Seattle is nation's most competitive city, survey says

Thursday, December 12, 2002

By PAUL NYHAN
SEATTLE POST-INTELLIGENCER REPORTER

Seattle has taken plenty of lumps in recent years, but the city ranks as the most competitive urban locale in the country, a new study says.

Over the past three years, Seattle saw its biggest business player, The Boeing Co., move to Chicago and its reputation tarnished by congested roads, World Trade Organization riots and a slumping economy.

But the Seattle-Tacoma-Bremerton area also boasts a wealth of capital, a high-tech infrastructure, a steady stream of exports and an educated work force. Together, the elements created the most competitive city in the country, according to a report from the Beacon Hill Institute at Suffolk University.

"You have simply managed to put it together," said David Tuerck, executive director of the Boston-based group.

One of the region's greatest strengths is the amount of cash that circulated in recent years. Seattle ranked second among the 50 surveyed urban locales in venture capital as a percentage of its gross metropolitan product, according to the Beacon Hill study.

In addition, the Seattle area was the second-most-prolific breeder of new publicly traded companies, the study found.

"I think venture capital is hugely important," Tuerck said.

In the late 1990s, the Puget Sound region was one of the hotbeds of venture-capital activity. The problem is, much of that activity dried up in Seattle and the rest of the country along with the dot-com sector. The study largely relies on data from 2000 and 2001.

One of Seattle's strongest asset is its link to the outside world, as the region received the top score in the "openness" category. Seattle scored well in large part because of its export-heavy economy, driven by Boeing, the nation's leading exporter, according to the report.

Employers also can recruit from an educated labor pool, because the Seattle-Tacoma-Bremerton area came in second only to Hartford, Conn., for the percentage of its population that received high school diplomas, according to the data.

Seattle is far from a perfect place to live and compete, however. The metropolitan area received one of the lowest scores, 40th out of 50 cities, in the government and fiscal-policy category.

The "weakness is caused largely by workers'-compensation collections and unemployment payments," according to the report.

With high housing costs and other financial headaches, Seattle is also an expensive place to live, ranking 42nd in the study's cost-of-living index.

With one of the highest unemployment rates in the nation, the region also fares poorly in the jobless category.

In the end, the positives far outweighed the negatives, allowing Seattle to receive the highest score for competitiveness, defined as its ability to support a healthy per-capita income while nurturing business growth, the report said.

Interestingly, the top three cities, Seattle, San Francisco and Boston, received poor scores for fiscal and government policies. In contrast, all three regions were in the top 10 in terms of technology.

At the other end of the spectrum, New Orleans posted the worst competitive score, with Buffalo, N.Y., coming in 49th and Memphis, Tenn., 48th.

P-I reporter Paul Nyhan can be reached at 206-448-8145 or paulnyhan@seattlepi.com

Add P-I Business headlines to