The new geography of jobs

This book was published 10 years ago, but the core idea is as topical as ever for exploring drivers of local economic development.

Enrico Moretti, Professor of Economics at the University of California Berkeley argues that local job creation by innovation jobs – those based on developing new ideas and technologies, requiring high levels of technical expertise, creativity and problem-solving skills – exceeds the local job creation potential of other sectors such as manufacturing.

“..based on analysis of 11 million American workers in 320 metropolitan areas, shows that for each new high-tech job in a metropolitan area, five additional local jobs are created outside of high tech in the long run.”

The jobs created are both highly skilled e.g. lawyers and doctors, as well as in non-professional occupations e.g. waiters and shop assistants. This diversity of local employment follows companies in the innovation sector because high-tech workers are well paid, enabling higher discretionary spending, operations of high-tech firms require local business services, and there is a multiplier effect in job creation because high-tech firms tend to be located near each other.

Source: The New Geography of Jobs, Harper Collins Publishers