Minoli Ratnatunga
Director, Regional Economics Research, Center for Regional Economics
California and Human Capital and Indexes & Rankings and Job Creation and Regional Economics
Minoli Ratnatunga is director of regional economics research at the Milken Institute's Center for Regional Economics, where she focuses on regional economic development and regional competitiveness.
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Getting Rusty: Time to Update Our Economic Groupings of Cities

By: Minoli Ratnatunga
August 11, 2016

The term “Rust Belt” has been in the news recently, with politicians promising to revive the region while cities rush to deny that the label should be applied to them. It’s unsurprising that the term—tied to a history of depopulation and the decline of heavy industry—carries unhappy baggage. But recent research here at the Milken Institute suggests the broad classification really does mask a significant divergence in economic fortunes. Since local policymakers deal with their cities as they are and not as people elsewhere might perceive them, our research provides regional decision-makers with a more current and data-based group of peer metros to benchmark their performance against.

The first in a series, the paper “Regional Performance Over Time: Thriving and Reviving Amid Economic Challenges,” groups metros with peers based on a 25-variable economic profile using a cluster analysis. These 15 new groupings reflect the current industrial mix in these metros, independent of their histories. For example, Milwaukee, one of the cities rejecting the Rust Belt moniker, is instead classified as a “Rejuvenated Region,” along with several other former industrial hubs that have successfully broadened their economic bases to include services such as education, finance and insurance.

In addition to more accurately classifying similar cities—rather than sticking to historical or geographic labels or wishful rebranding attempts—these robust new groups give us a new way to assess who is doing well, given their industrial mix. Using the Milken Institute’s long-running “Best-Performing Cities” (BPC) index to evaluate economic success, we identify regions that have outperformed their peers over the past decade. A metro experiencing a temporary boom in a core industry might shoot up the BPC rankings one year and plummet the next, but metros that can hold steady or recover quickly despite economic headwinds affecting their core industries may have something to teach their peer cities.

In the coming year, we’ll be reporting on a series of case studies that explore the choices of successful cities and identify factors that helped them resist or recover from downturns. The broader aim of this series is to use the specific metropolitan experiences behind the numbers to offer decision-makers in peer regions a suite of best practices to consider as they pursue robust and sustained prosperity for their communities.


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  • Interested in application to KCMO

    Posted by Tex Sample, 09/13/2016 (22 months ago)

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