What’s the sweet spot for economic growth? If you look at a new ranking from Area Development of all 365 U.S. metros, you come away with the feeling that spot is somewhere south of the Mason-Dixon line and most likely somewhere with some heavy energy reservers.
For its Leading Locations list, AD evaluated nearly dozen different economic and workforce indicators from the Bureau of Labor Statistics, the Bureau of Economic Analysis, and the U.S. Census American Community Survey.
A few takeaways in looking at the list:
Underscoring a trend that demographer Joel Kotkin is championing, size doesn’t matter when it comes to positive economic momentum. Of the 20 metros at the top of Area Development’s ranking, just five have populations of more than 1 million and none has a population of more than 2 million.
Columbus – not the large metro in Ohio, but the compact metropolis of 77,000 in Indiana – is at the top of the list. Two North Dakota metros – Bismarck and Fargo – are No. 4 and No. 5 respectively and combined have a population of not much better than 300,000.
Technological capabilities have kicked down the barriers for smaller communities to attract investment and talent and take advantage of their often lower wage and cost structures.
Geography seems to matter some. Metros in the Southwest and Southeast take eight of the top 20 spots. Among them is Nashville TN (N0. 15), long a capital of health care and music production but also a driving force in the Southeast’s booming Auto Alley. Charleston SC (No. 14) on the list offers a highly valuable port location that is highly attractive to major manufacturers such as Boeing and BMW that have made enormous investments in the state.
Energy and technology most definitely matter. The list overall is dominated by metros that have major energy or technology clusters (and in some cases, both). The energy surge is benefitting communities such as Midland and Odessa in Texas, Lafayette LA, Oklahoma City and Casper WY.
Tech mecca San Jose is the largest population center with the highest ranking, No. 7 on the list. Austin TX has a legacy in computers and information technology and its reputation as center of innovation is expanding to social media. It’s also an emerging clean energy hub, with companies engaged in everything from alternative fuels to solar power to energy storage technology.
Can you connect the dots between education, innovation and growth? A common denominator among many of the the top 20 metros was close proximity to a major university. In places like Austin, Knoxville TN, Manhattan KS, Morgantown WV and Columbia MO the proximity could be measured in feet instead of miles.
There are good examples for any community from this list, small, medium or large. While location and industry segment certainly play a role they aren’t the only influencers. Columbus IN is a traditional manufacturing center square in the middle of the Midwest. How do geography, size and industry clusters factor into your economic development strategies? Are they a challenge to overcome or an opportunity to take advantage of? Share your thoughts.