This article originally appeared on Business Insider.
The future of the American economy may be driven by the Sunbelt’s cities.
As Barron’s recently reported, economic and social power in the US may be shifting away from giant coastal cities like New York and San Francisco to metropolitan areas located below the Mason-Dixon line. That’s because economic power is flowing to the middle of the country — and places like Houston, Dallas, Nashville and Miami are becoming hot spots.
Just as New York City has Wall Street and San Francisco has Silicon Valley, Houston has its own energy economy and Miami has proximity to Latin America and a growing financial industry. And while Los Angeles has Hollywood and Washington, DC has politics, Dallas has a thriving environment of diverse business giants and Nashville is a health care and tech hub.
“You used to have two coastal power zones where you could live your best life, never really touching the red states,” Stanford historian Niall Ferguson told Barron’s. “We now have a multipolar America instead of a bipolar America. This reflects an incredibly remarkable difference in taxes, quality of life, cost of living, ability to build, and quality of governance.”
A March Redfin analysis of its user search data indicated that San Francisco, New York City, Los Angeles and Washington, DC were the top four cities to which Americans were looking to relocate. Meanwhile, Miami is the city where users are most interested in relocating to – with Dallas and Houston in eighth and 10th place, respectively. Low taxes and housing costs appear to be one of the top factors motivating movers.
That’s why these four cities could be at the center of America’s economic future.
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Houston can take advantage of America’s shift toward renewable energy. Duy Du/Getty Images via BI
Houston is the fourth largest city in the US and home to 26 Fortune 500 companies, trailing only New York City and Chicago.
Major energy companies such as ExxonMobil, Phillips 66, and ConocoPhillips call the city home, and as a result, 40% of Houston’s economy is directly or indirectly tied to oil and gas.
But if the city is open to change, renewable energy can provide economic opportunities. Time reported on data from McKinsey suggesting that by 2040, Houston could receive $250 billion in annual investment tied to the emerging energy industry due to its existing infrastructure and skilled workforce.
Home to NASA, Houston is also set to become a hub of the space industry.
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Companies are moving to Dallas in part because the city is full of young workers. Joe Daniel Price/BI via Getty Images
According to the Census Bureau, from 2021 to 2022, Dallas experienced the largest numerical population growth of any US metro area, with a net increase of more than 170,000 people.
Since 2010, more than 175 companies have moved their headquarters to the North Texas area, including Dallas. And other business giants are expanding in the city. For example, Goldman Sachs has said it plans to add about 5,000 jobs in Dallas once its new regional office is completed.
Wells Fargo Chief Technology Officer Steve Hagerman previously told Business Insider at a time when some companies were struggling to find workers that Dallas was offering a growing group of “prime working age” individuals ages 23 to Were between 38 years old. The city also provides technical degrees to many graduates, which can develop it as a technological hub.
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Miami’s proximity to Latin America could help its economy in the years to come. Nisian Hughes/Getty Images via BI
Miami’s population grew 1.7% from 2021 to 2022, the fourth-fastest rate among the 50 largest U.S. cities. Amazon founder Jeff Bezos even said he was moving there after 29 years in Seattle.
While the city’s crypto boom has not gone according to plan, other companies in the finance industry have also moved to the city, including hedge funds Elliott Management and Citadel.
Given its proximity to Latin America, Miami is also home to the headquarters of over 1,100 multinational corporations. In the coming years, strong immigration levels into the city could continue to boost its workforce and economic growth.
Miami is also a popular destination for tourists and the wealthy. A report from consulting firm Henley & Partners said the number of Miami millionaires is expected to grow 75% from 2012 to 2022, one of the fastest rates in the country.
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Nashville’s healthcare industry has created thousands of jobs for residents. Dan Reynolds Photography/Getty Images via BI
Nashville was ranked as the top city in the US for job opportunities and earning potential in an analysis by HR firm Checkr. Released earlier this year. In May, Nashville was ranked number four in the Milken Institute’s ranking of the nation’s best-performing cities based on labor-market performance and economic opportunity.
“Although Nashville is a well-known and popular tourist destination, its economy is stronger than just the music and hospitality industries,” the report said.
The city, which has been named the healthcare capital of America, is home to more than 500 companies in the industry, including 17 public healthcare companies. There are approximately 570,000 jobs in this industry in the Nashville area.
Nashville also has the potential to grow its tech industry. Amazon and Oracle are among the companies that have invested in the city in recent years.
Coming into the limelight can have its challenges.
The increasing population in cities can contribute to increasing housing costs. David Susi/Getty Images via BI
Despite the economic benefits, progress in these cities will likely come with some obstacles.
To varying degrees, these cities are already getting a glimpse of how higher housing costs could impact a sector of growing demand.
Furthermore, these southern metropolises and their high temperatures may also face future challenges related to the climate crisis. Miami, in particular, can be unsafe.
Meanwhile, the coming years could see a battle between coastal cities and Sunbelt metropolises to claim who offers the most economic power.
Source: www.entrepreneur.com
