Utah's Provo-Orem metropolitan area took the No. 1 spot in the Milken Institute's Best-Performing Cities index for a second consecutive year, reflecting the robust growth of high-tech industries outside the coastal enclaves that launched the digital revolution.
Provo-Orem was among several Middle American cities in the top-10. Their success did not preclude growth in Silicon Valley. San Jose rose nine places to finish second with the help of tech giants such as Apple and Google. Austin, Texas, placed third after adding nearly 5,000 jobs in its professional, scientific, and tech-services sectors during 2017.
Top-10 Best-Performing U.S. Cities (previous year)
- Provo-Orem, Utah (1)
- San Jose-Sunnyvale-Santa Clara, California (11)
- Austin-Round Rock, Texas (9)
- San Francisco-Redwood City-South San Francisco, California (4)
- Dallas-Plano-Irving, Texas (3)
- Raleigh, North Carolina (2)
- Orlando-Kissimmee-Sanford, Florida (7)
- Seattle-Bellevue-Everett, Washington (17)
- Fort Collins, Colorado (5)
- Salt Lake City, Utah (10)
"High-profile corporate site searches like Amazon's HQ2 competition highlight the importance of a strong knowledge-based economy," said Minoli Ratnatunga, co-author and Milken Institute director of regional economics research. "Tech companies, augmented by research universities, are among the most powerful assets a metro can have in our tech-driven economy."
Five California cities and three Utah cities placed in the top-25. San Francisco held steady in fourth place, and Oakland-Hayward-Berkeley was No. 14. Southern California's Riverside-San Bernardino-Ontario area, buoyed by Amazon's continued investment in a major logistics center, rose five places to No. 15. Researchers also documented a big jump for Santa Rosa, which rose 25 places to No. 18.
In Utah, Provo was joined by No. 10 Salt Lake City and No. 21 Ogden-Clearfield. St. George, Utah, was No. 2 in the small-metro rankings.
Merced, California, showed the most improvement, leaping 56 places to No. 38 as a result of expansion at the University of California, Merced. Hiring at Tesla's Gigafactory 1 helped Reno, Nevada, rise 26 places to No. 11.
Among small cities, Bend-Redmond, Oregon, retained the top spot for the third year running thanks to stellar job and wage growth. Gainesville, Georgia, remained in third place.
Published annually since 1999, Best-Performing Cities: Where America's Jobs are Created and Sustained (www.best-cities.org) measures the economic vitality of 200 large metros and 201 small cities. Metrics include growth in jobs, wages and salaries, and technology output. The rankings help policymakers, investors, and companies understand where local economies are thriving.
Provo-Orem is home to Brigham Young University, a top technology-transfer school, and fast-growing technological and entrepreneurial communities. Major employers include Qualtrics International, a customer-survey software firm, and San Jose-based Adobe Systems. In the five years ending in 2016, the metro's tech-sector GDP grew 31 percent faster than the national tech sector.
"Utah's industrious and innovative people continue to drive growth in the technology and business communities," said Governor Gary Herbert. "We are focused on laying the groundwork and infrastructure necessary to support this success far into the future."
Two Texas cities, No. 3 Austin and No. 5 Dallas, were in the top-5. Other inland metros in the top-10 were Raleigh, North Carolina; Orlando, Florida; and Fort Collins, Colorado.
"Tighter competition for talent and rising housing costs have pushed some firms to expand outside the big coastal centers, driving growth inland," said Kevin Klowden, executive director of the Milken Institute Center for Regional Economics and California Center. "Now Middle American cities are beginning to see some of the same problems – labor shortages, higher home prices, and longer commutes."
The full report with a table of all the metros evaluated is available online at www.milkeninstitute.org.