The Multiplier Factor of High-Tech Jobs

The growth and the rise of jobs in the innovation sector matters to all of us whether we work in the innovation sector or we don’t work in the innovation sector.  And the reason is that every time a local community is able to attract an innovation – and innovative employer, like a high tech employer or some other type of employer that generates innovation, he gains not just the jobs, not just the employees of that employer, but it gains many more jobs in the local service sectors that are supported by the jobs in the high-tech employer.  It’s called the multiplier factor.  

My research shows that for each additional job in a high tech company in a local community, you create about five additional jobs outside high-tech in that community.  Jobs like, taxi drivers, hairdressers, waiters, baristas or doctors, lawyers, nurses.  

Take Apple, for example.  Apple has 30,000 workers in Cupertino, okay, but it indirectly supports 70,000 workers outside iTech in the metro area around Cupertino.  So, remarkably, the most important effect that Apple has on the local labor force is not in high tech, it’s outside high tech.  And these jobs are a mix of jobs for people with a lot of education, like the doctors and lawyers and nurses and teachers, as well as those with less education, the waiters, and the taxi drivers and the hairdressers.  

So remarkably, from the point of view of a city, if you’re trying to generate jobs for the least fortunate of your residents, those who might have a high school degree at most, the best thing you can do today is to attract a high tech employer that hires a lot of highly educated employees.  That’s the best way to generate local job growth.

In Their Own Words is recorded in Big Think’s studio.

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