WINTER 2005

Businesses Don't Just Choose a City, They Choose a Specific Neighborhood

Creating a Communitywide Vision
for Housing, Neighborhood Development

Strategies for Rural Development:
It Takes a Region to Raise an Entrepreneur

CDFIs: Putting the Best Foot Forward

Eileen Wolfington Joins St. Louis Fed

Pamphlets List Home Counselors

Financing Development:
Learning from the Past,
Looking to the Future

Have You Heard

Spanning the Region

Calendar

A Closer Look
Included with Bridges is A Closer Look, a supplement that takes topics from previous and current issues of Bridges and examines them from the perspective of a particular area or community.  This issue of A Closer Look focuses on Arkansas and its efforts to develop regional entrepreneurial development systems.

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By Christopher H. Wheeler
Senior Economist
Federal Reserve Bank of St. Louis

Economic activity within metropolitan areas in the United States tends to be distributed unevenly. Within nearly any city, there are neighborhoods that grow—attracting businesses that provide jobs, goods and services—and there are those that do not. Why are some neighborhoods more conducive to economic development than others?

Between 1994 and 2002, for example, the St. Louis metropolitan area saw its total private sector employment grow by 12 percent, or nearly 130,000 jobs. During this same period, the number of business establishments grew by nearly 3,500, or roughly 5.3 percent.

What these aggregate figures fail to reveal, however, is a substantial difference in the experiences of neighborhoods throughout the metro area. Across St. Louis’ 226 ZIP codes, employment growth varied between –93 percent and 1,100 percent, while business establishment growth ranged between –50 percent and 200 percent.

Why does economic activity vary so much across a metropolitan area? This article attempts to provide some semblance of an answer to these questions by looking at the recent experiences of a collection of approximately 15,000 neighborhoods (defined by ZIP codes) across a sample of 361 metropolitan areas in the United States. To do so, we studied the pattern of development, quantified by changes in the total number of business establishments, and identified some basic neighborhood characteristics that are associated with different levels of this development...FULL STORY