The Sun Belt shines for US tech and manufacturing

How the US should be divided regionally is a source of constant debate. Even the seemingly simple demarcation between south and north is unclear. Virginia’s status as ‘southern’ is disputed, despite Richmond once serving as capital of the predominately southern Confederacy. The proper designation of border states such as Kentucky and Maryland is open to question. Texas is sometimes thought of as a southern state, while officially designated part of the south-west, or even sometimes a region in itself. Even Delaware, the US’ second-smallest state, is divided, with its lower portion culturally southern, the upper part northern. It is, perhaps, for this reason the US is often divided into various ‘belts’. These are used to tie together different states, usually describing some political or economic characteristics that bind them together.

The strong influence of religion has earned some southern states the title of Bible Belt, while in the comparatively secular Pacific north-west one can find the Unchurched Belt. The area of land from the Atlantic north-east region to the Great Lakes, once known as the Factory Belt has, since the 1980s, been referred to as the Rust Belt. The former slave states from Virginia down to eastern Texas were once collectively known as the Black Belt, owing to a large African-American population, while the dominance of maize growing from Illinois to Nebraska and the Dakotas earned the region the name of Corn Belt. Louisiana, Mississippi, Arkansas and Texas together form the Rice Belt – again, owing to the dominance of that particular crop. The north-east is sometimes referred to as the Salt Belt, due to its need for salt to apply to icy and snowy roads in the winter, while the unusually high incidence of cardiovascular disease has won the south-east the unfortunate title of the Stroke Belt. The frequency with which these belts are spoken of varies, of course: some have reached the point of cliché, while others have fallen out use or have been rendered obsolete by changing trends.

The new south
Of all the belts that crisscross the US, the largest is the Sun Belt. As with all US regional designations, the exact borders are disputed, but in its widest definition, the Sun Belt stretches from the Carolinas and Florida in the east, right down to Georgia, Alabama, Mississippi and Louisiana in the south-east, and through to south-western states such as Texas, New Mexico and Arizona, and as far as Nevada and California. Stretching from the Pacific to the Atlantic, the region houses around 33 percent of the US population.

The term was coined in the 1970s in reference to the politically changing and resurgent southern third of the US. Kevin Phillips, a political writer and Republican Party strategist, first used to the term in his book The Emerging Republican Majority to describe the social trends and political changes that helped Richard Nixon win the 1968 presidential election. The term referred to states that formed the lower ring of the US; states that were becoming increasingly important at the time, both politically and economically.

The south-east of the US has historically been economically poor. However, in the mid-20th century, many of these states started to see rising fortunes, and, along with their south-western neighbours, came to form the Sun Belt. The reasons for this economic boom are varied: the invention of air conditioning made the warm climate more tolerable to live in, while federal spending programmes provided a much-needed spark to economic development. The region enjoyed strong growth soon after the post-war period, around the same time the once-prosperous north-east and mid-west were turning into the Rust Belt.

The south-east of the US has historically been economically poor. However, in the mid-20th century, many of these states started to see rising fortunes

Much of this economic growth came from the technology sector. At the onset of the Cold War, the vast and undeveloped Sun Belt states formed the perfect location for the expansion of the defence industry. Heavy investment was pumped into research centres around the Sun Belt, alongside the sprawling university complexes of states such as California and Texas. As Bruce Schulman noted in his From Cotton Belt to Sun Belt: “Research parks…received billions of dollars in defence contracts and attracted scientists and engineers from across the nation.” These science and tech hubs created by military investment soon generated a buzz within the consumer tech economy, which by the 1980s was giving way to California’s Silicon Valley and Texas’ Silicon Prairie.

Certain states, such as Florida, Arizona and New Mexico, also saw increased immigration of elderly people from the north of the country. A combination of the Sun Belt’s mild winters and its newly obtained air conditioning capacity meant pensioners looked to these states as ideal places to retire. Likewise, tourism grew to become a major industry for many of the states, particularly Florida, Nevada and California. In Arizona, too, local politicians were able to successfully lobby for federally supported light industry. However, the technology sector – largely growing out of military defence dollars – has remained the Sun Belt’s most successful industry, and the key to its development.

The boom was both the result and cause of increasing migration to the area from northern regions: for parts of the Sun Belt, it was the first serious inward migration in over a century. Previously, southerners tended to migrate northward in hope of increased prosperity, but the reverse became true, signalling the shifting centres of economic power in the US. Now, the region accounts for a third of the entire US population – around 109 million people.

For decades, the south-east languished in the shadow of the north’s success, stuck in a perpetual sense of backwardness. At the same time, the south-west was an outpost, a dusty pioneering edge of the country – Arizona and New Mexico only received statehood in 1912. But together as the Sun Belt, these regions, by the 1980s, had come to be seen collectively as the most dynamic and important part of the country.

The region transitioned from a “south of boll weevils, magnolias, juleps and sharecroppers into a Sun Belt of skyscrapers, dealmakers, military bases and air-conditioned comfort”, wrote Schulman. The region even gave the south a new identity; in the mid-20th century, the south was still confronting its legacy of racism, and was seen by much of the country as socially and economically backward. However, as Schulman observed, “the idea of the Sun Belt offered the [region] a fresh identity, linking it with the west”. As one analyst put it, according to Schulman: “Yankee executives might balk at moving to the south, but they might seek to locate to the Sun Belt.”

Shining bright
The region was hit hard by the economic recession, stemming from the collapse of the US housing market. Between 2010 and 2015, however, Houston, Dallas, Miami, Phoenix and Atlanta saw their populations grow by a collective 1.57 million. This increase was made up of both domestic and international migrants. What’s more, in every year there has not been a recession in the 21st century, the fastest growing city in the US has always been in the Sun Belt. Economic and employment growth has also been strong: as the urban studies theorist Richard Florida recently noted in an article for CityLab, among US counties with leading business and job growth, many “are located in large Sun Belt metros like Miami, Tampa, Orlando, Phoenix and Charlotte”.

When it comes to employment in the technology sector in the US, the Sun Belt continues to keep pace with the major economic sectors of the rest of the nation. According to a study in CompTIA’s 2016 Cyberstates report, though California predictably had the highest number of tech industry workers in 2015, Texas was in second place, with over 585,000 tech employees – nearly twice the number in New York, which was in third place. Florida came fourth, beating education and research powerhouse Massachusetts.

The region was hit hard by the economic recession, stemming from the collapse of the US housing market

According to a study by the Martin Prosperity Institute, Rise of the Urban Start-Up Neighbourhood, Californian neighbourhoods in San Francisco, Los Angeles and San Diego, alongside those of Boston and New York, receive the largest amount of venture capital funding for start-ups. As the study noted: “The top 20 neighbourhoods or zip codes for venture investment include nine in San Francisco, five in San Jose, three in Boston-Cambridge (one in suburban Waltham and two in Cambridge close to MIT), and one each in San Diego (close to the University of California, San Diego), Dallas and New York (close to New York University).” Even outside California, the Sun Belt does well in this regard: Frisco in Dallas receives 1.11 percent of all venture capital in the US, while the Dunwoody zip code in Atlanta is among the top 20 recipients of venture capital for software start-ups.

That said, this success does not extend to the entire Sun Belt region. The tech sector, according to the study, contributed only 1.8 percent of Louisiana’s total GDP, and 2.6 percent of Mississippi’s. In contrast to other Sun Belt states, tech accounts for 10.5 percent of California’s GDP, 5.6 percent of Florida’s, 7.9 percent of Georgia’s and 6.2 percent of Texas’. Heavy investment in tech flowed into California, Texas and Florida for national defence reasons in years past, forming technology hubs that soon saw their benefits transfer to the civilian. For other regions in the Sun Belt, however, the benefits of the tech industry have not been felt.

Some states have been successful in cultivating a tech sector, but not all – even the successful ones – have become technology hubs. South Carolina, for instance, saw employment grow by 3.3 percent in 2015, primarily based on the expansion of its automotive and aviation manufacturing industries; a $500m manufacturing operation in the Charleston area, potentially employing nearly 3,800 workers, is now being planned by Volvo and Mercedes-Benz. Nevada, meanwhile, has a relatively small technology sector, being traditionally dominated by gambling, mining and agriculture, but its tech contribution is set to grow as it becomes the home of world-leading data centres that power the cloud economy.

Setting sun
Since the start of the post-recession recovery, many Sun Belt states have been seeing the sort of success – in terms of population and job growth – that led to them being grouped under the same umbrella in the first place. However, the constituent states’ success and growth has increasingly diverged in both pace and direction. California, Texas and Florida have all seen, and continue to see, a powerful technology sector boost their economies. Georgia also seems to be cultivating a tech start-up culture, particularly in Atlanta. Other states, however, are going down different roads: Nevada may be seeing some gains in its tech sector, but South Carolina is becoming an increasingly important manufacturing hub.

At the same time, the gap in prosperity and overall economic development between states such as Mississippi and the Sun Belt’s tech hubs show huge differences do exist in this disparate collection. What appears to tie the Sun Belt together is the fact it is still on its way to becoming the centre of both political and economic gravity in the US. That said, some aspects of unity in the region are beginning to fray: California’s tech industry is more likely to be spoken of alone, as Silicon Valley, rather than part of the Sun Belt; Texas’ fortunes are increasingly tied to its fellow energy-producing states northward in Oklahoma and the Dakotas; North Carolina’s growing biomedical research is making it a region in its own right; and South Carolina’s manufacturing surge is now seen as part of a distinctively south-eastern reshoring phenomenon. As the US economic recovery continues, and the southern third of the country sees itself surge ahead, the sun may be setting on the Sun Belt as a regional grouping, but as long as the member states continue to move from strength to strength, the end will not be mourned.