New Report: Most Dynamic Metropolitans Annual Ranking, 2021

Heartland Forward releases its annual rankings of America's Most Dynamic Metropolitans

BENTONVILLE, Ark., April 5, 2022 /PRNewswire/ -- Heartland Forward has released the 2021 edition of its annual Most Dynamic Metropolitans (MDM) report, which ranks and analyzes which locales are making themselves more resilient and moving toward better economic futures for their citizens. Those highly ranked have propelling factors for a dynamic metro to sustain itself including assets such as tech hubs, outdoor and lifestyle recreation and the presence of higher education institutions. In addition, those at the top of the ranking lack a dependence on energy or international tourism and business travel which were affected by COVID.

To determine the rankings and analysis, the index captures:

• recent employment growth
• wage growth
• GDP growth
• two entrepreneurship metrics: 1) the density of young business activity within the overall economy and 2) density of well-educated workers within the workforce employed by those young businesses
• the average income of the metro area

Tracking progress. As an annual index, Heartland Forward shares that several metropolitans have shown improvement over past years. For example, heartland metro Columbia, Missouri, jumped to 51st place from 75th. Other heartland university towns such as Madison, Wisconsin, and Ann Arbor, Michigan, regained positions in the Top 100.

Pandemic considerations. The COVID-19 pandemic disrupted life and contracted our local economy in unprecedented ways. That is why the underlying structural composition of metropolitan economies played a larger role than ever. Given the differences between 2021 and years past, population density and vaccination rates influenced movements up or down the rankings as well.

Ross Devol, President and CEO of Heartland Forward said: "In a time of unprecedented crises and economic turbulence, American metropolitans have shown their resilience and creativity. We are proud to present the annual Most Dynamic Metropolitans index for the third year in a row, which tracks fluctuations in local economies over a most-challenging time and reveals some glimmers of hope, particularly for those heartland metros that are anchored to universities, experiencing a re-emergence in manufacturing, entrepreneurship, transportation hubs and growing their outdoor recreational amenities. We look forward to tracking this progress year-over-year to help policymakers understand the forces that will improve their economic outputs."

Jonas Crews, Economist at Heartland Forward said: "The 2021 edition of Most Dynamic Metropolitans tells the story of American metropolitan life during the pandemic. The story has varied significantly across the country, but there are some patterns in that variation. Thus, instead of focusing on which metros ranked at the top, we decided to focus on the ingenuity some of America's urban centers displayed in navigating a complex public health and economic crisis. This makes us profoundly optimistic about America's metropolitans, including those in the heartland, that might have been previously cast-aside but are now finding their footing in ever-more inventive and opportune ways."

Governor Spencer Cox, State of Utah:  "Once again, we're honored to have five metro areas in the Top 25 Most Dynamic Metros, the most of any state in the nation. From job growth to GDP growth to record-low unemployment, Utah continues to be a national economic leader and we appreciate this recognition." 

The rankings.
Top 25 Metropolitan Areas in the United States for 2021:

1. San Jose-Sunnyvale-Santa Clara, California
2. The Villages, Florida
3. San Francisco- Oakland-Berkeley, California
4. St. George, Utah
5. Provo-Orem, Utah
6. Logan, Utah-Indiana
7. Austin-Round Rock-Georgetown, Texas
8. Bend, Oregon
9. Boulder, Colorado
10. Naples-Marco Island, Florida
11. Seattle-Tacoma-Bellevue, Washington
12. Boise City, Idaho
13. Salt Lake City, Utah
14. Reno, Nevada
15. Idaho Falls, Idaho
16. Ogden-Clearfield, Utah
17. Coeur d'Alene, Idaho
18. Fort Collins, Colorado
19. Durham-Chapel Hill, North Carolina
20. Crestview-Fort Walton Beach-Destin, Florida
21. Fayetteville-Springdale-Rogers, Arkansas
22. Colorado Springs, Colorado
23. Raleigh-Cary, North Carolina
24. Bremerton-Silverdale-Port Orchard, Washington
25. Wilmington, North Carolina

Key takeaways.

1)    The Bay Area remains dominant. Despite more restrictive COVID-19 protocols than much of the nation, San Jose-Sunnyvale-Santa Clara, California was first. It is on a peninsula but doesn't have the population density of large cities such as New York, Los Angeles or Chicago. San Francisco-Oakland-Berkeley was third. While experiencing an 8.3% decline in employment in 2020, jobs rebounded in 2021 and strong income growth over the medium term, along with the knowledge-intensity of its young firms, helped sustain its high ranking. Many workers chose to work remotely, but most remained in exurban locations, places beyond the city and suburbs of the Bay Area.

2)    Emerging tech hubs continue to cultivate their national positioning. Austin-Round Rock-Georgetown, Texas, was another tech hub that ranked high (seventh). While it doesn't have as high a share of its startups in the tech sector as the West Coast hubs, it has a vibrant entrepreneurial ecosystem with lower costs. Several California tech firms announced they were moving their headquarters to Austin (Tesla and Oracle being the most prominent). The University of Texas and being the state capital assisted as well. Seattle-Tacoma-Bellevue was another tech hub among the most dynamic, coming in at 11th. Home to Microsoft, Amazon and many other corporate headquarters, and the cutting-edge biomedical research-producing University of Washington, Seattle barely slipped from its previous spot.

3)    Natural amenities are becoming a premium asset. Perhaps the most salient pattern present in the annual evaluation is the extent that several Rocky Mountain states exerted their dominance. Utah achieved a remarkable accomplishment— all five metro areas in the Top 25 (St. George, 4th; Provo-Orem, 5th; Logan, 7th; Salt Lake City, 13th; Ogden-Clearfield, 16th). Several are emerging tech hubs with attractive outdoor recreational amenities that are appealing to knowledge-worker talent, including entrepreneurs. Many tourists, who might have gone abroad if not for COVID-19 travel restrictions, visited Utah, and some remained to work remotely. Altogether, Rocky Mountain states claimed 12 of the Top 25 spots (Idaho and Colorado with three each and one in Nevada). These other metros (Boulder, Colorado, for example) share these characteristics and several have research universities. Although not in the Rockies, Bend, Oregon, at eighth falls into the outdoor recreation category close to coastal tech hubs.

4)    Major universities are community and economic anchors. Another group are attractive, lower cost locations anchored by major research universities not in Mountain states. The Research Triangle has Durham-Chapel Hill (16th) and Raleigh-Cary (18th), North Carolina; and Wilmington, North Carolina, joins the top 25. North Carolina State, the University of North Carolina and Duke are research leaders and incubators of tech firms. Software firms such as SAS and Red Hat are anchors as well as major biopharmaceutical firms. Fayetteville-Springdale-Rogers, Arkansas, (Northwest Arkansas) home to Walmart in Bentonville, combines the advantages of the University of Arkansas, outdoor amenities such as mountain biking, arts and recreation, along with corporate headquarters of logistics giant, J.B. Hunt, and the world's second largest protein producer--Tyson Foods.

5)    Urban flight benefited retirement destinations, such as Florida. Florida had The Villages at second. It has seen rapid population growth due to retirees flocking there. Additionally, Naples-Marco Island, Florida was 10th, and Crestview-Fort Walton Beach-Destin, Florida, was 20th. Pent-up demand for travel, and substitution of domestic for international visitation, aided their performance.

6)    Oil and gas economies were largely losers. A key reversal of fortunes occurred among oil and gas focused metros. Due to COVID-19 and the collapse in energy demand and prices, as well as more capital constraints on the fracking sector, oil and gas exploration declined in 2020 and most of 2021. Even with oil prices recovering in recent months, exploration activity is recovering slowly. Former No. 1, Midland, Texas, slipped to 38th, marking the first time Midland has not held the top spot in the index's three-year history. Greeley, Colorado, and Odessa, Texas, among the most oil and gas dependent in the nation, slid more than 200 spots. Four of the top seven metros experiencing the biggest fall from last year's rankings were in oil and gas extraction-dependent metros. Even former top heartland performers such as Houston and Dallas fell in the ranking due to reliance on oil and gas, though Dallas had airline dependence further harming it.

7)    Foreign tourism and business travel-reliant economies suffered. Another structural component of the change in fortunes was how susceptible metropolitan areas were to foreign tourism and business travel. Foreign tourists have longer hotel stays and spend more per day than domestic tourists at museums, galleries and eating and drinking establishments. For example, Orlando, Florida dropped to 125th; Miami to 140th; Las Vegas to 164th; and Honolulu to 316th.

8)    Looking ahead: the heartland is on its way to growth. Although the heartland had just two metros in the Top 25, four in the Top 50 and 17 in the Top 100; there were encouraging trends that will manifest themselves over the next couple of years. Heartland university towns witnessed an improvement in ranking in this edition. In addition to Austin and Northwest Arkansas, Columbia, Missouri, home to the University of Missouri, rose 24 positions to 51st. Madison, Wisconsin, and Ann Arbor, Michigan, moved back into the Top 100. Columbus, Ohio, home to Ohio State University, was just outside the Top 100 at 102nd. Intel just announced they are establishing two computer chip plants at a site in the metro area, and Ohio State and the technical schools were big reasons. As firms look at reshoring high value-added manufacturing or expanding capacity domestically rather than abroad, heartland locations will look increasingly attractive with lower costs and renewed focus on upskilling.

9)    Other heartland metros to watch: Memphis rose 51 positions this year. Kansas City climbed 60 places over the last two years. Nashville should resume its high ranking as tourism begins to recover with its business-friendly environment and mix of cultural and natural amenities. Michigan saw several metros begin to advance in the rankings including Niles, Bay City, Jackson and Midland.

About Heartland Forward:
Heartland Forward is a nonpartisan, 501c3 organization whose mission is to improve economic performance in the center of the United States by advocating for fact-based solutions to foster job creation, knowledge-based and inclusive growth and improved health outcomes. Heartland Forward conducts independent, data-driven research and programs to facilitate action-oriented discussion and impactful policy recommendations. To learn more, visit https://heartlandforward.org/.

Contact: Erika Tannor, [email protected] 917-626-2487

SOURCE Heartland Forward