The Diffusion of New Technologies

Abstract

We identify phrases associated with novel technologies using textual analysis of patents,
job postings, and earnings calls, enabling us to identify four stylized facts on the diffusion of jobs
relating to new technologies. First, the development of economically impactful new technologies
is geographically highly concentrated, more so even than overall patenting: 56% of the most
economically impactful technologies come from just two U.S. locations, Silicon Valley and the
Northeast Corridor. Second, as the technologies mature and the number of related jobs grows,
hiring spreads geographically. But this process is very slow, taking around 50 years to disperse
fully. Third, while initial hiring in new technologies is highly skill biased, over time the mean skill
level in new positions declines, drawing in an increasing number of lower-skilled workers. Finally,
the geographic spread of hiring is slowest for higher-skilled positions, with the locations where
new technologies were pioneered remaining the focus for the technology’s high-skill jobs for
decades.

Keywords: Geography, Employment, Innovation, R&D

JEL Classification: O31, O32