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From Site Selection magazine, January 2017

Raytheon’s decision in Tucson shows how a low ranking can sometimes point to a growth opportunity.

Tucson, Arizona
Photo courtesy of


Research on advanced industries launched by The Brookings Institution several years ago received its latest update in August 2016. Among the state and metro findings, the Tucson metro area in Arizona was shown to have shed more than 1.5 percent of its employment between 2013 and 2015 in the 50 R&D- and STEM-worker-intensive industries Brookings tracks.

“Large metropolitan areas contained at least four of five U.S. workers in 17 individual advanced industries, among them management and technical consulting services, data processing and hosting, and software publishing.”
— Brookings Institution, August 2016

That put the area on a low rung compared to the other 99 metro areas the think tank follows. However, the area also showed a strong advanced industries employment concentration of between 8.6 percent and 10.1 percent. Somewhere in the delta between those two findings lurked skills and expertise.

That may have been one factor in Massachusetts-based Raytheon Company’s November announcement that it plans to expand its Southern Arizona operations by adding nearly 2,000 jobs at its Missile Systems business headquarters in the region over a five-year period. The company plans to hire workers at all skill levels with an emphasis on engineering and other higher-wage, technical positions. Job creation, facilities expansion and operational output is expected to result in billions of dollars of economic impact for Arizona over 10 years.

Raytheon Arizona
Raytheon in November 2016 announced it would expand its Southern Arizona workforce by 2,000 workers over the next five years, mostly in engineering and technical fields.
Photo courtesy of Raytheon

“These rewarding, high technology jobs will support Raytheon’s growth and bring even more top talent to this region,” said Dr. Taylor W. Lawrence, Raytheon Missile Systems president. “The strong support we receive from state and local organizations is essential to our expansion plans, and will help provide Raytheon with the workforce and infrastructure to meet the growing demand we are seeing from our customers.”

Partners in the expansion initiative include Arizona Governor Doug Ducey, Arizona Commerce Authority, Pima County, City of Tucson, Sun Corridor Inc., Tucson Electric Power and the Tucson Airport Authority.

“With an existing workforce of 10,000 people and a network of over 500 suppliers in Arizona, Raytheon is the largest private employer in Southern Arizona and has an incredibly positive economic impact throughout our state,” said Governor Doug Ducey. “Increasing Raytheon’s infrastructure and job growth in Arizona is a major win for all of us, and the result of strong partnerships statewide.”

Particular attention to the city’s boundary lines was meaningful too, as was supportive infrastructure investment.

“Raytheon’s decision to annex into the city gave them the tools and opportunity to stay and grow in Tucson,” said Tucson Mayor Jonathan Rothschild. “Management saw that being part of Tucson made good business sense.” 

“Altogether, the country’s 100 largest metropolitan areas contained 74 percent of all US jobs in the advanced industries sector in 2015.”
— Brookings Institution

“In recent years, the county has made several key transportation/infrastructure investments near Raytheon to support potential expansions such as this one today,” said Sharon Bronson, chair, Pima County Board of Supervisors, “including the Raytheon buffer zone; creation of the Aerospace, Defense & Technology Research and Business Park; and rerouting Hughes Access Road to create the new Aerospace Parkway.”

Those improvements and more have allowed expansions and relocations from such companies as Caterpillar, HomeGoods and Comcast, said Joe Snell, president & CEO, Sun Corridor Inc. “Southern Arizona is now at the top of national job growth rankings,” he said, “making us a region on the move.” 

The Lowdown from Brookings

The research from Brookings shows that, between 2013 and 2015, all but seven states saw both output and employment expansions, as did 80 of the largest 100 metropolitan areas. “Nonetheless,” said the think tank’s report, “the shifting fortunes of the sector’s various industries are altering and, to an extent, narrowing the geography of advanced industries’ growth.”

Fifteen Best-Performing Large Metro Areas

by Employment Growth Rate in Advanced Industries, 2013-2015

Output (in $ billions)

  2010 2013 2015 CAGR, 2010-13 CAGR, 2013-15
Nashville, TN $8.70 $11.50 $12.70 9.60% 5.00%
San Francisco, CA $65.30 $74.10 $88.10 4.30% 9.00%
Jackson, MS $2.30 $2.40 $2.60 1.20% 4.60%
Cape Coral, FL $1.30 $1.50 $1.60 4.90% 2.60%
Kansas City, MO/KS $13.30 $13.70 $15.20 0.90% 5.40%
Raleigh, NC $11.70 $12.90 $15.30 3.30% 9.00%
Charlotte, NC/SC $15.80 $18.60 $20.10 5.60% 3.80%
Memphis, TN/MS/AR $4.80 $5.30 $5.90 3.30% 5.60%
Toledo, OH $4.50 $5.30 $5.80 5.60% 4.90%
Provo, UT $3.40 $3.60 $4.30 1.40% 9.80%
Madison, WI $5.40 $6.30 $7.30 4.90% 8.10%
Austin, TX $20.50 $24.20 $28.10 5.70% 7.80%
San Jose, CA $56.90 $74.80 $87.80 9.50% 8.30%
Grand Rapids, MI $6.30 $8.20 $8.80 9.10% 4.20%
McAllen, TX $1.20 $1.60 $1.80 11.20% 5.40%



  2010 2013 2015 CAGR, 2010-13 CAGR, 2013-15
Nashville, TN 56,011 70,545 82,206 8.00% 7.90%
San Francisco, CA 255,585 298,646 347,802 5.30% 7.90%
Jackson, MS 14,945 16,204 18,756 2.70% 7.60%
Cape Coral, FL 7,098 8,800 10,184 7.40% 7.60%
Kansas City, MO/KS 86,447 95,090 109,208 3.20% 7.20%
Raleigh, NC 55,010 64,545 73,881 5.50% 7.00%
Charlotte, NC/SC 81,916 93,213 106,203 4.40% 6.70%
Memphis, TN/MS/AR 29,095 31,792 35,955 3.00% 6.30%
Toledo, OH 22,593 27,795 31,427 7.20% 6.30%
Provo, UT 21,064 24,945 28,195 5.80% 6.30%
Madison, WI 34,215 39,257 44,143 4.70% 6.00%
Austin, TX 94,333 113,534 127,514 6.40% 6.00%
San Jose, CA 260,441 293,743 329,409 4.10% 5.90%
Grand Rapids, MI 37,714 46,817 52,154 7.50% 5.50%
McAllen, TX 4,495 4,903 5,450 2.90% 5.40%


CAGR = Compound Annual Growth Rate
Source: Brookings Institution analysis of Moody's Analytics estimates, August 2016

That mostly means good news for the Northeast and the West, as states in those US regions “captured larger shares of the nations’ 2013–2015 advanced sector growth than they did in the previous three years thanks in large part to their specializations in fast-growing high-tech services ranging from computer systems design to R&D. In the Northeast, for example, tech-intensive New York, Massachusetts, Rhode Island, Maine, New Hampshire, and Connecticut all saw significant quickening of their output and employment growth. Similarly, tech-oriented Western states, including Utah, Oregon, Colorado, California, and Idaho, also saw rapid, accelerating growth on both measures.”

“Between 2013 and 2015, all but seven states saw both output and employment expansions, as did 80 of the largest 100 metropolitan areas.”
— Brookings Institution

Indeed, in December, Colorado companies with technologies that could improve 3D printing, doctor/patient interactions and farming were approved for funding as part of the Advanced Industry Accelerator Grant Program through the Colorado Office of Economic Development and International Trade (OEDIT).

A total of $4,141,990 was approved in the latest cycle for Proof-of-Concept and Early Stage Capital and Retention Grants to support Colorado’s advanced industries. The Advanced Industry Accelerator Programs (AIA) — encompassing Proof of Concept, Early Stage Capital and Retention, and Commercialization Infrastructure — were created in 2013 to promote growth and sustainability in Colorado’s advanced industries by driving innovation, accelerating commercialization, encouraging public-private partnerships, increasing access to early-stage capital and creating a strong infrastructure that increases the state’s capacity to be globally competitive.

The group of 26 metro areas especially oriented toward advanced manufacturing includes Wichita, Kansas; Grand Rapids, Michigan; Toledo, Ohio; and Providence, Rhode Island.

The Brookings research also shows that advanced industries’ production “takes place principally in metropolitan areas, where the universities, technology innovation assets, supply chains, STEM workers, and industry clusters on which the sector depends reside.

Altogether, the country’s 100 largest metropolitan areas contained 74 percent of all US jobs in the advanced industries sector in 2015 while the country’s full list of 381 metropolitan areas contained 89 percent of those jobs.”

The think tank found that 18 large metropolitan areas generated advanced industries’ output gains of 5 percent compound annual growth rate (CAGR) in those years, while 16 metros delivered employment growth that fast.

“In Provo, Utah; San Francisco, California; San Jose, California; and Madison, Wisconsin, annual output growth topped 8 percent, while in Nashville, Tennessee; San Francisco; Jackson, Mississippi; Cape Coral, Florida; Kansas City, Missouri; and Raleigh, North Carolina, employment growth exceeded 7 percent a year,” said Brookings, while output and job numbers slumped in places such as Bakersfield, California; Tucson; and New Haven, Connecticut.

Divining Providence

Brookings noted that 26 metropolitan areas especially oriented toward advanced manufacturing “saw their aggregate advanced industries’ output grow at a steady 2.17 percent CAGR between 2013 and 2015 (compared with 0.88 percent between 2010 and 2013) while employment growth doubled to 3.38 percent. This group of advanced manufacturing-oriented metros ranges from the highly specialized Wichita, Kansas; Toledo, Ohio; and Grand Rapids, Michigan; to Ogden, Utah; Boise, Idaho; and Providence, Rhode Island. Fourteen of these 26 metro areas saw the pace of their output growth increase, and a slightly different 14 saw the pace of their employment growth pick up.”

“Indianapolis, Indiana; Worcester, Massachusetts; Ogden, Utah; and Boise, Idaho, all saw significant output and employment growth acceleration driven at least in part by their diverse specializations.”
— Brookings Institution

The picture in Providence got even prettier in June 2016 when GE Digital announced that it would locate an initial 100 jobs at a new IT center in the city, where new work in software applications and high-performance computing would take place. Providence was a runner-up in the GE HQ site selection process that had chosen Boston earlier in the year.

In an interview with Site Selection, Rhode Island Commerce Secretary Stefan Pryor says IT/cyber was among five advanced industry targets that the state’s work with Brookings identified, the others being maritime/defense; shipbuilding; bioscience and advanced business services. He also notes new programs from Governor Gina Raimondo’s administration that undergird advanced industries growth: the Wavemaker Fellowship program that helps STEM graduates repay college loans; the TechHire talent recruitment program; and the new CS4RI program, which makes Rhode Island the first state to have computer science in every K-12 school.

Brookings also noted specific patterns in some cities because of particular advanced industry niches.

Golisano Institute RIT NY
Though Rochester shows slight contraction in advanced industries, like other cities it has the heritage and the talent. Golisano Institute for Sustainability at Rochester Institute of Technology in New York is one of nearly 200 partners across 30 states in the Smart Manufacturing Leadership Coalition, named in June 2016 to lead the new Los Angeles–based Smart Manufacturing Innovation Institute.
Photo by Alex Tong courtesy of RIT

“Auto-focused metros such as Nashville, Tennessee; Jackson, Mississippi; Grand Rapids, Michigan; and Toledo, Ohio, continued to enjoy rapid growth in output and employment, albeit with some slowing. Meanwhile, manufacturing regions with other production specializations saw gains. Indianapolis, Indiana; Worcester, Massachusetts; Ogden, Utah; and Boise, Idaho, all saw significant output and employment growth acceleration driven at least in part by their diverse specializations in auto parts and medical equipment, pharmaceuticals, precision instruments, aircraft parts, or semiconductors.”

By contrast, such niches as chemical products manufacturing in Rochester, N.Y., and Oxnard, Calif., and iron and steel production in Cleveland, Ohio, saw contraction.

If the Tucson example is any sort of guide, that might just mean opportunity lurks in these redeveloping cities too.

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