Where does adaptation to innovation take place? The supply of educated workers and local industry
structure matter for the subsequent location of new work–that is, new types of labor-market activities
that closely follow innovation. Using census 2000 microdata, I show that regions with more college
graduates and a more diverse industrial base in 1990 are more likely to attract these new activities. Across
metropolitan areas, initial college share and industrial diversity account for 50% and 20%, respectively,
of the variation in selection into new work unexplained by worker characteristics. I use a novel measure
of innovation output based on new activities identified in decennial revisions to the U.S. occupation
classification system. New work follows innovation, but unlike patents, it also represents subsequent
adaptations by production and labor to new technologies. Further, workers in new activities are more
skilled, consistent with skill-biased technical change.