Growing regional inequality is one of the most serious problems affecting America today. Perhaps the most pointed example of this worsening winner-take-all geography is the extraordinary concentration of high-tech startups in just a handful of cities and metro regions across the country.
A , AnnaLee Saxenian of the University of California, Berkeley, showed how the San Francisco Bay Area has been able to move from one technological field to the next: from computer hardware and software to biotechnology, social media, and artificial intelligence. In this way, a broad set of technological capabilities—reflected in a high score on the SCI—are key to the long-term ability of cities and regions to grow and prosper.
But based on their metrics, the current geography of high-tech America is incredibly uneven. The map above shows how U.S. metros stack up on the SCI. Green dots on the map highlight places that score high on the SCI, while brown dots indicate low-scoring metros. With the exception of just two cities, Chicago and Austin, all of the green or blue dots (indicating a high level of startup complexity) are located on the coasts. Indeed, just four coastal superstar city-regions dominate on the Startup Complexity Index: the San Francisco Bay Area (including both the San Francisco and the San Jose metros), New York, Los Angeles, and Boston-Cambridge. Together, they house nearly two-thirds of all high-tech startups in the Crunchbase dataset tracked by the study, while being home to less than 15 percent of the U.S. population.
San Francisco has the highest startup diversity, with nearly a quarter of all startups and advantages in a whopping more than two-thirds of technology fields. New York City is next, with more than 15 percent of startups and advantages in more than 60 percent of high-tech fields. Los Angeles and San Jose each have roughly 9 percent of startups: L.A. has advantages in almost half of high-tech fields, and San Jose in almost 40 percent. Boston has 6 percent of companies and advantages in about a third of high-tech fields. Other significant hubs include Chicago, Seattle, and Austin, each with at least 2 percent of startups and advantages in more than 100 technology fields. Miami, Atlanta, D.C., Dallas, Denver, and Philadelphia have about 1 percent of startups and advantages in 60 to 85 high-tech fields.
The vast majority of metros have few, if any, distinct advantages in startup technology. This includes some talked-about up-and-coming tech hubs like Pittsburgh, Nashville, and Detroit, as well as smaller hubs that have sprung up in college towns like Ann Arbor, Madison, and even the North Carolina Research Triangle. Here, the study provides limited evidence in support for the so-called the “rise of the rest:” the emergence of new high-tech centers in other parts of the nation.
But the geography of high-tech may not be as hard-wired as we think. Greater Boston and the San Jose area were once the unquestioned leaders in startup technology; today they account for just 15 percent of high-tech startups. The past two decades have seen the incredible rise of the three major new tech hubs: San Francisco, New York, and Los Angeles. These places, which had much lower levels of high-tech startup activity back in the 1990s, now account for roughly half of all high-tech startups.
While the current geography of high-tech startups remains highly uneven and winner-take-all, the combination of the deepening new urban crisis of housing unaffordability and economic inequality and the mounting backlash against tech firms suggests that we may be reaching another inflection point in America’s high-tech geography.
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