The U.S. economic boom of the 1990s was powered by a micro-chip.

Although that might be a bit of an overstatement, there is no question that computer and electronics industries have been shining stars in job creation and economic growth. According to the most recent report from the American Electronics Association (AEA):

High-tech industries added 1.1 million new jobs to the U.S. economy since 1993.

Technology accounted for 8 percent of the 13.8 million jobs created in the private sector between 1993 and 1998.

In many cities, technology accounts for an even greater percentage of job creation, including 40 percent of new jobs in San Jose, Calif., since 1993.

Much of this activity is taking place where it would be expected. San Jose, for example, leads the nation in computers, electronic components, semiconductors and industrial electronics manufacturing. Chicago is the leader in communications equipment manufacturing employment. And Rochester, N.Y., home of Xerox, sets the pace in photonics manufacturing jobs.

Increasingly, however, high-tech job growth is no longer confined to such traditional areas as Silicon Valley, Silicon Alley and Boston. Many states and regions are making an effort to court computer and electronics businesses and the high-paying jobs they create. High-tech companies, in turn, are starting to broaden their horizons.

"Industries tend to cluster together," said Vann Cunningham, practice principal with the Location Analysis Group of Lockwood Greene Consulting in Atlanta. "These businesses tend to be very innovative in technology, but not so innovative in their locations."

Talent is first priority in locating decisions

High-tech industries traditionally have located where the workers are.

"The talent pool is the most important factor," said Terry Riley, executive director of the Hampton Roads Technology Council in Virginia Beach, Va. "In rapidly growing high-tech areas, there are high vacancy rates - companies are generating jobs faster than they can fill them."

To find qualified workers, employers are taking a hard look at places such as the Tidewater area of Virginia, with eight degree-granting universities and three community colleges. There also is a steady stream of highly trained people entering the job force from the many military bases in the area, according to Riley.

One reason V4 Consulting selected Indianapolis as its headquarters was ready access to graduates of the University of Indiana, Purdue University, Notre Dame and Butler University. V4, which provides technological solutions to health care providers, plans to add more than 500 jobs as part of its $7.9 million expansion.

"The talent pool is phenomenal, just an absolute A-game talent pool," said Bill Luallen, managing partner of V4. "The unique thing we are seeing is double majors in computer science and finance who can contribute right away."

The key, according to Cunningham, is finding workers who are adept not only at today's technology but who can quickly get up to speed on emerging technology.

"The driving force is finding places with a relatively skilled labor force that have excellent training capacity," said Cunningham.

Employees want to work in a great place to live

Running a successful business requires more than simply finding talented people. Companies also must be able to attract, hire and retain them. It's in these areas that cities such as Virginia Beach and Indianapolis are seeking to carve out a niche.

"Once you find the talent, what does it cost you to get it?" said Riley. "You have to look at the recruitment and compensation costs, then the cost of doing business."

A lower cost of living - which benefits employers and employees alike - has been a major contributor to the diffusion of technology businesses.

"There is a tendency to look at places not considered in the past - outside California, Washington, Oregon or Texas," said Cunningham. "There has been a shift over the past couple of years. New York, North Carolina and Virginia have done well. Alabama, South Carolina and Georgia are possibilities."

Quality of life, always a difficult term to define, is becoming more important than ever in retaining good employees. Cities around the nation are promoting their low housing costs and convenience.

"What we've seen over the past 15 years is a flight out of Silicon Valley to places such as Denver, Boulder, Arizona and Santa Fe," said Riley. "People get tired of the negatives and move away."

The fastest-growing medium-sized cyber-cities (25,000 to 75,000 tech jobs) are Colorado Springs, San Francisco, Houston, Denver and Sacramento, according to the AEA. Leading the way among small cyber-cities (between 15,000 and 25,000 tech workers) are Fort Worth, Texas; Boise, Idaho; San Antonio, Texas; Hartford, Conn.; and Albuquerque, N.M.

The AEA ranks cities on six quality of life factors - air pollution, crime, unemployment, commute times, arts and culture, and climate. Coming out on top are Boulder, San Francisco, Denver, Raleigh and Minneapolis-St. Paul.

Workers look for the right mix

After the demise of many dot-com companies, employees are looking for a better balance between their work and home lives, according to Luallen.

"One of the first things we looked for is the right cultural atmosphere for our people," he said. "The technology industry is so intense and volatile that they need to have a home-type environment. During our search, Atlanta and Indianapolis both have that type of community feeling."

A Midwest location can be a positive to employees weary of cross-country travel.

"You can travel anywhere from here without having to cross three times zones," said Luallen. "You can fly to any city east of the Rockies by 9 a.m., work a good 10-hour day and be home by 9 p.m."

Putting the package together

As with any industry, computer and electronics firms also go where incentives are right. Many states proactively seek out high-tech businesses and the tax revenue they generate.

"Several states in the South and Northeast have made a decision that they want a piece of this business in the future," said Cunningham. "They have adjusted their incentive programs to be more competitive."

Virginia, for example, was the first state to create a cabinet-level secretary of technology. V4 selected Indianapolis after considering offers from two southern cities.

"Of the cities we looked at, it was very close with two others," said Luallen. "The involvement of Indiana governmental leaders at state and city levels and the business community was very integrated. They really try to incorporate you as a business into their community. At the end of the day, the Indianapolis business culture was the winning component."