Cities have always been central to the American economy, but sometimes it's easy to forget just how central. For instance, the Washington metropolitan economy is bigger than the economy of Denmark, Hong Kong, Poland or South Africa. New Yorkers alone create more economic activity than Australia, Argentina or Russia, and Los Angeles-Long Beach is ahead of South Korea, Taiwan and Switzerland in terms of economic activity.
These are some of the comparisons made in a report released last week by the National Association of Counties and the United States Conference of Mayors. The report, titled "U.S. Metro Economies: The Engine of America's Growth," confirms what has long been obvious to some: America's current prosperity is largely due to its enterprising metropolitan areas.
The report reveals that 80 percent of the country's employment, income, and production of goods and services comes from the metro areas. Indeed, 94 percent of technology jobs are concentrated there, and 95 percent of job growth is also in such areas.
"The speculation that information technology and telecommuting will make the metro areas obsolete has not proved true," said Sara Johnson, coauthor of the report and Standard & Poor's-DRI's North American research director.
For instance, metropolitan Washington (including Northern Virginia) amounts to more than 36 percent of the total gross state product of Maryland. More surprising, however: Baltimore, a much slower-growing metropolitan area, accounts for a much greater 52 percent of the gross Maryland product.
According to Johnson, there are several reasons metro areas continue to drive growth. A key one, however, is the availability of skilled and educated labor. Johnson estimates that 29 percent of the people in metro areas have graduate degrees, versus 17 percent in non-metro areas.
"Metro areas most successful were those with strong international linkages that foster export growth," said Johnson.
No surprise which metro area tops the list: The Big Apple, with $363.25 billion of gross product last year, ranks 14th among the top 100 economies in the world. Surprisingly, though, Silicon Valley's San Francisco and San Jose rank 51st and 64th, respectively.
The big metro areas of the East Coast generate more economic activity than their West Coast counterparts. Consider this: New York, Boston and 28th-ranked greater Washington (an area that includes suburban Maryland, Virginia and parts of West Virginia) account for almost 9 percent of the gross U.S. product. In comparison, Los Angeles-Long Beach, greater Seattle and San Francisco make up less than 6 percent of the gross national product.
Also, the Washington metro area grew faster in 1998, at 8.15 percent, than New York (4.33 percent), Los Angeles-Long Beach (4.14 percent), Boston (5.46 percent) and metro Philadelphia (7.99 percent).
But the fastest growing metro areas last year were concentrated in the middle and southern parts of the country. Denver, Dallas, Atlanta and Orlando all posted more than 10 percent growth.
Those that lagged include Honolulu, Anchorage and Flint, Mich. Johnson says there are a variety of reasons behind those cities' poor showings, ranging from the fall of Asian markets to high tax rates to cold climate.
Despite such pockets, the United States can still boast of 47 metro areas that are among the world's 100 largest economies.
The metro regions of Baltimore and Washington are equivalent to more than 88 percent of Maryland's gross product.
Maryland's population: 5.14 million
38.7% Washington (D.C./Md./Va./W.V.)
12.8% Rest of Md.
Maryland's Gross Product: $158.5 billion
36.6% Washington (D.C./Md./Va./W.V.)
11.4% Rest of Md.
SOURCE: Standard & Poors DRI