The recession spared few U.S. cities, wiping out 9.4 million jobs between November 2007 and August 2009. Many will never return, and those that do you probably won’t find on the East or West Coast. For the most active areas of job creation (and lower costs of doing business) you have to go to the heartland, home to 80 percent of the top 25 regions on our list of Best Places for Business.
In most of these hot hubs you’ll find a strong university or two, providing rich cultural life and the kind of technology transfer that sparks entrepreneurial activity — giving that educated population lots of reasons to stick around.
Topping our 13th annual list of the Best Places for Business and Careers is Raleigh, N.C. It is one of those locales with a strong university presence helping fuel growth in the area (albeit in an East Coast state, a rarity in the upper part of the list). Raleigh and nearby Durham (ranked No. 31) get a strong boost from three elite schools in the surrounding area in University of North Carolina, Duke University and North Carolina State.
Raleigh ranks No. 1 after dipping to third last year. Low business costs (18 percent below the national average) and a smart labor force (42 percent have a college degree) make North Carolina’s capital an attractive spot for employers like First Citizens Bank and Progress Energy. Job seekers get it: The net migration rate to Raleigh was the second highest in the U.S. over the past five years.
Our look at America’s Best Places for Business showcases the stark contrast between Texas — with its low-cost, pro-business regulatory environment (5 cities among the top 25, led by Austin at No. 7) — and overregulated and wildly expensive California (home to 8 cities that rank in the bottom 25, including No. 200 Merced). Texas was one of the last economies to succumb to the recession and one of the first to bounce back, while California is limping along with an unemployment rate of 11.7 percent (only Nevada’s is worse).
Besides Austin, Texas also placed San Antonio and Dallas in the top 10. San Antonio, ranked No. 8, is among the fastest-growing metro areas in the U.S. (the population increased 25 percent since 2000). It has been buoyed by defense spending and hiring at Toyota Motor’s truck assembly plant. Dallas (No. 10) has been one of the most resilient economies during the recession and could add 190,000 jobs in the next three years.
It’s not all bad in the Golden State. Aside from nice weather, California does have bright spots in San Jose (No. 35) and San Francisco (No. 37), both of which made the top 40 thanks to a rich arsenal of educated and talented workers.
Demographer Bert Sperling argues that much of the recent success of the heartland can be attributed to “extractive industries” like oil, gas and mining as well as record-high crop prices that have provided jobs and revenue to the center of the U.S. “These economies run in cycles, and these booms and busts are often decades in the making,” he says.
Our ranking of Best Places looks at the 200 largest metropolitan statistical areas in the U.S. These range in size from the New York City metro, with to 11.6 million people, to Laredo, Texas, home to 252,000 people. We consider 12 metrics relating to job growth (past and projected), costs (business and living), income growth, educational attainment and projected economic growth.
We also factor in quality of life issues like crime rates, cultural and recreational opportunities and net migration patterns. Lastly we included the number of highly ranked colleges in an area per our annual college rankings. A tip of the cap to Moody’s Economy.com, which provided much of the data, including the economic forecasts. Bert Sperling, founder of Sperling’s BestPlaces, put together a culture and leisure index for Forbes and also crunched the crime numbers for us. College attainment data is compiled by the Census Bureau.
Des Moines, Iowa, last year’s No. 1 dropped one spot as employment fell 0.9 percent in 2010. The area still has plenty to offer with business costs 16 percent below the national average and household incomes that are expected to increase 4.2 percent annually through 2013, eighth best in the U.S. Workers at big employers like Principal Financial and Wells Fargo enjoy cheap housing (median price $148,600) and 20-minute average commutes.
Another big metro that made the top 10, in addition to the three Texas locales, is Denver, which ranks No. 9. U.S. economic growth has been tepid since the recession ended, but Denver’s economy grew 3.9 percent last year and is expected to grow 3.9 percent annually through 2013 according to Economy.com. Denver’s great quality of life and educated workforce make it a favorite with companies in industries from aerospace and bioscience to energy, financial services and information technology. Major employers include IBM, Lockheed Martin and Wells Fargo.
A big mover in the rankings this year is the New York metro, which ranked No. 45, up from No. 99 in 2010. Yes it is still the most expensive place to do business in the U.S. at 51 percent above the national average, but the job and economic forecasts are much improved for the area. The economy is forecast to expand 4.5 percent per year and household income are expected to increase 4.1 percent annually the next three years, 12th best in the U.S.
New York also scores well on quality-of-life issues. It ranks first on Sperling’s index among cities for culture and recreation, and its crime rate is 11th-lowest in the country. The biggest draw might be its talented, educated work force with 36 percent having a college degree–only Washington, D.C. is higher among the 10 largest metros. The concentration of big firms is unmatched as well. It is the corporate home for 80 public companies with more than $1 billion in sales.