by Beverly Kerr, Chamber Vice President of Research
On June 2, the Milken Institute published a new report, North America’s High Tech Economy: The Geography of Knowledge-Based Industries, that revisits indicators originally produced in an influential Milken Institute report from 1999 documenting the importance of high-tech industry to regional economic vitality.
Austin comes into the new report’s composite “Tech Pole” index ranking of metropolitan areas at 20th place. This is not very different from Austin’s place (21st) in the 1999 report (which did not include Canada and ranked based on a somewhat different methodology). However, the current report provides rankings based on 2003 as well as 2007 and Austin had been at 16th place in 2003.
The index is designed to be indicative of an area’s ability to grow and sustain high tech industries and the name of the index is mean to represent the relative technology gravitational pull that such regions exert.
Austin’s highest LQ, 10.5 in computer and peripheral equipment manufacturing, means that the local concentration of this industry is over ten times that of North America. The next most significant high tech LQ for Austin, 7.4, is in semiconductor and other electronic product manufacturing. San Jose has an over all high tech LQ of 4.6. Like Austin, its two highest individual tech industry LQ are in computer manufacturing (28.4) and semiconductor manufacturing (17.3).
The top scoring metro (San Jose) is given a score of 100 and each other metro is rebased to the top scoring metro. There’s an extraordinary spread between San Jose and the 2nd ranking metro, Seattle, which has a Tech Pole score of 46.4. Dallas, ranked 6th, has a score of 21.8 and Austin comes in at 20th with a score of 11.6.
Although Austin’s 20th place showing might not seem as elevated as we sometimes get used to seeing in other ratings and rankings, the new report nevertheless refers to Austin as a “poster child for the concept of a 21st-century knowledge-based community” and the 1999 report, which details the author’s arguments about the decisiveness of concentrations of knowledge-based industries in greater depth, references Austin frequently as an exemplar.
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