ABSTRACTHistorically, employment in high‐technology manufacturing industries has been concentrated in metropolitan areas. The product life cycle theory of industrial location suggests, however, that employment in this sector will decentralize as these industries mature and production processes are standardized. This study utilized shift‐share analysis and Enhanced County Business Pattern data to determine the extent to which a metropolitan‐to‐nonmetroplitan employment shift occurred from 1975 to 1982. Employment shifts for nonmetropolitan counties of different sizes, adjacency status, and cenus regions were estimated. Also, the specific high‐technology manufacturers (four‐digit SIC) participating in the decentralization process were identified. The findings of this study indicate that nonmetropolitan employment in the high‐tech sector increased by more than 13,000 as a result of decentralization. Small‐ and medium‐sized nonmetropolitan counties and nonmetropolitan areas in New England, the South, and the West experienced the greatest gains in high‐technology employment. Urban‐to‐rural employment shifts in innovative high‐technology industries was restricted to primarily counties adjacent to metropolitan areas and nonmetropolitan counties in the New En