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RE: Locations
April 2003

Where Are The High-Tech Locations In The U.S.?

By James Beatty, NCS International

High tech. You and I use the term every day in our conversations about the contact center industry and other related industries that are referred to as high-tech. Just what is and (for my purposes) where are high-tech industries and occupations in the United States? It certainly is one of those industries or jobs that you know it when you see it, but how do you quantify it, measure it, define it, and locate it or recruit it? Well, for these answers and even more insight on this topic, I found a wonderful study written by Chad Wilkerson, who is an associate economist at the Federal Reserve Bank of Kansas City. His article helps to demystify the high-tech topic for me and I thought you would enjoy his analysis as well. 

Wilkerson starts by offering a few definitions of high-tech. One definition was put forth by the Congressional Office of Technology Assessment, on which I was proud to serve as a member of the Advisory Panel on Information Technology and Economic Development. The OTA as it was called, states that, "High-tech is the design, development and introduction of new products and innovative manufacturing processes or both through the systematic application of scientific and technical knowledge." This was in fact their definition in 1982 and generally has been accepted among researchers. Despite general agreement on the definition, there has been considerable disagreement on which industries should be considered high tech.

Wilkerson cites one method, which is to simply choose industries whose products and services are widely considered as high- tech, such as computer manufacturing and online information services. Yet another method is to determine the percentage of an industry's national employment in high-tech occupations and to consider the industry high-tech if the percentage significantly exceeds the national average across all industries. For example, he cited one study that considered an industry high-tech if at least nine percent or three times the national average of its employees were engineers, physical scientists, math scientists and science/engineering managers. The study actually identified 30 such industries, which were led by the "guided missiles and space vehicles" industry, which had a whopping 43 percent of its employment in high-tech occupations.

Here is a listing of high-tech occupations job titles with the Department of Labor Service Occupation (SOC) codes.

SOC  Occupation Title
15  Computer Specialists
17 Engineers
19  Scientists

Table 1

There are several categories within each Occupation title.

The North American Industry Classification System (NAICS) lists high-tech industries in a similar fashion. The measurement is the share of an area's total employment in four key high-tech industries.

NAICS  Industry Title
334 Computer and Electronic Product Manufacturing
5112  Software Publishers
514  Information and Data Processing Services
5415 Computer Systems Design and Related Services

Table 2

So with this as a basis of study, I will focus on where the high-tech occupations and the high-tech industries are in the U.S. by size of city. (Chart below)

METRO SIZE Percentage of Workers In High-Tech Occupations - National Leaders Percentage of Workers in High-Tech Industries -
 National Leaders
Over 2 Million
(22 metros)
San Francisco-Oakland-San Jose, CA: 12.7
Seattle-Tacoma-Bremerton, WA: 10.8
San Francisco-Oakland- San Jose, CA: 10.9
Boston-Worcester-Lawrence, MA-NH-ME-CT: 7.7
Average 7.4 4.4
1-2 Million
(27 metros)
Raleigh-Durham, NC: 12.2
Austin-San Marcos, TX: 11.0
Austin-San Marcos, TX: 9.2
Raleigh-Durham, NC: 5.2
Average 6.0 2.7
500 - 1 Million (32 metros) Colorado Springs, CO: 9.6
Albuquerque, NM: 9.1
Colorado Springs, CO: 8.7
Omaha, NE: 5.1
Average 5.2 2.3
200,000-500,000 (84 metros) Huntsville, AL: 15.7
Melbourne-Titusville-Palm Bay, FL: 12.9
Huntsville, AL: 13.8
Binghamton, NY: 12.5
Average 4.9 2.0
Under 200,000 (108 metros) Cedar Rapids, IA: 10.4
Richland-Kennewick-Pasco, WA: 9.6
State College, PA: 8.5
Sherman-Dennison, TX: 8.3
Average 3.7 1.9

Table 3

After reviewing the data, there are some theories that are put forth. For instance, since much high-tech is specialized, high-tech workers tend to go where the job opportunities are more plentiful, especially in larger metropolitan areas, so they can minimize the opportunity of going without work in down times. Wilkerson also suggests that highly skilled workers may also prefer certain recreational and cultural amenities, such as museums, zoos, art venues and sports teams.

However, it bears discussion to point out that with all of the amenities of the larger metro area, there can also be some drawbacks, such as crime and the cost of living. These factors, coupled with the explosive growth of the Internet, which make it easier for workers to interact with colleagues, suggest that smaller areas and non-metro/rural areas have an opportunity to create niches in the high-tech phenomenon. In other words, if they recruit the workers based on an excellent quality of life, then the companies follow.

Another factor that influences the high-tech location trend is the presence of government/military-related research institutions. Albuquerque and Santa Fe, New Mexico certainly have benefited from the presence the Sandia National Laboratory and the Los Alamos National Laboratory. The North American Space Command at Cheyenne Mountain and the U.S. Air Force Academy have impacted Colorado Springs, Colorado (I suppose I should also mention the U.S. Olympic Committee).

The implications for high-tech corporate decisions regarding locations for expansions suggest that the cities highlighted in Chad Wilkerson's study are prime areas to be considered when the economy rebounds to levels that will in fact sustain growth.

I trust this study will also be useful to the communities that are cited as the national leaders in their respective population groupings. I hope it will encourage them to go forth and promote themselves as high-tech locations. Communities that were not cited in a specific metro division should begin to amass the data needed to quantify their high-tech occupational or industry penetration. Keep in mind that corporate America loves numbers and rankings and any community would be well advised to know their own before the site searches begin. If you would like to see the study in its entirety, go to www.kc.frb.org. If you would like to send me any comments, please do so at [email protected] or [email protected], and remember to refer to www.callcentersites.net for the latest information on call centers and back- office location information.

James Beatty is president of NCS International, Inc., which specializes in corporate site selection, community analysis and marketing.

[ Return To The April 2003 Table Of Contents ]

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