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Five cities that will rise in the New Economy

From Seattle to Huntsville, Ala., five cities are poised to prosper in the New Economy because of exports, innovation, clean technology, and healthcare.

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The result of all this may be a shuffling of economic power not just among cities but regionally. During the low-cost energy years, the South and Southwest boomed. Nonunion labor was more important than a college degree. “Now, it might be New England and the coastal areas that lead us more than the South and the Sun Belt,” says Mr. Muro.

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Demographics will drive change, too. Cities that have expensive housing may find themselves at a disadvantage in attracting young people. “We’re going to be facing what I call the third civil war – it’s going to be a war between cities and metro areas over where young people will settle, because we’re going to have to fill a lot of jobs,” says Barry Bluestone, an economist at Northeastern University in Boston.

Many of these young workers will be going to places where they sense a think-outside-the-box culture. “It’s hard to be a dynamic economy if you’re a culture that does not tolerate risk,” says Susannah Malarkey, who heads a trade group, the Technology Alliance, in Seattle.

Cities, of course, have been reinventing themselves since the days of cobblestone streets. Pittsburgh went from being the nation’s Bessemer furnace to an education and medical technology leader. Boston, once a textile hub, is the cerebrum of America with all its colleges. What will be the next power centers?

Any list is a bit arbitrary. But below are some cities that at least show the forces remaking urban America, hastened by the rasp of recession. “The collapse two years ago was so dramatic, so unexpected,” says Barry Mason, dean of the business school at the University of Alabama. “But out of crisis comes opportunity.”

1. Boston is magnet for high-skilled workers

2. Fort Collins, Colo., builds on clean tech

3. Houston aims to move beyond the oil age

4. Huntsville eyes next launchpad for growth

5. A Seattle slew of advantages

6. The next boom cities overseas

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