Is it Time for the U.S. Government to Drag Tech Jobs out of Silicon Valley and Into the Heartland?

Silicon Valley continues to be the elephant in the tech room. In every study I’ve seen, it dominates the share of tech jobs. Its engineers command the highest salaries. And in spite of regular reports of its coming demise, its dominance continues.

Over the years, various regions, in the U.S. and around the world, have pitched themselves as “the next Silicon Valley.” And some have indeed increased their respective pools of tech jobs. But none—with the exception of Boston, Seattle, San Diego, and North Carolina’s Research Triangle—have become serious technology hubs.

In fact, notes a recent study by the Brookings Institution, those first three (Boston, Seattle, and San Diego) plus Silicon Valley accounted for more than 90 percent of tech job growth from 2005 to 2017. Other “superstar metro areas” are growing quickly [see list]. By contrast, much of the rest of the country is starving for tech jobs—and losing ground. This is bad for a number of reasons, the report pointed out. These include increased political polarization in the country, rising housing costs and traffic problems in the cities that are tech-haves, and skilled worker shortages in the have-nots.

Top 20 U.S. Tech Metro Areas

• New York-Newark-Jersey City, NY-NJ-PA
• San Jose-Sunnyvale-Santa Clara, CA
• Los Angeles-Long Beach-Anaheim, CA
• Seattle-Tacoma-Bellevue, WA
• Boston-Cambridge-Newton, MA-NH
• San Francisco-Oakland-Hayward, CA
• Dallas-Fort Worth-Arlington, TX
• Washington-Arlington-Alexandria, DC-VA-MD-WV
• San Diego-Carlsbad, CA
• Chicago-Naperville-Elgin, IL-IN-WI
• Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
• Phoenix-Mesa-Scottsdale, AZ
• Minneapolis-St. Paul-Bloomington, MN-WI
• Houston-The Woodlands-Sugar Land, TX
• Portland-Vancouver-Hillsboro, OR-WA
• Atlanta-Sandy Springs-Roswell, GA
• Austin-Round Rock, TX
• St. Louis, MO-IL
• Denver-Aurora-Lakewood, CO
• Miami-Fort Lauderdale-West Palm Beach, FL

(Source: Brookings Institution)

The solution Brookings researchers propose? Government intervention. They argue that the federal government should create eight to 10 regional “growth centers” in the U.S. heartland. According to them, each area should receive $700 million in direct R&D funding each year for the next 10 years. In addition, each should get workforce development funding of $5 million per year, plus exemptions from certain regulations, and other benefits, for a total 10-year cost of about $100 billion.

Where exactly are these potential “Silicon Valleys”? The report identified 35 possible areas that met certain criteria: geographically distant enough from superstar cities to be truly new regions; the presence of a university; a population higher than 500,000; and the presence of at least some local STEM talent, including Ph.D.-holders.

Using these and other factors, Brookings calculated an eligibility index. Madison, Wisc., came out way on top, followed by the Minneapolis—St. Paul area of Minnesota and Wisconsin, the Albany area of New York, and the Lexington area of Kentucky. [See table]

Some other interesting tidbits in the data:

• The Albany area wins the patent race, with 124 patents per 100,000 people living in the region

• Madison’s big advantage is in University STEM R&D, at nearly $1700 per person. Its nearest competitor, Pittsburgh, has roughly a third of that.

• Madison also has the largest percentage of people with bachelor’s degrees and STEM doctorates in its population. Go Badgers!

Contenders for the Next Silicon Valley:

(Source: Brookings Institution)

A version of this post appears in the February 2020 print issue as “Is It Time to Drag Tech Jobs Out of Silicon Valley?”