Metro Denver's International Competitiveness: Ranking Denver with OECD Data

A basic premise of A View of the Rockies is that Metro Denver does not just compete with cities in the United States for capital, employees and businesses, but also with metro areas around the globe. This blog entry explores Metro Denver’s international competitiveness by examining the area's rankings compared to international metro areas based on key metrics such as population, productivity, GDP per capita, employment rate and educational achievement.

The Organization for Economic Cooperation and Development (OECD) (http://www.oecd.org/) is an international organization which “brings together the governments of countries committed to democracy and the market economcy from around the world to: Support sustainable economic growth; Boost employment; Raise living standards; Maintain financial stability; Assist other countries' economic development; and Contribute to growth in world trade.” Headquartered in Paris, the OECD has 30 member nations in Europe, North America and Asia.


The OECD produced a publication called Competitive Cities in the Global Economy in 2006 as part of the OECD Territorial Reviews series which defines and compares 78 international metro areas. The OECD uses a methodology which looks at population population density, commute patterns and total population size to define metro regions. Listing all the metro areas included by the OECD in this report would be too lengthy for this blog but the U.S metro areas include the following : Atlanta, Baltimore, Boston, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Los Angeles, Miami, Minneapolis, New York, Philadelphia, Phoenix, Pittsburgh, Portland, San Diego, San Francisco, Seattle, St. Louis, Tampa Bay, and Washington D.C. International cities come from Canada, Mexico, Europe, Japan, South Korea, etc.

Any attempt at comparing economic data across nations is fraught with challenges due to differences in data collection methodologies and definitions between governments in different nations. These issues should be kept in mind in viewing the data presented in this blog. Note also that the metrics presented below are not comprehensive measures of global competitiveness but do provide useful measurements and indications.

So how does Denver compare to other international cities across key metrics reported by the OECD? The following table summarizes Denver’s rankings. Note the table is constructed in such as way that higher rankings are always better. So, for example, a higher ranking on unemployment means the actual unemployment percentage is low.

Metro Denver's International Rankings Based On OECD Competitiveness Metrics

Metro Denver scores extremely well (4th) both in absolute terms and relative to the national U.S. population in the percent of its population with higher education (referred to as "Tertiary" education in the table above). This rating indicates that Denver's labor force is highly skilled and well-positioned to participate in knowledge-based economic activities. Denver also scored well in the GDP per Capita (7th) and Productivity (13th) metrics which are also both indicators of the quality of the regional labor force.

However, in total population, Denver is one of the smallest metro areas analyzed by the OECD (61st). Many of the other international metro areas in the survey which have relatively small populations have the advantage of being national governmental capital cities and/or the largest city in their respective nations (e.g. Prague, Vienna, Stockholm, Oslo, Helsinki, Dublin and Auckland). Metro Denver's relatively small population, lack of national capital status, and its spatial isolation from other large metro areas may make it relatively harder to market the Denver Metro Area to international businesses and investors because there is a smaller chance that international decision makers will either visit Denver directly or visit near-by metro areas and do a side trip to Denver (less spill over). I believe this disadvantage implies that Metro Denver may need to work relatively harder and smarter than global competitor metro areas to develop international brand awareness and attract the global financial capital and businesses that a city with its high quality labor force and natural amenities would normally justify.

Denver also scores in the bottom half (upper portion) of the rankings of employment and unemployment scores relative to the home country national average score. To some degree scoring in the lower mid-range in these metrics should not be viewed as major competitive determent because the United States overall has relatively lower unemployment than many other nations with cities included in the survey. However, Denver does score below other U.S. cities on the employment metric except for St. Louis, Houston, Chicago, Cleveland, Pittsburgh and Detroit. Metro Denver's relatively weak score here may be in part due to the Metro Area's reliance on air transportation and telecommunications industries both of which were in economic down cycles during the 2002 and 2004 time frame when this data was gathered. This points out a larger concern about the Metro Denver economy -- that traditionally the Denver economy has been very cyclical with heavy dependence on a relatively small number of industries. This issue is something which merits further exploration and discussion in a later blog entry.