1. Services and the New Economy: Elements of a Research Agenda William B. Beyers Department of Geography University of Washington Seattle, WA 98195 http://faculty.washington.edu/beyers/research

2. The New Economy What is the “New Economy”? Why is it “new” What are the research challenges for economic geographers? What is the role of services in the New Economy?

3. Defining the New Economy Some key elements: - increased economy-wide productivity - a shift in industrial output mix - a shift in occupational structure - a shift in places that are most vibrant The U.S. ESA efforts at definition and measurement

4. A Powerful Impact on GNP, And Employment Defined based on % of IT Capital or level of IT capital per worker

5. New Economy Impact on GNP Almost 57% of GNP Growth 1990-1997 was in IT Intensive Industries

6. Composition of IT Using Industries

7. Composition of IT- Producing Industries

8. Average Annual Percentage Point Contributions of IT to Rising Labor Productivity Growth Source: Digital Economy 2000, p. 35

9. Key Research Issues related to the New Economy Geographic Shifts in jobs Headquarters Control Shifts The Growing Importance of Small Enterprises Occupational Shifts New Forces in Location Decisions Interaction bases Trade in the New Economy New Patterns of Consumption Why?Where?How?

10. Geographic Shifts in Jobs

11. Realignment of Metropolitan Areas (1985-1995) ? Role of New Economy Industries?

12. Employment Growth in the West in the 1990’s ? Role of New Economy Industries?

14. Employment Growth 1990-1998 Rural West

15. Research Needs - Geography of Jobs in the New Economy l More recent data - trends in the 1990’s l Sectoral analyses focused on New Economy industries l Regional case studies, picking apart recent patterns of growth l Linking studies of job growth with other attributes of the New Economy

16. Headquarters Shifts Old Economy – Concentrated in New York and Old Economy Cities  New Economy Of the 100 largest IT Corporations in the world 81 are in the U.S., 54 are in the Western U.S. 44 are in California ? Geography of Control in the New Economy?

17. Research Needs - Headquarters Shifts l Are Old Economy companies responding to New Economy trends? - Boeing’s HQ move? l How are regional fortunes conditioned by the waxing and waning of New Economy companies?.coms.orgs.edus l Related industries

18. Increasing Importance of Small Enterprises ? Role of New Economy Proprietors? Urban and Rural?

19. Research Needs related to Proprietorships l A recent slowdown - is it due to the hot economy? l With the cooling of growth, will proprietorships have a new surge in growth? l With the massive shift to a {Professional} service economy, what will be the long-run trend towards more small firms?

20. Occupational Perspectives on Job Creation

21. 1980 Distribution of Occupations by Industry

22. Change in Occupations United States 1980-2000 ? Role of New Economy Industries?

23. Across Most Occupations Job Gains Have Been Largely in Services ? How much of this growth has been in New Economy Industries?

24. Research Needs Related to Occupational Structural Change l Across industries, the generic rise of services occupations…what does this mean for training institutions? l For social groups l For ethnic groups l For communities l How do we reconcile an industry-based view with the pervasive occupational pattern of change?

25. Location Decisions - More Contingent  Sites not selected to be close to clients or suppliers  Sites selected to suit founder or employee lifestyles e.g. “A considerable number of employees bike to work or want to bring their dogs to work.” “Golf tees, pool tables, basketball courts, and ping-pong tables were part of the office environment we visited.” ? What location factors are key to New Economy firms?

26. Research Needs - Location Decision Making in the New Economy l Is the “California School” out? l What are the key factors for New Economy firms? l How do we revise theory? l How do we revise public policy? l What should be our strategy towards data gathering?

27. Interaction in the New Economy: Do People still meet People? l Clearly, yes l But how? l In the flesh, like here and now, or in cyberspace and not in the flesh? l The difficulties involved in measurement, and the paucity of survey research

28. Modes of Producing and Delivering Producer Services Work Excludes video conferencing, WAN, Satellite Uplinks, and Other Sample Size = 665

29. Interaction – Greater Use of IT and Face-to-Face Contact Key New Economy Industries require Face-to-face Contact ? How Are Advances in IT Affecting Location Decisions?

30. New Census Data on the importance of e-commerce 4.8% of $13.7 trillion in sales by these industries Statistics for the year 1999

31. Research Needs - Interaction & the New Economy l How has the evolution of the Internet altered the production and delivery of work? l Beyond the Internet, what about evolution of Intranets, IT networks that routinize e- commerce, and other telephonic systems? l How do we measure transactions and other activity in these areas? l What should we include in these measures?

32. Trade in the New Economy l If services have dominated the growth of jobs, have they also dominated the growth of the economic base of regions? l It is easy to say “yes,” but it is hard to document this with data l Data on trade in services basically only exists in selected case studies, even though services employment dominates all major cities in the U.S.

33. Trade in the “Hard Core” New Economy Picking up on an unpublished paper by Malecki: l Network Capacities (international internet bandwidth) l Backbone networks connecting public network access points l IX Internet Access Points l Peering systems

34. Trade in the New Economy: Producer Services Geographic Markets

35. Trade in Producer Services

36. Trade by Lone Eagles, High Fliers and Other Firms

37. Changes in Trade in the New Economy Sample Size = 577 Lone Eagle/High Flier Threshold Increased Exports Decreased Exports

38. Trade in the New Economy – Services Lead the Economic Base A Minimum Requirements Estimate – Likely Under- States Exports ? What Would Case Studies Of Trade Patterns Reveal For New Economy Industries?

39. Research Needs - Trade in the New Economy l Few case studies documenting trade in services l No systematic measurement by federal statistical establishment l No knowledge of geography of trade for key IT-using and IT- Producing sectors in the New Economy

40. From Production to Consumption Perspectives

41. Why this shift, as it relates to the New Economy? l Engel Function Arguments l But, what beyond these arguments? l How does shifting lifestyle, Quality of Life, and the role of IT- related technologies impact these changes? Such as the USC IT proposal

42. Changing Demands in the Recreation Account Many New Economy Industries are Linked to Consumer Recreation Demands ?What is the Geography Associated With these Outlays?

43. Consumption Spaces in the New Economy ? What is the functional classification of consumption spaces? ? What is the urban and rural pattern?

44. So, where do we go from here? Geographic, Corporate Control, Enterprise, Occupational, and Trade Related Research Priorities in the New Economy Location and Modes of Interaction in the New Economy – IT Related Research Priorities New Patterns of Consumption (and Investment) in the New Economy need to be investigated The Need for Wide-Ranging Case Studies That Inform and are Informed by Theory

45. The Proposed USC IT Project l Job mobility and housing choice l Home -based work & the social meaning of work l Impacts of e-commerce on transportation and social interaction l The NSF proposal - IT and democratic processes

46. The Proposed NSF Project: Some Thoughts l How and who will know of this effort? l What topics will be the subject? l How will ICT’s be disentangled from other factors? l How do we disentangle causes from effects? l How do we generalize from LA to other cities?