Milken Institute's 2020 Ranking of Best-Performing Cities
Propelled by its capacity for innovation, unparalleled ecosystem, and exceptionally strong wage growth, the San Francisco metropolitan area was ranked first in the Milken Institute’s 2020 Best-Performing Cities Index. It is the first time San Francisco has topped the list since 2014.
The index, published annually since 1999, measures economic vitality in 200 large metros and 201 small cities using job creation, wage growth, and innovation industry metrics. The rankings help policymakers, investors, and businesses understand where and how regional economies are prospering.
“The top-performing cities have cohesive strategies that allow them to weather economic storms and leverage their assets for sustained growth,” said Kevin Klowden, executive director of the Milken Institute Center for Regional Economics. “San Francisco’s legacy of innovation, research universities, and abundance of skilled labor and tech startups highlight the depth and dynamism of the region’s economy.”
2020 Top-10 Best-Performing Large U.S. Cities (Prior Year’s Ranking)
San Francisco-Redwood City-South San Francisco, California (4)
Provo-Orem, Utah (1)
Austin-Round Rock, Texas (3)
Reno, Nevada (11)
San Jose-Sunnyvale-Santa Clara, California (2)
Orlando-Kissimmee-Sanford, Florida (7)
Boise City, Idaho (12)
Seattle-Bellevue-Everett, Washington (8)
Dallas-Plano-Irving, Texas (5)
Palm Bay-Melbourne-Titusville, Florida (57)
In all, four California cities ranked in the top-25, including San Jose, Oakland, and Riverside-San Bernardino.
"We are proud of the historic growth -- fueled by our innovation -- that we are seeing in California,” said Lenny Mendonca, chief economic and business advisor to California Governor Gavin Newsom. “But you can’t have growth without inclusion. It’s about both, and we remain committed to making sure the health of our economy and the opportunities created are shared by more people in more places across our state.”
Other top-10 Best-Performing Cities from previous years’ indices remained among the top-ranked. For example, second-ranked Provo-Orem, Utah was the 2017 and 2018 Best-Performing City, while Bay Area neighbor San Jose-Sunnyvale-Santa Clara, ranked fifth, was number one in 2015.
The top-10 also features several middle-sized cities riding the new wave of the tech-driven economy. Fourth-ranked Reno, Nevada, for instance, is home to Tesla’s Gigafactory 1, an emerging cluster of data centers, and a thriving logistics and drone sector, including the first commercial drone delivery company in the U.S.
Several metro areas made significant jumps. Among the most improved was 10th-ranked Palm Bay-Melbourne-Titusville, Florida, rising 47 places to reach this year’s top 10. The city benefited from increased defense industry spending, including Lockheed Martin’s decision to move its Fleet Ballistic Missile HQ to Titusville, Florida, and a strong year in tourism—Port Canaveral accounted for 16 percent of all US cruise ship embarkations in 2018.
“While San Francisco has returned to the top spot in this year’s index, the most compelling story is the rise of non-traditional tech and employment centers in other parts of the country,” Klowden said. “These emerging centers include cities like Reno, Boise, and Melbourne, which experienced an incredible rise to break into this year’s top-10.”
Among small cities, Bend-Redmond, Oregon, retained its first-place ranking for the fourth year running, boasting a well-diversified economy, the best five-year wage growth, the second-best five-year job growth among all small metros, and nascent vehicle technology and hemp industries.
Retiree havens and tourism-oriented cities like St. George, Utah, and Coeur d’Alene, Idaho, featured prominently in the top-10, highlighting the role of key industries and anchor communities in driving economic growth.