Local and Regional Indices Guide Policy, Too

Indices also are created at the regional and local level as well. Once again, while there is some crossover in measures, there are also significant differences that reveal some regional variation and shifts in priorities. This section highlights: regional indices for Washington D.C. (Potomac) area, Silicon Valley, Tri-Cities area in Washington State, the Roanoke region and Philadelphia; and national metro area studies compiled by the Progressive Policy Institute, the Milken Institute, the Brookings Institution and AEA. A matrix presenting the common indicators among the local indices is available here.

The Regional Indices

All regional indices include some measure of workforce make-up. All but the Potomac Index measure “gazelle” firms in some manner. Silicon Valley and Tri-Cities include measures of average income and all indices look at education of the workforce or the educational system in some manner. Venture capital or investment is included by all indices as well as patent activity. All but Philadelphia include crime indices and some measure of air and water quality. All indices include various measures in reference to transportation and transportation access.

There are many differences in local and regional indices as well. Tri-Cities includes weather and tax burden, Philadelphia includes their “creative class” ranking and broadband availability, Silicon Valley includes volunteer rates and housing near rail centers or major bus corridors, and Potomac includes a voter registration measure and intergovernmental cooperation.

Local or regional indices can be very different depending on the goal and what each region is trying to measure. To view each of these and other local indices, follow the provided links below:

• Comparison of Tallahassee and Other American and Florida MSAs Using the Metropolitan New Economy Index - http://www.cefa.fsu.edu/projects.html
• Index of Silicon Valley - http://www.jointventure.org/resources/2002Index/index.html
• Innovation and Entrepreneurial Index (Philadelphia) - http://www.ipphila.com
• Potomac Index - http://www.brookings.edu/dybdocroot/es/urban/gwrp/potomacindex.htm
• Regional Economic Strategy (Roanoke region) -  http://www.rvarc.org/
• Southern California Technology Innovation Index 2002 - http://www.larta.org/Research/publications.asp
• Tri-Cities Innovation & Technology Index - http://www.pnl.gov/edo/innovationtechindex.pdf

Progressive Policy Institute

Offering an assessment of the progress made by the nation's 50 largest metropolitan areas toward becoming high-tech communities, as well as providing policy recommendations to help cultivate and encourage New Economy businesses, the Progressive Policy Institute (PPI) and Case Western Reserve University's Center for Regional Economic Issues prepared The Metropolitan New Economy Index: Benchmarking Economic Transformation in the Nation's Metropolitan Areas. These metro areas account for approximately 60 percent of the nation's workforce.

The index uses 16 economic indicators grouped in five subcategories — knowledge jobs, globalization, economic dynamism, transformation to a digital economy, and technological innovation capacity — to rank the metro areas on the extent to which they have made the transformation to the New Economy. Some of the indicators include number of initial public offerings (IPO's), workforce education levels, broadband telecommunication providers, dot-com domain names, patents issued, and the number of science and engineering graduates from area colleges and universities.

Along with the rankings, the report recommends a public policy framework that metro areas should follow to succeed in the New Economy. In particular, the report argues it is time to replace the Old Economy goal of simply getting bigger with the New Economy goal of becoming more prosperous. To do this, metropolitan areas need to shift focus from providing businesses tax breaks and other subsidies to investing in the skills of the workforce, a vibrant infrastructure for technological innovation, and quality of life.

The index can be found at http://www.ppionline.org

The Milken Institute

The earliest and still one of the best indices on metro economies is the America's High Tech Economy: Growth, Development, and Risks for Metropolitan Areas, prepared by the Milken Institute in 1999. Using a series of applied econometric approaches, the Milken Institute examined the role of high technology industries in explaining the relative economic growth of metropolitan areas. They found that high-tech activity (measured by movements in the relative metro real high-tech output index and the 1990 location quotient in high-technology activity) can explain 65 percent of the growth differential between metros in the 1990s.

The authors also developed a composite, standardized measure of high-tech spatial concentration combining the location quotient with the metro area's share of the national high-tech output. The result was the identification of "Tech-Poles" — metro areas that have some degree of relative technology gravitational pull or attraction.

The report is available online at: http://www.milken-inst.org. A print version is available through SSTI's bookstore at http://www.ssti.org/Publications/publications.htm

The Brookings Institution

Looking at 51 metropolitan areas, the Brookings Institution report Signs of Life: The Growth of Biotechnology Centers in the U.S identifies those areas possessing the greatest concentration of the U.S. biotechnology industry and potential for growth. Factors going into the assessment of which metro areas constitute biotechnology centers include: biomedical research infrastructure; NIH funding for medical schools; biotechnology related patents; venture capital for biopharmaceuticals; pharmaceutical/biotechnology alliances; life science and pharmaceutical research employment; number of biotech companies with more than 100 employees; number and share of biotech firms by establishment date; market capitalization of biotech companies; and, memberships in the biotechnology industry association.

Signs of Life: The Growth of Biotechnology Centers in the U.S. is available on the Brookings Institute's Center on Urban and Metropolitan Policy website: http://www.brookings.edu/urban/

AEA's Cybercities

Another large scale index is the Cybercities: A City By City Overview of the High-Technology Industry available from http://www.aeanet.org/. Like the annual Cyberstates report, Cybercities only looks at employment in the information, electronics and communication sectors.