Cities fuel innovation and job growth, not only within the city itself, but the surrounding suburbs and exurbs as well. Large metropolitan areas grab most of the attention, but smaller cities are just as appealing and can be just as attractive as their larger brethren. Like the smaller cities listed here.

To attract businesses and newcomers, smaller cities have to offer benefits at least as good as larger metros. There isn’t one primary factor, but several elements working together to drive a city’s growth and appeal. 

Among the many factors is a strong and rising job market and sustained wage growth. It also helps if a city has an expanding tech sector. Because no business or home can run without reliable internet, a city needs a strong broadband network. And since not many people can afford to move to or live in a city with sky-high home prices, an affordable housing stock (relative to their wages) is a major selling point. This is the state where people are getting rich off their homes.

To identify the best performing small cities in America, 24/7 Wall St. reviewed the overall ranking on city performance from economic think tank Milken Institute’s Best-Performing Cities 2021. Scores are based on an index of “jobs, wages, and high-tech growth while incorporating new measures of housing affordability and household broadband access.” Each city’s score from last year is also included. Total population figures are one-year estimates from the 2019 American Community Survey.

By those standards, Idaho Falls, Idaho tops the list of best performing small cities. It moved up six places to take the top spot, driven mostly by job gains and an emerging high-tech industry. The city’s tech center is supported by the Idaho National Laboratory and Batelle Energy Alliance, LLC.

Logan, Utah, situated close to the Idaho border, ranks high on the list, coming in at No. 2. Like Idaho Falls, it sports a strong tech sector, with a concentration in pharmaceutical and medical manufacturing. 

Yet a high-tech hub doesn’t necessarily vault a city to best performing status. The third city on this list, The Villages in Florida, is well known as a retiree haven. But that’s likely what supported its job growth in the service industry — a factor in pushing up the city two ranks on the Milken rating. Are any of these cities among the best small cities to start a business?

Click here to see the best performing small cities in America

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