C alifornia, it is often noted, accounts for more than a tenth of the national economy. That’s true–but somewhat misleading. The "California economy" is not evenly spread across the state, but rather it is driven by a few metropolitan areas. The Los Angeles and San Francisco metropolitan areas are responsible for more than half the state’s economic clout. Along with San Diego and San Jose, they together contribute 72 percent of the state’s GDP. True, if California were its own country it would have the eighth largest GDP in the world, but if these four metros alone were a separate nation, they would outpace India, Mexico, South Korea, and Australia.

Two other economically powerful states, Illinois and New York, are even more dependent on their metro powerhouses, with Chicago and New York each constituting more than three-quarters of their state’s GDP. (The New York metro actually powers two states: the portions of the metropolitan area in New York account for 75.7 percent of that state’s GDP, and the chunk of the metropolitan area across the river in New Jersey accounts for 77 percent of Jersey’s GDP). Texas and Florida likewise each get 80 percent of their economic heft from the handful of major metros within their borders.

Though our economic development policies don’t reflect it, America doesn’t really possess a national economy, or even a collection of 50 state economies. Instead, America’s long-term prosperity stands or falls on the more local prosperity of its 363 distinct, varied, clustered, and interlinked metropolitan economies, dominated by the 100 largest metros–many of which cross county and state jurisdictions and incorporate multiple city centers, suburbs, exurbs, and downtowns in a way that the old hub-and-spoke model of urban geography never did. In that sense, America is quite literally a "MetroNation," utterly dependent on the success of its metropolitan hubs.

From the hundreds of square miles that constitute contemporary London to the sprawling Brazilian city-states of Sao Paulo and Rio, metros are the new norm in global economic development, shaped by twenty-first-century forces of globalization, innovation, and cultural diversity. These forces assign enormous value to a relatively small number of factors–infrastructure networks, industrial innovation, human capital, the quality of place–and then reward those nations and places that are best able to marshal and align those assets. And those places are, increasingly, metros–pulsating zones of urban, suburban, and exurban synergies and exchange that revolve around cities. Metros–and not only their constituent individual cities, suburbs, or isolated municipalities–are therefore one of the most critical places where federal policymakers should focus their attention and resources as they seek to restore prosperity to our nation.

Yet here is the problem: While America is more metropolitan than ever, the nation’s policies and structures rarely match economic reality. As a nation, we remain fixed in old arrangements, established decades ago and kept in place by bureaucratic inertia and entrenched political interests. Such a misunderstanding of contemporary urban structures inevitably leads to bad public policy decisions. Take as an example the nation’s crumbling infrastructure, now finally in the public eye. We should be spending money on metropolitan infrastructure, such as new transit lines or the maintenance and upgrade of existing roads and bridges, because it gives the best return on investment, the most bang for the buck. And yet the federal government sends the overwhelming bulk of national infrastructure funds to states, not metros. Given the vagaries of state politics, state departments of transportation in turn tend to scant metro investments in favor of building brand-new roads in far-flung places. Money that could be fueling the metro economic engine ends up widening a rural highway.

We can no longer afford this mismatch. As the nation gathers its energies to emerge from the current rattling recession, President Barack Obama and Congress need to re-imagine the relationships between the federal government, states, and localities to more fully realize the potential of metropolitan America. Washington must lead in areas that transcend the reach of local action and require national vision, direction, and purpose–areas such as the provision of world-class interstate road and rail links, investments in science and basic research, immigration reform, and the creation of a framework for controlling greenhouse gas emissions. At the same time, Washington needs to get past its focus on states and empower metro areas–often made up of dozens of independent governments–to work closer together and begin asserting themselves as coherent, if widespread, entities. And finally, Washington and all levels of government need to maximize their performance by deploying information, standards-setting, and data to improve decision-making and problem-solving.

America can no longer pretend that it is a single economy, nor can it imagine that it is a nation of independent, small towns, punctuated by large but isolated urban centers. It must embrace its metropolitan future–and all the wrenching change that entails.

The New Metro Reality

Strictly speaking, a metro is a core urban area of more than 50,000 people, the surrounding county, and the adjacent counties that are economically and socially connected, as measured by commuting patterns. (In the 1950s, when commuting data was less reliable, connections were measured by phone calls.) That bare definition suggests that a metropolitan area is essentially a big city and its surrounding, subordinate suburbs. In the 1940s and 1950s, metropolitan areas were likely to be a simple hub-and-spoke system, with cities that were geographically, economically, and psychologically central to their surrounding region. Cities were related to, and interdependent on, their surrounding suburbs, but they were also largely self-contained, with their own diverse economies and geographies.

But as the decades have passed, and people and then jobs have moved beyond city borders, it no longer makes sense to think about, say, New York City without thinking about northern New Jersey, or Chicago without looking to Joliet. The Office of Management and Budget, which sets the metropolitan area definitions, and the Census Bureau no longer even refer to central cities but instead to "principal cities," in an acknowledgment that there is no single "center" in many metropolitan areas. What we casually refer to as the New York metropolitan area is formally the "New York-Northern New Jersey-Long Island NY-NJ-PA" metropolitan area; Chicago is "Chicago-Naperville-Joliet, IL-IN-WI." Unwieldy as they may be, those bureaucratic handles encode the boundary-jumping, state-spanning, increasingly complex reach of metropolitan life.

In the Chicago metropolis, for example, the real economic and social geography stretches from the hustle of the downtown Loop to the leafy suburban neighborhoods of Oak Park to the prairie landscape of Goose Lake to the employment center of Schaumburg and to the satellite cities of Aurora and Waukegan. Cook County, home to Chicago, draws in more commuters than any of the other counties in the region, but it also sends more commuters out than any other county. And it’s the Chicago metro area, not the city itself, that is the real international business hub. Chicago proper has only 16 percent of the foreign-owned companies that have headquarters in the Chicago region and only a third of the local businesses with international subsidiaries. The rest are in the suburbs.

And increasingly, these metros are what propel the American economy. Chicagoland and the other 100 largest metros in America, in this respect, represent just 12 percent of the nation’s land area but generate two-thirds of U.S. jobs and three-quarters of the nation’s output. Almost two-thirds of the population lives in the 100 largest metros, including 85 percent of the nation’s immigrants and 77 percent of its minority residents. Surprisingly, half of all Americans who live in rural areas (which are defined by population density) also live within the boundaries of metropolitan areas (which, recall, are defined by economic and social connections). There is no longer a rural-metropolitan dichotomy; there’s a rural-metropolitan overlap.

What is more, metropolitan areas contain and aggregate key drivers of the nation’s prosperity. Ports and airports in the largest 100 metros handled 75 percent of all foreign seaport tonnage, 79 percent of all U.S. air cargo weight, 92 percent of all air passenger boardings, and 95 percent of U.S. public transit miles traveled. The largest 100 metros produced 78 percent of all patents, attracted 80 percent of NIH and NSF research funding, and received 94 percent of all venture capital funding in 2005. Similarly, metros are the crucial stewards of U.S. human capital, as they encompass two-thirds of major U.S. research universities, 72 percent of adults with a post-secondary degree, and 75 percent of workers with graduate degrees.