Are Cities the Key to U.S. Economic Growth?

The same support network that makes Silicon Valley a hub for technological innovation will save Northeast Ohio and other metropolitan areas around the country.

That's the theory that drives the research for Bruce Katz, the vice president and founding director of the Brookings Institution's Metropolitan Policy Program.

As Katz explained it at a National Journal Live event Wednesday, just 12 percent of our nation's landmass is taken up by the nation's top 100 metropolitan areas. However, that area is home to two-thirds of the country's population, who generate 75 percent of the national GDP.

"There really isn't an American economy," Katz said. "There's a network of metropolitan economies."

These metropolitan areas and cities, therefore, power the country's economic engine. They can also serve as an indicator for the rest of the country. For example, a demographic trend is likely to happen at a faster pace in these areas, Katz contends.

But this also means that economic trends hit these areas stronger, as well. Katz argues that a debt and consumption economy brought on the recession. Instead of creating new things, it was based on "Starbucks, stadia, and stealing businesses," he said. In other words, American metropolitan areas were more focused on building a new stadium and basing the economy on how many beers and hot dogs people buy.

The recession was a wake-up call, but now that it's over and the economy continues to improve, it is up to these cities and metro areas to unify resources, boost creativity, and find ways to improve the economy. It also means that cities need to focus on manufacturing and trade.

"We're going back to basics in cities and metropolitan areas," Katz said. "Dolly Parton, a great economist, once said, 'Find out who you are, and do it on purpose.' "

This also means that these cities can't rely on the federal government to pave the way, either. Yes, the federal government can create trade policies that help these cities grow, but the cities must be the driving factor in improving the economy.

That's where the importance of municipal leadership comes in—leaders who have the power to bring together people with these ideas. These leaders need to get beyond divisions and unify local and metropolitan areas. Once that happens, they can go up the chain and influence national leaders to change their policies.

Katz is already seeing these cities take on responsibility. Already, 20 of the top 50 metro areas around the country have formal plans to achieve their economic goals.