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The growth index is a measure of percentage and absolute growth. If job growth were to be measured in percentage terms alone, small companies would dominate the list. (Those going from one to three employees would report 200% growth.) If absolute growth alone were used, only large companies would qualify. (Those going from 5,100 to 5,200 employees would top the list with 100-employee gains.) To avoid either of those extremes and to capture growth that is significant in both percentage and absolute terms, Cognetics developed its growth index. Technically, it is a company's percentage employment growth (expressed as a decimal) times its absolute employment growth.

A city's rank in this report is based on a weighted average of its significant-start index and its young-grower index. Both indices are scaled versions of the percentage of significant starts and percentage of young companies that grow. Those indices are completed by ranking all places in the study by their significant-start and young-grower percentages, respectively, assigning 100 to the top-ranked place and 0 to the bottom-ranked place on each list, and calculating the relative position of all places in between.

To end up with a high overall index, a place must have a large number of significant start-ups and be able to support the growth of a high proportion of them.

Source: U.S. Bureau of Labor Statistics.

Source: U.S. Department of Commerce, Bureau of the Census, 1998.

LOCATION, LOCATION, LOCATION

PLACE OF BUSINESS: Brooklyn, N.Y.
COMPANY: Spinecare
CEO/FOUNDER: Drew Bizzoco
TYPE OF BUSINESS: Provides multidisciplinary health-care services
REVENUES: $4.5 million
EMPLOYEES: 47
WHY BROOKLYN?
"This is where I was born and raised. Brooklyn is my home, and home is where the heart is," says Bizzoco. "It would have been stupid to go somewhere else, because I wouldn't have had all this business right off the bat. We love Brooklyn -- it's got the best pizza and Italian ices in the world."
DOES LOCATION MATTER?
"Definitely. We're on a busy avenue, and we have a lot of walk-by traffic. Most of our patients are local, so everything is accessible. We stay here because the business is better than if we'd gone anywhere else."

PLACE OF BUSINESS: Youngsville, N.C.
COMPANY: P&R Environmental
CEO/FOUNDER: Gary M. Pratt
TYPE OF BUSINESS: Recycles plastic bottles from curbside programs
REVENUES: $8.6 million
EMPLOYEES: 170
WHY YOUNGSVILLE?
"I was living in Raleigh, so I surveyed the surrounding counties for a location, and this one seemed to be the best," says Pratt. "If you look at the material we pull in and the markets we serve, Youngsville was right smack in the middle of it all. It's also located on good highways. Luckily, I didn't have to move."
DOES LOCATION MATTER?
"Yes, in terms of logistics and being accessible to markets that bring us materials as well as the locations where we send materials. Also, we're in Franklin County, next to the one Raleigh is in. The area around Raleigh has more of a city mentality. Here in Franklin County, we're a big fish in a small pond."

PLACE OF BUSINESS: Duluth, Minn.
COMPANY: Peepers
CEO/FOUNDER: Dan Thralow
TYPE OF BUSINESS: Retails sunglasses, night-vision equipment, and telescopes
REVENUES: $1.5 million
EMPLOYEES: 32
WHY DULUTH?
"Originally, it was because Duluth is a tourist destination," Thralow says with conviction. "It's between the tourist areas of Thunder Bay, Ontario, and Minneapolis, so a lot of people pass through here. Also, I personally love the city. The people here -- including my employees -- are more honest, loyal, and reliable than most. I think it has to do with the Midwest upbringing and the weather. It takes a particular type of person to handle so many months of subzero temps. If you can do that, you tend to look at things in the long term. That makes for a good employee."
DOES LOCATION MATTER?
"For us, not like it used to, no. When we were strictly retail it was huge. Now we're on the Internet, and location really doesn't make a difference. But the fact that I can live here -- it's the gateway to the North Woods, has clean water, clean air, low crime -- and still run the company is terrific.

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