Inc.'s business friendly cities,_or not..

[Cathy]

http://www.inc.com/magazine/20040301/top25.html

10 Worst Metro Areas
These large cities suffer from unaffordable housing, overreliance on single industries, and often, poor quality of life for the middle class upon whom entrepreneurs rely.

1. San Jose Silicon Valley's decline is a tale of hubris, bad timing, high costs, and overconcentration in high tech. San Jose still has massive talent and a great infrastructure for high-tech entrepreneurs, but a view toward diversifying the economy seems long overdue.

Grand Rapids (2), Greenville-Spartanburg (3), Dayton (4), Rochester, N.Y. (5), Milwaukee (12) Pick your poison: metal furniture, auto parts, textiles, fiber optics. These cities all were huge losers in the manufacturing decline of the past five years, a reversal that seems very slow in ending. All these areas are victims of the rise of offshore manufacturing in China and Mexico.

New York City (6), San Francisco (7), Boston (9) Call these the lost "bubble children" of the 1990s. Pumped up on dot-com steroids, these areas neglected to keep costs down and thought the high-tech/financial service nexus would sustain their growth. It didn't, as jobs in these industries dropped precipitously, particularly after 2000. The Big Apple, with its immigrant base and strong cultural industries, is far from dead but the new growth seems to be heading to the ex-urbs.

Portland (8), Raleigh-Durham (13) These towns have been "cities of the future" for years. Too bad the future is more complicated than envisioned. High costs and the antibusiness mood in Portland has hurt it. Raleigh-Durham's overconcentration on tech is a problem, but the basic cost structure is still not impossible. Bet on a better showing from the Carolina region within a year or two.

Philadelphia (10), Hartford (11) Two long-term losers in terms of jobs and population remain down on the list. Glittery recovery of Philadelphia's downtown has not made up for high costs, political problems, and continued decay in outlying neighborhoods. Hartford's city is still shrinking, and Connecticut remains a fairly expensive place to do business, but the area's bucolic archipelago of small towns and fancy suburbs could recover quickly from the recession.

How The 2004 Top Cities Were Selected

http://www.inc.com/magazine/20040301/top25.html

[Anonymous]

INC's ranking of the RD area as the 13th worst in the country is in sharp contrast to other studies, e.g. Forbes, where the region is ranked among the top 10. Why the difference? Inc's ratings are based on actual data where small entrepreneurial companies are adding jobs. The other rankings are based on such things as proximity to major research universities, # of patents issued, skilled work force, etc.

Inc's ratings place Green Bay first, Madison WI. second, Sarasota third, followed by Fresno, Bakersfield, Reno. Albuquerque, Tuscon, etc.

My SWAG. Both ratings are correct! In terms of a medium or large business relocating here the Triangle has been a great place. IBM was the leader and Nortel, Glaxo, Cisco, Lucent, etc continued the pattern and accounted for much of the growth in the '90's. The hot pace of growth thru 2000 drove up costs - until the bottom fell out starting in the 1st Q of 2001.

But small entrepeneurs, with some high-tech exceptions dont care about many of the things that attract the larger companies. They are typically underfinanced and the cost of doing business is their #1 concern by far. Low cost space for offices, labs and manufacturing is ther #1 criterion. A low cost of living is another. Climate - who cares? The cost of skilled labor? Not material as stock options are often the key in smaller companies. And so the entrepeneurs of silicon valley migrated from the high cost coast to the far les attractive inland cities. Modesto! Bakersfield! Green Bay! Who would ever want to live there!

Another factor is that the traditional mindset among state and local leaders here was to attract branches of larger companies. Fostering entrepeneurship was not a top priority. Availability of venture capital was not among our strong points. SAS is the exception that proves the rule - a home grown, entrepeneurial business that evolved into a major one.

Here is what the two lead speakers said at last years emerging issues forum (on reviviving the Triangle's economy):

Gov. Hunt – The future is in start-ups rather than attracting big companies.

Noah Pitkus (Dir. of Emerging Issues Institute) – Referencing the local high tech economy – things are so bad – people must change their old ideas – emphasis should be on new strategies.

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Stan