Knowledge-Based Industries, Entrepreneurship Drive Economic Success

Knowledge-Based Industries, Entrepreneurship Drive Economic Success

Knowledge-based industries and a strong culture of entrepreneurship are critical drivers of economic growth in metropolitan areas, a report from the Walton Family Foundation finds.

Based on performance-based metrics such as average annual earnings, job growth, Gross Domestic Product gains, and the proportion of jobs contributed by young and startup firms, the report, The Most Dynamic Metropolitans (104 pages, PDF), measured and ranked three hundred and seventy-nine  metropolitan areas across the United States according to economic performance. The report details certain industry and structural characteristics of the top performing metro areas, including those with thriving professional, scientific, and technical services as well as those that exhibit a strong culture of entrepreneurship. All other factors being equal, regions with leading research universities and four-year colleges demonstrated robust economic growth. Sectors that showed growth include scientific research services, engineering services, accounting, business management consulting, the biomedical and life sciences, tourism, and computer and technology-driven industries. The report also found that a dependence on mining, principally coal mining, is a negative factor for economic growth and that areas with adjacent communities dependent on agricultural crop production have witnessed slower economic growth overall.

According to the report, the top ten metro areas for economic performance are Midland, Texas; San Jose-Sunnyvale-Santa Clara, California; Midland, Michigan; Elkhart-Goshen, Indiana; Bend-Redmond, Oregon; St. George, Utah; Austin-Round Rock, Texas; Greeley, Colorado; San Francisco-Oakland-Hayward, California; and Seattle-Tacoma-Bellevue, Washington.

"The data show that a knowledge-based economy is key to unlocking economic potential in metropolitan areas across the United States," said Ross DeVol, the lead researcher and a Walton Fellow. "Cities making investments in a knowledge-based economy have performed better economically than those that have not. Technology sectors are underrepresented, and too little emphasis is placed on supporting entrepreneurs in heartland metropolitan areas. Investors must be willing to support early-stage firms, and more universities need to embrace commercialization as a critical part of their mission and educational attainment, particularly in science, technology, engineering and mathematics (STEM) for economic progress in the heartland and [across] the nation."