U.S. regions for tech startups
ew research puts four Colorado cities in the top 10 regions in the U.S. with the highest density of high tech startups.
According to a joint study by Engine, a technology research foundation, and the Ewing Marion Kauffman Foundation, Boulder and Fort Collins-Loveland rank first and second among metro regions with the highest ratio of tech startups compared to the national average. Denver comes in at 6th and Colorado Springs ranks 9th. Grand Junction is listed as 19th.
The research defines high-tech startups as new businesses with a high concentration of employees in the fields of science, technology, engineering and math.
The study reports that after adjusting for city size, Boulder has a rate of high-tech business formation that is more than six times the U.S. average. In addition, the report says college towns like Fort-Collins and Corvallis, OR, and smaller cities with a defense presence such as Colorado Springs and Huntsville, AL, are among the nation’s leaders in high-tech startup density.
One of the key findings of the study is that new and young businesses -- not small businesses -- are the engine of job creation in the U.S. and high-tech startups in particular are important drivers of job creation throughout the country. According to the research, high-tech startup job creation is so robust that it more than makes up for the job destruction from early-stage business failures across the private sector as a whole.
"By comparing the high-tech sector with other firms across the economy, we see the job-creating power that growth-oriented technology startups harness, compared with other young businesses,” says Ian Hathaway, an economic advisor to Engine and author of the report. “Observing these trends, it is clear that encouraging the creation of new tech businesses can boost our economy."
According to the report, high-tech firm births were 69 percent higher in 2011 than in 1980. And specifically in the information and communications technology sector, new firm births grew by 210 percent. During the same period, business creation in the private-sector as a whole was down 9 percent.
The report also finds that relative to their share of firms in the economy, high tech is 23 percent more likely than the private sector as a whole to witness a new business formation. In the information and communications technology segment specifically, the number grows to 48 percent more likely.
High-tech startups are becoming increasingly geographically diverse, the report says, while the opposite is true for new businesses across the economy generally.
"In the case of Boulder, a startup community whose evolution I've observed and participated in closely over the past many years, the cultural and economic transformation has been extraordinary," says Brad Feld, co-founder of Boulder's Foundry Group. "While there isn't one, definitive blueprint to building a technology industry, this research can hopefully inspire communities and policymakers to work together to ensure that the spread of high-tech entrepreneurship isn't just a trend, but a long-term phenomenon."
The report claims that each of the high density metro areas has at least one of three characteristics in common:
- They are well-known tech hubs with highly skilled workforces.
- They have a strong defense or aerospace presence.
- They are university cities.
Here is the full list of the top 25 regions with the most tech startups:
- 1. Boulder, CO
- 2. Fort Collins-Loveland, CO
- 3. San Jose-Sunnyvale-Santa Clara, CA
- 4. Cambridge-Newton-Framingham, MA
- 5. Seattle, WA
- 6. Denver, CO
- 7. San Francisco, CA
- 8. Washington-Arlington-Alexandria, DC-VA-MD
- 9. Colorado Springs, CO
- 10. Cheyenne, WY
- 11. Salt Lake City, UT
- 12. Corvallis, OR
- 13. Raleigh-Cary, NC
- 14. Huntsville, AL
- 15. Provo-Orem, UT
- 16. Bend, OR
- 17. Austin-Round Rock, TX
- 18. Missoula, MT
- 19. Grand Junction, CO
- 20. Sioux Falls, SD
- 21. Bethesda-Frederick-Rockville, MD
- 22. Durham-Chapel Hill, NC
- 23. Portland-Vancouver-Beaverton, OR-WA
- 24. Wilmington, DE
- 25. Ames, IA