Research, Data, and Analysis Focused on Central Texas
Produced by the Capital Area Council of Governments
There is a general understanding among Capital Area residents that the local economy is strong. One of the questions that flows naturally out of a period of robust economic growth is, “How long will this last?” A recent report issued by The Brookings Institute provides useful context for that question by examining what they’ve termed, “advanced industries.” Generally speaking, the Brookings Institute’s group of advanced industries includes high value sectors in manufacturing, energy, and services that utilize high-skill workers. These are industries thought to drive innovation and advance the technological frontier.
When introducing their advanced industries series, the Brookings Institute lays out several justifications for studying the specific advanced industries they identify. The authors note that “From 1980 to 2013, [economic output in] advanced industries expanded at a rate of 5.4 percent annually—30 percent faster than the economy as a whole. Since the Great Recession, moreover, both employment and output have risen dramatically.” (1) So one reason advanced industries matter is that they are highly productive sectors where new jobs are being created at great scale.
Another reason to pay attention to advanced industries is because these industries tend to pay high wages to workers. The same initial Brookings study notes that “In 2103, the average advanced industries worker earned $90,000 in total compensation, nearly twice as much as the average worker outside the sector.” (2) If we in the Capital Area are interested not just in job growth, but also in livable-wage job growth, a richer understanding of the advanced industries creating high-wage jobs seems prudent.
Also, Brookings’ most recent update in their advanced industries research shows that while the sector continues to grow in aggregate, that growth is becoming increasingly concentrated in certain metropolitan areas. In other words, the forces driving the growth of advanced industries are responsive to local economic conditions. This affords us the opportunity to look at advanced industries in the Capital Area in greater detail, with an eye toward understanding the existing landscape of advanced industries in our region and the factors influencing their growth.
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Data Points is a blog dedicated to policy and planning issues in the Capital Area of Central Texas. It is produced by staff at the Capital Area Council of Governments (CAPCOG).