It is good news that the U.S. economy is starting to grow again with consumer confidence the highest it has been in four and a half years, after the worst national downturn in eight decades. But sustaining and building on this steady but slow recovery will require a new way of looking at our national economy. Where can we make the investments that will leverage and catalyze the greatest economic growth? The answer? Cities.
At a time when more than half of the world lives in urban areas, strong, successful American cities are more essential than ever to a strong America. And at a time when our federal and state governments too often are dysfunctional and locked in partisan paralysis, cities are the best scale at which to organize to tackle critical issues. Cities are big enough to make a difference but small enough to make things happen quickly and effectively.
Mayors and urban leaders across the country are asking, "What will it take for my city to prosper in this new economy?" CEOs for Cities, a national organization of cross-sector, cross-generational urban leaders, surveyed the landscape and concluded that the future belongs to those cities and regions who are able to frame their opportunities and challenges by first assessing their vital signs -- critical information that benchmarks their economic performance. Just as the medical profession looks at four vital signs to assess a human's health, so too must we identify and assess the key vitals that determine the economic health and vitality of cities.
It is clear that there is no one thing that will increase the prosperity of a city, but there are measurable indicators that cities can focus on to maximize their potential in a global economy. For example, it's probably no surprise that the San Jose metropolitan area, home to Silicon Valley, raised the most venture capital in 2011 and had the most utility patents in 2009 (83.5 per 10,000 employees), relative to the other 51 largest metro areas. It may however come as a surprise that the Miami area has the highest percentage of entrepreneurs (16 percent). These are all measures of innovation in a city, which is a key factor to growing the economy.
In our new report, City Vitals 2.0, we have developed a four part formula to help city leaders benchmark their economic performance. Using more than two dozen different indicators, we show how cities need to focus on four vital signs: building connections, increasing innovation, improving talent, and capitalizing on your city's distinctiveness. C-I-T-Y: Connections, Innovation, Talent, Your Distinctiveness spells out the genetic code for formulating city economic success in the new economy.
By examining factors across a variety of categories and using an expansive set of metrics, City Vitals isolates the diverse opportunities and challenges of the nation's 51 largest metro areas.
First, we look at a city's connectedness. The cities that will win in the new networked economy are those that best connect their physical, human, and social capital and take advantage of their density to create walkable neighborhoods, sustainable transportation, robust civic engagement, and business and industry clusters of competitive advantage.
Second, creating a culture of innovation and entrepreneurship is critical in a world that is moving at lightning speed. Have you wondered why MySpace didn't create Facebook? Why Blockbuster didn't create Netflix? One reason is that at some point MySpace and Blockbuster stopped acting and thinking like a start-up. They weren't sufficiently managing to the hidden curves and edges of lightning-fast market transitions. Darwin's theory has never been more relevant: survival isn't about strength; it's about the ability to adapt, reinvent, and be responsive to change.
Third, we look at how a city develops, attracts, engages, and retains its talent. Our research shows that if you measure the economic success of cities and regions on the basis of per capita income, 58 percent of a city's success comes down to just one thing -- the level of educational attainment of its citizens. We have developed the national Talent Dividend initiative to build metro level strategies to increase the number of citizens with 2-year and 4-year degrees.
Fourth, we look at a city's distinctiveness. Of course, no two cities are the same, but understanding the unique qualities and differences of each individual city is critical to maximizing each city's potential in a global economy.
While not every city can be number one at everything, there are lots of things that cities can and should strive to excel at. That's why CEOs for Cities is providing insight into the opportunities and challenges of each city.
Want to change the nation? Start with your city.
Want to change your city? Check your city vitals.
Lee Fisher is the President and CEO of CEOs for Cities.
Joe Cortright is Senior Research Advisor for CEOs for Cities.