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Winning Industries and the Growth of Good US Jobs

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The Pursuit of Economic Development

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Abstract

Gabe examines the types of industries that support the growth of good jobs in states and US metropolitan areas. The best sectors for economic development tend to be technical and producer services; and energy- and transportation-related industries. An abundance of businesses in technical and producer services is especially important to the economic development of large metropolitan areas. Gabe finds that, although having a strong presence in manufacturing, as of 1990, was a bad harbinger for the future development of regions (because manufacturing employment declined nationally), an expanding manufacturing sector in a region helps the growth of good jobs. Overall, the chapter provides sound advice to state and regional officials in their search to identify “winning sectors” for industry clusters and export promotion.

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Notes

  1. 1.

    Michael Porter (2000, p. 16) defines clusters as “a geographically proximate group of interconnected companies and associated institutions in a particular field, linked by commonalities and complementarities.”

  2. 2.

    http://www.ripleys.com/myrtlebeach/#odditorium. Accessed May 5, 2016.

  3. 3.

    The idea that fixed costs of production can influence the location of industry is at the heart of Paul Krugman’s (1991, 1992) “increasing returns models.”

  4. 4.

    More recent studies have examined the factors—for example, knowledge spillovers, labor market pooling—influencing the geographic concentration of industries (Rosenthal and Strange 2001; Ellison et al. 2010).

  5. 5.

    Knowledge spillovers are also important to the economic development of big cities. The idea here, as explained by Gilles Duranton and Diego Puga (2004), is that information flows more easily among people and businesses in densely populates regions.

  6. 6.

    An article by Jaison Abel and Richard Deitz (2012) shows that on-campus research and development activities increase the demand for human capital in a region.

  7. 7.

    Information on the number of establishments by industry category is from County Business Patterns of the U.S. Census Bureau.

  8. 8.

    These location quotients are calculated using data from County Business Patterns of the U.S. Census Bureau.

  9. 9.

    The first six categories listed (e.g., Mining, Construction, Manufacturing) are major industry groups under the Standard Industrial Classification (SIC) typology. The final category listed (i.e., “certain types of services”) includes some—but not all—sectors included in the Services (SIC) major industry category.

  10. 10.

    It’s interesting that, of the top-five metropolitan areas for economic development, the two with the highest specializations in computer and data processing services—San Jose and Austin—also happen to be the two most-populated metros of the bunch. We learn throughout the book that the types of regional characteristics that support the growth of good jobs are quite different for large and small metropolitan areas.

  11. 11.

    These figures are calculated using data from County Business Patterns of the U.S. Census Bureau.

  12. 12.

    The number of industries (i.e., 48) analyzed in Fig. 3.3 is lower than the 58 shown in Table 3.1 because the 1975 to 1990 US growth rates are unavailable for some sectors. Several business services that are shown separately in Table 3.1 (e.g., Advertising, Computer and Data Processing Services, Miscellaneous Business Services) are combined into a single category of Business Services in Fig. 3.3.

  13. 13.

    This result of a converging manufacturing sector is explained, in more detail, in Chapter 9.

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Authors and Affiliations

  1. University of Maine, Orono, Maine, USA

    Todd M. Gabe

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Gabe, T.M. (2017). Winning Industries and the Growth of Good US Jobs. In: The Pursuit of Economic Development. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-52476-4_3

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  • DOI: https://doi.org/10.1007/978-3-319-52476-4_3

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  • Publisher Name: Palgrave Macmillan, Cham

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  • Online ISBN: 978-3-319-52476-4

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