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May 2004, Vol. 127, No. 5

Précis

High-tech rankings
Next: flexible upper lips?

Précis from past issues

High-tech rankings

The past several years have seen the publication of a number of studies that rank metropolitan areas on the degree to which they are "high-tech" or not. These studies are of interest to local chambers of commerce, seeking to promote their city, and to firms considering opening a new establishment or moving an existing establishment. Karen Chapple, et al, writing in Economic Development Quarterly, point out that these studies do not reach a consensus as to which of the Nation’s metropolitan areas are the most "high-tech." Differences in methodology, in which industries, areas, and time periods are studied, and in how "high-tech" is measured lead to different results. They review some of the articles in this field (including two from this publication that appeared in July 1991, and June 1999) and introduce their Human Capital-based approach.

Their approach involves selecting about three dozen of the occupations in the BLS Occupational Employment Statistics program and placing them in two occupational groups, "high-tech" and "I-tech" (information technology). Next, they identify "high-tech" and "I-tech" industries—those industries that had shares of total employment in these two occupational groups that were significantly higher than other industries. Defining "high-tech" industries by the amount of human capital involved with science and technology includes industries that other methods leave out. Then they look at the 30 metropolitan areas that had the greatest absolute job growth during the 1990s and total the jobs in the "high-tech" and "I-tech" industries. The results? Chicago, Washington DC, and San Jose rank first, second, and third in the total number of "high-tech" jobs. San Jose also has the highest share of "high-tech" jobs, followed by Seattle and Boston. Ranking first, second, and third in the total number of "I-tech" jobs are Chicago, Washington DC, and New York. The metropolitan area with the largest share of its employment in "I-tech" industries is San Jose, followed by Washington DC, and Boston. Chapple, et al, conclude by saying that the "widely held conceptions of high-tech activity as predominantly Sun Belt and bicoastal . . . do not hold up." They also note that anyone using metro rankings of this sort should carefully consider the definitions and methodologies used to obtain the results.

In the same issue, Vijay K. Mathur writes that the Human Capital-based approach to ranking "high-tech" metropolitan areas is, like its predecessors, basically arbitrary, but it is still an improvement precisely because it is based on the idea of human capital. Whether such rankings are of any use for local policymakers is another question.

Joseph Cortright and Heike Mayer are more skeptical about the value of metropolitan area "high-tech" rankings; "more heat than light," they say. The different definitions used in different studies should give the reader pause. Local policymakers seeking to maximize economic growth should concentrate on understanding their region and improving relationships with local businesses.

Paul D. Gottlieb (coauthor of the Metropolitan New Economy Index that Chapple, et al, critique in their article) says that different studies have different purposes and asks if "arbitrary" means anything other than "different." He also questions the use of absolute job growth as criteria for including metropolitan areas. He concludes that the human-capital or occupational approach is valuable and worthy of commendation.

Next: flexible upper lips?

On April 6, 2003, British workers gained the statutory right to request flexible work arrangements such as compressed hours, job sharing, flexitime, or home working while British employers gained the statutory duty to take such requests seriously. According to a recent British Department of Trade and Industry (DTI) Employment Relations Occasional Paper, a slender majority of employees surveyed from 5 to 12 months later were aware of their right to request and about one in eight had actually made such a request. The most commonly requested practices were part-time work and flexitime; meeting child care needs was by far the most frequent reason given for requesting flexible work. On the employers’ side, 77 percent of requests were accepted outright and a further 9 percent were partially accepted or the subject of a compromise arrangement.

The Second Work-Life Balance Study: Results from the Employees’ Survey (DTI Employment Relations Survey No. 27), a study based on a survey taken before the law was changed, also found that the most common request for job flexibility was for reduced hours and/or flexitime and that the most common reason for seeking such an arrangement was to care for children. In this baseline survey of employees, almost all respondents believed that people work best when they can balance their home and work lives and that employers had a role to play in helping with that balance. On the other hand, 60 percent of employees thought, quite realistically, that they shouldn’t expect to be able to change their work arrangement if doing so would be too disruptive of the business.