US Mayor Article

High Technology Drives Economic Growth in Cities, Mayors' Survey Shows Growth in Investment and Jobs Placing New Demands on Infrastructure, Affordable Housing

July 31, 2000

One in Four Cities Report Most New Jobs Filled by City Residents

High technology industries dominate the economic growth occurring in cities throughout the nation, with telecommunications leading the growth in the high tech sector, according to a survey released in Seattle by The U.S. Conference of Mayors.

The mayors' report on the impact of high technology on city economies, "America's Cities and the New Economy," is based on information provided by 177 of the nation's larger cities. Responding to a May 2000 survey, high percentages of mayors and other top city officials reported significant or moderate growth across many economic sectors - construction, retail and wholesale sales, telecommunications, hospitality/entertainment/tourism, high technology, health, finance and investment, and personal services, among them.

  • Asked to rank the sectors in which they are experiencing the strongest growth, high technology was most often given the top ranking and was most often cited as the area receiving the highest priority in the cities' economic development efforts.

  • Asked to rank the areas within the high technology sector which are showing the strongest growth, the largest group of officials, 43 percent, put telecommunications first. As a group, telecommunications, Internet services, and e-commerce received the most first-, second- and third-place rankings.

  • Asked for the greatest assets their cities would present to high tech businesses they wanted to attract, the largest group of officials described their available work force. Asked for the weaknesses which, if corrected, would produce the greatest improvement in ability to attract these businesses, officials most often described weaknesses in their available work force.

In the majority of the survey cities, most of the new jobs being created are being filled by residents of the region who live outside the cities; this situation was reported by 70 percent of the survey respondents. Just under one-quarter of the officials said that most new jobs were going to city residents. In addition, most of the cities reported growth in their immigrant populations over the past five years, and nearly nine in 10 of these said that the recent immigrants are actively participating in their cities' new job markets.

The survey also called on officials to evaluate the impact of high tech economic development on the physical infrastructure and housing available within their cities. Most - 84 percent - believe their infrastructure encourages, rather than limits, economic growth and investment, and almost all say that investing in infrastructure is an important requirement in support of high tech development efforts. Fiber optic cable and communications networks were cited by more than 90 percent of the officials - by far the largest group - as infrastructure areas experiencing either significant or moderate new demands as a result of high tech development. Asked to rank the infrastructure areas in which demand is hardest to meet, the largest group of officials - 44 percent - put roads and bridges first; more than four in five of all officials ranked roads and bridges first, second or third.

While officials in more than three in five of the survey cities believe their currently-available housing encourages, rather than limits, economic growth and investment, many of those surveyed report that shortages exist at all income levels. Asked to characterize their shortages, officials in 28 percent of the cities said a serious or very serious shortage existed for upper income households, 32 percent said such shortages existed for middle income households, and 46 percent said they existed for low and moderate income households. In 30 percent of the cities, officials believe that increased demand at the upper income level is contributing to a shortage of affordable housing for middle income people; in about the same percentage of cities, officials see upper income demand contributing to a shortage for low and moderate income households.

Just over two-thirds of the officials said the economic growth their cities are now experiencing is adding to an affordable housing problem that already existed; the remaining officials said the growth is creating a new problem for them.

Many of the survey respondents also reported a problem generally referred to as the "digital divide." Lack of access to computers and the Internet were reported to be significant problems for particular segments of the population in just under half of the survey cities, with 84 percent of officials in these cities characterizing the problem as either serious or very serious. In nine in 10 of the cities, officials see the divide as being along income lines.

The survey on the new economy was released during the 68th Annual Conference of Mayors which was held June 9-13 in Seattle. More than 300 mayors of the nation's larger cities - those with populations of at least 30,000 - were in attendance.

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