This presentation was part of the Growing Entrepreneurial Communities Summit, a practitioner-focused summit designed to help economic development and small business practitioners effectively create economic growth through entrepreneurship in local communities. The 2018 Summit, subtitled Entrepreneurship on the Edges, focused on providing information and practitioner insight in how to effectively develop disadvantaged urban and rural communities using entrepreneurship-led development strategies.

1. Mark Muro
Brookings Metropolitan Policy Program
Growing Entrepreneurial Communities Summit
April 24-25, 2018
Contexts for research:
Digitalization, community size, and growth
@MarkMuro1

3. Digitalization and the hierarchies of growth
Geographies of opportunity
1
2

5. 56%
30%
40%
48%
5%
23%
2002 2016
Low Medium High
Share of U.S. employment by digital skill level
The share of jobs requiring high & medium digital skills has skyrocketed
Administrative support
39 64
Physician assistants
27 56
70% in
Medium
or High

6. Tech empowers: Digitalization brings higher wages
Average annual wage by digital score, 2016
$ 30 K
$ 48 K
$ 73 K
Low Medium High

7. But tech also polarizes: Regions’ digital skills correlate with higher pay
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Averagewage,2016
High digital employment share, 2016
Correlation between metro mean annual wage and high digital
employment share
Boulder, CO
Hammond, LA
San Jose, CA
Boston, MA
Kansas City, MO
Lincoln, NE
Janesville, WI
Bismarck, ND
Sioux Falls, SD
Lawrence, KS

8. These dynamics appear to be favoring larger, denser communities
Source: Brookings analysis of U.S. Census Population Estimates
-2%
0%
2%
4%
6%
8%
10%
2010 2011 2012 2013 2014 2015 2016
Population growth by community size
Pct. change since 2010
1,000,000+ 250,000 - 1,000,000 < 250,000 Micro areas Metro adjacent counties Non-adjacent counties

9. These dynamics appear to be favoring larger, denser communities
0%
2%
4%
6%
8%
10%
12%
14%
16%
2010 2011 2012 2013 2014 2015 2016
Employment growth by community size
Pct. change since 2010
1,000,000+ 250,000 - 1,000,000 < 250,000 Micro areas Metro adjacent counties Non-adjacent counties
Source: Brookings analysis of EMSI data

10. These dynamics appear to be favoring larger, denser communities
Source: Brookings analysis of U.S. Business Dynamics Statistics
0%
2%
4%
6%
8%
10%
12%
14%
Startup rate for metropolitan and non-metropolitan areas
Percent, 1978 - 2014
Metropolitan areas Non-metropolitan areas
Note: Establishment births at new firms as a share of all establishments

11. Digitalization and the hierarchies of growth
Geographies of opportunity
1
2

12. Some rural places in most regions have seen strong growth since the Great
Recession…
Source: Brookings analysis of EMSI and QCEW data
Note: Only non-metropolitan counties displayed; 2017 annual average based on January to September
Employment CAGR
2010 - 2017
1.0% - 3.0%
3.0% - 13.8%

13. …and as a whole smaller places performed markedly better in 2017
Source: Brookings analysis of QCEW data
0%
1%
2%
3%
4%
5%
6%
7%
January February March April May June July August September
Employment growth by community size
Pct. change since January, 2017
1,000,000+ 250,000 - 1,000,000 < 250,000 Micro areas Metro adjacent counties Non-adjacent counties
Note: Preliminary estimates

14. Some states are seeing e-ship that exceeds metro rates
Source: Brookings analysis of U.S. Business Dynamics Statistics
7.6%
7.4%
7.0%
6.9%
6.2%
6.2%
6.1%
6.1%
6.2%
Startup rate in non-metropolitan areas
Selected states, 2014
Startup rate
2014
All metro areas 6.4%
All non-metro areas 4.8%
United States 6.1%
Note: Establishment births at new firms as a share of all establishments

15. And likewise some very small places excel at producing high-growth firms
12 micropolitan areas have
densities of high-growth firms
that place them in the top 25
among all metropolitan areas…
They include:
• Spirit Lake, IA
• Summit Park, UT
• Bozeman, MT
• Oxford, MS
• Hailey, ID
Source: Brookings analysis of Inc. Magazine and Center for American Entrepreneurship data

16. In sum, we need to dig deeper
Aggregate information tends to
obscure variation--and insight that
local practitioners can build on
Researchers—working with
practitioners—should keep digging
beyond the relatively limited data
on entrepreneurship that is easiliy
available for localities and
neighborhoods

17. Mark Muro
Senior Fellow
Metropolitan Policy Program at Brookings
mmuro@brookings.edu
@markmuro1
For more information:

18. Mark Muro
Brookings Metropolitan Policy Program
Growing Entrepreneurial Communities Summit
April 24-25, 2018
Contexts for research:
Digitalization, community size, and growth
@MarkMuro1