High technology, innovation and inequality: Does high-tech growth come at a cost?

Session organizers:

Tom Kemeny (T.E.Kemeny@soton.ac.uk), Neil Lee (N.D.Lee@lse.ac.uk)

Innovative, high-technology sectors are widely seen as crucial for economic development. An optimistic literature touts the benefits of these sectors for the prosperity of city economies. Tech workers earn high salaries, which generate beneficial spillovers throughout the local economy, especially in terms of the creation of non-tech jobs in nontradable sectors (Moretti, 2010; van Dijk, 2016). Success stories like San Francisco, Seattle and Cambridge have inspired urban policymakers to focus on innovation and high-tech as the route to prosperity.
But there may be a dark side to the story. Prototypical cases of technology-driven success display very high levels of inequality (Breau et al., 2014), leading Florida (2017) to declare the existence of a ‘new urban crisis’. Lee and Rodriguez-Pose (2016) show that the benefits of high-tech do not trickle down to those at risk of poverty. Kemeny and Osman (2017) suggest that – once local living costs are taken into account – workers in nontradable activities may actually be made worse off. Meanwhile, Hsieh and Moretti (2015) argue that tight planning restrictions reduce national growth and redistribute spillovers from workers to homeowners. This special session seeks papers focused on the intersection of innovation, high-technology and inequality.

Themes include, but are not limited to: Who are the winners and losers from growth in innovative and high-technology activities? What are the spatial distributional consequences of skill-bias technical change? Can innovation-led development be inclusive? The urban impact of new technology The impact of new technologies on labour markets Case studies of labour markets in innovative cities



Breau, S., Kogler, D. F., & Bolton, K. C. (2014). On the relationship between innovation and wage inequality: new evidence from Canadian cities. Economic Geography, 90(4), 351-373.

Hsieh, C. T., & Moretti, E. (2015). Why do cities matter? Local growth and aggregate growth. National Bureau of Economic Research Working Paper No. w21154.

Kemeny, T., and Osman, T. (2017) The wider impacts of high-technology employment. Mimeo

Lee, N., & Rodríguez-Pose, A. (2016). Is there trickle-down from tech? Poverty, employment, and the high-technology multiplier in US cities. Annals of the American Association of Geographers, 106(5), 1114-1134.

Moretti, E. (2010) Local multipliers. American Economic Review, 100, 1–7. van Dijk, J. J. (2016). Local employment multipliers in US cities. Journal of Economic Geography, lbw010.