The cities that lead America's transition from a goods-producing to service economy.

The American economy has long been transitioning from goods-producing to service. But how has this transition occurred across America's cities and metro areas? What does its geography look like?

To get a finer-grained sense of this, I turn to a new metric which compares the ratio of services to goods produced across metro areas, created by José Lobo of Arizona State University and based on data from the U.S. Department of Commerce's Bureau of Economic Analysis

For the U.S. economy as a whole, the ratio of services to goods is roughly 3 to 1 (3.22). But there is considerable geographic variation: 210 metros rank well above this average ratio — including 40 of the 50 largest metros (those with more than one million people) — and 154 are below the average.

The map above by Zara Matheson of the Martin Prosperity Institute charts the ratio of services to goods for all metros. Post-industrialism is strongly concentrated across the Boston-New York-Washington corridor, along the Florida coast, in Southern and Northern California, and in other pockets across the country. 

The table below lists the top 20 large metros across the country (those with over one million people) that score highest on the of ratio services to goods.

Rank Metro Area Ratio of
Services to Goods
1 Washington-Arlington-Alexandria, DC-VA-MD-WV  11.17
2 New York-Northern New Jersey-Long Island, NY-NJ-PA  9.86
3 Miami-Fort Lauderdale-Pompano Beach, FL  7.75
4 Tampa-St. Petersburg-Clearwater, FL  5.96
5 Boston-Cambridge-Quincy, MA-NH  5.93
6 Baltimore-Towson, MD  5.90
7 Atlanta-Sandy Springs-Marietta, GA  5.62
8 Kansas City, MO-KS  5.35
9 San Diego-Carlsbad-San Marcos, CA  5.35
10 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD  5.33
11 Hartford-West Hartford-East Hartford, CT  5.29
12 Los Angeles-Long Beach-Santa Ana, CA  5.26
13 Denver-Aurora-Broomfield, CO  5.16
14 Columbus, OH  5.10
15 Chicago-Joliet-Naperville, IL-IN-WI  4.55
16 San Francisco-Oakland-Fremont, CA  4.53
17 Minneapolis-St. Paul-Bloomington, MN-WI  4.39
18 Seattle-Tacoma-Bellevue, WA  4.36
19 Phoenix-Mesa-Glendale, AZ  4.27
20 Providence-New Bedford-Fall River, RI-MA  4.20


Washington, D.C., not surprisingly, stands out on this measure with a ratio of 11.17, more than three times the national average. Greater New York is second with a ratio 9.86, roughly three times the national ratio. Miami is third (7.75) more than twice the national average. Many metros along the Bos-Wash corridor have high service to goods ratios: Boston ranks fifth, Baltimore sixth, Philadelphia 10th, Hartford 11th, and Providence 20th. Miami and Tampa, both in Southern Florida, rank third and fourth. In the Sun Belt, Atlanta is seventh and Phoenix 19th. On the West Coast, San Diego is ninth, Los Angeles 12th, San Francisco 16th, and Seattle 18th. But a number of Midwest metros also show a considerable service-orientation. Kansas City is eighth, Columbus 14th, Chicago 15th, and Minneapolis 17th. 

The transition from goods production to service production has been happening for almost four decades now, but it is unfolding unevenly across America's economic landscape, as these numbers clearly show.

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