Best Cities 2010: Seattle, Wash.

Rain City? We'd say Brain City. Home to a well-educated workforce, a world-class research university, über innovators Microsoft, Amazon and Boeing, and a host of risk-taking, garage-tinkering entrepreneurs, Seattle crackles with creative energy. "We only have two products here: smart people and great ideas," says Mark Emmert, president of the University of Washington.

Those same attributes drive the Seattle economy, which is preparing for takeoff after hitting a few hard bumps over the past several years, especially in real estate, manufacturing, construction and retail. One shiny new prospect: Boeing's 787 Dreamliner, a commercial airplane that the company says flies farther and uses 20% less fuel than similar-size aircraft. This game-changing plane, along with a backlog of orders for older planes and the prospect of a major military contract, forecast clear skies ahead for Boeing as well as the industry. "Aerospace here is huge and growing," says Bill McSherry, of the Prosperity Partnership, a business consortium.

Equally energized is the life-sciences industry, a staple of the Seattle business scene thanks to the University of Washington's billion-dollar-a-year research budget and a cluster of top-flight medical and bioscience centers. The strength of the sector has made Seattle a focal point for global health initiatives, including those of the Seattle-based Gates Foundation and the Obama administration. "We have the greatest concentration of global health activities, in terms of discovery, development and delivery, of any place in the world," says Lisa Cohen, executive director of the Washington Global Health Alliance. "We can't hire fast enough."

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

Clean tech is an ideal fit for a city teeming with engineers, environmentalists, software geeks and scientists. This industry, which includes construction, architectural services, engineering and environmental consulting, grew 4.2% a year from 2002 to 2008 and is expected to grow about 1.4% annually over the next few years, outpacing the economy as a whole, according to the Puget Sound Regional Council.

Seattle-based McKinstry, the giant company that retrofits buildings for energy efficiency and installs energy-efficient systems in new buildings, not only serves as a national model for clean tech but also demonstrates the area's willingness to nurture new ideas. McKinstry recently opened the Innovation Center, an airy, 24,000-square-foot space outfitted with reclaimed timber and glass walls. Here, entrepreneurs can develop their products alongside McKinstry engineers and brainstorm with each other at the in-house wine bar. "It's a place for collaboration," says Elsa Croonquist, managing director of the center.

Seattle's intellectual sizzle has yet to solve all of its problems, which include empty office buildings, stalled construction projects, aging infrastructure and a collective tendency to debate rather than decide. From his office aerie on the 57th floor of the municipal tower, Stephen Johnson, acting director of the Seattle Office of Economic Development, points to the ailing manufacturing center to the south and the mostly vacant skyscraper opposite his window. "Other areas have been deliberate in how economic development occurs," Johnson says. "We've been more laissez-faire. We realized with this recession that our city and region need to be much more aggressive in business development."

Seattle is revising its tax, zoning and permit policies to make them more business-friendly, says Johnson. Meanwhile, this sophisticated Pacific Rim city has other qualities to recommend it, including great food, a glorious setting, an outdoorsy culture, enough rain to keep the locals' complexions looking dewy -- and, yeah, plenty of smart people.

VIDEO: Take a Guided Tour of Seattle