Small Cities Are Rising...

Living in New York, London, Tokyo, or any one of the world’s great cities is a singular experience. Every big city has its unique charms, but all offer hubs of creativity, cosmopolitan thinking and a chance to rub shoulders with “the best and the brightest.” For years, we’ve been hearing that the most talented, most ambitious and best educated people flock to big cities to be with other creative thinkers, and that has turned select cities into ever bigger winners.

But could we be getting to a point where big city life is just too much? Big cities are not for everyone, for one thing. And as Simon Kuper of The Financial Times noted last month, big cities are getting more expensive and crowded. When running out of space and battling high living costs become fixations, megacities may not be best for innovation or economic dynamism. Instead, Kuper suggests, “The star of the next 25 years could be the smaller city.” In Europe, that means not London or Paris, but Bristol or Bordeaux. In the U.S., it means not New York or San Francisco, but Dallas or Boise.

Joel Kotkin and Michael Shires, professors in urban studies and public policy, agree. In their studies on U.S. city demographics and related economic development issues, they found that many small and medium-sized cities have been experiencing the highest job growth and inbound migration. Census data, they say, show people leaving the New Yorks and San Franciscos of the world to migrate to cities with populations of 500,000 to a million people. Far from being backwaters, some smaller cities have the most dynamic economies in the nation.

In their recent ranking of the 70 largest U.S. metropolitan areas, Kotkin and Shires found that the number one city for job growth was the Provo-Orem area in Utah -- with a population of 603,000 and job growth of 4.4% in 2016. Provo is typical of many of the cities that ranked highly – a pleasant college town with affordable housing and a low tax burden. Kotkin and Shires say it’s helpful when smaller cities are in attractive locales, close to the mountains or ocean, and offer high quality public amenities. Having a college or university brings in talent and intellectual vibrancy. Being close to a bigger city with a large airport helps too. Provo, for example, is an hour away from Salt Lake City, which itself ranked 13 on Kotkin and Shires’ list. In fact, there were four Utah cities that made it into their ranking’s top 20.

A bigger city that shows up as a winner is Dallas, where affordable housing, low taxes, and a business-friendly economy built on diverse industries have been attracting both foreign and domestic migrants – especially from California. Contrast that with the San Francisco Bay Area, where the tech sector still is driving strong job growth, but where 46% of millennials indicated in a recent poll that they would like to leave the area because of high housing costs.

By no means is anyone declaring the end of the big rich city. But it may be the beginning of a shift. Kotkin and Shires say, “Ultimately we may be on the cusp of a new economic era in which the cost of housing and living becomes once again a key determinant in regional growth.”

Kuper notes that New York City’s government expects population growth to slow from 16.6% in 1980-2010 to 9.5% from 2010 to 2040. Tokyo, the world’s largest city with a population of 38 million, will start shrinking in 2020. Smaller cities in China will grow far more quickly than first tier cities.

And on a more philosophical note, there’s a growing sense that the megacity may not be the place to do your best work. Kuper cites Stanford literary theorist Hans Ulrich Gumbrecht’s suggestion that small cities may be the best place to come up with big ideas. Such cities must be big enough to have smart people running them, but also small and livable enough to be able to think clearly.