and education of the workforce, patent production, business startups, per capita productivity of the workers, and the like. Multivariate analysis is used to reduce these 20 attributes down to 10 orthogonal dimensions; then the scores on these dimensions are used to identify eight different innovation and entrepreneurial clubs. Basically the exercise deconstructs the metropolitan economies into various parts so that each economy is assigned a signature score on each of the independent factors. High-tech places, which are especially active in both patents and startups, are shown to be more heterogeneous than low-tech places. Moreover, the recent growth and change seen in many metropolitan areas appears to be associated with the incidence of very different factors: population growth has been driven by forces that are different from those that have induced either employment change or productivity growth in those metropolitan areas.