"What we have here are families, and families create growth," says Ramon Alvarez, the father of three and owner of the nation's only Latino-owned Jaguar dealership, in Riverside, Calif. "You see a lot of upward mobility around here. I see a run of growth that could last for 10 or 15 years."
"It's Econ 101," observes Bart Hill, CEO of San Joaquin Bank, a fast-growing financial institution based in Bakersfield, Calif. "It's just much cheaper to do business here than on the coast." Hill has seen a rapid growth in manufacturing, health, and financial service firms in his area. But there are even signs that some of California's vaunted technology industry may be moving inland. Sacramento, Santa Rosa, Stockton, and other smaller inland communities have been picking up high-end jobs for years. Even such perennial hard cases as Fresno have become attractive to knowledge workers, according to Lance Donny, CEO of Brightcode, a small software service firm located in the longtime agricultural center.
"I recruit people who find a five-minute commute, and the ability to get a great house, pretty attractive," Donny explains. "After 2000, we found we had plenty of resumes. You can pay people a little less because they also pay less for rent, which leaves us with a nice profit."
But California is not the only place where this shift to the periphery is increasingly obvious. Brookings demographer Frey calls this process, appropriately enough, "Jerseyfication" and ties it to the growth of areas surrounding the expensive major cities of the Northeast, including such high-fliers as northern New Jersey, the upper Hudson Valley in New York, Long Island, and the southern New Jersey areas near Philadelphia, as well as the Maryland-Virginia regions around the nation's capital.
"These are areas near old high-fliers and major cities that have become too expensive for families to move into," Frey says. "They have the advantage of being reasonably affordable but still close enough to tap into the big-city economies."
The Midwest
Another surprising trend on the list has been the general rebound of the Midwest and Great Plains. Frey says his studies indicate there was a flight from dense cities in the immediate post 9/11 year. This trend has helped some long-suffering large midwestern cities--such as No. 32 St. Louis, No. 28 Louisville, No. 29 Kansas City, and No. 30 Cincinnati. The longtime outmigration of people, particularly skilled workers, from the Midwest, Frey suggests, has significantly slowed. Indeed, recent Census data reveals that the Midwest has done relatively well attracting new knowledge workers. "People are saying maybe it makes sense to move to Omaha or Kansas City," suggests Ernie Goss, a regional economist based at Creighton University in Omaha. Places such as Fargo, N.D., or Sioux Falls, S.D., have among the best-educated young people in the country, he says. This appeal is critical with entrepreneurs trying to get skill sets that are hard to find in small communities.
Lyndon Hurley, whose Sioux Falls-based Hurco Technologies makes equipment for sewer and water systems, finds that even if his company is short on welders, workers are willing to relocate. "We get e-mails from people all over the country who want to come here," he reports. But it's not just traditional manufacturing that is doing well in these places. Sioux Falls and Fargo, in North Dakota, have also developed substantial technology industries. In the past such areas exported their young talent; now they are keeping more and bringing some back.
The Internet is part of the reason, suggests Michael Chambers, CEO of Aldevron, a Fargo-based biotech firm. Digital technology has overcome these areas' traditional sense of isolation from "the centers of action." Even the smallest town is wired now, says Chambers, whose firm has grown from 12 to 30 employees since its founding in 1998. "Its now not about being remote, but choosing to live in a place that makes sense from a personal point of view." Indeed, so strong is the business revival in Fargo, Sioux Falls, and some other Great Plains communities that their populations and employment rates are growing faster than the national average--something that has rarely been seen over the last half century. These places may not be the next Atlanta, but with good cost structures and devoted entrepreneurs they are becoming, in very real ways, prominent centers in the rapidly shifting geography of America's business. I
Sustained growth in the Southeast left formerly hot cities such as San Francisco, New York City, and Boston behind.
1. Atlanta "Hotlanta" is precisely that, the hottest of the hot economies of the country. Pummeled in the early days of the 2000 recession, the sprawling Georgia metropolis has roared back, mostly on the basis of its strong service sector, pro-business culture, and a relatively affordable housing environment in comparison with other big-time cities.
2. Riverside-San Bernardino California's premier hot spot has been criticized as the epitome of urban sprawl and for creating mostly "crummy jobs."
But it's also been the Golden State's economic Energizer Bunny: The low-cost haven keeps on growing in population, attracting emigrants from the coast.
3. Las Vegas At first hurt by the downturn in tourism after 9/11, the Nevada metropolis has gotten its groove back. Although tourism remains the linchpin, the area is creating jobs in high-end sectors and even manufacturing, in large part because of an exodus from more expensive locales on the Western Seaboard.
