Comparing Cleveland

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Cleveland has been grappling with its sluggish growth and lack of high-tech industries.

Many Clevelanders ask themselves what needs to be done to move our economy away from traditional manufacturing and industrial and into high tech and bio tech. That’s the issue Robert Atkinson, Ph.D., of the Progressive Policy Institute of Washington, D.C., and Paul Gottlieb, Ph.D., of Case Western Reserve University’s Center for Regional Economic Issues, tackled when they developed The Metropolitan New Economy Index.

To educate federal, state and local policymakers about the characteristics of the New Economy, Atkinson and Gottlieb analyzed 50 metropolitan regions to rank some of the major drivers in the economic success of a city.

This is how Cleveland stacks up against its peers.

Knowledge jobs

Fundamental in determining a region’s success is its ability to attract, develop and retain knowledge workers. Large metro areas will prosper if workers are employed in knowledge- and information-based jobs.

Ranking is this area can be determined by the share of the work force employed in managerial, professional and technical positions, and the education level of those employees.

The top five cities in this category are Washington, D.C., Denver, Minneapolis, Austin and Raleigh-Durham. Cleveland ranks No. 19.

Globalization

A region’s ability to conduct business globally is vital, and the only indicator of a region’s ability to sell to and service the world is foreign exports.

In 1995, the world’s economic output was $4 trillion; by 2000, it had jumped to $21 trillion.

The top five cities in this category are Seattle, Miami, Richmond, San Francisco and Houston. Cleveland ranks No. 34, behind Pittsburgh (32), Philadelphia (20), Indianapolis (18) and Cincinnati (15).

Economic dynamism

The rejuvenation of a region through the formation of innovative companies is a key determinate of economic vitally.

This dynamism is manifested in fast-growing, entrepreneurial companies. Indicators in this area are the percentage of jobs in gazelle (rapidly growing) firms, the degree of job churning and the value of local IPOs.

The top five dynamic cities are San Francisco, Las Vegas, Orlando, Denver and Seattle. Cleveland ranks No. 38, with Cincinnati, Columbus, Dayton, Pittsburgh, Detroit and Rochester bringing up the rear.

Gazelle jobs

The presence of rapidly growing firms known as gazelles indicates a dynamic and adaptive economy.

Between 1994 and 1998, gazelles generated approximately as many jobs (10.7 million) as the entire U.S. economy (11.1 million).

The key indicator in this category is an annual sales revenue growth of 20 percent over four consecutive years.

The five cities with the most gazelle jobs are Orlando, Las Vegas, Charlotte, San Francisco and Phoenix. Cleveland placed in the 26th to 50th percentile.

Digital economy

In a digital economy, virtually all economic transactions are conducted via electronic means. The indicators include the percentage of adults online, the number of commercial Internet domain names, the percentage of children with classroom computers, the Internet backbone structure and the number of broadband telecommunications providers.

The top five cities in the digital economy are San Francisco, Austin, San Diego, Washington, D.C., and Denver. Cleveland ranked in the 1st to 25th percentile.

Innovation capacity

Innovation capacity stems from increases in knowledge and innovation and their widespread adoption.

Indicators of innovation include the number of high-tech industry jobs, degrees granted in science and engineering, the number of patents, the amount of academic research and development funding, and the amount of venture capital invested.

The top five cities in innovation capacity are Raleigh-Durham, San Francisco, Austin, Boston and Rochester. Cleveland ranked in 26th to 50th percentile. How to reach: Case Western Reserve University, (216) 368-5534; The Progressive Policy Institute, (202) 547-0001

Progressive Policy Institute