The New Economy Thrives in Smaller Communities |
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Taimerica Management Company looked at New Economy
trends for one of our Texas clients. We predicted that major metros,
with their hub airports and superb national airline connections, had a
decided advantage in developing the New Economy. But we found business
services, the statistical category that includes information technology
firms and call centers, thriving in all sizes of community .
The fastest growing metro in America in business services, no surprise
here, is Seattle. Seattle and San Jose have industry concentrations
that are double or quadruple those in other software centers, underscoring
their dominance in the software industry (See table below).
What's remarkable about the overall list is that six of the Top-10 centers
have less than 150,000 population. Smaller communities, not just
the major metros, are growing from a combination of new data centers, call
centers and software programming houses.
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(1990-98)
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Payroll growth in business services since 1990 averaged 10.3 percent per year in all metro areas. The 100 largest metros averaged an almost identical 10.7 percent per year while the average for the 100 mid-size metros between 200-600,000 population was 10.0 percent. Size doesn't matter that much when it comes to building a new economy on business services Top-10 metros on this list saw explosive growth in business services, growing at double the national rate (18-24 %/year). When a community with 62,000 jobs, like Steubenville, Ohio, sees payrolls in business services swell by $37 million in 8 years, this segment is having dramatic effects on America’s smaller communities. What are the industry hot buttons that move a community into the top tier of business service centers? A computer sciences program at a research university is the prominent factor in Iowa City, Austin, and Corvallis. A large buyer of programming services, such as a military command or major IT company, is a factor in others. These large buyers serve two purposes. First, their purchases serve as a platform for attracting software companies. And second, they become “Spin-Gins. ” Every major technology cluster formed in the USA over the last 50 years has had a Spin-Gin as its anchor-- a large science based company that trains technologists in the business skills they need to launch their own companies. What else do the Top-10 communities have in common? A highly educated workforce for starters. New economy companies need a breath and depth of knowledge workers. (A third of the workforce in many of these areas have a college degree or better). Major research efforts apparently are not as significant as the training offered by academic institutions. One community that just missed the Top-10 list, Savannah, has seen an explosion in graphic arts and web design services spawned by a newer private academic institution, the Savannah College of Art and Design. Success in attracting and maintaining business call centers is another element of success in these communities. Call centers, which are an unpopular target for developers in the 21st century, serve as a platform for the New Economy. They elevate the technical infrastructure and workforce skills in an area which evolves later into sophisticated IT functions. Wilmington, Delaware is an example of this evolution. A popular location for call centers in the early 1980’s, Wilmington has transformed itself over the last 15 years into the US community with the highest concentration of IT jobs in the USA (4.5 times the national average). Where to Find out MoreTaimerica prepared more Top-10 tables for large and mid-sized metros, which are available by clicking on one of the links below.Small-Size Metros Mid-Size Metros Large-Metros Slowest Growth Taimerica offers a range of professional ED consulting products, including strategic plans, target industry definition, incentive reviews as well as New Economy Blueprints. We are actively involved in helping communities like yours look at innovative growth strategies built on trade and technology development. Please contact our President, Ed Bee, to discuss your needs.
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