The Milken InstituteaEUR(TM)s annual Best-Performing Cities index (released today) ranks American cities based on economic outcomes, not the business climate and quality of life factors that might help create them, so there is no checklist of determinants for success. But if there were, Austin, Texas, would probably tick all the boxes. It has a top-tier university, an educated and growing workforce, a vibrant tech sector, an innovation infrastructure and business climate that promotes growth, and it is the capital of a state benefiting from the resurgence of the energy industry. No surprise, then, that it is No. 1 in our 2013 rankings aEUR" reclaiming the position it held two years ago.
Black gold, Texas tea
Looking at the top 10 large metros, itaEUR(TM)s clear that technology and energy continue to drive economic growth. The list of top 10 small cities also points to the importance of universities as anchors for innovation, and the benefits of having stable state revenue to invest in them. Cities with growing tech hubs often also have universities that train and attract an educated workforce. The confluence helps start-up companies develop, while the innovation infrastructure helps turn those bright ideas into jobs and wages.Being located in a state thataEUR(TM)s riding the ongoing energy boom also helps aEUR" with new tax revenue pouring into state coffers and easing the pressure on public sector employment (a problem that continues to burden the nation as a whole) while creating demand for support services that spread growth to urban centers. In North Dakota, oil production has climbed more than 400 percent in the last five years, helping to place Fargo and Bismarck in the top 10 small cities this year.
Nice work if you can get it
With tech driving performance in the rankings this year, we have an educated set of cities in the Top 10; eight of them have a larger share of adults with a bacheloraEUR(TM)s degree than the national average (at least 32 percent versus 29 percent nationwide). These eight cities also host a greater concentration of tech companies.
The Austin, San Francisco and San Jose metros power their tech growth with well-schooled workers. Their share of adults with degrees is 10 to 20 percentage points higher than the national average. In Boulder, Colo. aEUR" a smaller metro with a large college population and a vigorous tech industry aEUR" the percentage of the population with a college degree is almost double the national average.
In the top 10 large metros, only Greeley, Colo., had a smaller than average cohort with a bacheloraEUR(TM)s degree. Houston was close to average, and the performance in our rankings of both places was based on their leadership in energy.
Clearly, to create and sustain jobs today, it helps to have both a strong tech sector and proximity to an energy boom. But even the most enlightened city planning can’t relocate natural resources, so investing in human capital by preparing the workforce for knowledge-based jobs is the way to go.
Click on our Best-Performing Cities website to see where your city ranks. http://bit.ly/It0KJI #bpcfor2013
1. U.S. Census, American Community Survey, Percent bachelor’s degree or higher (2012)