The article shows that services industries often cluster together in the same areas, even more than manufacturing industries. Traditional reasons like knowledge sharing and labor pooling don't fully explain this clustering. Instead, industries tend to group together because they need to be close to their suppliers or customers. For services industries, sharing knowledge and trading directly with each other are the main reasons for clustering, especially at the local level. Information technology has made it less necessary for services industries to be close to each other at the state level. In contrast, manufacturing industries cluster together mainly because of labor pooling and direct trading relationships at the state level.