Neighboring city envy: What else can ABQ do?
Cities, by creating and growing economic ecosystems that foster industry clusters, have become the driving force for states’ and nations’ economic growth. States like California and Texas have high economic growth because they have cities with booming economic ecosystems. A nation’s economy grows because its cities have high economic growth.
The Milken Institute annually rates the nation’s top 200 large cities and 200 small cities based on economic outcomes. Milken’s nine rating criteria are weighted and based on prior year and short-term averaged and include job growth, wage and salary growth, and four high-tech criteria. Milken’s 2016 report is at www.best-cities.org/pdf/best-performing-cities-report-2016.pdf
The 15 large cities/metro areas rated the highest in Milken’s 2016 report are, in order: San Jose-Sunnyvale-Santa Clara, Provo-Orem, Austin-Round Rock, San Francisco-Redwood City, Dallas-Plano-Irving, Raleigh, Nashville-Davidson-Murfreesboro-Franklin, Fort Collins, Orlando-Kissimmee-Sanford, Seattle-Bellevue-Everett, Salt Lake City, Charlotte-Concord-Gastonia, Denver-Aurora-Lakewood, Portland-Vancouver-Hillsboro and Cape Coral-Fort Myers.
Despite high rankings in two of the four high-tech criteria, Albuquerque ranked 174, up from 180 in 2015. Job, wage and salary growth were stagnant. New Mexico had three cities in the top 200 small cities: Santa Fe (145), Las Cruces (147) and Farmington (150).
San Jose metro area’s success is due to its world premier ecosystem of innovation and entrepreneurship.
The top six metros have major technology-based industry clusters and high entrepreneurship. California led with six of the top 25 metros and four in the San Francisco area. This is the premier tech region in the world, with a diversity of industry clusters.
Despite Texas’ exposure to declines in oil prices and exploration, it had two metros in the Top 5 and three in the Top 25. Among the top 25 metros only Grand Rapids, Mich., was outside the Southeast, Southwest or West.
Construction employment was the highest-growth sector, closely followed by professional and technical services including: scientific research and development, architectural and engineering, computer systems design and related services, specialized design and technical consulting. Metros with a high concentration of these and a strong entrepreneurial ecosystem were among the leaders.
The Provo metro is one of the most vibrant tech entrepreneurial hotbeds in the nation. Provo was first in the nation in high-tech GDP growth in 2015, with gains coming from software to computer systems design. The Provo metro is home to half a dozen unicorns, start-up companies valued over $1 billion. Several more “soonicorns” are about to become unicorns. BYU faculty and graduates are major contributors to Provo’s economic ecosystem.
The Austin-Round Rock metro offers high-tech entrepreneurs and young knowledge workers a less-costly alternative to California. Austin pays the highest tech salaries in the nation when adjusted for housing cost. Austin also provides a fertile environment for start-ups spun-out of the University of Texas. These helped Austin have the highest startup rate among large metro areas in the nation.
Texas has 15 large metro areas rated ahead of Albuquerque followed by Colorado (5), Utah (3), Arizona (2), and Oklahoma (1). There is no shortage of successful neighbors.
As the location of a $3 billion national laboratory, a USAF research laboratory, New Mexico’s largest university, and another large national laboratory within 100 miles, the Albuquerque metro area should have a booming technology-based economic ecosystem. If Israel can leverage its high-tech defense capabilities to build a booming private sector economy, why can’t Albuquerque?
Recommended actions include: (1) Sandia, LANL, USAF, UNM and the Mayor’s Office study Milken’s highest-rated large city metros to determine how these cities are leveraging their technology capabilities to build local economic ecosystems. (2) Craft a vision for growing Albuquerque’s private sector economy. (3) Develop a publically disclosed strategy for realizing this vision. (4) Employ innovative economic development leadership. (5) Think big.