Northwest Arkansas ranks no. 21 for most dynamic U.S. metros

The most economically dynamic metros have diverse industries, a mix of young and legacy companies and fun things to do, a report out today by Heartland Forward shows.

What's happening: The Bentonville organization ranked the most dynamic U.S. metros of 2021 by tracking fluctuations in local economies and each area's potential economic future.

• Northwest Arkansas is ranked No. 21 out of 382 metros, unchanged from its 2020 ranking.

The big picture: The report sussed out a trio of takeaways for economic developers looking to improve the economy in their communities:

• Jobs should be spread across diverse industries to avoid boom-bust cycles.
• A collection of both young and well-established companies, universities or government agencies creates a golden combination of stability and innovation.
• Amenities that provide quality of place — outdoor accessibility, museums or good schools — are important to attract talent.

Context: Heartland Forward, a Bentonville think tank focused on improving the economic performance of a 20-state region in the center of the U.S., publishes the report annually.

• This year's report includes perspective on the first full year of the pandemic.

What they did: Researchers looked at wage, employment and GDP growth, as well as the average income of each metro.

• They also included the share of employment at companies five years old or younger, and the share of employees at those companies with a bachelor's degree or higher.

The entrepreneurial metrics indicate a metro's potential for growth, CEO and president of Heartland Forward, Ross DeVol, told Axios.

Zoom in: Factors contributing to NWA's ranking include its 6% employment growth from June 2020 to June 2021 and the fact that its per capita income was more than $75,000.

• Stable employers like Walmart, Tyson Foods and J.B. Hunt, mixed with the number of area startups and a high ratio of college-educated workers at those startups, were also a factor.

What they found: Northwest Arkansas (No. 21) and the Austin metro (No. 7) are the only two "heartland" states that ranked in the top 25.

• Communities dependent on oil and gas or energy — like Odessa, Texas and Greely, Colorado — dropped in the rankings due to the decline in fuel demand during the pandemic.

• Technology hubs — like Austin and Columbus, Ohio — continue to attract more talent, startups and investments.
• Metros dependent on foreign tourism and business travel, like Miami and Orlando, Florida, suffered.
• The Villages, Florida, benefited from urban flight as retirees moved to there.
• Areas that have major universities and long-term, stable employers fared well, including NWA and three metros in North Carolina.

"The pandemic has reminded us all that life is so much more than working, eating, watching television, and scrolling social media; we yearn to explore the natural world and develop new relationships. Cultural and recreational amenities provide such opportunities in our own backyard, and the most successful metros during the pandemic era have an abundance of these amenities."

Of note: The Heartland Forward report uses much of the same methodology as the Milken Institute's Best-Performing Cities report, but also weighs the role entrepreneurship plays in each metro.

Go deeper: Read the full report and all metro rankings. See an interactive version of the map.