The Location and Growth of Business and Professional Services in American Metropolitan Areas, 1976–1986

Abstract

The economic base of American metropolitan areas relies increasingly on business and professional services. We explore the causes for fast growth of these sectors in metropolitan areas for 1976–86. Business and professional services produce new types of inputs to a large number of sectors. They encompass far more than externalization of activities once produced internally by manufacturers. We emphasize localization of business and professional services in selected metropolitan areas driven by the demand for skilled labor and information. Using employment data for SMSAs, we present empirical evidence verifying the concentration of business and professional services in the largest metropolitan areas and a temporal lag in their market penetration of smaller metropolitan areas. We introduce a new measure called a growth quotient to show that these services are growing rapidly in selected regional metropolitan areas. SMSAs in the industrial belt, especially in their central counties, rely on business and professional services to generate new jobs. Elsewhere metropolitan growth is more diversified.

City Systems and Industrial Market Structure

“…A second point of context relevant to the increased complexity of industry structures is that the period between 1982 and 1992 saw marked volatility in both national and international economies, with recessionary pressures and the advent of restructuring in the manufacturing sector especially consequential for the services sector (Harrington 1995;Ó hUallacháin 1996;BagchiSen and Sen 1997). Among the services sectors more significantly affected by general economic turmoil, rather than by industry-specific factors, are those more directly related to consumer spending (e.g., personal services and health services) or to business closure and restructuring (e.g., legal services, personnel services, and building services).…”

“…By 1992, however, the national map exhibits less east-to-west variation, with Atlanta and San Diego now closer to the national norm but St. Louis below the national average. This latter event is no doubt the consequence of the historic dominance of the aerospace and defense industries within the St. Louis economy and the decline of this sector throughout the midwest in the 1980s (Ó hUallacháin 1987;Naponen et al 1996).…”

Creativity, Community, & Growth: A Social Geography of Urban Craft Beer

“…These studies examined metropolitan regions and specific specialized industries (like so-called producer services) to understand the scale and scope of spatial interactions that define innovative communities, industries, and sectors (O hUallachain, Reid 1991, 1993, Markusen 1996. Eventually, geographies of innovation went micro and began to seek an understanding of the relationship between firm growth, knowledge production, and production systems on the ground and across space.…”

Service Employment in Large, Medium, and Small Metropolitan Areas in the United States

“…Existing firms are externalizing certain service inputs, and new firms are subcontracting out services such as advertising, tax accounting, payroll, and other intermediate services instead of maintaining these activities in-house. Shifts in household characteristics (i.e., an increased participation of women in the labor force, and an increase in elderly population) have led to an increased demand for consumer services such as child care, cleaning, food delivery, nursing, and retirement services (Daniels, 1982;Petit, 1986;Coffey and Polese, 1987;Kirn, 1987;Nusbaumer, 1987;Drennan, 1989;Ó hUallacháin, 1989;Price and Blair, 1989;Illeris, 1991;Ó hUallacháin and Reid, 1991;Sui and Wheeler, 1993). In addition to producer services, the demand for nonprofit services (i.e., health care, education, social services, and government services) also has grown in the past two decades.…”