The job magnets no one expected: How 12 U.S. cities are defying the odds

It’s hiring season -- from coast to coast -- at Modern Technology Solutions Inc. The fast-growing defense contractor has openings in 27 cities, including six unfilled jobs in Silicon Valley and another 11 at its headquarters in Alexandria, Va. 

But the company’s biggest hiring crusade is happening in Huntsville, Ala., where MTSI is trying to fill 42 openings for system engineers, software developers and more.

Huntsville!? 

Yes, Huntsville. It doesn’t matter that the mid-sized Alabama city lacks northern California’s world-famous startup scene, or the Washington, D.C., area’s political stature. Huntsville’s edge traces back nearly 60 years, to NASA’s earliest days; it involves deep-rooted strengths in aerospace and defense engineering talent.

Look closely at the current U.S. labor market, and you’ll find a cluster of other cities executing their version of the Huntsville playbook.They aren’t trying to match the vast multi-industry cachet of giant metropolises like New York or Chicago. Instead, these smaller cities are betting heavily on a single home-grown industry so robust it can be an enduring job magnet, all by itself.

In the right spots, this risky strategy is paying off. Fresh analysis by LinkedIn’s Economic Graph team highlights 12 cities that are thriving, even with an unusually high concentration in a single industry, such as health care, manufacturing, retail or finance. In all of them, average hiring rates have climbed by at least 6.5% from last year, well ahead of the national average of 2.7%. (See methodology section below for details.) 

Health care is the most common driver, benefiting cities such as Kalamazoo, Mich., Raleigh-Durham, N.C., Boston, Cincinnati, Allentown, Pa., and Erie, Pa. Manufacturing, meanwhile, is the star of the show in Huntsville, Evansville, Ind., Detroit and Greenville, S.C.

The Fayetteville, Ark., metro area can thank retailing for its job growth, chiefly because of Walmart's headquarters in nearby Bentonville. And in Des Moines, Iowa, finance is the sector that defines success.

This new list skews toward the sorts of smaller cities that often get overlooked in narratives about U.S. economic strength. Only Boston, Detroit, Cincinnati and Raleigh are big enough to host major league sports teams. Most of the other cities have populations of 250,000 or less. 

Yet small doesn’t mean puny. Tim King, MTSI’s top executive in Huntsville, says that in recent years, he and his colleagues in this northern Alabama city have recruited technical talent from as far away as Nevada, California and Florida. As newcomers keep arriving, housing prices in Huntsville are surging and “we’ve got more Realtors than homes for sale,” King jokes.

 Anecdotes of small-city allure are borne out by comprehensive data. LinkedIn data shows that in the past year, Huntsville (population 205,000) has been a net attractor of talent from cities as large as Washington, D.C. Meanwhile, Raleigh-Durham has benefited from some net immigration from New York City. 

“About 60% of us are from somewhere else,” says Huntsville’s mayor, Tommy Battle. (He grew up in Birmingham, Ala.) While military tech remains the city’s economic core, makers of cars and all-terrain vehicles have widened Huntsville’s economic base. Other newcomers have livened the city’s restaurant selection, music scene, shopping malls and craft-beer options.  

A lot more jobs are coming to Huntsville, too. The FBI has announced a $1 billion buildout that will employ more than 4,000 people, including big-data specialists. Facebook a year ago committed $750 million to build a data center in Huntsville. Meanwhile, Amazon founder Jeff Bezos has begun building rocket engines for his Blue Origin space exploration company in Huntsville.

 “There are plenty of opportunities for smaller communities to do fine,” says Enrico Moretti, an economics professor at the University of California, Berkeley. He is best-known for his 2012 book, “The New Geography of Jobs,” in which he highlighted ways that large cities can become magnets for artists, creative workers and high-earners in fields such as banking or tech -- as all of them thrive by being near one another. But that same dynamic can work in cities with populations of just 100,000, Moretti says.

Technology and advanced manufacturing tend to be more durable sources of economic advantage than a concentration in health care or education, says Richard Florida, a professor at the University of Toronto’s School of Cities, and author of the book “The Rise of the Creative Class.” Still, Florida says, “eds and meds can help stabilize a city,” so that underlying employment and spending patterns remain strong enough for specialized industries to thrive.

Has your city found a showcase strength that can help it thrive? Should it? Share your thoughts in the comments below.

* * *

Methodology: To identify the fastest growing metros with high industry concentrations, LinkedIn data scientists Brian Xu and Michael Lombard first calculated the percentage of LinkedIn member positions in 23 industries for every U.S. metro area. Higher education clusters were filtered from these calculations to avoid a prevalence of college towns. Next, a Gini coefficient calculation was performed to determine the 100 metros with the highest levels of industry concentration in the United States. These metros were then ranked by the year-over-year change in seasonally-adjusted hiring rate. The LinkedIn Hiring Rate (LHR) is the percentage of LinkedIn members who added a new employer to their profile in the same month the new job began, divided by the total number of LinkedIn members in that country. The top industry by percent of member positions was highlighted for each metro.