Brookings Research: Building AI cities: How to spread the benefits of an emerging technology across more of America

02 August 2023

Brookings Research: Building AI cities: How to spread the benefits of an emerging technology across more of America

In the U.S., recent waves of tech innovation and adoption have greatly altered the nation’s economic landscape. These waves have brought both the diffusion of new technologies into new regions (with local economic benefits), but also intense clustering of jobs and businesses related to them, which has contributed to vast inequality among regional economies.

This is the subject of the current report. A companion to the earlier Brookings paper that warned about the uneven geography of AI activity, the discussion here reviews the AI location problem and highlights key federal, state, and local policy moves that could counter it.

The report begins by reviewing the intensely concentrated nature of the overall AI industry (as opposed to the recent boom in generative AI) and suggesting the need to widen the sector to ensure broader participation. (At a few points the report touches on the specific growth trajectory of generative AI applications.)

After that, the report recommends an array of federal, state, and local actions that could promote more even geographic development as the industry enters a new growth stage powered by generative AI.
Ultimately, the report suggests that policymakers now have an opportunity to bring about more geographically inclusive development for one of the most important innovations of our time. . .

And Brookings Metro recently described a similar “winner-take-most” dynamic in six digital service industries, where the concentration of employment in a short list of “superstar” metro areas has been increasing over the last decade.

Despite the known benefits of such industry clustering, the uneven geography of tech is not always benign.
Most notably, certain aspects of clustering—based on tech-inherent influences such as first-mover advantages, agglomeration dynamics, and the network effects produced by tech platforms—threaten the balance of the economy.

As an innovation matter, the nation’s hyper-concentrated tech geography may be narrowing the range of possible tech advancements and creating harmful imbalances among firms, local ecosystems, and the resources they command.

And as an economic development issue, such imbalances tend to create large pools of high-skill workers in some areas while other areas suffer a “brain drain” that leaves lower-skill workers behind.

also say only 6 metro areas (San Francisco, San Jose, New York, Los Angeles, Boston, and Seattle) accounted for nearly half (47%) of the nation’s generative AI job postings from January 2023 to May 2023, according to new

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research. Dive in: brookings.edu/articles/build