The recession brought Orlando tourism down by 4.7 percent and sent housing tumbling; median prices dropped below $100,000 in 2010 after peaking at almost $265,000 in 2007. Unemployment also reached its worse level—11.9 percent in 2010.
"When the two big pieces of your economic pie cease to exist, said Orlando's mayor, Buddy Dyer, "you recognize dramatically the need for diversification."
For Orlando that meant building on its strengths by creating mixed-use clusters around existing industries, such as digital media and biosciences, to generate jobs, further education and attract talent. Already home to 400 digital media companies, the city is developing its newest cluster, Creative Village, downtown.
Video-game maker Electronic Arts' studio and the University of Central Florida's School of Emerging Media are both established there; more digital media ventures, retail, housing, parks and cultural spaces are planned, with the city offering job-creation incentives to high-wage employers and local financial-match dollars for federal grants. Among federal dollars the project has received is a Transportation Investment Generating Economic Recovery II (TIGER II) grant.
"That next generation of smart people are looking for more than just year-round sun and no income tax," said Dyer.
In southeastern Orlando the city has expanded on its strong health-care base. In the past few years, more than $2 billion in construction has taken place by the public and private sector to expand its life sciences facilities at Lake Nona, a 7,000-acre research and residential cluster being developed by private investment company Tavistock Group.
The community's Medical City includes two research centers and three hospitals, with more facilities on the way. Lake Nona, which has been praised by Harvard Business School for its innovation and collaborative process, is projected to create $7.6 billion in economic impact, including 30,000 jobs, by 2017. Among the medical research under way, there are studies on cancer, neurodegenerative and infective diseases, wound-healing, metabolic disorders and cardiovascular issues. One doctor has already identified, for the first time, stem cells that can heal the heart of a mammal in utero after a heart attack.
As the nation has recovered from the recession, tourists have returned to Orlando, with 59 million of them expected this year. And housing is improving, too; the city boosted that industry by offering several initiatives, such as those designed to help spur construction by expediting bid, permitting and planning-review processes.
Orlando unemployment is now down to 6.6 percent. "In the Orlando community we're open to new ideas that can make a big impact," said Thad Seymour, senior vice president at Lake Nona and president of its nonprofit Lake Nona Institute, which devises creative ways to build healthful, educated and sustainable communities. "Nothing holds us back."
(Read more: America's cities on the edge)