How competitive is Seattle with other cities?

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A gathering at the 2014 Mobile Games Forum in Seattle: The city's tech sector is strong but there are questions about other parts of the local economy.

Amid all this talk of Seattle’s soul, the city seems to lack a thermometer by which to holistically measure what it really means to live and work in Seattle. A new study from the Boston Consulting Group, commissioned by the Seattle Metropolitan Chamber of Commerce, is in some ways an attempt to do just that. And by the standards of the study, the fears of some about the city's economic viability and its livability amid an inflating tech balloon and shrinking middle class appear to be coming true.

Forgoing the fluffier talk about the city's “soul,” the BCG studies, first commissioned in 2009, measure Seattle’s competitiveness. There is no standard measurement for competitiveness, which was left instead to BCG's definition. The pillars the company chose are logical enough: human capital, including education, diversity, livability and natural environment; the costs of doing business; the presence “innovation ecosystem” or how well startups can get going; movement of goods and global connectivity; and infrastructure.

In the simplest of terms, competitiveness seems to boil down to the question of whether it makes sense to live here. Will I find a house and a job? If I have a kid, will he or she get educated? If I have skills, can I put them to use? If I don’t have skills, can I find them? As the study came from the Chamber, business is necessarily connected to those questions: As a CEO, would I consider either starting or moving my business to Seattle? Will I stay?

To measure all this, BCG selected a pool of nine cities deemed similar to Seattle, including some obvious picks like Vancouver and San Francisco, as well as some less obvious choices like Singapore and Amsterdam, chosen because of concerns about competitiveness in a global economy. Relative to these places, Seattle ranked 5th in 2013, while San Francisco ranked first and Hamburg, Germany ranked last. However, in 2015 Seattle dropped a space to 6th. Singapore passed San Francisco to take first.

The drop, said the Chamber’s CEO Maud Daudon, is less a result of Seattle moving backward than it is the other cities moving forward. That said, while Seattle has seen job growth in the high- and low-income brackets, middle-class jobs fell by about 7 percent. So while people may move here to work at Amazon (desk-crying notwithstanding) Seattle is losing its ability to attract workers outside of the tech industry. All you have to do to know that’s a problem, said Daudon, is to look at Detroit.

With a shrinking middle class comes a whole host of other issues as well. The wage gap has grown significantly since 1999 and infrastructure, especially for traffic, has lagged behind the growth of the city. Daudon said while ongoing and yet-to-come efforts will have a positive impact — Sound Transit 3, universal Pre-K, and a forthcoming partnership to address income inequality (Daudon declined to elaborate) — they haven’t had time to catch fire just yet.

There is some wiggle room for how much value one might place on competitiveness. For example, San Francisco ranks higher than Seattle. But, as a recent New York Times article showed, becoming San Francisco is, for a lot of people, the worst-case scenario. “When people say they don’t want to be San Francisco a lot of it is because it’s the city of haves and have nots,” said Daudon. “The middle has evaporated.” So, while San Francisco’s ranking as a competitive city is buoyed by its feverish employment and the innovation in Silicon Valley, its growing unaffordability and income inequality are dragging it down as well.

The Chamber has also become heavily involved in this year’s Seattle City Council elections, avoiding candidates like Councilmember Kshama Sawant and Jon Grant who are more skeptical of business. In fact, the specifics of the BCG study will be presented this week at the same Suncadia retreat that Sawant pilloried her fellow council members for attending last year. (For the record, Councilmember Tim Burgess, Mayor Ed Murray and King County Executive Dow Constantine will attend.) So, the study’s emphasis on fostering business competitiveness and innovation may not be universally agreed upon in the public sector.

As far as next steps, Daudon said the chamber will release a number of initiatives in the coming weeks. When asked what should happen tomorrow – or even yesterday – to assure a strong city, she emphasized cooperation. “We need to get aligned,” she said, referring to business, non-profits and the public sector. “We need to get everyone on the same page.”


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About the Authors & Contributors

David Kroman

David Kroman

David Kroman is formerly a reporter at Crosscut, where he covered city politics.