When it comes to the technology and startup hotspots, the first name that comes to mind is often San Francisco, which is practically synonymous with Silicon Valley in most people’s minds. However, think tank the Milken Institute's new “Best-Performing Cities 2021” report finds that the longstanding No. 1 best performing city in the US has tumbled 23 spots amid the COVID-19 pandemic. The rankings are based on data for job creation, cost of living and wages and reflect economic conditions conducive to startups.
Replacing San Francisco this year in the top spot for best-performing city on the Milken Institute’s list is Utah’s Provo-Orem metro region. San Francisco’s drop mirrors a larger trend described in the report, in which the highest performing and most economically viable cities are shifting away from previously leading regions like California and Massachusetts.
The Top 5 "Best-Performing Cities" are:
Provo-Orem, Utah: Jobs, wages and high-tech GDP growth pushed Provo-Orem into the first position among best-performing cities this year. The city is ranked highly for its tech industry concentration and moved up to 11th in short-term jobs augmentation compared to 29th last year. Robust support from regional educational institutions has fostered a booming tech sector and a strong reputation for hosting new and flourishing startup companies. In addition, Provo’s Brigham Young University provides skilled graduates, research, and innovation support to the tech industry as well as to large and stable employees. Provo-Orem and its adjacent cities have benefited largely due to the migration of the tech industries from the expensive big cities, the report also notes.
Palm Bay, Florida: Mainly as a result of its diversified, high-tech industrial base, including a considerable part of the national aerospace and defense industries, Palm Bay continues to climb up the best-performing cities rankings by scoring the second position. Despite the COVID-19 pandemic, employment has merely fallen 1.5 percent among short-term jobs in the region, the Milken Institute finds. Housing in the area is also affordable, even though in recent years rent and median home sale prices have gone up, while continued investment in the school system is attracting a growing educated labor force and talent.
Austin, Texas: Austin has maintained its third-place position in the ranking chart, reflecting marked development in many of the report’s indicators. Its numerous advantages include a low tax rate and ample space for development and expansion. The region also has a moderate cost of living despite its booming tech sector, and Austin has successfully marketed itself as friendly and open to business relocations. The state capital is also home to a major research university with strong ties to industry: the University of Texas at Austin. Recently Oracle, the world’s second-largest software company, also announced plans to move its headquarters to Austin from Redwood City, Calf., highlighting the city’s magnetic tech pull.
Salt Lake City: Moving into fourth position versus 21 last year on the Milken Institute’s list, Salt Lake City has gained consistent employment growth across multiple sectors. The region is a hotbed for technology, finance and professional services, the report finds. Based on the booming tech sector in particular, income growth has been strong in the city, resulting in a continually high GDP. The region has experienced some economic setbacks due to COVID-19, but offsetting factors include widespread access to broadband and a low cost of housing, both of which help support proliferating startups and businesses.
Raleigh, North Carolina: The “City of Oaks” scored the fifth position on the “Best-Performing Cities” list with the help of its vibrant and wide-ranging tech sector. The region has achieved noteworthy growth in the past five years in both technology output and overall wages. However, the COVID-19 pandemic has hit the region, as since October 2019, job opportunities have fallen and taken the city to the bottom half of the short-term job growth indicator, the report finds. Raleigh city boasts three foremost research universities that offer well-educated young personnel, and the metro area is a hub for tech industries including communications equipment manufacturing, pharmaceuticals manufacturing and software publishers. Raleigh has also witnessed a rise in seasonal customer service jobs, offering a short-term boost to the regional economy.
The remaining top 10 Best-Performing Cities from the Milken Institute’s report, from sixth to 10th respectively, are:
Boise, Idaho … Phoenix … Nashville, Tenn. … Ogden, Utah … and Huntsville, Ala.
Source: Escalon Services