Innovation and the Growth of Cities

Innovation and the Growth of Cities

Zoltán J. Ács

This new and original book by Zoltan Acs explores the relationship between industrial innovation and economic growth at the regional level, and reaches conclusions as to why some regions grow but others decline. While the analysis draws on industrial organization, labor economics, regional science, geography and entrepreneurship, the book focuses on innovation and the growth of cities by the use of endogenous growth theory.

Chapter 7: Employment Growth in Metropolitan Areas

Zoltán J. Ács

Subjects: economics and finance, economics of innovation, evolutionary economics, geography, cities, innovation and technology, economics of innovation, urban and regional studies, cities


7.1 INTRODUCTION Shift-share analysis has become a very popular tool for analyzing regional employment change. While earlier papers have focused on one version of the shift-share technique, this chapter looks at shift-share analysis from both absolute and relative perspectives. The purpose of this chapter is to utilize the traditional approach to shift-share analysis to analyse high-technology employment change in 37 metropolitan areas. A new variable, labor force, is introduced to permit inter-metropolitan comparison by converting absolute numbers into relative numbers. High technology in metropolitan areas has received little attention in shift-share analysis and little has been done in analyzing high technology at the industry level. This chapter has two objectives: (1) to utilize the traditional shift-share technique in both absolute and relative terms and illustrate why both are necessary, and (2) to give the first account of the recent trend of high-technology employment in US metropolitan areas. In Section 7.2 we introduce the data, followed by a description of technique in Section 7.3. Section 7.4 provides a regional analysis and Section 7.5 provides an industry by industry analysis of high technology employment. We find that shift-share analysis is a useful tool to study employment shifts in metropolitan areas. Most of the gains and losses in an MSA can be explained by the region’s competitiveness component. 7.2 DATA The Bureau of Labor Statistics (BLS) supplied employment, or ES-202 series data, for the years 1988 and 1991. Employment data are reported to the BLS by State Employment Security Agencies (SESAs) and cover...

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