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The Most Start-up 'Dense' Area in the U.S.

A new report from Engine and the Kauffman Foundation measures the so-called start-up density around the country. The winners might surprise you.
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Three years ago, Brad Feld, the investor-turned-author who co-founded Techstars in Boulder, Colorado in 2006, mused on his website that Colorado might have the highest "entrepreneurial density" in the entire country. 

Turns out Feld (who's also an Inc. magazine columnist) was onto something.

Back then, he wrote:

During lunch, I reflected some on the number of times I've heard in the past year from people outside of Boulder about how Boulder has become a nationally known entrepreneurial center...

While I was listening to everyone and being proud of the little 100,000 person town I call home, I thought of a new phrase that I hadn't used before: "entrepreneurial density." I wondered out loud if Boulder was the "highest per capita collection of entrepreneurs in the U.S."  I have no idea if this is true but from my travels around the U.S. it feels like something that might be true.

According to a report released today by Engine.is and the Kauffman Foundation, it is true: Boulder has the highest "high-tech startup density" of any metro area in the United States. Fort Collins-Loveland--a metro area about 60 miles north of Boulder--ranks second. And Colorado Springs and Denver both make the top 10. In other words, four out of the top 10 cities on the list are in Colorado. 

Engine's economic advisor Ian Hathaway, who led the report--which is available here--measured start-up density by looking at a couple of factors. First, they qualified high-tech start-ups as those companies with very high shares of employees in the STEM fields of science, technology, engineering, and math. Then, they calculated the number of those start-ups in a region, relative to the average across the United States. 

Silicon Valley and Boston ranked third and fourth, respectively.  

Of course, the ranking is a measure of density--not volume. In terms of venture capital raised, for instance, the Bay Area is still an order of magnitude "bigger" than Colorado. (According to CrunchBase data, the amount of funding raised by start-ups in California in July 2013 was $1.4 billion. Colorado start-ups raised abut $130,000 in the same time period.)

Still, there's something special about Colorado, where a new start-up sprouts up every 72 hours. It's tough to determine the exact factors that make Colorado so appealing for high-tech start-ups, but it's likely a combination of several elements. Richard Florida, the urban studies theorist and author of "The Rise of the Creative Class" recently cited three particular Boulder ingredients that could help explain its start-up density: "talented people and a high quality of life that keeps them around, technological expertise, and an open-mindedness about new ways of doing things, which often comes from a strong counterculture." [Link added for editorial laughs.]

The study doesn't go too deeply into the causes of start-up density, but it does offer economic development folks a chance to see which cities are "doing it right." 

"In the case of Boulder, a start-up community whose evolution I've observed and participated in closely over the past many years, the cultural and economic transformation has been extraordinary," Brad Feld commented as part of the research. "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."

IMAGE: tanakawho / Flickr.com
Last updated: Aug 14, 2013




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