While the economic downturn was terrible for America as a whole, the level of terribleness wasn’t equal across the country. Some cities were more resilient because they were invested in industries that allowed them to keep creating jobs and paying decent wages.
What were those industries? The Milken Institute’s latest Best-Performing Cities index crunches six years of data for 379 metropolitan areas and finds that technology and energy development were key to the most successful places. San Francisco and Austin, Texas, were on top, with energy centers like Provo, Utah, and Houston, Texas, not far behind.
The ranking is based on nine components, with the most weighting given to growth in jobs, wages, and salaries. It also incorporates data for the latest available years (2012-2013 for jobs and technology output, and 2011-2012 for wages and salaries) as well as specific measures of high-tech economic output.
California and Texas dominates the list, with Colorado also figuring strongly. Among smaller cities, many are in the shale energy producing regions, such as the Dakotas. The biggest gainers from the 2014 edition of the index are in cities that saw big housing busts but are now rebounding–places like Las Vegas and West Palm Beach, Florida.
The report puts some of the success of San Francisco and Austin down to a clustering effect and dense urban areas that allows cross-pollination of talent, capital and ideas. “They are able to offset high costs, an unfavorable tax structure, and a burdensome regulatory environment thanks to the clustering of talent and technology in an entrepreneurial ecosystem,” it says.
Of course, the Institute’s definition of “best performing” is quite limited. The index doesn’t pay attention to things like cost of living or quality of life, which are obviously important to people’s actual experience of living somewhere.
Also, economic growth isn’t an absolute good. A lot of San Franciscans think their city is less interesting and vibrant place today, despite all the jobs it has created in the last decade. Ultimately, what you think “best performing” is subjective, not something you can assess with a few statistics.