But you can make the argument for Nevada, Korhonen learned. By moving to Reno, PC-Doctor has been able to cut basic operating expenses nearly 20%. That's helped the company keep blue-chip clients like Dell, IBM, and Fujitsu. And adjusting to doing business in Reno has been easy, Korhonen adds. Most computer manufacturers have consolidated in Asia, so it doesn't much matter where PC-Doctor is based. Nor has it been hard to attract talented employees. "A lot of our people are in their early 30s, and they benefited from the move," Korhonen says. "They can buy a home and, if they want, have a family on a single income."
Such factors have produced one of the most important shifts in the new new economy -- the movement of young, educated workers, the raw material of growth, away from high-cost urban centers like Boston, the Bay area, and New York. "The knowledge migration -- the bright flight -- is going to smaller places that are not usually the prime suspects," says William Frey, a demographer at the Brookings Institution. "These places now have more to offer. The Starbucks culture is now coast-to-coast. You can get satellite TV, read good books, and go to good restaurants in all kinds of places."
Of course, not all lower-cost locales are doing well. No one complains about housing prices in, say, Sharon, Pa. (No. 272), Lansing, Mich. (No. 273), or Muncie, Ind. (No. 274). But those areas, beaten down by manufacturing's long decline, continue to suffer. On the other hand, communities that can attract skilled workers and nurture knowledge-based or service-industry businesses are thriving. Fort Myers, Fla. (No. 9), once was known as little more than a retirement haven. Now Fort Myers, as well as much of the rest of the southwestern Florida coast, is brimming with newly minted information, business services, and financial services firms, many of them staffed with migrants to the area. "There's a great and growing availability of talent in the area," says Craig Pisaris-Henderson, whose search-engine marketing firm, FindWhat.com, is based in Fort Myers. The company has revenue of $169 million and employs 195 in an office a stone's throw from the Gulf. "We can fill most positions here within 24 hours," Pisaris-Henderson says.
FindWhat.com is cashing in on a little-noticed trend that has been building for well over a decade. Even in the late 1990s, when the dot-com boom was in full flower and all the world's attention was focused on Silicon Valley and Boston's Route 128, some of the biggest job gains among educated workers were taking place in Sunbelt cities like Orlando, Phoenix, Charlotte, N.C., Atlanta, and Las Vegas. Between 1995 and 2000, for example, Naples, Fla., ranked first in terms of net migration of young, single, college-educated people, according to the U.S. Census.
The process has only accelerated since then. Cities like New York, Boston, and San Francisco still attract many of the best and the brightest when they are in their 20s and early 30s. But as these people get older and start families, they tend to move to nearby suburbs or out of the region entirely. That's one of the reasons, according to William Frey, that there has been large-scale out-migration among native-born Americans from major urban centers and a corresponding movement of people into places like Riverside-San Bernardino, Calif. (No. 6), Las Vegas (No. 14), and Phoenix (No. 16). Between 2000 and 2003, for example, New York experienced a net out-migration of some 469,000 native-born citizens. In San Francisco, the number was 118,000. Las Vegas and greater Phoenix, by contrast, each added 130,000 people over the same period.
These shifts in migration have had a profound effect on the relative health of the nation's largest and most celebrated economies. Since 2001, for example, once red-hot Austin (No. 152) lost 12.9% of its information and 7.3% of its business services positions. Over the same period, Boston, one of the new economy's first hotbeds, shed 22.3% of its information jobs, 11% of its business services positions, and 6.8% of its financial services jobs. San Francisco, another former new-economy darling, has suffered similar losses. New York City finally appears to be emerging from its post-September 11 slump, rising 41 places to No. 184, thanks to strong growth in health care and business and financial services. Yet New York's overall performance pales compared with that of the region's suburban economies, including Monmouth-Ocean, N.J. (No. 39), and Putnam County (No. 36) in New York's Hudson Valley.
Declustering patterns can be seen in big cities. Philadelphia and its suburbs seem to exist on different planets.
Similar declustering patterns can be seen in other big northeastern cities. The economies of Philadelphia (No. 265) and its southern New Jersey suburbs (No. 24), for example, seem to exist on different planets. A similar divergence can be seen between fast-growing Manchester, N.H. (No. 21), and the Boston region, from which it draws both workers and entrepreneurs. "Our address in southern New Hampshire was a big draw for engineers from down there," says John McLaughlin, president and CEO of CoreMedical, a medical-industry job-placement firm in Windham, about 20 miles north of Manchester. "It's the taxes, the housing costs, and the business climate that make the difference."
