Often, you can predict where something is headed by charting where it's been. 

In December, Startup Genome partnered with Inc. to analyze 50 U.S. metropolitan areas--in everything from job creation to entrepreneurship rates to wage increases--and then to score them by economic growth. That turned into this list of America's Surge Cities.

From testing the mettle of well-known hubs to identifying underrated and promising metro areas, this list of America's Surge Cities is exhaustive and contains particular insight regarding the present and future of the U.S. economy. Here are three key takeaways from the study: 

1. Mid-sized cities are surging in the U.S.

Most of the largest metropolitan areas in the U.S. can boast at least some growth. Net business creation and job creation are positive in more than 90 percent of the 50 metropolitan areas included in the study, with population and average wages on the rise in over 80 percent of cities. Austin, Texas, Raleigh, North Carolina, Nashville, Tennessee, Salt Lake City, and San Francisco are leading the way.

2. Tech hubs are driving wage growth in the country.

Startups are the biggest net job creators in the U.S. economy, and tech companies create high-paying jobs. For the cities featured in Inc.'s Surge Cities study, the metrics quantifying tech ecosystems--in things like early-stage funding for startups, for example--are closely correlated with wage growth. (The only two variables with stronger correlation were population growth and job creation.) In other words, the healthier a city's tech ecosystem, the bigger the paychecks.

These have proven to be critical growth factors for Seattle, San Francisco, Boston, and San Jose, California, which are experiencing the greatest wage increase of all the cities on our list.

3. Silicon Valley leads the country on innovation, with one big caveat. 

San Jose and San Francisco--the two metropolitan areas making up the Silicon Valley ecosystem--are by far the top leaders on innovation. With about 13 early-stage funding deals per 100,000 people, as Startup Genome's calculations from PitchBook and Crunchbase show, they have over three times as much early-stage tech funding per capita than their closest competitor, Boston.

In most areas, Silicon Valley performs at the top. But there are two important measures where it lags: local job creation and population growth. San Francisco is in the middle of the pack here. (Boston, too, is hitting a wall when it comes to finding talent.)

This inhibited growth is one reason Austin, which is growing its population four times faster than San Francisco and San Jose, pulled ahead to become Inc.'s top Surge City. A thriving startup ecosystem combined with a still-reasonable cost of living give Austin a boost over rivals.

Overall, the Surge Cities research points to a new geography of growth in the U.S. The big cities on the coasts continue to do very well, but strong challengers are rising up in the middle of the country to make this a good moment for Surge Cities in America.

Published on: Apr 1, 2019