Aerial view of Provo, Utah

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New High-Tech Corridors Are Driving Economic Growth

February 18, 2021

Technology is driving new economies. A strengthening tech corridor helped Provo-Orem, Utah, top a new index on best economic performance among large cities in the U.S., according to the newly released 2021 Milken Institute’s Best-Performing Cities Index. A high-tech industry presence also helped drive job growth and economic performance for Idaho Falls, Idaho, which topped the list as the best-performing economy for a small city.

The annual index measures economic vitality in 200 large metro areas and 201 small metro areas, factoring in job creation, wage growth, and innovation industry metrics. This year’s index also reflects how the pandemic has impacted economies nationwide. This year Milken added housing affordability and broadband access among its variables.

“The pandemic has had an outsized impact on cities where the economic effects of the current recession are exacerbated by high housing costs,” says Kevin Klowden, executive director of the Milken Institute Center for Regional Economics and California Center. “By measuring for factors such as jobs, wages, and high-tech growth, the Best-Performing Cities Index offers analysis of how metro areas have fared based on the resilience of their local economy. And by incorporating data designed to gauge inclusivity, it provides important insights into how cities will be prepared to meet challenges and opportunities for future growth post-pandemic.”

Provo-Orem has benefited from the tech sector’s out-migration from more expensive coastal areas of California, the study notes. It has attracted tech giants like Qualtrics, Vivint, and Smart Citizen. Meanwhile, coastal California markets such as San Jose and San Francisco, which usually top Milken’s list, placed at number 24 and 22, respectively, on the 2021 rankings. High housing costs and a decline in short-term job growth led to their lower rankings this year, the survey notes.

Overall, the researchers note that large cities in the intermountain West and South are outperforming several areas along the coasts due to higher levels of short-term job growth and more affordable housing.

“As we discovered through our rankings, cities perform best when they pursue innovative strategies that allow high-tech industries to grow while still providing affordable costs of living,” says Misael Galdamez, senior policy analyst in the Milken Institute Center for Regional Economics. “This alignment provides a foundation for metro areas to become more resilient to economic shocks.”

The following large U.S. cities topped the 2021 Milken Institute Best-Performing Cities Index:

1. Provo-Orem, Utah
2. Palm Bay-Melbourne-Titusville, Fla.
3. Austin-Round Rock, Texas
4. Salt Lake City, Utah
5. Raleigh-Cary, N.C.
6. Boise, Idaho
7. Phoenix-Mesa-Chandler, Ariz.
8. Nashville-Davidson-Murfreesboro-Franklin, Tenn.
9. Ogden-Clearfield, Utah
10. Huntsville, Ala.
11. Denver, Aurora-Lakewood, Colo.
12. Fort Collins, Colo.
13. Seattle, Bellevue-Kent, Wash.

The following small U.S. cities topped the 2021 rankings:

1. Idaho Falls, Idaho
2. Logan, Utah-Idaho
3. The Villages, Fla.
4. St. George, Utah
5. Daphne-Fairhope-Foley, Ala.
6. Coeur d’Alene, Idaho
7. Sioux Falls, S.D.
8. Sebastian-Vero Beach, Fla.
9. Gainesville, Ga.
10. Charlottesville, Va.
11. Punta Gorda, Fla.
12. Bellingham, Wash.
13. Bend, Ore.