by James A. Bacon
The occupational cluster labeled “professional, scientific and technical services” (PS&T) has been one of the fastest growing job categories in the United States economy since 20o1, expanding some 15% in contrast to a roughly 20% decline in such noteworthy clusters as manufacturing, media and finance over the same period, writes Joel Kotkin for NewGeography.org. That trend has been a positive one for Virginia — at least for the Washington and Richmond metropolitan areas, less so for Hampton Roads.
In an important modification to the line that I have frequently peddled here — that high-salary, high-skill jobs tend to gravitate toward larger labor markets — PS&T jobs have been moving to second-tier labor markets such as Jacksonville, alt Lake City, Kansas City and Richmond over the past decade. (See the list of the 50 largest metros in Kotkin’s blog post.)
Writes Kotkin: “Once considered the natural domain of megacities and dense urban cores, high-wage business service jobs, largely due to technology, can increasingly be done anywhere. This suggests that the playing field for such positions, rather than concentrating, will become ever wider. As the struggle for good jobs intensifies in the years ahead, expect the competition between regions to get even greater.”
Washington: Washington has the highest concentration of PS&T jobs in the nation, with a “Location Quotient” of 2.45 in 2012, meaning that it has 2.45 times the number of jobs as a percentage of population as the nation as a whole. While the percentage growth in the number of such jobs was relatively high — 26.1% — the intensity score increased only incrementally because the base was very high to start with.
Richmond: Richmond’s LQ was only 1.01 in 2012, a hair above the national average. However, job growth over the decade was robust, 28.9%, so the LQ rose by 9.8%.
Hampton Roads: Here we get another clue into the region’s sub-par economic performance over the past decade. PS&T jobs increased only 7.4% since 2001, and actually declined over the past two years. The region’s Location Quotient was .89, or one of the lowest in the nation.
Bacon’s bottom line: There’s no secret to the Washington region’s growth in PS&T jobs — the occupations are tied to the region’s strength in government-driven systems integration. The labor pool is so deep that the region has achieved critical mass, generating new enterprises that draw upon that talent, which in turn increase the need for even more PS&T workers. That dynamism overcomes the fact that salaries are higher than anywhere in the U.S. outside San Jose and San Francisco.
Richmond is more of a mystery. There is no single industry cluster that can explain the growth in PS&T jobs. It’s possible that the job cluster is so small that growth of a handful of organizations could account for the surge. I learned recently, for example, that the Richmond Federal Reserve Bank handles the lion’s share of IT management for all federal reserve banks across the country. Could job growth at the Fed, or another big employer like Capital One, have made the difference? I don’t know. Local economic development authorities should take a look.
Hampton Roads… I think we have a problem, folks. Not only do these jobs comprise a smaller slice of the economy, wage levels are lower. This is a strategically critical occupational category for any region, and local authorities need to understand the source of weakness.
Hat tip: Tim Wise
