“For each new high tech job in a metropolitan area, five additional local jobs are created outside of high tech in the long run.”
Enrico Moretti, who specializes in labor economics at the University of California, Berkeley, argues that while most industries exhibit a latent multiplier effect on job creation, the innovation sector has the biggest impact on metropolitan economies. According to Moretti, the multiplier effect of innovation industries is three times greater than that of manufacturing.
In his book, The New Geography of Jobs, Moretti analyzed a dataset of 11 million workers across 320 U.S. metropolitan areas for patterns in job creation and employment. His book frequently cites Boston as a prototypical “brain hub” that has benefitted mightily from the buildup of its innovation sector, particularly in information technology, life sciences and medical research.
In addition to its leading research universities that attract top talent from all over the world, Massachusetts leads the nation in federal research funding according to the MassTech Collaborative. On related metrics, the state ranks next to the top among leading technology states in the U.S. in terms of turning R&D investment into ideas, technologies and startup companies.
Economists often use the number of patents to quantify innovation coming out of regions, industry sectors and companies. The intellectual capital and IP generated in Massachusetts is virtually unrivaled in America when the metric is patents per capita, venture capital investment per dollar of state GDP, or the number of academic articles in science and engineering per dollar of R&D invested.
I recently spoke about the intersection of innovation and intellectual property to the Intellectual Property Owners Association’s annual meeting, held in Boston. See my remarks for more on what makes Boston such a powerful and unique hub of innovation.