High-technology employment and R&D in cities: Heterogeneity vs specialization

Abstract

This paper uses data from high technology industry clusters in U.S. cities to establish a strong positive relationship between city, industry cluster (and university) R&D, and subsequent employment in the same industry cluster and city. Perhaps surprisingly, in view of recent results that heterogeneity favors growth, we found no evidence for spillovers from R&D in any one high technology cluster to employment in any other. However, spillover benefits from specialization appear microeconomically plausible in our context, though the data panel is too short to obtain any conclusions regarding growth.

Employment Growth and Entrepreneurial Activity in Cities

“…This suggests that specialization does not generally lead to higher levels of technological externalities or other knowledge spillovers that promote growth in the same industry sector. This is consistent with the findings of Glaeser et al (1992), Feldman and Audretsch (1999) and Acs, FitzRoy and Smith (2002).…”

“…Glaeser et al (1992), Feldman and Audretsch (1999) and Acs, FitzRoy and Smith (2002) examined the role of externalities associated with knowledge spillovers as an engine of regional economic growth. They found that local competition and industrial variety, rather than regional specialization and monopoly encouraged employment growth.…”

The impact of geographic differences in human capital on service firm formation rates

“…Those new firms that had 500 or more employees in their first year of activity appear to be primarily offshoots of existing companies. 3 Single unit firm formations in year t are identified on the LEEM as non-affiliated establishments with a start-year of t or t-1 that had no employment in March of year t-1, and had positive employment below 500 in March of year t. This avoids inclusion of either new firms that have not yet actually hired an employee, or firms recovering from temporary inactivity. 4 The 'start-year' is the year that the establishment entered the Census business register.…”

“…In fact, the 1990's saw an increase in the incidence of highly educated individuals starting new businesses, especially in the technologically advanced sectors of the economy, like computers, biotechnology, and internet-dependent businesses (Acs, FitzRoy and Smith [3]). However, there was also an increase in startups of many service businesses using relatively unskilled labor for services such as building cleaning, security, detective, and secretarial services.…”

Rebalancing and Sustaining Growth in China

“…There have been no uniform standards for the estimation of knowledge stock. Following the approach used by Acs et al (2002), the number of effective invention patents is used to measure the knowledge stock here.…”