A combination of factors is drawing people to cities like Sydney. Credit:Peter Braig There is a global trend for the most innovative, productive industries, and the best educated people, to converge on cities that are knowledge and tech hubs. This has helped transformed the economies of Australia's two biggest cities over the past two decades. Regional GDP estimates released this month by urban economist Terry Rawnsley of SGS Economics and Planning found two powerhouse knowledge industries – financial services and professional services - now account for 25 per cent of the Sydney's economic output and 21 per cent of Melbourne's. Other knowledge-intensive industries including business services, IT and education (especially in Melbourne) have helped drive growth. These firms are increasingly clustered in the vicinity of the CBD and employ some of Australia's most productive workers. Weaker job prospects elsewhere

Ecomomic growth in regional Victoria has been way below Melbourne's for the past decade. Credit:Jesse Marlow Rawnsley warns that traditional sources of employment outside the big cities, including regional manufacturing, are in decline. Demand for new mining-related employment has also been weak since the end of the resources boom. Average annual economic growth rates in regional NSW and Victoria during the past decade have been way below Sydney and Melbourne. It means there are both "push factors" encouraging workers to leave regional areas as well as "pull factors" luring them to cities, especially the prospect of relatively well-paid jobs. The vibe

Big cities offer things other than employment that are increasingly in demand, such as high-ranking universities, top restaurants, entertainment venues and cultural institutions like museums. Rawnsley says people are prepared to pay to live in the big cities not only because they get access to jobs and services but also because of "the vibe you don't get elsewhere". Richard Florida, an American urban studies expert, writes that big cities have become places where talented, well-educated people "feel they need to be". Younger people The work opportunities available in Sydney and Melbourne attract young people - the median age in both cities is already below the national figure and way lower than in many regional areas. That means higher fertility rates and greater economic dynamism. Despite high housing costs, big cities remain a magnet for overseas migrants. Net overseas migration in Victoria and NSW reached all-time highs last financial year and a big share of those new arrivals headed for Sydney and Melbourne. A virtuous cycle

The economic dynamics favouring big cities are self-reinforcing. Across the world they are bringing together educated, ambitious people dubbed the urban "creative class" by Richard Florida. Loading As these people share ideas, raise capital and start businesses it stokes demand for even more jobs and amenities. In turn that attracts even more ambitious, well-educated people. It is a cycle that promises to compound the advantages of big cities over time. And that means the economic fortunes of Sydney and Melbourne are likely to become increasingly detached from many other parts of Australia.