Great chip chase: high-tech can bolster local economies
Washington — It sometimes seems every locale in America wants to turn itself into a Silicon Ridge, Microchip Oaks, or Random-Access-Memory Manor. Is this pursuit of high-technology development an insubstantial fad, or does it hold real promise for the economies of many areas of the United States?
A congressional panel has just completed the first state-by-state survey of high-tech industrial development initiatives.
Many of these programs are not just efforts to steal already existing high-tech firms from other parts of the country, say staff members who worked on the report. Instead, the plans may indeed foster economic growth that might not otherwise have occurred.
''I've developed a lot of respect for these states,'' says a researcher in the Congressional Office of Technology Assessment (OTA). ''They are really looking to see what they do best, and then building on that.''
Hawaii, for instance, has a state-funded effort to develop tropical applications of biotechnology and microelectronics. A small town in Indiana, building on its strengths as a light manufacturing center, has developed a healthy industry that manufactures plastic keys for computer keyboards.
Overall, the OTA turned up 150 state government economic development programs that had at least some features aimed at high-tech.
Twenty-two states have narrower programs exclusively designed to create, attract, or retain firms that design and manufacture high-tech products.
The oldest of these narrow programs, North Carolina's famous Research Triangle Park, was established in 1959. But most of the efforts have been founded only in the last three years.
Encouragingly, the OTA staff member says, not all states were simply trying to become a clone of California's Silicon Valley, with its rich crop of computer-company world headquarters and R&D facilities. Most were trying to shape high-tech development to fit existing local economies.
States that already have high concentrations of technology firms - California , Connecticut, Massachusetts - had comprehensive programs designed to tout research facilities and attract cutting-edge firms that commercialize new technology.
For instance, a state-funded Connecticut agency recently set up an Innovation Development Loan Fund to provide seed money for creative new products.
States where ''smokestack'' industries such as steel are the backbone of the economy tend to search for ways to upgrade these traditional businesses using high-tech, the OTA says. And states still economically undeveloped - mostly in the agrarian areas of the South - usually try to make themselves attractive to basic assembly plants for high-tech products.
But ''high-tech is not Oz,'' as an editorial in Massachusetts High Tech magazine warned earlier this year. Narrowly defined as computer manufacturing, biotechnology development, etc., ''high-tech'' won't create that many new jobs. Of the 25 occupations with the largest numbers of new slots opening during the 1980s, only one - computer systems analyst - is directly related to high-tech, according to Bureau of Labor Statistics figures.
States should be aware that ''high-tech'' is more than just its narrow definition, one expert says. They should look for general economic opportunities created by fast-growing technological industries - as did the Indiana town, which is fast on its way to becoming a keyboard capital. Efforts to attract robotics plants or biotechnology firms may simply be misplaced enthusiasm.
''It's as if you were looking at the auto industry before it became big, in 1910, and saying, 'Well, if we want to take advantage of this, we have to become another Detroit,'' says Aaron Gurwitz, an economist at the New York Federal Reserve Bank. ''But that's not necessarily so.''
California, Mr. Gurwitz points out, has profited handsomely from the rise of autos by providing a home for subcontractors and accessory manufacturers.