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The Geography of Business Density

The Geography of Business Density
Reuters

As urban living becomes ever-more crowded and compact, cities are increasingly seen as a fundamental driver of progress and prosperity.

While density is doubtless important, cities must also be able to balance the crude packing-in of people with the ability of residents and businesses to interact. The skyscraper districts of Asia’s mega-cities are phenomenally dense, but they can function as vertical sprawl, inhibiting the very kinds of interactivity that density is supposed to promote. 

Conventional density measures essentially tally the number of residents per square mile or kilometer. But what about the density of businesses that serve the same area? A metric that accounts for it might help us better understand the geographic concentration of businesses and the potential for greater economic interaction among them.

To get at this, José Lobo of Arizona State University calculated a measure of business establishment density per square mile. The data on the number of establishments is from the United States Census Bureau’s MSA Business Patterns, while the data on the land area of counties (which make up metropolitan areas) is from the Bureau’s American FactFinder.

 Zara Matheson of the Martin Prosperity Institute

The map above by Zara Matheson of the Martin Prosperity Institute (MPI) charts this measure of establishment density across U.S. metros. The table below lists the top 20 large metros (those with populations of more than one million people) on this metric.

The variation in business establishment density across metros is substantial, from a high of almost 80 businesses per square mile to a low of 0.2. The average for U.S. metros is 6.8 establishments per square mile. 

Business Density for the Top 20 Large Metros

Rank Metro Area Business Establishments
per square mile
1 New York-Northern New Jersey-Long Island, NY-NJ-PA 79.0
2 Los Angeles-Long Beach-Santa Ana, CA 68.7
3 San Francisco-Oakland-Fremont, CA 47.9
4 Boston-Cambridge-Quincy, MA-NH 34.9
5 Miami-Fort Lauderdale-Pompano Beach, FL 33.1
6 Chicago-Naperville-Joliet, IL-IN-WI 32.9
7 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 31.5
8 Tampa-St. Petersburg-Clearwater, FL 27.2
9 Milwaukee-Waukesha-West Allis, WI 26.7
10 Cleveland-Elyria-Mentor, OH 26.3
11 Providence-New Bedford-Fall River, RI-MA 25.9
12 Baltimore-Towson, MD 25.2
13 Detroit-Warren-Livonia, MI 25.2
14 Washington-Arlington-Alexandria, DC-VA-MD-WV 25.0
15 Hartford-West Hartford-East Hartford, CT 19.6
16 San Diego-Carlsbad-San Marcos, CA 18.2
17 Buffalo-Niagara Falls, NY 17.1
18 San Jose-Sunnyvale-Santa Clara, CA 16.8
19 Seattle-Tacoma-Bellevue, WA 16.5
20 Orlando-Kissimmee, FL 15.8

 

The greater New York metro tops the list with 79 establishments per square mile. Los Angeles is second with 68.7. Both have business densities more than ten times the national average.

The entire Bos-Wash corridor scores highly on the measure: Boston comes in fourth (34.9), Philadelphia seventh (31.5), Providence 11th (25.9), Baltimore 12th (25.2), Washington, D.C. 14th (25.0), and Hartford 15th (19.6).

On the West Coast, San Francisco is third (47.9); San Diego, 16th (18.2); San Jose, 18th (16.8); and Seattle, 19th (16.5).

A number of Midwest metros also rank highly. Chicago is sixth (32.9), Milwaukee ninth (26.7), and Cleveland 10th (26.3). Detroit is 13th (25.2) and Buffalo 17th.

Southern Florida is also well represented, with Miami in fifth place (33.1), Tampa eighth (27.2), and Orlando 20th (15.8).

Business density is closely related to population and population density, as would be expected. Using a regression analysis, my MPI colleague Charlotta Mellander predicted expected establishment densities given the population densities and examined to what extent the real values are above or below the predicted values. L.A., Miami, San Francisco, San Diego, and Cleveland are among the metros that have greater establishment densities than their population densities would predict, while Salt Lake City, Omaha, San Antonio, and surprisingly, greater New York, have less.

Top image: Keith Bedford / Reuters

Richard Florida is Co-Founder and Editor at Large at The Atlantic Cities. He's also a Senior Editor at The Atlantic, Director of the Martin Prosperity Institute at the University of Toronto's Rotman School of Management, and Global Research Professor at New York University. He is a frequent speaker to communities, business and professional organizations, and founder of the Creative Class Group, whose current client list can be found here. All posts »

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