What are the pros and cons of concentrating high-tech companies in one place?
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CityLab , a news media specialized in urban information, points out the current situation that American high-tech companies are concentrated in some areas, and summarizes its merits and demerits.
Why US Tech Inventors Are So Highly Clustered-CityLab
https://www.citylab.com/life/2019/10/technology-inventions-where-work-patents-agglomeration-data/599089/
Enrico Moretti, professor of economics at the University of California, Berkeley, said, “70% and 79% of patents in the three fields of“ Computer Science, ”“ Semiconductor, ”and“ Biology and Chemistry ”submitted between 1971 and 2007, respectively. 59% are from the top 10 cities with the highest number of patented companies, 'he pointed out , pointing out that high-tech companies are concentrated in a few cities.
The table below shows the ranking of metropolitan areas where 2007 patented companies are located. In the computer science field, the city of San Jose, San Francisco, and Oakland in California accounted for 26.2% of the total, as well as New York Newark Bridgeport (9.1%), Seattle / Tacoma, Metropolitan areas such as Olympia (8.4%), Austin Round Rock (6%), and Boston Worcester Manchester (4.8%) follow.
In the semiconductor field, “San Jose, San Francisco, Oakland” and “New York Newark Bridgeport”, which ranked first and second in the computer science field, were 25.5% and 14.9%, respectively.
“New York Newark Bridgeport (11.4%)” and “San Jose, San Francisco, Oakland (11.2%)” monopolize the top two in the field of biology and chemistry.
The reason why patented companies are biased to specific cities is not just because high-tech companies are in the same city, but because they are interacting with each other and productivity has improved significantly. Moretti said, “The presence of Microsoft, headquartered in Seattle, has increased the productivity of Seattle PC-related companies by 8%.” On the other hand, he pointed out, “The decline in Kodak , a prominent photographic equipment manufacturer, has led to a 20-32 % drop in productivity in Rochester , New York, the company's home,” and high-tech companies are concentrated in the same region. He expressed his view that a synergistic effect was born.
On the other hand, if high-tech companies are crowded, the inequality will be widened and hollowed out due to soaring rents. In San Francisco, which is ranked high in the above three tables, the median home price has exceeded 1.46 million dollars (about 160 million yen), and the second highest home price in the western United States It is more than twice as expensive as Los Angeles. As a result, in California, where San Francisco is located, it has been reported that there are 38,000 more outflows than annual inflows.
The following article details the current state of San Francisco.
What is the current situation in San Francisco, where housing costs are too high and residents move away from the city? -GIGAZINE
by Alexander Mils
In order to examine the relationship between high-tech companies' ubiquity and productivity, Moretti conducted a simulation of “when high-tech companies are equally distributed in major US cities”. As a result, productivity increased by 27% in the bottom 25% of cities in the United States, while productivity dropped by 15% in the top 5% of cities. In the US as a whole, productivity has dropped by 11%.
From these analysis results, CityLab stated that “the concentration of high-tech companies will benefit the US economy, but winners and losers will also be born”, and the profit and concentration between high-tech companies is a trade-off. I showed the view that there is a relationship.
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