It’s no surprise when San Jose and San Francisco — the engines that power the tech industry in Silicon Valley and the San Francisco Bay Area — dominate a list of innovative U.S. cities. But what about bucolic Corvallis, Oregon? Or quaint Burlington, Vermont, population 42,284?
These cities also made the cut for America’s Most Innovative Cities, NerdWallet’s guide for understanding where the impact of tech funding, innovation and startup activity is the strongest. Resident for resident and startup for startup, these cities have an outsize impact.
Silicon Valley is by far the leader. With a high number of patents per capita and venture capital funding figures that no other place comes close to, the metro area that includes the cities of San Jose, Sunnyvale and Santa Clara leads all in tech innovation.
The West dominates. Only two East Coast places made our top 10 list — Burlington, Vermont, and Boston, Massachusetts.
Universities are key. Every area in our top 10 is located near a major university, suggesting that higher education and innovation are closely linked.
Factors we considered
- Number of patents per 1,000 residents. We looked at the number of patents granted in the technology class by the U.S. Patent and Trademark Office in each metro area from 2009 to 2013 to find the areas with the most inventive residents.
- Financial support for innovation. We examined the amount of venture capital funding an area received per capita in 2014 to understand if entrepreneurs have access to the capital they need.
- Economies of agglomeration. Agglomeration — nearness of location — is used here to describe the benefits when companies, like startups, cluster together. The higher the density of startups, the more innovators can benefit from common labor pools and idea sharing.
For similar studies and more, visit NerdWallet Cities.
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<a href='http://nerdwallet.com' ><img src='https://www.nerdwallet.com/blog/wp-content/uploads/2015/02/Final.graphic.innovativecities.jpg' alt='America's Most Innovative Tech Hubs'/></a><br/> Via:<a href='https://www.nerdwallet.com'>NerdWallet</a>
America’s most innovative tech hubs
1. San Jose, California, metro area
Money talks when it comes to innovation in the San Jose area. With $3,585.68 of venture capital funding per capita pouring into companies in the area in 2014, there is no question that the technology capital continues to grow and attract inventors and innovation. Silicon Valley boasts 27.39 tech-class patents for 1,000 residents, the highest in our study. The valley’s U.S. Patent and Trademark Office, designed to give West Coast entrepreneurs closer access to government regulators and education, will permanently occupy part of San Jose’s City Hall after renovations are completed this year.
2. Boulder, Colorado, metro area
If startups beget startups, Boulder area residents should expect to see even more growth in innovation. Boulder came through with the highest density of startups in our study — six times the national average. The area is the home of TechStars, a startup incubator similar to Silicon Valley’s Y Combinator. Boulder still has a ways to go before reaching the venture capital funding levels of startups in Silicon Valley, but it ended 2014 with a strong $963.75 in funding for every 1,000 residents, the third highest in the country.
3. San Francisco, California, metro area
San Jose’s neighbor to the north enjoys a well-established technology community and a strong flow of venture capital funding — the second highest in our study at about $3,400 per capita. The area has a history of attracting the adventurous, from the forty-niners of the Gold Rush era to the hippies in the 1960s. Today, SoMa and other neighborhoods have gained reputations as powerful startup incubators.
4. Corvallis, Oregon, metro area
Oregon State University provides a deep pool of educated workers to fuel innovation at established companies, including Sarepta Therapeutics and Hewlett-Packard, which bases its printer cartridge prototyping here. Startups also thrive in the area, with a density of 2.0, or double the national average, according to data from the Kauffman Foundation. The foundation focuses on new technology companies, which they say become job-creation machines. The Corvallis area had an unemployment rate of 5.1% in November 2014, lower than Portland, Eugene and the statewide figure.
5. Seattle, Washington, metro area
With household names such as Amazon and Microsoft dominating the region’s employment scene, the metro area can sometimes seem like the land of the giants. But it’s still very much a player in attracting and sustaining a thriving community of startup entrepreneurs. The density of tech startups in the area is more than double the national average.
6. Fort Collins, Colorado, metro area
Fort Collins and its flagship Colorado State University campus (with more than 30,000 students) lands ahead of San Jose and San Francisco in terms of tech startup density, with three times the national average, or a score of 3.0. (San Jose and San Francisco’s scores were 2.60 and 2.40, respectively.) This area also wages a mighty battle (like nearly all startup-centric areas) to retain engineering talent locally and eagerly takes on the fight against the lure of Silicon Valley.
7. Provo, Utah, metro area
Home to Brigham Young University, one of the largest private universities in the nation, the Provo area is another city that benefits from having a large community of young, well-educated workers. While the area clocked the lowest number of patents for 1,000 residents in our top 10 at only 2.89, it still receives above-average amounts of venture capital funding. The national spotlight recently fell on a Provo startup, Cerebral Success, which focuses on brain health, and it earned a chance to compete on the TV show “Shark Tank.”
8. Austin, Texas, metro area
This unique area is a major center for the tech industry with 1.7 times the national average of startups. The metro area also has attracted offices of Apple, Google and Facebook. The Austin area owes its success both to its creative spirit and top-tier university, the University of Texas at Austin. The city becomes the epicenter of the tech-creative community each spring with the South by Southwest Interactive Festival, which brought 55,000 people to Austin last year. This year, SXSW is slated for March 13-17.
9. Burlington, Vermont, metro area
Centered around the largest city in Vermont, the Burlington metro area isn’t all that large — Burlington has only 42,284 residents, and about a quarter of them are students at the University of Vermont — but it does have a strong culture of entrepreneurship. The Ben & Jerry’s ice cream franchise began here in a renovated gas station. This Northeast tourist destination makes the list because of its high number of tech-related patents, the third highest for 1,000 residents in our top 10 list. The area also enjoys a slightly above-average density of tech startups.
10. Boston, Massachusetts, metro area
Boston emerged from the Great Recession with a flurry of startup activity, moving it beyond its fame as the geographic genesis of Facebook. Today, Boston is known also as the home of Wayfair and Care.com, a popular matching service for parents and caregivers. While its density of tech startups is only average, Boston commands almost the same amount of venture capital funding per capita as the second place on our list, Boulder, with over $900 per capita pouring into the city. This interest in investment is fueled by Boston’s world-class universities, notably Harvard and MIT.
America’s most innovative tech hubs
|Rank||Metro area and state||Patents per 1,000 residents
from 2009 to 2013
|2014 venture capital funding per capita||Tech startup density||Overall score|
|1||San Jose, CA||27.39||$3,585.68||2.60||80.11|
|3||San Francisco, CA||7.44||$3,485.31||2.40||53.70|
|6||Fort Collins, CO||4.91||$42.03||3.00||21.83|
|12||Ann Arbor, MI||8.31||$189.79||1.40||18.76|
|14||Santa Cruz, CA||9.95||$10.02||0.90||16.40|
|16||Salt Lake City, UT||2.11||$291.34||2.00||15.35|
|19||San Diego, CA||5.31||$250.71||1.20||14.58|
|21||Boise City, ID||6.66||$2.88||1.30||14.46|
|23||Colorado Springs, CO||1.51||$1.02||2.30||13.52|
|27||Santa Barbara, CA||3.25||$309.92||0.90||11.00|
|31||Sioux Falls, SD||0.65||$12.31||1.70||9.35|
|32||Des Moines, IA||1.87||$24.51||1.40||9.34|
|38||Kansas City, MO||1.65||$44.56||1.30||8.72|
|39||New Haven, CT||2.48||$368.81||0.50||8.46|
|43||San Luis Obispo, CA||1.28||$192.63||1.00||8.04|
|44||State College, PA||2.14||$16.80||1.10||7.98|
|45||Santa Rosa, CA||2.12||$248.94||0.70||7.97|
|48||New York, NY||1.61||$211.44||0.80||7.53|
|50||Baton Rouge, LA||0.37||$0.46||1.40||7.29|
Here’s how the score for each area was calculated:
1. Number of utility patents, having a primary classification in classes of technology as defined by the U.S. Patent Classification System, granted in the metro area from 2009 to 2013 from the U.S. Patent and Trademark Office. This is 33.3 percent of the total score.
2. Venture capital funding per capita in 2014 from the National Venture Capital Association. This is 33.3 percent of the total score.
3. Tech startup density in each metro from the Kauffman Foundation. The density is a ratio that compares new companies in a region to the number of new companies in the U.S. controlling for population. For example, if an area’s density is over one, then the area has higher than average number of new tech companies. This is 33.3 percent of the total score.
Infographic by Sydney Buffman.
Downtown Boulder, Colorado, image via iStock.