Guess Who is Ranked #1?

The self-proclaimed "Live Music Capital of the World" is booming, thanks in large part to Austin's high-tech industry (key employers include Dell, IBM and Apple) and the University of Texas, which provides the area with a steady stream of engineering talent. In addition to music, the city also has a thriving film industry. Its projected gross domestic product growth by 2012 is second only to Mobile, Ala., and first among the largest 100 metro areas in the country. Metro area Austin's population is expected to grow nearly 15% by 2012.

FORBES Ranks Austin #1 Fastest-Growing Large Metro!

To compile our list, we looked at all of the country's 363 metropolitan areas, defined by the U.S. Census Bureau has a geographic region with a "core urban area" of at least 50,000 people. Because many small metro areas are high growth--and because we wanted to show growth in large cities as well--we split the group into two classes: the largest 100 metro areas (with at least 528,000 people) and everyone else. We use projections run for us by Moody's Economy.com to show growth in "gross metropolitan product (GMP)," between 2007-2012.

Of course, if one looks at economic growth in the country's largest 100 metros, the usual suspects jump to the top of the list. With an estimated 32% GMP growth from 2007-2012, Austin, Texas, is the winner for big metros. Atlanta, Seattle, Orlando, Houston and San Jose, Calif., also appear high on the list. What do they all have in common? They're tech hubs with proximity to universities and a healthy increase in population. Austin's population, for example, is expected to increase by nearly 15% by 2012, according to Moody's Economy.com forecasts.

Bruce Katz, director of the Metropolitan Policy Program at the Brookings Institution, says there are several factors to take into consideration when measuring the pulse of a metro area: innovation, human capital, infrastructure and the actual quality of a place.

"These assets drive everything," says Katz. Some ways to measure them: the number of patents a metro area produces (innovation), the number of college graduates that live there (human capital), the amount of passenger miles its residents travel (infrastructure) and the vibrancy of its downtown area (quality of place).

A glance at the country's most economically healthy large metro areas underscores his point. Computer manufacturer Dell (NASDAQ: DELL - news - people) and the University of Texas anchor Austin's tech community. San Jose receives an influx of grads from places like Stanford and UC-Berkeley who want to work in Silicon Valley. Atlanta, home to Emory University and the Georgia Institute of Technology, is also the headquarters of UPS (NYSE: UPS - news - people), CNN and AT&T Mobility (NYSE: T - news - people), the largest cellular carrier in the United States.

To be sure, GMP is not the only method of measuring a metro area's economic vibrancy. Population growth, job growth, housing starts and personal income growth are all other factors to consider. However, we felt that an examination of the output of goods and services in a metro area was perhaps the purest method of determining how vibrant an economy will be several years down the road.

In the current economic climate, predictions for housing starts are open to the most uncertainty. Moody's forecasts take the current slowdown into consideration but do not account for a potential recession. A study compiled by Global Insight and released by the U.S. Conference of Mayors in November found that the most significant losses in real GMP were concentrated in California, though every state has taken a hit.

FORBES, Brian Wingfield and William Pentland, 01-30-08