Latest Milken Institute rankings of cities is a mixed bag for Tennessee
A total of 10 cities from the Volunteer State made the 2024 rankings. Half went up from 2023, the others half went down, some rather substantially.
The Milken Institute has just released its ranking of the 200 best-performing large cities and 203 best-performing small cities in the country, and the results on the large city side are mostly favorable for the Volunteer State. The same cannot be said for three of the four cities that are classified as smaller.
According to the news release accompanying the report that has been released annually since 1999, the rankings reflect the cities’ effectiveness at leveraging their resources to promote economic growth and provide their residents with access to the essential services and infrastructure needed for success. The index is based on job creation, wage growth, and the high-tech sector’s output growth. One of those key measures is officially known as the high-tech location quotient, which is a ranking of the city’s share of its gross domestic product (GDP) compared to the others on the list. Those are in addition to measures of access to economic opportunities, such as housing affordability and broadband coverage. Recognizing the importance of sustainable and equitable growth, this year’s index also includes metrics of a community’s ability to respond to economic and natural disasters and income inequality.
So, you are no doubt wondering more about how the Volunteer State performed. A total of 10 metropolitan statistical areas (MSAs) made the list of 403 across the country. Six of those were in the large city category, while four were in the small city grouping.
On the large city side, Chattanooga, Clarksville, Knoxville, and the Bristol-Kingsport MSAs all moved up the list with the Northeast Tennessee cities showing the most increase, a dramatic jump of 43 spots to place #118 in the latest rankings. The Gig City also showed significant movement, jumping 26 places from its 2023 ranking of #72, now placing #46. Knoxville jumped four spots and is now ranked #28, while Clarksville moved up 10 spots to #95.
By comparison, Nashville, which was ranked #4 in the 2023 results, dropped two spots to #6, still a laudable placement for Tennessee’s rapidly growing municipality. The news was not so good for the Memphis MSA, which includes three states, dropping 40 spots to place #175.
In terms of small cities, three of the four MSAs showed declines including two that could be classified as steep ones.
- Johnson City, which was ranked #35 in the 2023 report, dropped 25 spots to #60 in the 2024 rankings.
- Morristown, which was #80 last year, dropped four spots to #84 this year.
- Jackson dropped 93 places, falling from #47 in 2023 to #140 in 2024.
By comparison, Cleveland, the fourth city in the smaller group, moved up 58 spots to #127 in the latest rankings.
Looking at the details that resulted in the final positioning, here are the highest and lowest rankings for each city in alphabetical order:
- Bristol-Kingsport MSA – Housing affordability (#1) and broadband coverage (#191).
- Chattanooga MSA – Housing affordability (#6) and high-tech location quotient (#187).
- Clarksville MSA – Inequality index (#3) and high-tech location quotient (#199).
- Cleveland MSA – Short-term job growth (#26) and wage growth from 2021-22 (#188).
- Jackson MSA – High-tech GDP growth rate from 2017-22 (#21) and high-tech location quotient (#202).
- Johnson City MSA – Housing affordability (#26) and inequality index (#180).
- Knoxville MSA – High-tech GDP growth rate from 2017-22 (#17) and broadband coverage (#157).
- Memphis MSA – High-tech GDP growth rate from 2021-22 (#38) and short-term job growth (#193).
- Morristown MSA – High-tech GDP growth rate from 2021-22 (#2) and high-tech location quotient (#199).
- Nashville MSA – High-tech GDP growth rate from 2017-22 (#4) and high-tech location quotient (#117).
In its news release announcing the ranking, the nonprofit Milken Institute noted that this year’s report was based mostly on data from 2022. That said, the organization added that the top-performing cities had several common themes: a vigorous and growing high-tech sector, rebounding leisure and hospitality sectors, and community resilience. Simultaneously, housing supply and affordability was a concern among most top-performing cities. While remarking on the strong performance of top-ranked cities, this year’s BPC report also noted that cities that offer higher wages and lower costs of living remain attractive to younger generations of workers.
The full report can be found here.
