Over the past thirty years, transnational investment, trade, and government policies have encouraged the decentralization of national economies, disrupting traditional patterns of urban and regional growth. Many smaller cities -- such as Seattle, Washington; Campinas, Brazil; Oita, Japan; and Kumi, Korea -- have grown markedly faster than the largest metropolises. Dubbed here "second tier cities, " they are home to specialized industrial complexes that have taken root, provided significant job growth, and attracted mobile capital and labor.

The culmination of an ambitious five-year,...