PPI Releases Metro New Economy Index

Offering an assessment of the progress made by the nation's 50 largest metropolitan areas toward becoming high-tech communities as well as providing policy recommendations to help cultivate and encourage New Economy businesses, the Progressive Policy Institute (PPI) and Case Western Reserve University's Center for Regional Economic Issues yesterday released The Metropolitan New Economy Index: Benchmarking Economic Transformation in the Nation's Metropolitan Areas. These metro areas account for approximately 60 percent of the nation's workforce.



The top 25 states (based on aggregate score) are:

Co-authored by Robert D. Atkinson, vice-president and director of PPI's Technology and New Economy Project, and Paul D. Gottlieb, associate director of the Center for Regional Economic Issues at Case Western Reserve University, the index uses 16 economic indicators grouped in five subcategories -- knowledge jobs, globalization, economic dynamism, transformation to a digital economy, and technological innovation capacity -- to rank the metro areas on the extent to which they have made the transformation to the New Economy.

Some of the indicators used in the study include number of initial public offerings (IPO's), workforce education levels, broadband telecommunication providers, dot-com domain names, patents issued, and the number of science and engineering graduates from area colleges and universities.



Along with the rankings, the report recommends a public policy framework that metro areas should follow to succeed in the New Economy. In particular, the report argues that it is time to replace the Old Economy goal of simply getting bigger, with the New Economy goal of becoming more prosperous. To do this, metropolitan areas need to shift focus from providing businesses tax breaks and other subsides to investing in the skills of the workforce, a vibrant infrastructure for technological innovation, and quality of life.

Specifically, the report advises metropolitan areas to:

• Know the region's economic function in the global economy 
  
  Metropolitan areas should carefully analyze their economy to identify and assess the competitive position of the key industry clusters in order to craft a metropolitan-wide economic strategy for the New Economy.
• Create a skilled workforce
  
  Metropolitan-area governments need to adopt policies, such as K-12 reform and regional workforce development programs, to ensure that American companies have the skilled workers they need to be productive, while simultaneously ensuring that American workers have the skills they need to navigate, adapt, and prosper in the New Economy.
• Invest in infrastructure for innovation
  
  Metropolitan areas should support research universities and technology commercialization programs, encourage modern telecommunications infrastructure and expand access to the Internet in order to foster technological innovation.
• Create a great quality of life
  
  To make a region more attractive to knowledge workers, metropolitan areas should take steps to boost forward-looking amenities like outdoor recreation facilities and new urbanism, improve public safety through technology innovations like wireless communication systems, and reduce road congestion by among other things, expanding road capacity and deploying new intelligent transportation systems.
• Foster an innovative business climate
  
  Government should recognize and celebrate public and private innovation and support the formation of high-tech business councils to encourage networking and learning, and should reinvent and streamline land processes to have a functioning real estate market.
• Reinvent -- and digitalize -- government
  
  Governments that succeed in the New Economy will be entrepreneurial and innovative, relying heavily on information technology, performance standards and accountability, and encourage public and private partnerships.
• Take regional governance seriously
  
  Metropolitan areas are now the fundamental competitive units of the New Economy, and New Economy governments should form strategic visioning and managing partnerships, across local government boundaries, with all the key players in a region (private sector, universities, labor, community organizations).

"Too many city benchmarking reports simply provide information that allows the top-ranked cities to crow, and the bottom-ranked cities to start wringing their hands. We felt it would be irresponsible for us to rank metropolitan areas on their participation in the New Economy without providing at least a rough blueprint for  improving their performance. This report is targeted at an audience of national and regional policy makers, in hopes of better advancing the metropolitan agenda in this New Economy," Atkinson stated.



The report may be obtained at http://www.ppionline.org or by contacting PPI's communications office at (202) 547-0001.



Return to the top of this page