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San Francisco leads nation in adapting to New Economy

San Francisco leads nation in adapting to New Economy

According to a survey of the 50 largest U.S. metropolitan areas, the San Francisco Bay area has best adapted to a knowledge-based "New Economy." Austin,
  • Written by American City & County
  • 2nd May 2001

According to a survey of the 50 largest U.S. metropolitan areas, the San Francisco Bay area has best adapted to a knowledge-based “New Economy.” Austin, Texas, and Seattle are not far behind.

Researchers at Cleveland-based Case Western Reserve University and the Washington, D.C.-based Progressive Policy Institute conducted the survey. Its goal was to determine which metropolitan areas had most successfully made the transition from a manufacturing-based economy to one that is more reliant on ideas and information to create jobs and wealth. Researchers determined the leaders by weighing factors such as the number of initial public offerings, the number of patents issued, the percentage of the population that uses the Internet and workforce education levels.

The survey revealed some patterns. Medium-sized cities tended to score higher than large cities. Raleigh-Durham, N.C., and San Diego ranked fourth and fifth on the list while New York, Chicago and Los Angeles ranked 17th, 19th and 20th, respectively. Also, cities on the West Coast and in New England tended to rank higher than cities in the Southeast.

The report’s authors recommended that local government leaders think regionally and de-emphasize traditional economic development policies such as tax breaks to lure businesses. Instead, cities should focus on creating a skilled workforce, invest in telecommunications infrastructure, and increase the quality of life to attract smart, skilled workers.

“This New Economy is here to stay and our metropolitan areas need to understand and adjust to these new challenges,” says Robert Atkinson, report co-author and director of the Progressive Policy Institute’s technology and New Economy Project.

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