May 14, 2016
There is an ongoing argument about the state of innovation in the United States. Some would argue that it’s dying a slow death, while others would argue that it’s growing and evolving and we’re becoming more innovative than ever before. It’s hard to measure innovation in a scientific way, but that doesn’t mean we shouldn’t try.
The U.S. Chamber of Commerce Foundation, the Chamber’s FreeEnterprise.com, and 1776 just released the second annual Innovation that Matters report. The report examined the top 25 U.S. startup hubs and looked at which ones are attracting top talent, getting the most investments, developing specializations, creating density, connecting the community to build cultures of innovation.
Of the 25 cities they looked at, Boston, San Francisco, Denver, Raleigh-Durham, and San Diego came out on top. They are the cities that are considered the best poised to be successful in our evolving digital economy. I’m sure no one is surprised to see San Francisco on this list, but Boston beat it out for the top spot due to its lack of a cohesive community and declining quality of life for residents.
Last year’s study hypothesized that that modern innovation economies depend on open and collaborative networks. That innovation thrives in major urban centers because more people living closely together means more minds collaborating, more people to test ideas on, and larger pools of potential customers. This year’s study confirmed that and dug deeper into how city leaders can apply this research to secure an innovative and prosperous future for their citizens.
“We built 1776 to help entrepreneurs succeed wherever they live because we know they need a strong base of support in their communities,” said Donna Harris, cofounder & co-CEO of 1776. “Our research over the past year shows how cities can build that infrastructure and draw on national networks to support not only startups, but the innovative companies that have always powered their regions.”
A few key takeaways from the report:
- Cities that dominated different industries in the 20th Century may not be in the 21st: A lot of cities that are strong in a particular city are not stepping up by becoming digital leaders in the same industry. For example, Portland has been a healthcare hub for many years but it is not a digital health hub.
- Economically struggling cities are creating new opportunities for themselves: Young, educated people are flocking to cities like Pittsburgh and New Orleans, mostly for the cheap cost of living, but once they get there, they are building their own communities of innovation and collaboration.
- Healthcare is the biggest new digital industry: Health had the most startup activity across the board. When looking at the combined education, energy, health and smart city industries, health comprised 60 percent of all new startups.
The report also provided tips for what city leaders can do to keep their cities at the forefront of technological change:
- Understand the inevitable trajectory of the digital economy
- Imagine a new future that includes history; where technological possibility intersects with legacy assets and unique strengths
- Focus beyond startups to include corporations, universities, nonprofits and local government
- Work proactively toward a new governing framework that marries technological possibility and regulation
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