Fort Smith metro area gains on Milken list

The Fort Smith metro area was one of four Arkansas metro areas to improve in ranking with the closely watched Milken Institute report on the “Best-Performing Cities” index.

Fort Smith’s 2009 ranking on the list was 62nd, up from 69th in 2008.

The Little Rock-North Little Rock-Conway metro area moved from 54th in 2008 to 23rd in 2009. The Fayetteville-Springdale-Rogers metro jumped from 57th to 27th in 2009, and the Texarkana area jumped from 81st to 17th on the small metro city list.

In Oklahoma, the Tulsa metro area moved to 19th from the 72nd spot it held in 2008. The Oklahoma City metro area moved to 26th in 2009 from its 2008 spot at 50th.

According to the Milken report, the Best-Performing Cities index is designed to measure objectively which U.S. metro areas are most successful in terms of job creation and retention, the quality of jobs being produced, and overall economic performance.

“Specifically, it pinpoints where jobs are being created and maintained, where wages and salaries are increasing, and where economies and businesses are growing and thriving,” the report notes.

Keys to success in 2009 were certainly attributes for Arkansas. Milken notes that cities gaining on the index likely didn’t experience large housing bubbles and enjoyed “a heavy reliance on the oil and gas industry, either as a headquarters or for exploration.” Milken also noted that several top-performing metros were centers of activity in
alternative fuels and clean technology initiatives.

Tracy Winchell, an economic development staffer for the city of Fort Smith, said she is excited about the Fort Smith gain because social media is growing more important in how a community is perceived externally and how community residents form an opinion of their community.

“The bottom line is that individuals are more powerful than they’ve ever been before, and news like this gives us information by which our citizens can actually have something good to talk about within their communities,” Winchell said.

NATIONAL FINDINGS
The Austin-Round Rock, Texas, metro area was the top city on the 2009 Milken list.

“Austin managed to add jobs during 2008 — no small feat in a dismal macroeconomic environment. It also seems poised to be among a handful of cities that will experience net job growth in 2009,” Milken noted in the report. “The secret of Austin’s success is a unique combination: the stability afforded by being the state capital and the home of a major research university, plus the economic dynamism of a thriving technology cluster and professional services sector. Austin seems ready to benefit from its foray into clean energy technology as well.”

Milken issued the following summary of “key findings.”
• In our rankings of the nation’s 200 largest cities, eighteen Southern metros, six Western metros, and one Midwestern metro made the top 25.

• Texas had an impressive performance, claiming four of the top 5 spots and nine of the top 25 spots among the 200 largest metros. It accounted for four of the top 10 best-performing small metros as well.

• Among the nation’s ten largest metros, Houston–Sugar Land–Baytown, Texas, remains the top performer. In the full rankings of all 200 cities, it moved up from 16th place last year to 5th place overall this year.

• The metro experiencing the largest gain was Hartford–West Hartford–East Hartford, Connecticut, which moved up a remarkable 101 spots to take 48th place.

• Midland, Texas, maintained its hold on the top position among the nation’s small metros, courtesy of robust oil and gas exploration activity.

MILKEN METHODOLOGY
Following are excerpts from how Milken creates the Best-Performing Cities index.
“The 2009 index applies the methodology used in previous editions. … The index measures growth in jobs, wages and salaries, and technology output over a five-year span (2003–2008) to adjust for extreme variations in business cycles. It also incorporates the latest year’s performance in these areas. Lastly, it includes twelve-
month job growth performance (March 2008 to March 2009) to capture relative recent momentum among metropolitan economies. Employment growth is weighted most heavily in the index because of its critical importance in determining community vitality. Wage and salary growth also measures the quality of the jobs being created and sustained. Technology output growth is another important element in determining the economic vibrancy of cities.”

“We have incorporated other measures to reflect the concentration and diversity of technology industries within the MSAs. High-tech location quotients (LQs, which measure the concentration of the technology industry in a particular metro relative to the national average) are included to indicate a metro’s participation in the knowledge-based economy. We also measure the number of specific high-tech industries (out of a
possible twenty-five) whose concentrations in an MSA are higher than the national average.”

“The Best-Performing Cities index is solely an outcomes-based measure. It does not incorporate explicit input measures (such as business costs; cost-of-living components, such as housing; and other quality-of-life measures, such as commute times or crime rates). Static input measures, although important, are subject to large variations and can be highly subjective, making them less meaningful than more objective indicators of outcomes.”