From 2016 to 2021, Provo, Utah, experienced rapid labor market expansion field by growth in the technology sector, helping it maintain the top spot ont the Milken Institute’s Best Performing Cities index. (Getty Images/iStockphoto),
ACROSS AMERICA — Cities with robust technology sectors, widespread access to high-speed internet and an ample supply of affordable housing topped the Milken Institute’s new Best-Performing Cities index that ranks hundreds of large and small metropolitan areas.
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The 2023 index and rankings, released Tuesday, are mainly based on data from 2021, and reflect COVID-19 pandemic recovery, according to Maggie Switek, the director of regional economics for the Santa Monica, California-based think tank’s research department.
An established hub for tech startups, the Provo-Orem metropolitan area in Utah maintained its top ranking with the highest levels of employment growth from 2016-2021 and in wages.
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Rounding out the top five were Austin-Round Rock, Texas; Raleigh-Cary, North Carolina; Nashville-Davidson-Murfreesboro-Franklin, Tennessee; and Boise City, Idaho.
Among small cities, Idaho Falls, Idaho, returned to the top ranking after falling to fifth place in last year’s index. Its rise back to the top was buoyed by strong job and wage growth.
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The other four cities in the Top 5 include Logan, Utah; St. George, Utah; The Villages, Florida; and Bend-Redmond, Oregon.
Common themes among top-performing cities included a vigorous and growing high-tech sector, rebounding leisure and hospitality sectors, and above-average access to broadband.
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Many fell short in housing affordability. To remain attractive to young workers, they should work hard to provide an ample supply of housing they can afford, Switek told Patch.
The report ranks 200 large metropolitan areas and 203 small metropolitan areas, this year focusing on jobs, wages, high-tech growth, housing affordability and household broadband access. Cities are ranked in five tiers, with Tier 1 made up of the strongest-performing cities and Tier 5 the lowest.
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Much has changed since 2021 — for example, this year alone, tech companies have shed jobs in the tens of thousands, and inflation has kept housing costs high. Whether the top-performing cities will retain their rankings in future reports could hinge on how well they’ve done to create high-paying jobs in other sectors, Switek said.
Large cities remain the center of economic activity three years after the onset of the pandemic, despite an exodus from the large population cities that started in 2020, according to the rankings. In 2021, metropolitan areas generated almost 90 percent of the U.S. gross domestic product, and are home to 86 percent of the nation’s population.
The main difference between large and small cities is that “a lot of households in small cities do not have access to broadband,” Switek told Patch. “They either don’t have a subscription, the city doesn’t have enough infrastructure, or the service is priced out of people’s reach.”
The shift to work-from-home jobs early in the pandemic spurred some cities to expand broadband access. That should continue if cities with broadband gaps want to remain competitive, Switek said.
“We do not want to imply these cities are not trying to expand access. There’s more to be done,” she said. “We’re not the only ones saying this, but the trend from our reports confirms we need to provide more access.”
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As it is now, “20 percent of people don’t have internet, and that affects population growth. In Tier 5 small cities, the number of jobs has decreased,” Switek said. “It’s not just about jobs. It’s also about access to health care, especially when it comes to mental health.”
Housing is another big area of concern, especially in the lower performing Tier 5 cities.
“About 30 percent of the population spend 30 percent of their income on housing costs, whether rent or mortgage,” Switek said. “Cities know this is a concern, and it comes out in our report as an area of focus. Pricing is a game of demand and supply.”
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