the new economy high tech industries and the role limits of state economic development policy
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The New Economy, High Tech Industries and the Role/Limits of State Economic Development Policy. The New Economy. “ The Information Economy ” “ The Digital Economy ” “ The Risk Society ” “ The Knowledge Economy” “ The Network Economy ”. What is New about the New Economy?.

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the new economy
The New Economy
  • “The Information Economy”
  • “The Digital Economy”
  • “The Risk Society”
  • “The Knowledge Economy”
  • “The Network Economy”
keys to the old and new economies
OLD ECONOMY

Stable

National

Hierarchical

Mass Production

Capital and Labor

Mechanization

Lower Costs

Go-it-alone Business Culture

A Skill or Degree

Adversarial Relations

NEW ECONOMY

Dynamic

Global

Networked

Flexible Production

Innovation and Knowledge

Digitization

Innovation, Quality, Speed

Alliances and Partnerships

Lifelong Learning

Collaboration

KEYS TO THE OLD AND NEW ECONOMIES
implications of new economy for ed
Implications of New Economy for ED
  • Importance of Technology to all firms
  • Innovation
  • Entrepreneurship
  • Boost Firm and Worker Learning
  • Agglomeration or clusters of firms matter
  • “Entrepreneurial” Strategies, aka growth from within strategies will drive development

--Progressive Policy Institute

factors that attract and sustain high tech industries
Traditional measures

Tax structure

Compensation costs

Space costs

Capital costs

Business climate

Specific to High-tech

Proximity to research institutions

Access to venture capital

Educated workforce

Network of suppliers

Technology spillovers

Quality of life

-- Milken Institute

Factors that attract and sustain high-tech industries
high tech economic development
High Tech Economic Development
  • What is “high-tech” industry?
  • How important is to regional economic prosperity?
  • Is high tech a silver bullet?
what is high tech
What is High-Tech?
  • Varying definitions
    • Workers
      • Scientists, engineers, programmers
    • Processes
      • Manufacturing vs. Services?
    • Products
      • Computers vs. Shoes
3 organizations measuring the new economy
3 Organizations Measuringthe New Economy

These three, plus others, have either developed measures of local economic performance in the new economy, or include new economy data points in their measures:

  • Progressive Policy Institute
  • Milken Institute
  • Corporation for Enterprise Development
miliken institute s definition
Miliken Institute’s Definition
  • High Technology Industries
    • Spend above average amount of revenue on R&D
    • Employ above average # of technology using occupations (scientists, engineers, etc)
ht manufacturing industries
HT Manufacturing Industries
  • Drugs
  • Computer and Office equipment
  • Communications equipment
  • Electronic components
  • Aircraft
  • Guided missiles,
  • Search equipment
  • Medical supplies, lab instruments
ht service industries
HT Service Industries
  • Telephone Communications Services
  • Computer programming, data processing
  • Motion picture production
  • Engineering,
  • Research, Development and Testing services
high tech industries 1987 sics
283 Drugs

357 Computer equipment

366 Communications equipment

367 Electronic components

372 Aircraft & parts

376 Guided missiles

381 Navigation equip

382 Laboratory apparatus

384 Medical instruments

481 Telephone services

737 Computer programming

781 Motion pictures

871 Engineering services

873 R & D services

-- Milken Institute

High-tech Industries(1987 SICs)
new economy index
New Economy Index
  • More Expansive View
    • Industrial and Occupational change
    • Globalization
    • Dynamism and Competition
    • Information Technology Revolution
missing
Missing?
  • Significant technology users
    • Finance (banking and securities)
    • Insurance
    • Publishing
  • Processes are changing
    • Back offices (Citibank in SD)
    • E-publishing
    • Data bases
  • Important consumers of high technology
knowledge industries
Producers

Software

Bio-tech

Information technology hardware

Source: PPI

Users

Telecommunications

Banking

Insurance

Advertising

Law

Medicine

Government

Education

Knowledge Industries
high tech occupations
Producers

Engineers

Scientists

Programmers

Designers

Users

Managers

Lawyers

Bankers

Sales reps

Accountants

Teachers

-- PPI

High-tech Occupations
high tech occupations bls major groups
Primary

Computer & Mathematical

Architecture & Engineering

Life, Physical, Social Sciences

Secondary

Management

Business & Financial Operations

Legal

Education, training, library

Healthcare practitioners & technical

High-tech Occupations(BLS Major Groups)
who collects this stuff
Who Collects This Stuff?
  • Bureau of Economic Analysis
  • Bureau of Labor Statistics
  • Standard Industrial Classification (SIC), now (NAICS)
    • I.e. Drugs SIC 283
why states focus on ht
Why States Focus on HT?
  • Boosts long term growth of US economy
  • Determines relative economic success of regions
  • Source of Good Jobs
4 limits to high tech strategies
4 Limits to High Tech Strategies
  • Produce small numbers of jobs
  • Geographically concentrated
  • Not immune to business cycles
  • Public policy tangential to growth of industries?
high technology employment
High Technology Employment
  • U.S. Average is 5.3% (Miliken Institute)
  • Only 18 states are above average
    • (Where are the states?)
key factors of economic growth
Key Factors of Economic Growth
  • Science & technology
  • World-class education and skills
  • Organizational innovation
  • Robust competition
  • Open global trade

-- Progressive Policy Institute

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