The federal government must focus economic policy that’s aimed at reversing the untenable concentration of jobs and investment in a few elite and primarily coastal urban hubs.
A new report from the Brookings Institution warns of the trend becoming irreversible, to the detriment of the nation. The report, “The case for growth centers, how to spread tech innovation across America,” concludes that since 2005, five metro areas — Boston, the San Francisco Bay Area, San Jose, Seattle and San Diego — accounted for 90% of all U.S. growth in “innovation sector” jobs.
The jobs are defined by Brookings as those in the top science, technology, engineering and math industries that include extensive research and development spending. Another 343 metro areas lost a share of these jobs in that same period.
What follows those high-paying jobs is denser concentration of wealth and productivity. According to Brookings, half of the nation’s “innovation jobs” are in 41 counties. The destinations of the innovation sector draw educated people and investment money from other places, and those concentrations lead to continuing improvements in their economies and their residents’ well-being.
Industrial states lost population and wealth over the last 50 years as the nation ceded its once competitive edge in manufacturing to other countries, and then enacted trade agreements that disemboweled middle America of manufacturing jobs.
With a renewed emphasis on competitiveness alive in the United States, and a new recognition that free trade agreements should not sacrifice those Americans who depend on a manufacturer’s paycheck, America is clawing back economic power in the global arena.
Congress must consider tax credit, education and research policies that encourage geographic balance. There must be an investment in infrastructure that serves the needs of employers and workers: safe highways, public transit, reliable water and utilities, and broadband coverage. Health care, education and other social policies also deserve attention.
Brookings proposes the federal government focus on a short list of heartland metro areas with compelling strengths — places with the potential to be self-sustaining “growth centers.” These would be selected by a rigorous competitive process to receive substantial financial and regulatory support for 10 years and become self-sustaining new innovation centers. In an earlier study this year, Brookings proposed creation of a regional venture capital fund that would be big enough to attract money from more prominent investors along the East and West coasts.
Voters in the flyover states surprised the country and themselves in 2016 when they elected Donald Trump as president, responding to his promises to re-energize manufacturing. Voters must continue to use their political energy to ensure that they share equitably in the technology innovation revolution now underway.
First Published: December 29, 2019, 5:00 a.m.
