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Regional Specialization, Local Externalities and Clustering in Information Technology Industries

Is there a 'new' economic geography of Information Technologies driven industries? Does the fast growth of the Digital Economy shape new regional specialization and industrial concentration? How do the different theories of agglomeration externalities contribute to the understanding of clustering dynamics in IT industries? This paper uses geographical data from 1992 and 1997 Census to examine spatial and regional growth patterns of the Digital Economy in the United States. We argue that the regional co-location of the distinct industries (telecoms, software, Internet services, media) making the Information economy, but not their separate regional specialization, encourage employment growth. This 'convergence' process helps explaining the emergence of new IT-specialized clusters, amid the traditional high tech States. It also gives some economic substance to the common place idea of IT convergence, which is often solely considered under the technological or business dimension, and presents it as a particular case of Jacobs' dynamic diversity externalities.