Workforce Preparedness Measures and Characteristics

Edited excerpts from The Metropolitan New Economy Index, by Robert D. Atkinson and Paul D. Gottlieb, April 2001.

Framework
In the last 15 years, a "New Economy" has emerged in the United States. Among its defining characteristics: a fundamentally altered industrial and occupational order, a dramatic trend toward globalization, and unprecedented levels of entrepreneurial dynamism and competition-all of which have been spurred to one degree or another by revolutionary advances in information technologies (IT).

The New Economy in metropolitan areas
The same forces that are driving the New Economy-new industries and jobs, globalization, competition and dynamism, and the information technology revolution-are also driving a new reordering of the economic geography of America, including its metropolitan regions.

The share of employment located in the largest 61 metropolitan areas actually declined by 1.5 percent between 1988 and 1997, dropping from 55.1 percent to 54.3 percent. In contrast, the share of jobs in mid-sized metros (between 250,000 and 1 million population) increased by 4 percent, and the share in small metros (between 50,000 and 250,000) increased by 7 percent. In rural counties not adjacent to metro areas, the share of jobs declined by 11 percent during this time period.

In short, the common vision of the metropolitan area as a place with one economy, located among downtown skyscrapers and inner-ring factories, no longer describes the metropolis common to America at the beginning of the 21st century. By the early 1990s, 57 percent of office stock in America was located in the suburbs, up from 25 percent in 1970. Similarly, most high-tech jobs are in the suburbs as well.

Selective comparisons of largest 50 metro areas
This article reports data that was collected on the 50 largest consolidated metropolitan statistical areas (CMSAs) in the United States, as defined by the Federal Office of Management and Budget in 1999. The article relates the measures and characteristics that provide a ranking of the two Missouri Metro Areas as compared to the other 48 Metro Areas, including Chicago Metro Area.

Overall rankings
The rankings are for the 50 selected metro areas.

In looking at the 50 most populated metro areas, the authors used 16 indicators divided into five categories that were intended to best capture what is new about the New Economy:

1. Knowledge jobs. Indicator measures jobs held by managers, professionals, and technicians; and the educational attainment of the workforce.

2. Globalization. Indicator measures the export orientation of manufacturing.

3. Economic dynamism and competition. Indicators in this category measure the number of fast-growing "gazelle" companies (companies with sales growth of 20 percent or more for four straight years); the rate of economic "churn" (which is a product of new business start-ups and existing business failures); and the number of initial public stock offerings (IPOs) by companies in each metro.

4. The transformation to a digital economy. Indicators measure the percentage of adults online; the number of ".com" domain-name registrations; the share of students using computers in schools; Internet backbone capacity; and number of providers of broadband telecommunications services.

5. Technological innovation capacity. Indicators measure the number of high-tech jobs; the number of science and engineering graduates from area colleges and universities; the number of patents issued; expenditures on research and development at colleges and universities; and venture capital investments.

The indicators in these five categories were evaluated to determine the rankings of the most populated metro areas. These rankings, although not perfect measures of "the new economy" in each of the metro areas, are the beginnings of a first attempt to leave the measures of "the old economy" behind and look at new indicators for the new economy.

Metro Areas By Rank
Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25	Metro Area San Francisco Austin Seattle Raleigh-Durham San Diego Washington Denver Boston Salt Lake City Minneapolis Atlanta Dallas Miami Houston Portland Phoenix New York Philadelphia Chicago Los Angeles Rochester Hartford Sacramento Kansas City Orlando		26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50	Richmond St. Louis Detroit Indianapolis Charlotte Buffalo Nashville Cleveland Cincinnati Las Vegas Columbus Pittsburgh New Orleans Oklahoma City Milwaukee West Palm Beach Dayton Tampa Norfolk Greensboro Louisville Memphis Jacksonville San Antonio Grand Rapids Top 50 Metro

Both of Missouri's metro areas rank below the Metro's average for those areas selected. They are also below the ranking given the Chicago metro area, a reasonable benchmark for us. This obviously provides room for Missouri to improve its "New Economy" position.

The November Issue of Creating Quality will contain the comparisons of individual benchmarks for St. Louis, Kansas City and Chicago Metro Areas. These key factors will be discussed to help us understand why they are important and where our state's Metro areas rank nationally and as compared to our benchmark competitor, Metro Area of Chicago. Be sure to look for this issue with some very important factors affecting our state economy and jobs.

Source:
Edited excerpts from The Metropolitan New Economy Index, by Robert D. Atkinson and Paul D. Gottlieb, April 2001.

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Authored by: Jim Shonkwiler, Business and Industry Specialist, University of Missouri Extension
Source: Creating Quality Newsletter, Volume 10, Number 10, October 2001

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