According to a report, high-tech investment is now attracted to urban centers in the U.S.
Examining startup formation and venture capital data across the U.S., “Startup City: The Urban Shift in Venture Capital and High Technology” by Richard Florida and the Martin Prosperity Institute (MPI) at the University of Toronto’s Rotman School of Management, found that city centers accounted for more than half of all venture capital investment in a majority of major U.S. regions.
According to the The Florida and his MPI research report, the San Francisco Bay Area — which includes greater San Francisco and the Silicon Valley — accounted for more than 4 in 10 of all venture capital dollars (a total of $11 billion) invested across the entire United States with San Francisco leading (with $7 billion).
New York City represents the third largest center for venture capital financed startups, attracting $3 billion in 2011 with nearly 80% of this, $2.4 billion, invested in the city itself.
College towns like Austin, Raleigh-Cary in the North Carolina Research Triangle, Boulder, Ann Arbor, and Lawrence, Kansas attract venture capital as well.
Venture capital investment is also associated with levels of innovation (measured patents per capita) and concentration of high tech industry.
The amount of venture capital also follows the geography of talent, being correlated with the percentage of adults who are college grads and the percentage of the labor force holding knowledge-work jobs, and is associated with the diversity and openness of metros, with markers of diversity being immigrants and gays and lesbians.
Finally, the report found that the center or main cities accounts for more than 80% in New York, Austin and San Diego, for two-thirds in Seattle, roughly half in greater Washington D.C. and Baltimore and for 46. 5% in Chicago, for 20% or less in greater Boston, greater LA, Dallas, Philadelphia, and San Jose.
The full report can be downloaded here
FinSMEs
01/04/2014