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.