Southern Boom Towns Still Can’t Top Legacy Cities' Appeal

Southern markets have been showing a lot of promise as potential economic powerhouses, but they still have work to do to match legacy cities like New York, Los Angeles, San Francisco, and Chicago, according to Kearney’s 2024 Global Cities Report.

The report captures the current state of global leadership via the Global Cities Index (GCI) and assesses cities’ future prospects through its Global Cities Outlook (GCO). The top 25 leading global cities have been fairly steady for the past decade, but social, geopolitical, and technological transformations are disrupting the traditional global and US hierarchy, according to the report.

GCO findings highlighted the emergence of a distributed geography of opportunity within the United States, specifically with highly specialized talent and capital attraction no longer confined to the “superstar cities,” but instead spreading to a new tier of metropolitan areas, said Kearney. Pandemic-induced migration patterns saw a shift of people, businesses, and ideas from long-standing leaders such as New York, Chicago, Los Angeles, and San Francisco to other cities in other regions.

Notably, several Southern cities are getting bigger, including Dallas, Houston, Atlanta, Miami, Washington, D.C., and Charlotte. The region accounts for 66% of job growth and 87% of population growth. Meanwhile, legacy cities are contending with crime and quality-of-life issues that may be driving people away.

But that doesn’t mean legacy cities are being supplanted by Southern markets, the report said. While legacy cities’ performance on security and stability took a major hit, Southern cities lagged in inspiration.

“This means the jury is out on whether Southern cities are a long-term inspirational option for people and companies looking for a sustainable growth environment,” said Kearney. “So while people have been running from tier 1 cities due to security and stability concerns, they may return if Southern cities don’t foster inspirational growth to keep them there.”

Kearney said it will take a concerted effort by both city governments and enterprise leaders to create an inspirational growth story in these emerging markets. Governments should consider developing and scaling not-for-profit, civic/business organizations that channel public-private resources and residents toward civic improvement. Examples of legacy cities include the Partnership for New York City, the Chicago Commercial Club and the Bay Area Partnership.

Governments also should scale venture funding and start-up incubators and create teams to attract outside investment and corporate relocations. Meanwhile, business leaders could pool resources to find creative solutions to the issues their cities face, the report said.

“At the end of the day, Southern cities should take a page from legacy cities’ playbook and deploy the best practices that can create a win for the city, its companies, and its people,” said Kearney.