METRICS & MEASUREMENTS
Where are America’s Most Innovative Technology Hubs? Recent study determines who’s on top and where we stand by Mike Hunter
In a story written in March of last year, Scientific American looked at the “magic” that is Silicon Valley, and in its article, “Why Silicon Valley’s Success is So Hard to Replicate,” writer Barry Jaruzelski analyzes local resources, proximity to metro San Francisco and other attributes that are not necessarily unique to other key tech areas around the United States. It seems to be much more than variety and corporate culture. bitly.com/replicate-success
An important question to ask, of late, is, “Who is on top in innovation technology?” because the answer truly can make a difference in local markets that are all vying for the top position — or very close to the top. The good news is, many of the top communities are on top because they are making a concerted effort to compete. The bad news is some, like Phoenix — although they are working hard to compete — are way down on the list. NerdWallet, a website offering accessible online tools to better inform consumers on credit cards, insurance, loans and other consumer expenses, conducts research to help consumers take control over personal finance. Using its strengths to gather data, NerdWallet recently conducted a study to find America’s most innovative technology hubs. Not a huge surprise was the top region selected because of the high number of patents per capita and venture capital funding figures that no other place comes close to. That is the metro area that includes the cities of San Jose, Sunnyvale and Universities and their interest in startups were key Santa Clara (Silicon Valley), which leads all in tech innovation. factors, as every metro area in the Top 10 is located near Only two East Coast places made the Top 10 list: Burlington, a major university. This suggests that higher education Vt., and Boston. and innovation are closely linked, according to the findings NerdWallet determined that Phoenix is the 30th-most of the study and a correlation noted by researchers at innovative tech hub in the nation. Between 2009 and 2013, NerdWallet. there were 1.56 technology-class patents issued for every 1,000 residents. Phoenix also has a high startup density, with NerdWallet nerdwallet.com 1.5 times more new startups for its population size than the national average. Phoenix still has a ways to Cities Where the Action Is go in terms of the venture capital environment. The America’s most innovative tech hubs city has $55.26 in venture capital funding per capita. San Jose, the No. 1 city in the report, has $3,585.68 in Rank Metro area Patents per 1,000 2014 venture Tech Overall and state residents from capital funding startup score VC funding per capita, according to NerdWallet. 2009 to 2013 per capita density The methodology for the study looked at the 1 San Jose, Calif. 27.39 $3,585.68 2.60 80.11 number of utility patents that have a primary classification in classes of technology as defined by 2 Boulder, Colo. 10.20 $963.75 6.30 54.60 the U.S. Patent Classification System which were 3 San Francisco, Calif. 7.44 $3,485.31 2.40 53.70 granted in the metro area from 2009 to 2013. This 4 Corvallis, Ore. 12.28 $131.08 2.00 26.28 is 33.3 percent of the total score. It also looked at 5 Seattle, Wash. 5.40 $333.74 2.40 21.91 venture capital funding per capita in 2014 from the 6 Fort Collins, Colo. 4.91 $42.03 3.00 21.83 National Venture Capital Association, which is 33.3 percent of the total score. Finally, it looked at the 7 Provo, Utah 2.89 $833.52 1.90 20.80 Kauffman Foundation’s information on tech startup 8 Austin, Texas 6.58 $329.56 1.70 19.55 density in each metro area. The density is a ratio that 9 Burlington, Vt. 10.23 $65.74 1.30 19.41 compares new companies in a region to the number of 10 Boston, Mass 4.83 $948.58 1.00 19.40 new companies in the U.S., controlling for population. For example, if an area’s density is more than one, the 28 Rochester, N.Y. 6.05 $21.21 0.70 10.66 area has higher-than-average number of new tech companies. This determines the final 33.3 percent of 29 Phoenix, Ariz. 1.56 $55.26 1.50 9.78 the total score. 30 Champaign, Ill. 2.94 $11.62 1.20 9.46 Source: nerdwallet.com/blog/cities/americas-most-innovative-tech-hubs
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Profiting on innovation requires commercialization. Randall Stross shares the story of one of the most successful programs for entrepreneurs to go from concept to profitability in record time in his book The Launch Pad: Inside Y Combinator, Silicon Valley’s Most Exclusive School for Startups.