Battle Over the Best Cities for Business

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In Sunday's Boston Globe, author Christopher Shea illuminated the debate on what factors effect urban economic growth in the article "The road to riches?." At the center of the debate is Richard Florida, a Carnegie Mellon professor and author of "The Rise of the Creative Class," who contends that urban growth is driven by what he calls "the creative class" -- a new breed of American workers who are driven, educated, and, yes, ultra-hip. His theory has even inspired many cities across the country to create campaigns to lure this new class in an effort to boost their economies.

However, not everyone buys into this "creative class" theory. Joel Kotkin, a professor of public policy at Pepperdine University and the author of Inc.'s March article, "The Top 25 Cities for Doing Business in America," for one feels Florida has "mistaken the side effects of a booming economy for the causes of growth." So it's not surprising that Florida's top cities for business greatly differ from Kotkin's top picks. For instance, while Florida sees Boston, Portland, and San Francisco among America's most creative cities -- and poised as future powerhouses, Kotkin sees both Boston and San Francisco as among 10 of the worst metro areas for busines based on job growth stats from 2003.

It's not just Florida's list and Inc.'s that differ. Entrepreneur's list, published in Oct. 2003 and developed in partnership with D&B, put Minneapolis-St. Paul at the top of its list, while Raliegh-Durham, N.C., topped Business 2.0's March 2004 "Boom Towns" list. Inc.'s number one large city: Atlanta (Atlanta ranked 5th on Business 2.0's list and 3rd on Entrepreneur's best overall list).

The results become confusing if you don't dive into how the cities were measured. Entrepreneur seems to have used business starts, small-business growth and job growth stats as a few deciding factors. Business 2.0 measured cities by their capacity to generate high-wage jobs and factors including the population of knowledge workers -- or the "creative class" -- in a city. Inc. used current and historical job growth as its primary measurement, as "three-quarters of all new jobs are created by small business, according to the SBA," and thus, any city showing significant in job growth likely indicates that the city is "a hotbed of entrepreneurship."

So which list is best? Which cities are the best for doing business? I suspect a few of our Fresh Inc. readers might have an opinion or two. Let us know.