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Best-Performing Cities 2012
Jan 17, 2013
Publisher: Milken Institute

Data for all metros is available on the Institute's Best-Performing Cities interactive website, where you may also download the report.
The Milken Institute's annual index of Best-Performing Cities indicates that tech is back, especially in the world's best-known hub of innovation. The United States' best-performing metro area is San Jose, the capital of Silicon Valley. Other cities with strong exposure to technological innovation scored high in the new ranking: Austin, Texas (No. 2, up from fourth place); Raleigh, N.C. (No. 3, up from No. 14); the Washington, D.C., metro (No. 5 from No. 17); and Cambridge, Mass. (No. 8 from No. 12).

San Jose-Sunnyvale-Santa Clara, Calif., vaulted 50 spots from last year to No. 1, a position it last held on the index in 2001. San Jose's recovery has spread through the region's economy: For each job added in the tech sector, five jobs are created in other industries. For example, Apple has an estimated 34,000 employees in the metro area but is responsible for another 170,000 jobs in the region.

"People expect tech to be one of the most dynamic sectors of the economy, and it was," says Ross DeVol, chief research officer of the Milken Institute and one of the report's authors. "A perhaps less expected highlight of this year's rankings is how the national resurgence in manufacturing is reflected in the greatly improved fortune of local economies, especially in the upper Midwest."

Among this year's biggest gainers in large metros is Holland-Grand Haven, Mich., leaping 108 places to No. 40. Other Midwestern hotspots include Minneapolis-St. Paul; Gary, Ind.; Warren, Mich.; and Indianapolis. Each city moved up at least 70 spots in this year's index.

The Best-Performing Cities index includes measures of job, wage, and technology performance to rank the nation's 200 large metropolitan areas and 179 smaller metros. Unlike other "best places" rankings, it does not use quality-of-life metrics, such as commute times or housing costs. In the Institute's index, employment growth is weighted most heavily due to its critical importance to community vitality. Wage and salary growth measures the quality of jobs created and sustained.