The next Metro 500 index entry is not for those too afraid of controversy.

This is the Metro 500 Immigration Economy index.

Part of what makes large cities dynamic is their ability to attract inflows of populations, not just from other parts of the country, but also the world.

This is also the most difficult to broach, since it can provoke so much enmity. It’s not just an American issue. Immigration in Europe from Slavic states, the Middle East and Africa has also spawned reactionary political movements.

This can be also the hardest index to measure, because it depends on how the immigrant society integrates with the established sociopolitical climate. Some areas can offer a relatively tame interaction, while others have become so toxic that immigrant populations are “hidden in plain sight” and might be supporting a large underground or perhaps a lumpen society.

This, however, would attempt to trace legitimate economic transactions through employment and business creation through international migration.

The Metro 500 Immigration Economy index attempts to trace a metropolitan area’s source of people, see what social and economic links develop, and examine whether a remittance economy exists. That is important to consider since there could be large flows of money to the nation, or remittances may make up a large share of the country’s GDP (see this IMF posting for sources and recipients: http://www.imf.org/external/pubs/ft/fandd/2005/12/picture.htm ).

1. Find a source, such as Census or university data, that can detail what percentage of a metropolitan area’s population are foreign-born or first-generation. Note their countries of origin.
2. In one large source category, track the 500 largest sources of income.
2A. First find the largest established employers of immigrants by Payroll Capitalization (see post 29).
2B. Next tabulate a list of the largest businesses established or owned by foreign-born or first-generation entrepreneurs by gross recepits./
3. Combine the categories of step 2 into a chart, but detailing if they are employers or enterprises.
4. Find your metropolitan area’s remittances sent through banks or wire services and their destination states.
5. Optional: Find the value of goods and services that are imported from the immigrants’ home countries.

This chart attempts to find the economic ties between home and destination countries. It also shows how dynamic a city region is by how much economic activity can carry a much larger, remote population in a relatively small area.

Think about the sprawl of Northern or Southern California.

Neither are shining examples of great urban planning. Yet consider that the economic transactions of these two mega-regions. There’s a population of about 25 million, in the land area of what would be the size of a medium-sized state. Yet the economies of these two mega-regions are supporting the populations of almost every country on Earth! The same is true of the Bos-Wash corridor, though in arguably a more concentrated space. South Florida supports the economies of two continents.

No. 42 will not continue it. I have thought of two more megaregion dynamics to add to the Metro 500.

The first is the Metro 500 Philanthrophy index.

Again, these lists seek to serve what defines a metropolitan area’s economic transactions in a way an index like the S&P 500 tries to track the overall economy.

This one, though, will track economic transactions by a metropolitan region’s nonprofit and not-for-profit sector.

This sector has also grown in tandem with overall profit growth. Despite not organized around generating profits, these organizations still have an economic impact in that they hire workers, purchase supplies and either provide money or services.

Admittedly, this is going to be the trickiest to calculate and may need the most refinement. Feel free to add any input into how this could be cleaned up.

1. Find the 500 largest non-profit/not-for-profit institutions either headquartered or providing a physical presence in your metro region.
1A. Don’t commit to the list just yet. Thin it out by eliminating government agencies or any semi-public agency more than 51% controlled by a government body. Also eliminate the presence of any political organizations classified as a 501(c)(4) under the U.S. tax code and any labor unions. Furthermore, eliminate any instances where a nonprofits’ presence is only a mail collection center (a PO box or a donation processing facility either directly operated or outsourced).
1B. For religious organizations, exclude ministerial and houses of worship transactions but include any services provided beyond the celebration of congregants.
1C. So what does it leave? Generally, anything recognized under the law as a nonprofit/not-for-profit entity. That would be: Charities, educational institutions, health and well-being services (including medical centers, many of which are classified as nonprofits), arts institutions, historic organizations, service clubs and grant-making trusts and foundations.
2. Rank these institutions by total assets and classify them by their stated mission.
2A. When calculating medical center figures, only count foundation and physical assets. Exclude payments received and receivable for services performed.
2B. When calculating educational facility figures, exclude revenue from tuition and other expenses borne by students.
3. Ask these institutions to provide a list of their largest transactions received or monies awarded. Rank these by absolute value, in other words not subtracting a grant made from monies earned (a grant award that leaves the metropolitan area will sustain a nonprofit activity somewhere else, so it shouldn’t be counted as a liability against your area).
3A. Exclude individual donations or monies earned through individual donation campaigns. Just leave in large, identified gifts, grants, endowments or the value of donated in-kind items from single sources.
4. Plot out the sources and destinations of these funds. Make a note of the velocity of funds and the purposes they were given.
5. For institutions with a national and international presence, plot out the home city of the top-level headquarters for that organization.

This would be as noncontiguous as the B-2-B example I wrote about in comment No. 31, only this chart is far more fluid. For one thing, the connections are less concrete than the B-2-B index, since these aren’t necessarily bound by transportation access. Second, this chart will change its shape like an amoeba frequently.

There could be an epic disaster, like Hurricane Katrina, where there will be a sudden flow of aid to an area. Second, the sources and destinations of grants will shape even in other times as grant recipients and donors add or subtract services.

What you say about unproductive areas staying unproductive is true regardless of how much tourism they get. And the productive areas don’t have a problem – again, look at the Riviera, or at the California coast. It’s not like with natural resources, where there’s a well-known Dutch Disease afflicting even rich countries that make oil discoveries.

In an unproductive area, a dominant industry tends to crowd out other industries from sprouting.

What happens in an unproductive resort area? An inflow of capital causes the value of a currency to rise, making prices high. Resort areas also often do businesses on first world terms: buying in large quantities, doing business according to contract and setting prices in a strong currency like the dollar, pound or euro.

For native suppliers that manage to set a deal, the resort economy may compete with fulfilling local needs.

A money-making resort area often puts the region on a path of dependence. Public infrastructure will be for the movement of tourists and resort goods. Education systems will likely prop up hotel, restaurant and resort management and vocations.

If the resort economy is seen as vital, there will be reluctance to branch out into other economies that are independent of the dominant tourist trade.

The same goes to tax havens. The Cayman Islands aren’t the best example here. Hong Kong, Singapore, and Monaco have all prospered perfectly well as independent cities with low taxes. Switzerland is a finance haven, and while its growth has faltered recently, it’s not in a resource trap like any of the OPEC countries, which have had negative per capita growth in the last 30 years.

A resort area, per se, has the mirror image of a supply region in economic dynamics. A true supply region, though, has its source of wealth extracted from the area with value added elsewhere. The supply regions don’t benefit from the extraction, and must remain immiserated in order to be an economic participant. It has been an exception, rather than the rule, for supply regions to lift themselves out of the resource curse.

A resort area in a poor region of the world has access to goods and services, labor and capital. Generally, tourists aren’t extracting the scenic beauty of an island paradise or a mountain chalet and taking it back with them. They even tend to be economic oases in what could be lands rife with political and financial instability.

Resort areas are different from the supply regions in that economic value is added on-site, not away in other corners of the world. Tourist areas support a kitchen staff, local entertainers and some locally sourced merchandise.

However, despite the flood of money brought in through a tourist economy, the region remains poor. Five-star accommodations will pay workers reasonably well for the area, but they may still go home and live in squalor.

The money brought in through tourism is often a capital trap. Most of the money is tied up not in labor, but the upkeep of the resort areas. Furthermore, capital will continue to gravitate toward this industry, crowding out any local opportunities for more home-grown, economically dynamic transactions.

The same could be said about tax havens and the financial bubble cities like Dubai or the high-trade-deficit areas you have mentioned.

Aaron, you would be an asset to putting a Metro 500 list together for Indianapolis at least. I’m pretty sure you could build some amazing database architecture to make an endeavor like this possible.

Universities might be doing this kind of research already. See if they have anything you can use.

Dave, the B-2-B index I’ve posited is useful for your business sector but is one piece of your area’s overall economy. It’s more useful for the corporate end, but workers might find the Payroll Division more of use.

Think of these datasets as layers on Photoshop or Illustrator. You can overlap them and see what regions can take shape. You can toggle them on and off. The B-2-B profile for your region may encompass the globe, but there’s still a very important local economy that should not be overlooked.

On another note, I’m not sure why you call resort areas demand-based. In terms of what powers their economy, it’s no different from supply regions: it’s natural resources, whether oil or fertile land or natural beauty. I’m not a trade economist, but I believe one area where there is a difference is trade balance. The OPEC states have some of the world’s highest positive trade balances relative to GDP; small island states, including resort states like the Maldives and free energy states like Iceland, have some of the highest negative balances – see source here.

But one class of true demand-based states, with very high trade deficits, includes the various hotspots of foreign investment. Iceland was one, until the financial crisis. The Eastern European states were others. Those countries are unstable for reasons other than resources – they have no insulation from global finance, which leads them to crash at the first sign of global trouble. The list of European states most impacted by the current recession is almost identical to the list of European states with the highest negative trade balances.