Spatial evolution of the computer industry in the USA

This paper examines the spatial evolution of computers across 317 metro are as in the USA since the introduction of the personal computer. We start by examining the relative distribution of employment across cities, examining how that distribution changes in 1977-1992 and how cities move through the distribution. For computers, transition matrices are stationary, with the i ndustry exhibiting no tendency to settle down, nor any tendency of retrench ment during periods of national high-tech employment decline. There is no t endency of the relative size distribution of computer employment to collaps e, go bimodal, etc. Overall computers exhibit some turbulence, with dramati c big winners and losers among cities, as well as persistence for some citi es in employment shares. In attracting or repelling an industry, urban hete rogeneity is important. Large, well educated cities near San Jose have a mu ch greater chance of attracting high-tech employment (much lower mean first passage times moving up states) and less chance of losing it. In assessing the determinants of persistence in local employment patterns we examine so urces of productivity growth. We find strong evidence of significant dynami c own industry externalities for single plant firms and little evidence of urbanization-Jacobs-knowledge type externalities. Corporate plants in compu ters seem to be self-reliant and not really influenced by externalities. (C ) 1999 Published by Elsevier Science B.V. All rights reserved. JEL classifi cation: L86; R39.