New Geography

Author: Joel Kotkin and Michael Shires

  • The Cities That Are Stealing Finance Jobs From Wall Street

    Over the past 60 years, financial services’ share of the economy has exploded from 2.5% to 8.5% of GDP. Even if you believe, as we do, that financialization is not a healthy trend, the sector boasts a high number of relatively well-paid jobs that most cities would welcome.

    Yet our list of the fastest-growing finance economies is a surprising one that includes many “second-tier” cities that most would not associate with banking. To identify the cities making the biggest gains, we ranked metropolitan statistical areas’ employment growth in the sector over the long-term (2001-12), mid-term (2007-12) and the last two years, as well as momentum.

    Best Cities for Jobs in Finance Industries

    New High-Fliers

    Tops on our list among the 66 largest metro areas is Richmond, Va., where financial sector employment has grown an impressive 12% since 2009. This reflects the presence of large banks such as Capital One Financial , the area’s largest private employer with 10,900 jobs, and SunTrust Banks , which employs 4,400. The insurer Genworth Financial is based in Richmond, and Wells Fargo and Bank of America also have sizable operations there. Along with the Northern Virginia metropolitan statistical area (an area encompassing the state’s suburbs of Washington, D.C., including Fairfax, Arlington, Loudoun and Prince William counties), which is No. 7 on our list, the Old Dominion is quietly becoming a major financial power.

    In once-gritty Pittsburgh, which places second on our list, financial services is now the largest contributor to the regional GDP, according to the Allegheny Conference. Long seen as a backwater, the area has begun to lure the kind of highly trained workers used by financial firms, leading Rust Belt analyst Jim Russell to joke, “Pittsburgh is becoming the new Portland.” Financial employment there has grown nearly 7% since 2009. The strongly reviving local economy spans everything from energy to medical technology.

    Like Pittsburgh, some of the areas doing well in financial services are also thriving generally. These include such Texas high-fliers as No. 3 Ft. Worth-Arlington, where financial services employment has expanded over 12% since 2007, as well as No. 4 San Antonio-New Braunfels. And it is not real estate that is driving this boom—in Fort Worth, for example, the “real estate and rental and leasing” sub-sector of financial services shed jobs over the last five years while the “finance and insurance” subsector expanded almost 20%.

    Some metro areas that aren’t exactly setting the world on fire are scoring in the financial job sweepstakes. Jacksonville, Fla., ranks fifth on our list and St. Louis, MO-IL ranks eighth. In St. Louis, financial sector employment is up 6.4% since 2007 by our count, and the number of securities industry jobs has increased 85% to 12,000 over that span, according to the Wall Street Journal.

    What’s Driving Dispersion of Financial Services?

    The largest traditional financial centers appear to be losing their edge. New York, home to by far the largest banking sector with 436,000 jobs, places a meager 52nd on our list of the cities winning the most new jobs in the sector. Big money may still be minted in Gotham, but jobs are not. Since 2007 financial employment in the Big Apple is down 7.4%.

    The next four biggest financial centers are also doing poorly. San Francisco-San Mateo ranks 37th – remarkably poor given that San Francisco placed first overall on our 2013 list of The Best Cities For Jobs. Meanwhile Boston-Cambridge-Quincy ranks 44th (despite notching a strong 17th place ranking on our overall list), Los Angeles-Long Beach is 47th, and Chicago-Joliet-Naperville is 57th.

    So what gives here? A key factor is cost-cutting. As firms look to move back office and some sales functions to less expensive locales, the traditional financial centers are losing out. Between 2007 and 2012, New York, Boston, Los Angeles, Chicago and San Francisco lost a combined 40,000 finance jobs.

    In addition to lower rents in the cities that rank highly on our list, workers come cheaper, too: the average annual salary for securities industry jobs in St. Louis is $102,000, according to the Wall Street Journal, compared with $343,000 in New York.

    This trend is not just limited to the high-profile investment banks and brokerages. Insurance, the quieter and tamer part of the financial services sector (it has roughly the same number of jobs today as it did in 2001 and 2007), has seen an exodus of jobs into these lower-cost regional markets as well. Illinois-based insurance giant State Farm, for example, recently signed mega-leases in Dallas, Phoenix and Atlanta.

    Manufacturing And Energy Drive Changes

    The manufacturing revival in the Rust Belt and the Midwest is creating financial sector jobs in midsized cities (those with overall employment totaling 150,000 to 450,000).  Tops on that list is Ann Arbor, Mich., followed by Green Bay, Wisc., No. 16 Grand-Rapids-Wyoming, Mich., and No. 19 Madison, Wisc. Among small cities, Owensboro, Ky., ranks first, followed by No. 3 Kankakee-Bradley, Ill., No. 5 Clarksville, Tenn.-Ky., No. 11 Bloomington-Normal, Ill., and No. 13 Michigan City-La Porte, Ind. With low commercial and industrial market costs and available workforces, these regions could prove attractive to manufacturers re-shoring U.S. operations.

    The top of the financial services rankings for midsized and small cities is also liberally sprinkled with places where hot energy economies are driving employment in all sectors. The midsized list features Bakersfield-Delano, Calif., in third place, the Texas towns of El Paso and McAllen-Edinburg-Mission in fifth and ninth place, respectively, and No. 10 Lafayette, La. Our small cities ranking includes the Texas towns of Odessa (2nd), Midland (fourth) and Sherman-Denison (10th), and Cheyenne, Wyo. (14th). More economic activity will continue to flow to these regions both as they grow and as their suppliers move closer to reduce costs.

    What The Future Holds

    Historically financial services clustered in big cities, but increasingly cost is leading financial institutions to focus on smaller metropolitan areas. With the connectivity of the Internet and growth of educated workforces in many smaller metros, it has become increasingly possible for financial firms to locate many key functions outside of the traditional money centers.

    Some places can boast advantages beyond just lower costs. Jacksonville, and Miami-Kendall (No. 13 on our big cities list) benefit from the huge demand for financial advisers in Florida. The Sunshine State ranks fourth in the number of financial advisors, and this seems likely to grow as at least some of the expanding ranks of down-shifting boomers — some with decent nest eggs– head down south to retire or start second careers. This demographic trend could also benefit Phoenix, which already hosts substantial operations of Bank of America, JPMorgan Chase and Wells Fargo.

    Perhaps no low-cost metro area has greater long-term advantages than Salt Lake City, 12th on our list. The unique linguistics skills of the largely Mormon workforce have attracted big financial firms such as Goldman Sachs, who need people capable of conversing in Lithuanian, Chinese or Tagalog. Salt Lake City, with 1,400 employees, is the investment bank’s sixth largest location in the world.

    “We consider Salt Lake a high leverage location,” notes Goldman managing director David W. Lang. “There’s a huge cost differential and you have a huge talent-rich environment.”

    As we saw in manufacturing and information sectors, the financial services industry appears to be undergoing a profound geographic shift. Once identified largely with such storied locales as Wall Street, Chicago’s LaSalle Street or San Francisco’s Montgomery, the financial sector — like much of the economy — is dispersing, perhaps even more rapidly. Over time, this could accelerate the process of economic decentralization that has been occurring, fairly steadily, for the better part of a half century.

    Best Cities for Jobs in Finance Industries

    Joel Kotkin is executive editor of NewGeography.com and a distinguished presidential fellow in urban futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.

    This piece originally appeared at Forbes.com.

    Downtown Richmond photo by CoredesatChikai.

  • The Cities Winning The Battle For Information Jobs

    The information industry has long been a darling of the media — no surprise since the media constitutes a major part of this economic sector, which includes publishing, software, entertainment and data processing. Yet until the last few years, it has been a sector in overall decline, with almost 850,000 jobs lost since 2001. The biggest losses have been in telecommunications (half a million jobs gone since 2001) and print publishing (books, newspapers, magazines), which lost 290,000 jobs — 40% of its 2001 job base.

    Yet over the past two years, spurred largely by social media and the growing use of data in business, there has been something of a resurgence in the information sector, with strong hiring in software publishing, data processing and other information services. To identify the cities making the biggest gains, we ranked metropolitan statistical areas’ employment growth in the sector over the long-term (2001-12), mid-term (2007-12) and the last two years, as well as momentum.

    Best Cities for Information Sector Jobs

    The Usual Suspects

    On our large cities list (the 66 metropolitan statistical areas with more than 450,000 jobs), the top two, perhaps not surprisingly, are San Jose-Sunnyvale-Santa Clara, Calif., aka Silicon Valley, followed by San Francisco-San Mateo-Redwood City. Since 2007, the number of information jobs in the Valley has grown by 25%, although this has not offset the large job losses in manufacturing, construction and government. Overall, San Francisco comes off a bit better: information employment is up less over the same period, 18%, but it has suffered less grievous losses in its smaller industrial and construction sectors. The San Francisco metro area ranks No. 1 on our 2013 list of The Best Cities For Jobs.

    Several other of our top performers come from what we might consider the usual suspects of high-tech hype, including Boston (No. 4), where information employment is up over 8% since 2007, and Seattle (15th), which has posted solid if not overwhelming growth of 4% in the sector since 2007, but has a much stronger manufacturing scene than the Bay Area. (See: America’s New Manufacturing Boomtowns)

    The Rising Stars

    But the big story in the information sector may be the emergence of a whole series of smaller metro areas that are usually less expensive. Some of the names here would also not surprise, such as Austin, Texas (fifth), and Raleigh-Cary, N.C. (eighth). They have been pulling information jobs from places like Boston, New York and the Bay Area for almost a generation. For example, Apple decided last year to center its Americas operations division in Austin, which is likely to bring upward of 3,000 information jobs to the Texas capital.

    Less well-known has been the growth in other upstart locations. Perhaps the most dramatic player is third-place New Orleans-Metairie-Kenner, where information employment is up 28% since 2009. The information sector in the area, where I am currently working as a consultant to the regional development agency, GNO, Inc., is very broad-based, including companies in digital effects, videogames, software development as well as a burgeoning film and television industry. The recent decision by General Electric to place its new technology center and its 300 new technology jobs in New Orleans is another sign of the Crescent City’s emergence as a viable information hub.

    GE is representative of a growing trend to place high-tech jobs in a new cadre of low-cost locations. In addition to New Orleans, the conglomerate has announced, over the past year, new technology centers in Detroit; Richmond, Va.; and San Ramon, Calif. While these expansions were not enough to reverse the overall poor showing on our large cities list of Richmond (second to last out of 66) and Detroit (60th), they reflect a growing tendency of businesses to tap relatively low-cost pools of talent.

    In many ways, New Orleans’ success story in information — the migration of jobs to lower cost, but still attractive, regions — is mirrored in other metro areas in our rankings. This includes No. 6 Atlanta, whose 85,000-strong information sector is now the nation’s fourth largest, if you combine Silicon Valley and San Francisco into one region. As in New Orleans, mega-companies also see Atlanta as a major and affordable talent center. General Motors, for example, recently announced plans to set up its new software center in the Atlanta suburbs, bringing more tech jobs.

    Several other large but affordable metro areas are also gaining momentum, most of which are in the Sun Belt. These include seventh-place San Antonio, which has experienced strong growth in such fields as cyber-security, and Phoenix (ninth),which traditionally draws talent and companies from California, and has also won a 1,000-person strong GM tech center in suburban Chandler.

    Finally, tech and media watchers should look out for 10th-place Nashville-Murfreesboro-Franklin, Tenn. Like New Orleans, the country music capital has a very strong media base and provides newcomers with everything from a hip urban ambiance to bucolic country suburbs. Its information sector is also helped by growth in health and manufacturing in the area.

    What About The Big Boys?

    New York, with some 174,000 information jobs, and Los Angeles, with over 190,000, retain the largest clusters of information industry jobs, but they are not growing as quickly as our top 10 metros. New York, at No. 13, has enjoyed only modest 3.2% growth in employment in the sector since 2007, and, despite all the renewed hype about “Silicon Alley,” growth ground to a halt over the past year. Overall since 2001 New York has lost some 16,000 information jobs, many of them directly tied to a big drop in publishing employment.

    But the Big Apple is an information boom town compared to Los Angeles (28th), with information employment there dropping 7.3% since 2007. L.A. today has 25,000 fewer information jobs than in 2001. Things appear to be more stable recently, but the big issue for L.A. lies in the decline of the entertainment industry, which dominates much of the area’s information sector. Since 2007, the Big Orange has lost roughly 9,000 jobs connected to the motion picture, television and recording industry, something the region has not found a way to redress.

    The only information hub that arguably has done consistently worse is Chicago, which has lost 30,000 information jobs since 2001. Many of those losses came from publishing and telecom, which suffered huge losses early in the last decade. Since then, the information sector decline has slowed and last year the area eked out growth of 0.4%.

    Best Cities for Information Sector Jobs

    Little Wonders

    Information businesses historically cluster in big cities, but there are now several smaller regions whose sectors are now growing rapidly. On our medium-size metro area list (between 150,000 and 450,000 jobs), the top spot goes to Trenton-Ewing, N.J., which enjoyed 9.2% growth in the sector since 2007 and appears to be attracting software development jobs. There’s also been considerable growth in Utah, which boasts Provo-Orem (fourth) and Ogden-Clearfield (sixth). Combined with Salt Lake City, a respectable 17th on the large metro area list, the Wasatch Front appears to be a real comer in the information economy.

    The mid-sized list, like the rising stars, appears very much to be driven by lifestyle preferences and the proximity of universities to provide raw talent. If there’s a more physically attractive metro area than No. 2 Santa Barbara-Santa Maria-Goleta, Calif., we’d like someone to find it for us. Lansing-East Lansing, Mich. (third), and Madison, Wisc. (fifth), may be a lot colder and less spectacularly beautiful than Santa Barbara, but as college towns and state capitals, they boast considerable amenities and a constant flow of recent graduates. Much the same can be said of No. 7 Baton Rouge, La., which also enjoys the benefits of an expanding energy industry. Albuquerque, N.M. (eighth), and Huntsville, Ala. (ninth), while not state capitals, are home to major national science laboratories that also attract a deep pool of local technology talent.

    The impact of the modern energy industry on information grows from the need of oil and gas firms to use technology to discover, maintain and expand their operations. This can be seen in our number one small metro for information jobs, Cheyenne, Wyo., as well as the Texas towns of College Station-Bryan (third) and Tyler (fourth). The link between manufacturing and information is evident in some of the small metros, including No. 2 Flint, Mich., and No. 8 Columbus, Ind.

    Who’s Left Behind?

    The information industry’s growth has missed many, if not most American metro areas. This includes many large cities in California, including Oakland-Fremont-Hayward (58th on our large cities list), Sacramento-Arden Arcade-Roseville (63rd) and San Bernardino-Riverside (64th). Given its proximity to both Silicon Valley and San Francisco, Oakland’s slow recovery is a bit surprising, but remember it was only when growth in Silicon Valley went hyper-critical during the ’90s dot-com bubble that Oakland finally surged. Other poor performers include last-place Camden, N.J.; Oklahoma City (62nd), Kansas City, Kan. (61st).

    Yet to an extent not well appreciated in the media, a slow-growing or even shrinking information sector isn’t necessarily an economic kiss of death. Information remains a relatively small, if highly obsessed over, sector of our economy. Additionally, some of these jobs are being subsumed into the indistinguishable category of business services as more and more firms bring them in-house as part of the normal course of doing business. Nonetheless, while you can certainly thrive without it, given the glitz factor, most metro areas would probably prefer to rank among those that are winning these jobs than missing out on them.

    Joel Kotkin is executive editor of NewGeography.com and a distinguished presidential fellow in urban futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.

    This piece originally appeared at Forbes.com.

  • America’s New Manufacturing Boomtowns

    Conventional wisdom for a generation has been that manufacturing in America is dying. Yet over the past five years, the country has experienced something of an industrial renaissance. We may be far from replacing the 3 million industrial jobs lost in the recession, but the economy has added over 330,000 industrial jobs since 2010, with output growing at the fastest pace since the 1990s.

    Looking across the country, it is clear that industrial expansion has been a key element in boosting some of our most successful local economies. The large metro areas with the most momentum in expanding their manufacturing sectors also rank highly on our list of the cities that are generating the most jobs overall, including Houston-Sugarland-Baytown, Texas, which places first on our list of the big metro areas that are creating the most manufacturing jobs; Seattle-Bellevue-Everett, Wash. (third); Oklahoma City, Okla. (fourth), Nashville-Davidson-Murfreesboro-Franklin, Tenn. (No. 6); Ft. Worth, Texas (No. 9); and Salt Lake City, Utah (No. 10).

    Our rankings factor in manufacturing employment growth over the long-term (2001-12), mid-term (2007-12) and the last two years, as well as momentum. They identify those places where the market tells us the best storylines for manufacturing are being written.

    Best Cities for Manufacturing Jobs

    The Energy Boom and Industrial Growth

    What is striking about this revival is both its sectoral and geographic diversity. For Houston, the booming energy industry is driving job growth in metal fabrication, machinery and chemicals. Since 2009, Houston industrial employment has grown 15%, almost three times as fast as the overall economy. Of course, industrial growth also tends to create jobs in other sectors, notably construction and professional and business services.

    Much the same pattern of energy-driven growth can be seen in Oklahoma City, where the number of industrial jobs is also up 15% since 2009. This dynamic is also occurring in smaller metro areas. Energy cities did particularly well on our ranking of mid-sized metro areas (those with between 150,000 and 450,000 jobs overall), including third-place Lafayette, La.; Tulsa, Okla (fifth); Anchorage (sixth); Baton Rouge, La. (eighth); Bakersfield-Delano, Calif. (No. 13); and Beaumont-Port Arthur, Texas (No. 14).

    On our small cities list (under 150,000 jobs), two energy cities stand out, No. 4 Odessa and No. 7 Midland.

    The Great Lakes Revival

    The other big story in manufacturing has been the recovery of the auto industry. Essentially we see two parallel expansions, one based around the revival of U.S. automakers and their suppliers, particularly around the Great Lakes, and another that’s keyed by foreign-based firms, particularly in the Mid-South and Southeast.

    Among the larger metro areas, the star of the U.S.-led recovery is No. 5 Warren-Troy-Farmington Hills, Mich., an area that is widely known as “automation alley.” This region epitomizes the transition of manufacturing to more automated, high-tech production methods. After decades of losses, the area’s industrial employment increased 26% from 2009 through 2012.

    More hopeful still has been the industrial recovery of the quintessential factory region, Detroit-Livonia-Dearborn, No. 8 on our large metro area list. The Detroit resurgence is for real, with manufacturing employment up 18% since 2009. The industrial expansion has also sparked high-tech employment growth across Michigan that in 2010-2011 stood at almost 7% compared to 2.6% nationwide.

    Another big winner from the auto rebound has been Louisville-Jefferson County, Ky., No. 2 on our large cities list. Industrial employment in the area has expanded nearly 15% since 2009. Smaller cities in the region have also staged an impressive recovery. Columbus, Ind., No. 1 on our small city list, is benefiting from the growth of auto suppliers such as PMG Group as well as the expansion of a nearby Honda facility.

    The South Rises Again

    Many “progressive” intellectuals love to hate the South. The region, industrializing rapidly for decades, took a big hit when the recession devastated the manufacturing sector everywhere.

    But more recently many Southern areas have enjoyed considerable growth in a host of industries, from petrochemicals and autos to aerospace. This can be seen in two of the South’s largest metropolitan regions, Nashville, Tenn. (No. 6 on our list), and Virginia Beach, Va. (No. 7 ). In Nashville, much of the manufacturing job growth is auto-related, sparked in large part by the expansion of smaller plants and the nearby Nissan facilities.

    In contrast, Virginia Beach’s manufacturing job growth has been very diverse, reaching into fields as broad as fabricated metals and autos. Expanding investment from abroad, notably in aerospace and autos, has paced growth in other southern cities, notably Mobile, Ala., No. 1 in the mid-sized category, which has become a major production hub for Europe-based Airbus. Similarly, in Florence-Muscle Shoals, Ala., No. 3 on our small city list, industrial employment growth has been paced by the expansion of Navistar, as well as a host of smaller specialized manufacturers.

    Western Movement

    The West is often identified as a key high-tech and lifestyle mecca, but it also includes some of the nation’s top industrial growth centers. At the top of the pile sits No. 3 Seattle-Bellevue-Everett, home to Microsoft, Amazon and Starbucks SBUX, but also the birthplace of Boeing and its primary manufacturing location. Although the aerospace giant has moved some production elsewhere, Seattle has enjoyed nearly 13% growth in manufacturing employment since 2009.

    But the Emerald City is not the only western hotspot for manufacturing growth. Aided by low hydro-electric energy prices — as much as a third less than historic rival California –Washington State boasts several thriving industrial areas. Kennewick-Pasco-Richland earned the No. 2 spot in our small city rankings while Wenatchee comes in at No. 11. Low energy prices helps attract firms in diverse industries ranging from metals to food processing.

    The other western manufacturing hotspot is Utah, which also has low energy prices and a favorable business climate. Salt Lake City, which is becoming a perennial on many of our lists, has enjoyed a rapid expansion of technology-driven manufacturing, most notably a huge Intel-Micron flash memory plant, aerospace and recreation sports equipment industries. Also in the Beehive State, Ogden-Clearfield ranks No. 8 on our mid-sized list.

    Who’s Losing Ground?

    The bottom of our list generally divides into two categories: long-declining industrial hubs and places that are starting to de-industrialize rapidly. In many ways California represents the antithesis of the other western manufacturing economies, with its lethal combination of high energy prices and strict regulation. According to the California Manufacturing and Technology Association, the Golden State lost a full third of its industrial base from 2001 to 2010, and has yet to participate in the nation’s industrial recovery. Since 2010, manufacturing employment nationwide has grown more than 4% while in California industrial jobs have barely grown.

    With the exception of oil-rich Bakersfield, no California metro area approaches the top rungs of our manufacturing list. Most worrisome is the poor performance of Los Angeles-Long Beach, which ranked 46th out of 66 large metro areas. Still the nation’s largest manufacturing region, L.A. has lost some 4.7% of its industrial jobs since 2010, declining as the nation’s factory economy surged forward. Doing even worse is neighboring San Bernardino-Riverside, traditionally where L.A. firms expand, ranking a dismal 64th.

    But not all the bad news is in California. The most poorly performing manufacturing metro areas include such old industrial hubs as Camden-Union, rock bottom at No. 66, which has lost 7% of its manufacturing jobs since 2009 and a remarkable 23% since 2007. Both No. 62 Newark-Union, N.J., and No. 56 Rochester, N.Y., are also rapidly becoming industrial has-beens.

    Clearly America’s nascent industrial revival still has not reached many parts of the country. But given the evident relationship between growing economies generally and a vibrant manufacturing sector, perhaps more regions will place greater emphasis on industrial employment as they seek to recover from the Great Recession.

    Best Cities for Manufacturing Jobs

    2013  Mfg Rank – Large MSAs Area 2013 Weighted MFG INDEX 2012 MFG Employment (1000s) 2012  Mfg Rank – Large MSAs 2013 Mfg Rank Change from 2012
    1 Houston-Sugar Land-Baytown, TX 87.1         248.3 4 3
    2 Louisville-Jefferson County, KY-IN 82.2           72.5 47 45
    3 Seattle-Bellevue-Everett, WA Metropolitan Division 80.4         169.9 1 (2)
    4 Oklahoma City, OK 79.1           35.6 2 (2)
    5 Warren-Troy-Farmington Hills, MI Metropolitan Division 77.2         143.3 5 0
    6 Nashville-Davidson–Murfreesboro–Franklin, TN 75.7           70.4 48 42
    7 Virginia Beach-Norfolk-Newport News, VA-NC 75.4           55.1 33 26
    8 Detroit-Livonia-Dearborn, MI Metropolitan Division 71.0           80.4 24 16
    9 Fort Worth-Arlington, TX Metropolitan Division 70.1           92.8 9 0
    10 Salt Lake City, UT 67.8           55.7 3 (7)
    11 San Antonio-New Braunfels, TX 64.9           47.0 7 (4)
    12 Birmingham-Hoover, AL 64.5           37.5 46 34
    13 Charlotte-Gastonia-Rock Hill, NC-SC 64.3           71.0 22 9
    14 Milwaukee-Waukesha-West Allis, WI 59.5         119.5 10 (4)
    15 Minneapolis-St. Paul-Bloomington, MN-WI 59.2         181.5 15 0
    16 Austin-Round Rock-San Marcos, TX 59.2           51.1 8 (8)
    17 Fort Lauderdale-Pompano Beach-Deerfield Beach, FL Metropolitan Division 58.0           26.7 16 (1)
    18 San Jose-Sunnyvale-Santa Clara, CA 57.7         156.5 11 (7)
    19 Omaha-Council Bluffs, NE-IA 57.4           31.6 14 (5)
    20 Santa Ana-Anaheim-Irvine, CA Metropolitan Division 56.9         158.0 20 0
    21 Phoenix-Mesa-Glendale, AZ 56.6         117.8 43 22
    22 Denver-Aurora-Broomfield, CO 56.3           63.4 34 12
    23 Indianapolis-Carmel, IN 55.3           83.7 50 27
    24 Portland-Vancouver-Hillsboro, OR-WA 54.8         114.7 19 (5)
    25 Cincinnati-Middletown, OH-KY-IN 54.7         106.0 6 (19)
    26 Pittsburgh, PA 54.1           89.3 28 2
    27 Cleveland-Elyria-Mentor, OH 53.9         122.4 18 (9)
    28 Columbus, OH 53.0           65.6 21 (7)
    29 Sacramento–Arden-Arcade–Roseville, CA 52.6           34.1 57 28
    30 San Diego-Carlsbad-San Marcos, CA 52.5           93.1 29 (1)
    31 Honolulu, HI 52.4           10.8 36 5
    32 Atlanta-Sandy Springs-Marietta, GA 51.6         148.8 25 (7)
    33 Raleigh-Cary, NC 51.2           27.2 45 12
    34 Chicago-Joliet-Naperville, IL Metropolitan Division 50.9         324.7 26 (8)
    35 Nassau-Suffolk, NY Metropolitan Division 49.3           73.4 35 0
    36 Buffalo-Niagara Falls, NY 49.0           50.9 12 (24)
    37 Jacksonville, FL 47.6           28.0 53 16
    38 Boston-Cambridge-Quincy, MA NECTA Division 47.2           91.5 23 (15)
    39 Hartford-West Hartford-East Hartford, CT NECTA 46.7           56.8 27 (12)
    40 Bergen-Hudson-Passaic, NJ 46.5           60.2 17 (23)
    41 San Francisco-San Mateo-Redwood City, CA Metropolitan Division 44.9           36.2 37 (4)
    42 Oakland-Fremont-Hayward, CA Metropolitan Division 43.5           79.9 44 2
    43 St. Louis, MO-IL 42.0         109.0 31 (12)
    44 Providence-Fall River-Warwick, RI-MA NECTA 41.6           50.8 36 (8)
    45 Dallas-Plano-Irving, TX Metropolitan Division 40.9         164.2 30 (15)
    46 Los Angeles-Long Beach-Glendale, CA Metropolitan Division 40.8         362.7 49 3
    47 Memphis, TN-MS-AR 40.2           43.7 42 (5)
    48 Las Vegas-Paradise, NV 39.0           20.2 51 3
    49 Orlando-Kissimmee-Sanford, FL 38.7           37.7 40 (9)
    50 Philadelphia City, PA 38.6           23.1 55 5
    51 West Palm Beach-Boca Raton-Boynton Beach, FL Metropolitan Division 37.1           15.2 56 5
    52 New York City, NY 35.7           75.2 58 6
    53 Edison-New Brunswick, NJ Metropolitan Division 34.0           58.4 64 11
    54 Richmond, VA 33.9           31.9 65 11
    55 Tampa-St. Petersburg-Clearwater, FL 33.3           58.9 41 (14)
    56 Rochester, NY 32.9           57.9 32 (24)
    57 New Orleans-Metairie-Kenner, LA 32.1           29.8 38 (19)
    58 Northern Virginia, VA 30.7           21.9 39 (19)
    59 Bethesda-Rockville-Frederick, MD Metropolitan Division 30.5           15.8 54 (5)
    60 Kansas City, MO 29.6           37.8 13 (47)
    61 Putnam-Rockland-Westchester, NY 27.7           24.5 63 2
    62 Newark-Union, NJ-PA Metropolitan Division 27.5           63.4 52 (10)
    63 Miami-Miami Beach-Kendall, FL Metropolitan Division 26.8           35.0 59 (4)
    64 Riverside-San Bernardino-Ontario, CA 25.5           86.4 62 (2)
    65 Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Division 24.6           32.0 61 (4)
    66 Camden, NJ Metropolitan Division 21.9           35.3 60 (6)

    Manufacturing rankings by Michael Shires.

    Joel Kotkin is executive editor of NewGeography.com and a distinguished presidential fellow in urban futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.

    This piece originally appeared at Forbes.com.

    by Angry Aspie.

    May 15, 2013

  • The 2013 Best Cities For Job Growth

    The 2013 edition of our list shows many things, but perhaps the most important is which cities have momentum in the job creation sweepstakes. Right now the biggest winners are the metro areas that are adding higher-wage jobs thanks to America’s two big boom sectors: technology and energy.

    Our rankings are based on short, medium and long-term employment performance, and take into account both growth and momentum — whether growth is slowing or accelerating. (For a detailed description of our methodology, click here.) Consequently, areas that have made the strongest recoveries from deep setbacks often do well. Nowhere is this clearer than in the case of the San Francisco-San Mateo-Redwood City metropolitan division, our top-ranked large metro area (urban regions with more than 450,000 jobs). Over the last year, employment in the San Francisco area expanded a remarkable 4.1%, and is up 3.3% since 2008.

    A decade ago, the San Francisco area was reeling from the collapse of the last dot-com bubble; the damage was so deep that today it has only 0.6% more jobs than in 2001. Its sharp recent growth is primarily in the information sector, which has expanded a torrid 21.3% since 2009.

    Much the same can be said about San Jose-Sunnyvale-Santa Clara, better known as Silicon Valley, which is No. 7 on our large metro area list due to 3.4% job growth last year, and 2.3% growth since 2008; it is also propelled by 25% growth in information jobs since 2007. Yet looking at the longer term, the Valley, like San Francisco, is still rebounding from a deep downturn connected to the dot-com disaster of a decade ago. In fact, the Valley is still down almost 40,000 jobs from 2001.

    Is California Pulling Ahead Of Texas?

    Some East Coast boosters of the Golden State are making this claim, but we don’t see it in this year’s numbers. Besides the tech-rich Bay Area, home to two of our top 10 large metro areas, there are no other major California cities near the top. Most of the state’s big metros are in the poor to middling range over the long term; only Riverside-San Bernardino (45th place on our big cities list) has 10% more jobs than a decade ago. Los Angeles, the state’s dominant urban region, has lost some 120,000 jobs since 2001.

    In contrast, the Texas juggernaut rolls on. Growth there has not only been steady, it’s been widely spread across the state. Texas boasts a remarkable four major metros in our top 10, led by Ft. Worth-Arlington (No. 4), Houston-Sugarland-Baytown (No. 5), Dallas-Plano-Irving (No. 6 ) and Austin-Round Rock, which slips from first place last year to 10th. The state’s other big city, San Antonio, comes in at a very healthy No. 12.

    All these metro areas have more jobs than they did a decade ago — often a lot more. Since 2001, employment in Houston has expanded 20%; in Ft. Worth, it’s up roughly 16%; Dallas; 11%; Austin, a remarkable 26.5%; and San Antonio, 18.4%.

    The Energy Boomtowns

    The unconventional oil and gas boom has helped turn Texas into an economic juggernaut, particularly world energy capital Houston, but growth has also been strong in tech, manufacturing and business services. You see this same kind of blending of energy and other sectors in other strong growth economies elsewhere in the U.S., such as No. 3 Salt Lake City, No. 9 Denver and No. 15 Oklahoma City.

    But the real evidence of energy’s power can be seen in smaller metro areas. Oil-rich Midland, Texas, places first on our list of smaller metro areas (those with less than 150,000 jobs) and also first overall among the country’s 398 metropolitan areas. Nipping at its heels in second place in both categories is Odessa, Texas. On our medium-size cities list, energy towns with strong growth include No. 4 Corpus Christi, Texas; No. 5 Bakersfield, Calif.; and No. 6 Lafayette, La.

    Affordability + Quality of Life = Success

    But you don’t have to be a huge tech hub or energy capital to generate new jobs. The No. 2-ranked place in our big metro ranking, Nashville-Davidson-Murfreesboro-Franklin, Tenn., reflects the power of economic diversity coupled with ample cultural amenities, pro-business policies and a mild climate. Nashville’s 3.8% expansion in employment last year, and 7% growth since 2008, has been propelled by business services, education and health. There’s also been a recent recovery in manufacturing, up over 9% last year, as well as retail and wholesale trade. Like the Texas cities, Nashville has registered long-term growth as well, with 112,000 jobs added since 2001, a nice 16.6% increase.

    Much the same can be said about Charlotte-Gastonia-Rock Hill, N.C., No. 8 on our big city list, whose job base grew 3.3% last year. Virtually every business sector has been on the rebound since 2009, including financial services, despite Bank of America’s continuing troubles. Overall the local economy has added 100,000 jobs since 2001, up almost 13%.

    Steady, diverse growth can be seen in other low-cost and business-friendly towns such as our No. 11 big metro area, Raleigh Cary, N.C.; No. 13 Columbus, Ohio; and No. 15 Indianapolis. The shift towards stronger growth in areas away from the coasts has continued, at least in the more attractive metro areas.

    Who Doesn’t Have It?

    Of course, any list has its share of losers as well as winners. Sadly this includes long-suffering old industrial cities such as our last-placed big metro area, Newark-Union, N.J., which is followed, in order, by Saint Louis, MO-IL; Cleveland-Elyria- Mentor, Ohio; and Providence-Fall River-Warwick RI-MA. All but Providence, which stayed about even, slipped from last year’s rankings.

    But not all factory towns are headed in the wrong direction. No.  51 Detroit-Livonia-Dearborn advanced an impressive 11 places from last year’s list. The key here has not been the much talked about attempt to turn downtown Detroit into a cool place, but the resurgence of the auto industry. Manufacturing employment, concentrated in the region’s suburbs, is up over 18% since 2009 after decades of tumultuous losses.

    Also flailing a bit have been many of our largest, and most often celebrated, metros. Believe it or not, Detroit comes in one place ahead of Chicago-Joliet-Naperville ,Ill., which continues to promote itself as one of the nation’s great comeback stories, but in reality has continued to lose ground. You can tell the same tale about No. 46 Philadelphia, Pa., No. 41 Portland-Hillsboro-Vancouver OR-WA, and No. 37 Miami, which dropped a staggering 16 places despite the much celebrated recovery of its condo market. Selling to South America flight capital (legal or otherwise) and sun-deprived Europeans does not seem to be doing enough to revive the region’s overall economic vigor.

    There are also some signs that the big beneficiaries of the Bernanke-Obama-Bush economic policy may be losing some momentum. New York City, the major winner from the “too big to fail” banking bailout, fell seven places from last year to No. 18. Even Washington-Arlington-Alexandria, D.C., the nation’s prime beneficiary of crony capitalism and fiscal bloat, has lost steam, falling 10 places to No. 26 — a big decline from its No. 6 rankings in 2010 and 2011. We are usually loath to celebrate declines, but Washington’s loss, reflecting a slowdown in government growth, may be evidence that some equilibrium between the public and private sectors is slowly being restored.

    Joel Kotkin is executive editor of NewGeography.com and a distinguished presidential fellow in urban futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.

    This piece originally appeared at Forbes.com.

  • The Best Cities for Jobs 2012

    Throughout the brutal recession, one metropolitan area floated serenely above the carnage: Washington, D.C.  Buoyed by government spending, the local economy expanded 17% from 2007 to 2012. But for the first time in four years, the capital region has fallen out of the top 15 big cities in our annual survey of the best places for jobs, dropping to 16th place from fifth last year.

    It’s a symptom of a significant and welcome shift in the weak U.S. economic recovery:  employment growth has moved away from the public sector to private businesses. In 2011, for the first time since before the recession, growth in private-sector employment outstripped the public sector. More than half (231) of the 398 metro areas we surveyed for our annual study of employment trends registered declines in government jobs, with public-sector employment dropping 0.9 percent overall. Meanwhile, private-sector employment expanded 1.4 percent.

    Read about how we selected the 2012 Best Cities for Job Growth

    Instead of government, the big drivers of growth now appear to be three basic sectors: energy, technology and, most welcome all, manufacturing. Energy-rich Texas cities dominate our list — the state has added some 200,000 generally high-paying oil and gas jobs over the past decade — but Texas is also leading in industrial job growth, technology and services. In first place in our ranking of the 65 largest metropolitan areas is Austin, which has logged strong growth in manufacturing,  technology-related employment and business services. Houston places second, Ft. Worth fourth, and Dallas-Plano-Irving sixth. Another energy capital, Oklahoma City, ranks 10th, while resurgent New Orleans-Metairie places 13th among the largest metro areas.

    To determine the best cities for jobs, we ranked all 398 current metropolitan statistical areas based on employment data from the Bureau of Labor Statistics covering November 2000 through January 2012. Rankings are based on recent growth trends, mid-term growth, long-term growth and the region’s momentum. (Here is a detailed description of our methodology.) We also broke down rankings by size — small, medium and large — since regional economies differ markedly due to their scale.

    The strong growth of the energy sector, and Texas, is even more evident in our overall ranking, which includes many small and medium-sized metropolitan areas. The top 10 fastest growers overall include such energy-centric places as No. 1 Odessa, Texas; second-place Midland, Texas;  Lafayette, La. (fourth place); Corpus Christi, Texas (sixth), San Angelo, Texas (seventh); and Casper, Wyo. (10th).

    The shift from public to private can be seen in the falling rankings of many of the most government-dependent economies. Outside of Washington, D.C. (where federal employment actually has continued to grow), Bethesda-Rockville-Frederick, Md., took an even more dramatic tumble in our big city table,  dropping 34 places to No. 46.There were sizable relative declines in the rankings of many state capitals such as Springfield, Ill. and Madison, Wisc. College towns, which had previously done well in the face of the recession, have also moved sharply lower in our rankings, due to a combination of state budget cuts and better performance elsewhere. College Station, Texas, plummeted from fourth last year on our overall list to 167th; Fairbanks, Alaska, slid from 15th place to 165th, Corvallis, Ore., tumbled from 40th place to 203rd place; and Cedar Rapids, Iowa, dropped from 81st to 246th.

    Budget constraints have also hurt military towns, which previously had been largely immune to the recession. Last year’s overall No. 1, Killeen-Ft. Hood, Texas, slid to 43rd place; Jacksonville, N.C., home to Camp Lejeune, fell to 102nd from 19th last year; and Lawton, Okla., home to Fort Sill, slipped to 274th from  No. 20 last year.

    In addition to energy, the technology sector has been on a tear. After a decade of tepid growth and some years of job losses, Silicon Valley has blown itself another huge tech bubble, this time driven by the social media craze and a surge in private-equity investment. In the San Jose-Sunnyvale-Santa Clara metro area, the number of information sector jobs is up 36 percent over the past five years; this year the epicenter of Silicon Valley jumped 22 places to No. 5 among the 65 biggest metro areas. The social media boom has also been very good for the San Francisco-San Mateo-Redwood City area, which rocketed 16 places to a solid 17th this year.

    But much of the tech growth in the country has continued to flow to more affordable regions less dependent on venture investment. At the head of the pack is Austin, where Apple recently announced a large expansion,  and Salt Lake City, No. 2 on our big cities list, which is a major destination for expansion for Silicon Valley firms such as Adobe, Twitter and  Electronic Arts. Other big players benefiting from the tech boom include seventh-place Raleigh-Cary, N.C., which has been a consistent top 15 performer for the past seven years; Seattle, which rose 18 places to 14th, and Denver at No. 15.

    Perhaps most encouraging of all has been the expansion of the manufacturing sector. In 2011 manufacturing expanded at three time the rate of overall GDP, according to Mark Perry of the University of Michigan-Flint, and the sector added 425,000 jobs, also outpacing the national average.

    As a result, the fortunes of some of America’s hardest-hit manufacturing regions are improving. Columbus, Ind., rose from 235th overall last year to No. 3 on our list this year.  Michigan is beginning to see some signs of new life: perennial cellar dweller Holland-Grand Haven rose a remarkable 202 places to 19th on the overall list. A slew of other Michigan cities rose more than 100 places, including Grand Rapids (64th place), Bay City (136th), Warren-Troy-Farmington Hills (199th), Muskegon-Norton Shores (219th), and Jackson (233th).  It is a glimmer of hope in a region that has lurked near the bottom of our Best Places rankings for as long as we have published it.

    Another group of big cities that may be seeing light at the end of the tunnel are some of the metro areas hit hardest by the bursting of the housing bubble. Miami, Fla., which ranks 21st among the 65 largest metros, Tampa-St.Petersburg-Clearwater, Fla.  (33rd), Phoenix (45th), Riverside-San Bernardino, Calif. (50th), and even Las Vegas (56th) began to show some signs of new life this past year.

    So amidst all the good news, which big cities are still doing badly, or even relatively worse? Sadly, many of the places still declining are located in our home state of California, including Los Angeles (59th place among the biggest metro areas), Sacramento (60th), and, and just across the Bay from Silicon Valley, Oakland (63rd). Only the old, and to date still not recovering,  industrial towns of Providence, R.I. (64th), and Birmingham-Hoover, Ala. (dead last at No. 65), did worse.  And the glad tidings in manufacturing have not touched all the Rust Belt cities: Camden, N.J. (57th), Newark, N.J. (58th), Cleveland, Ohio (61st), and Detroit (62nd) still feature prominently near the bottom.

    Read about how we selected the 2012 Best Cities for Job Growth

    This piece originally appeared in Forbes.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and contributing editor to the City Journal in New York. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

    Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.

    Austin photo by Bigstockphoto.com.

  • The Best Cities for Jobs 2011

    These may be far from the best of times, but they are no longer the worst. Last year’s annual “Best Cities for Jobs” list was by far the most dismal since we began compiling our rankings almost five years ago. Between 2009 and 2010, only 13 of 397 metropolitan areas experienced any growth at all. For this year’s list, which measured job growth in the period between January 2010 and January 2011, most of the best-performing areas experienced actual employment increases — even if they were modest.

    For Forbes’ list of the best cities for jobs, we ranked all 398 current metropolitan statistical areas, based on employment data from the Bureau of Labor Statistics reported from November 1999 to January 2011. Rankings are based on recent growth trends, mid-term growth and long-term growth and momentum. We also broke down rankings by size — small, medium and large — since regional economies differ markedly due to their scale.

    Reflecting the importance of the war effort in stimulating local economies, command of this year’s best place for jobs was handed to the Army from the Marines. Killeen-Temple-Fort Hood, Texas, shot up to No. 1 from No. 4, while Jacksonville, N.C., last year’s first-place winner and home to Camp Lejeune, dropped to 19th place.

    Read about how we selected the 2011 Best Cities for Job Growth

    Once again the best places for jobs tended to be smaller communities where incremental improvements can have a relatively large impact. Eighteen of the top 20 cities on our list were either small (under 150,000 nonfarm jobs) or mid-sized areas (less than 450,000 jobs).

    But no place displayed more vibrancy than Texas. The Lone Star State dominated the three size categories, with the No. 1 mid-sized city, El Paso (No. 3 overall, up 22 places from last year) and No.1 large metropolitan area Austin (No. 6 overall), joining Killeen-Temple-Fort Hood (the No. 1 small city) atop their respective lists.

    Texas also produced three other of the top 10 smallest regions, including energy-dominated No. 4 Midland, which gained 41 places overall, and No. 10 Odessa, whose economy jumped a remarkable 57 places. It also added two other mid-size cities to its belt: No. 2 Corpus Christi and No. 4 McAllen-Edinburgh-Mission.

    Whatever they are drinking in Texas, other states may want to imbibe. California–which boasted zero regions in the top 150–is a prime example. Indeed, a group of California officials, led by Lt. Gov. Gavin Newsom, recently trekked to the Lone Star State to learn possible lessons about what drives job creation. Gov. Jerry Brown and others in California’s hierarchy may not be ready to listen, despite the fact that the city Brown formerly ran, Oakland, ranked absolute last, No. 65, among the big metros in our survey, two places behind perennial also-ran No. 63 Detroit-Livonia-Dearborn, Mich.

    One lesson that green-centric California may have trouble learning is that, however attractive the long-term promise of alternative energy, fossil fuels pay the bills and create strong economies, at least for now. Even outside of Texas, oil capitals did well across the board, not surprising given the surging price of gas. Our No. 2 small metro, Bismarck, N.D., which also No. 2 overall, is the emerging capital of the expanding Dakota energy belt. Also faring well are Alaska’s two oil-fire cities, Fairbanks (No. 10 on our small list) and Anchorage (No. 3 on the medium-sized list).

    There were some intriguing surprises as well. Most welcome are signs of revival from New Orleans-Metarie, La., which moved up a stunning 46 places to capture the No. 2 slot among our large metros. The region lost 11% of its population and nearly 16% of its jobs during the last decade. But now the Big Easy seems to be finding its place again among America’s great cities. Jobs, up 3.5% since 2006, have been created by rebuilding, a resurgence of tourism and a growing immigrant population – the region’s Hispanic population grew by 35,000 over the past decade.

    There were other inspirational improvements this year. Sparked by a revival in manufacturing, a host of former sad sacks in parts of the Midwest are showing signs of definite improvement. Niles-Benton Harbor, Mich., a long-time denizen at the bottom of our list, shot up a remarkable 242 places this year to a respectable No. 121. Another old industrial city, Kokomo, Ind., ascended 177 places to No. 215, while Holland-Grand Haven, Mich. improved by 172 places to No. 221 and Grand Rapids, Mich., rose 167 places to No. 183. Milwaukee, a long-time loser among our largest metros, moved up by a healthy 163 places overall to a better-than-average No. 143.

    The Northeast Corridor has also made strong progress. Here the likely explanation can be found in the fruits of Obamanomics. The stimulus has been particularly good for the vibrant economies surrounding the ever-expanding federal leviathan. Among the large metros, Washington-Arlington-Alexandria, Va., did best of all the cities outside the South, repeating its No. 6 ranking among large metro areas. Right behind, at No. 7 on the large city list, sits the primarily suburban Northern Virginia metro area, while Bethesda-Rockville-Frederick, Md., ranks 12th.

    The other big East Coast winners are the financial and university-oriented economies, which have reaped huge benefits from the TARP bailout and the Obama Administration’s college-centric stimulus plan. After the Texas cities and the imperial center, most of the best performing big metros are located in financial and university centers, including No. 9 New York City, No. 10 Philadelphia, No. 11 Pittsburgh, No. 13 Boston and No. 15 Raleigh-Cary, N.C.

    So who’s losing? Outside of Oakland and the big Southern California metros — including No. 60 Los Angeles, No. 59 Sacramento, No. 58 Riverside-San Bernardino and No. 50 Santa Ana-Anaheim- Irvine — the bottom tier consisted of a motley crew of mid-South cities like Memphis (#64 on the big city list) and still-struggling, former big Sunbelt boomtowns Las Vegas (No. 62), West Palm Beach-Boynton Beach-Boca Raton, Fla. (No. 56), Ft. Lauderdale-Pompano Beach-Boynton Beach, Fla. (No. 54), Phoenix-Mesa-Glendale, Ariz. (No. 53), Atlanta-Sandy Springs-Marietta Ga. (No. 52) and Tampa-St. Petersburg-Clearwater, Fla. (No. 51).

    For the most part, these areas rose with the housing bubble and will not fully recover until the economy diversifies beyond real estate speculation. Already some of the bubble victims are showing signs of life, including No. 155 Merced, Calif., up 134 places, and No. 167 Orlando, Fla., which rode a revived interest in tourism to jump 89 places since last year.

    While energy, America’s three wars, the recovering financial markets and real estate problems have played the lead role in setting the stage for the best places to do business, the Intermountain West has shown resilience with Salt Lake City, at No. 20 among large cities; Provo-Orem, Utah, Ogden-Clearfield, Utah, and Boulder, Colo. at Nos. 10, 25 and 26, respectively, among mid-sized cities; and Logan, Utah, and Fort Collins, Colo. at Nos. 9 and 38 among small cities.

    As America struggles with a weak economic recovery, opportunities abound across the geography of the states—even in places where it seems bleakest like California, Nevada and Florida. If old industrial areas can stage the glimmers of a comeback, along with over-taxed and over-regulated Gotham, and greater New Orleans can rise from the near dead, these areas, with generally newer infrastructure and attractive climates, might be next to experience a resurgence of their own.

    Read about how we selected the 2011 Best Cities for Job Growth

    This piece originally appeared in Forbes.com

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

    Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.

    Photo by Bas Lammers

  • Which Cities Will the High Cost of Energy Hurt (and Help) the Most?

    A high cost energy future will profoundly impact the cost of doing business and create new opportunities, but not necessarily in the way most people expect.

    By Joel Kotkin and Michael Shires

    The New York Times, the Atlantic Monthly and the rest of the establishment press have their answer: big cities like New York, Chicago, and San Francisco will win out. Our assessment is: not so fast. There’s a lot about the unfolding energy economy that is more complex than commonly believed, and could have consequences that are somewhat unanticipated.

    On the plus side there are some undoubted winners — those areas that produce energy and those with energy expertise. What’s working for Moscow, St. Petersburg, Calgary, Edmonton, and Dubai is also working for the U.S. energy regions as well. Not surprisingly, many are located deep in the heart of Texas. This includes not only big cities like energy mega-capital Houston but a host of smaller ones, like high-flyers Midland, Odessa and Longview.

    But it’s not just Texas cities that are winning. A host of other places have strong ties to energy production and exploration — Salt Lake City, Denver, and the North Dakota cities of Bismarck, Fargo, and Grand Forks. And it’s not just oil: The U.S. Great Plains have also been described as “the Saudi Arabia of wind.” If the right incentives are put in place, a wind-belt from west Texas to the Canadian border could be produce new jobs, both in building mills and also for the industries — manufacturers, computer-related companies — that will harness the relatively cheap energy.

    Alternative renewal energy producers in biofuels, thermal, and hydro-electric will also become big business. The Sierra Nevada cities like Reno could benefit from thermal; the Pacific Northwest’s hydro-power gives places like Portland, Seattle, and a host of smaller communities — Wenatchee, Bend, Olympia — a great competitive advantage in terms of dependable, low cost and low carbon energy.

    How about the big cities and metros that consume less energy? It seems logical that San Francisco, D.C., Los Angeles, Boston, Chicago, and New York should have an advantage over other cities and their suburban hinterlands; these cities, especially New York, have higher than average transit use. San Francisco and Los Angeles enjoy milder climates requiring less air conditioning and heating.

    But these advantages are somewhat mitigated by the fact that these same cities often pay far more for energy than their rivals. Electricity in New York, notes an upcoming study by the New York-based Center for an Urban Future, costs twice the national average. California cities also suffer much higher prices — almost 50 percent higher than their counterparts in the Midwest. So even if you use considerably less energy, you might end up paying more. Being a big, dense city clearly has advantages, but they too often are squandered by aging infrastructure, lack of new plants and high business costs.

    One other problem for big Northern cities: colder regions will feel the ripple in local economies as the impact of high heating bills is felt next winter. A cold winter will push northeastern city-dwellers to join the chorus of complaints now voiced by drivers in auto-heavy Sunbelt states like Florida and California.

    Nor is it certain suburban areas will do so much worse in tough energy times. Studies of commuting patterns in Chicago and Los Angeles show that many suburbs thirty miles or more from their downtowns — places like Naperville, Illinois and Thousand Oaks or Irvine, California — have shorter commutes than most inner-ring urbanites. This is a result of the movement of jobs to “nodes” on the periphery over the past 30 years.

    Another kind of area that will do well are those that have well-developed telecommuter economies. In Los Angeles, notes California State University at Los Angeles geographer Ali Modarres, telecommuters are concentrated not only in places like Santa Monica, but also in sections of the San Fernando Valley (which has most of the region’s entertainment workers) as well as further out inu highly educated communities like Thousand Oaks and Irvine. In the long run, the best and most energy efficient commute is none at all.

    So who are the losers? Certainly some of the distant outer suburbs, like the high desert communities far east of Los Angeles, which lack jobs for their residents, and suffer longer than average commutes. Also hurt will be poorer inner city areas where workers have to commute, by transit or car, over great distances. Sadly, it’s many of the communities that have already suffered the most. The changeover to lower mileage vehicles will be particularly tough on those communities that produce SUVs and trucks — places like Flint, Michigan; Ft. Wayne Indiana; and Janesville, Wisconsin.

    But there are also some auto centers that are likely to do better. Just follow where low-mileage vehicles, particularly those built by Toyota, Honda, Nissan, and the Korean makers, are either being built or planned. This is mostly a southern play — Tupelo, Mississippi; Nashville, Tennessee; and Georgetown, Kentucky, site of the largest Toyota plant outside Japan.

    Economic change has always impacted America’s communities. But with the current energy price surge, we may find that “creative destruction” may be sweeping through many communities even faster than we anticipated.

    Cities and Oil Prices: The Winners and The Losers

    For most places, it’s hard to tell what the long-term effect of the high cost of energy might be. But there are some fairly safe bets.

    Two kinds of areas tend to perform best in a harsh energy environment. One is the energy-producing cities, whose place at the top of this list should come as no surprise. Another, though it may take a bit longer to emerge, may be those cities that are sites for production of fuel-efficient vehicles. These tend to be located in parts of the country — Texas, the Southeast, and the Great Plains — that have lower energy costs and more favorable business climates.

    Winners:

    1. Houston: This is one town where $150 a barrel gasoline is viewed more as an opportunity than an atrocity. Not that Houstonians don’t drive — like other Texans, they tend toward the profligate in energy use. But prices are not terribly high by national standards and, more to the point, energy is producing lots of high wage jobs here for both blue- and white-collar workers. As headquarters to sixteen large energy firms — far more than New York, Dallas, and Los Angeles combined — Houston, which ranks No. 4 on our list of the best large cities to do business, provides an irresistible lure to hundreds of smaller firms specializing in everything from shipping and distribution of energy, to trading, exploration and geological modeling.
    2. Midland-Odessa, Texas: Houston is no longer the oil production center it once was, but the twin cities of Midland (No. 1 on our Best Cities list overall and among small cities) and Odessa (No. 4 on the list of small cities) certainly are. The two cities, only 20 miles apart in the energy rich Permian Basin, experienced hard times when energy prices dropped. Office buildings went empty, and people fled. But now the big problem is finding enough labor to keep the rigs going. Boomtimes are back — and only a dramatic change in the energy markets will slow them down.
    3. Bismarck, North Dakota: No. 30 on our Best Cities list of small cities, Bismarck may be in the early stages of a big time expansion. It’s the closest “big” city to the rapidly developing Bakken range — rich with oil and shale deposits — and already enjoys the advantages of being the capitol of a state that boasts a $1 billion surplus. North Dakota’s biofuels, wind, and coal industries also make the city a natural focal point for Great Plains energy. As in Midland-Odessa, the biggest constraint may well prove to be the availability of labor.
    4. The Mid-south Autobelt: The shift to smaller cars may seem dismal in Detroit, but it’s pure joy to much of the mid-South. Foreign companies specializing in energy efficient vehicles — Volkswagen, Kia, Honda, Nissan — are concentrated in a belt running from Nashville (No. 18 on the large metro list) and Chattanooga (No. 59 on midsize list) in Tennessee to Huntsville, Alabama (No. 5 on the midsize list). Local universities in the area are also getting into the act, with several cooperating in an automotive research alliance.

    Our list of losers is all too familiar. Basically, these are areas dominated by America’s weak automakers and are particularly wedded to the SUVs and trucks that are losing market share at an astonishing rate. Most fall in states that are strong union bastions, have relatively high energy prices, and get much of their energy from coal, a fuel that’s even less popular with environmentalists than oil is.

    Losers:

    1. Detroit: The center of the American auto industry ranks dead last, No. 66, on our big city list. The Motor City’s legacy as headquarters town for the former Big Three is now its biggest headache. It’s not just factory workers being hurt here; Detroit is where much of the technical, manufacturing, and design talent base of the U.S. auto industry resides. It’s also where ad agencies, law firms, and other high-end business service providers to the industry cluster. All have taken big hits over the last few years, which has led to increased out-migration, high rates of foreclosure and a deteriorating fiscal situation.
    2. Flint, Michigan: No. 171 on the small city list, just two from the bottom, Flint seems to make more and more of what Americans don’t want. In 2006, it made more than 170,000 pickup trucks; it’s doubtful it will see that level of production for a long time to come. And this is a place that was hurting even before gas prices went up. Over 40 percent of all manufacturing jobs disappeared between 2002 and 2007.
    3. Ft. Wayne, Indiana: Compared to Flint or Detroit, Ft. Wayne (No. 85 on the mid-sized list) is not doing too badly. Between 2002 and 2007 manufacturing employment dropped only 2.5 percent. The big problem is the future of the industrial sector. Ft. Wayne made 200,000 pickup trucks in 2006. It’s hard to see many of these jobs surviving if energy prices stay high.
    4. Janesville, Wisconsin: No. 92 on the small list, the Janesville plant manufactures GMC Yukon, the Yukon XL, the Chevy Tahoe, and the Suburban. Although more than 200,000 SUVs were produced at this plant in 2006, the plant will close by the end of 2010. The largest private employer in Janesville is Mercy Health Systems. Being in Wisconsin helps — the state is in better shape than Midwest neighbors such as Michigan and Ohio.

    Joel Kotkin is a presidential fellow at Chapman University and executive editor of Newgeography.com.

    Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.