LOS ANGELES—The Milken Institute’s annual Best-Performing Cities index for 2016 shows that tech is still tops, as cities that excel in innovation drive the nation’s economic dynamism. With an ecosystem for entrepreneurship, San Jose, CA, claimed the top spot again.

“America’s best-performing cities yet again demonstrated their innovation advantage aligned with high levels of entrepreneurship,” says Ross DeVol, chief research officer of the Milken Institute and one of the report’s authors. “That is witnessed not just in ‘traditional’ technology but in medical and financial services.”

The Best-Performing Cities index, compiled since 1999, uses a comprehensive, fact-based set of criteria to rank 200 large and 201 small metros across the United States. As an outcomes-based index, growth in employment, wages and technology output are heavily weighted; metrics such as cost-of-living and quality-of-life conditions, often highly subjective, are not included.

Highlights from the report “2016 Best-Performing Cities: Where America’s Jobs Are Created and Sustained” include:

• Top-ranked San Jose’s tech-fueled economy continues its two year hot streak, with high job growth and average annual wages of $111,000, versus $60,300 for the nation overall. It is the softer side of tech that is propelling the Silicon Valley economy: cloud computing, data processing and hosting services, social media and more.

• This year, America’s top performers were stable compared to the year before.  The top six large metros repeated from last year, at the most shifting two places, underscoring the continuing strength of knowledge-based economies. 

• California secured six of the top 25 spots among large metros, led by four metros in the San Francisco Bay Area, and two in the region in the top 10 small metros.

• Provo, UT, and Austin, TX, tied for second place. Booming Nashville, TN, appeared within the top 10 at #7, moving up 11 places.

• This year’s rankings represent the return of the traditional regional growth pattern of the Sunbelt, which had been interrupted by the Great Recession. Only one of the top 25 large metros – 22^nd ranked Grand Rapids, MI – was outside the Southeast, Southwest, or West.

• Bend-Redmond, OR, became the top-performing small metro in the nation. Strong high-tech job growth, low costs and plentiful recreational opportunities have helped the Bend region resume its boom.

“While technology still powers the top performers, we also see the return of real estate, tourism and auto-manufacturing related jobs on our 2016 index,” says DeVol. “Top-performing metros have cohesive strategies that allow them to distinguish themselves from others. They offer important lessons for other cities.”

Top 10 Best-Performing Large Cities

"2016 Best-Performing Cities: Where America’s Jobs Are Created and Sustained," by Ross DeVol, Joe Lee, and Minoli Ratnatunga is available for download at http://best-cities.org. Data for all metros is available on the interactive Best-Performing Cities website. Join the Twitter conversation at #bpcfor2016.