5. Conclusion

This paper has examined the factors that contribute to differences in employment growth rates across North American cities. We placed particular emphasis on the role of scientists and engineers in the growth process. Scientists and engineers are specialized workers who are directly involved with the development and implementation of new innovations. This is consistent with structural models that link urban growth to increases in multifactor (total factor) productivity.

Our analysis suggests that the contribution of human capital to growth may rest on the underlying complementarities that result from diverse mixtures of human capital. We find significant interactions between scientists and engineers and the broader cross-section of degree holders located in cities: the latter may be the primary mechanism through which scientists and engineers contribute to the growth process. In short, scientists and engineers—the left brain of cities—matter most for growth when combined with a large and diverse pool of human capital.

This relationship between growth and diversity finds a parallel in research that examines the growth and performance of firms. Companies that excel in the marketplace are often those that develop an array of complementary business skills across a broad set of strategic areas, such as human resource management, marketing and financing (Baldwin and Gellatly 2003). If firms require a broad set of skills to be successful, it is not surprising that the same may hold for cities.

Our empirical models also suggest that amenities play a central role in shaping urban dynamics. Differences in climate (heating-degree days) and in our more generalized measure of amenities are positively associated with changes in long-run employment. Growth in cities is as much related to their quality oflife as it is to productivity gains linked to human capital.

The second part of this paper examined the factors associated with the growth of scientists and engineers, a group of specialized workers that is often linked to differences in urban and industrial competitiveness. Our analysis finds a clear relationship between these specialized workers and the broader pool of human capital located in cities. Cities with large concentrations of these other- degree holders experience more robust science and engineering (S&E) growth than others, after controlling for a range of urban characteristics. These educated populations grow together, and there is some evidence that stronger growth in other-degree holders in the 1980s led to an acceleration of private sector S&E growth in the 1990s.

The strength of these effects needs to be set in context. S&E growth appears to be a stochastic process in which growth dynamics are strongly influenced by mean reversion. Cities that experience robust S&E growth in one period may experience weaker growth in the subsequent period.

An additional objective of our analysis was to learn more about how amenities—be they related to culture, climate or openness—help to attract workers with higher levels of human capital to cities. Florida’s work suggests that amenities are an increasingly important factor driving the concentration of skilled workers in cities. Our findings are consistent with Florida’s, in the sense that we find many of his variables to be associated with the growth of scientists and engineers. However, these associations were often inconsistent across time periods and specifications. This leads us to place less emphasis on culture, climate or openness as drivers of high tech growth and, instead, more emphasis on the complementarities that exist between scientists and engineers and other types of human capital.