Aaron Renn reviewing research by the Manhattan Institute:
Among the commonalities they did see, they noted that successful cities tended to have higher educational attainment; a higher professional, scientific, and technical job share; more large corporate headquarters, and less dependency on government spending in an era of state and local fiscal retrenchment. Laggards suffered disproportionately from over-dependency on housing construction.
A familiar list of reasons - we hear often of the importance of 'STEM' jobs, high order skills and corporate HQs. The bit that we aren't reminded of often enough is that high levels of dependence on government spending holds back regional economic development. This isn't just about benefits or the relocation of government jobs to depressed areas but encompasses other parts of popular regional development strategies such as university-led schemes of research funding.
The challenge here is for government - local or national - to develop strategies that promote regional development without its spending squeezing out private-sector growth. This is especially noticeable when we look at how middle-income jobs are distributed - in the big northern cities a far higher proportion of these jobs are public sector workers (teachers, social workers, local government officers and so forth). If the route to a decent living is seen to be via the public sector then people will choose that route.
Finally that point about housing construction speaks for itself.