Collectively, large cities — which we define as metropolitan areas with a population of 150,000 plus — in the United States are the center of gravity of the economy, generating almost 85 percent of U.S. gross domestic product (GDP) and nearly 20 percent of global GDP today. While New York and Los Angeles, the two American megacities with populations of more than ten million, have continued to tower above all others among the 259 large U.S. metropolitan areas, it’s the 257 "middleweight" cities — with populations of between 150,000 and 10 million — that generate more than 70 percent of U.S. GDP today. The top 28 middleweights alone account for more than 35 percent of the nation’s GDP.
It is America’s large cities, and particularly the broad swath of middleweights, that will be the key to the U.S. recovery and a key contributor to global growth in the next 15 years. Large cities in the United States will contribute more to global growth than the large cities of all other developed countries combined. We expect the collective GDP of these large U.S. cities to rise by almost $5.7 trillion — generating more than 10 percent of global GDP growth — by 2025. While New York and Los Angeles together are expected to grow at a compound annual rate of 2.1 percent between 2010 and 2025, the top 30 middleweights (measured by GDP) are expected to outpace them with a growth rate of 2.6 percent.
What’s the formula for success?
Even when narrowing our focus to the strongest performing cities, again there is no single path to success — no unique blueprint that all urban leaders should pursue. The cities that outperform their peers simply find ways to make the most of the economic opportunities they face, get lucky, or both. Some cities have been able to reinvent themselves; many others make the most of their endowments or their location.
Even in these important middleweight cities, growing is going to be tough
The coming years are not going to be easy. As households and the government pay down debts built up before and during the recession, growth could be dampened for many years. Cities that have experienced real estate booms and busts will find recovery particularly hard going. In Orlando and Phoenix more than half of mortgage holders are in negative equity. In Las Vegas, it’s two out of three. And there are still pockets of stubbornly high unemployment — two-thirds of all the jobs lost during the downturn were in states that accounted for only 45 percent of the U.S. population.