Free Enterprise Staff  | June 6, 2016

Does Your City Have What it Takes to Become the Next Silicon Valley?

Editor’s Note: The U.S. Chamber of Commerce’s annual America’s Small Business Summit starts next week in Washington. Check back each day this week for summit previews and speaker interviews, and follow along next week via the ASBS homepage and the Twitter hashtag #IAmSmallBiz for updates and live-stream events.

Silicon Valley, some have pointed out, was once little more than orchards and farmland, while Detroit, Cleveland and Pittsburgh have each had their eras at the forefront of American innovation. In other words, the national landscape of economic prosperity and technological prowess is ever changing. Today, on the cusp of another technological revolution, many have speculated over which American cities will emerge as the country’s premier innovation hubs in this new digital age.

One recent study serves up some important clues.

The 2016 Innovation That Matters report—released last month by 1776, Free Enterprise and the U.S. Chamber of Commerce Foundation—examined 25 major American cities and analyzed their readiness to thrive in a digital economy. What we learned through interviews with entrepreneurs in each city was that business leaders in every urban center are making concerted efforts to cultivate startup ecosystems and foster innovation. However, some have had more success than others, and every city still has ample room for improvement.

Some of the most interesting insights we gleaned from the study include:

  • Our country’s current technology hotbeds—Silicon Valley, Boston and New York City—are still leading the way in terms of overall startup activity, but they have mounting competition from some emerging cities. Denver, Nashville, San Diego and the Raleigh-Durham area in North Carolina, for instance, all ranked high on our list of the most well-positioned startup and innovation economies, and none of them are showing any signs of slowing down any time soon.
  • Being a tech town doesn’t inherently make you a pleasant town. Case in point, we discovered that Silicon Valley remains a draw for tech startups despite its poorly-rated quality of life for residents. Conversely, budding tech hubs like Denver and Raleigh-Durham climbed the rankings in large part because their high quality of life is attracting talented innovators.
  • One area where every city can evidently improve: Building relationships between local startups and established companies. In nearly every city the report examined, entrepreneurs lamented the support (or lack thereof) they receive from local companies and civic institutions. In fact, only 32 percent of those surveyed said that they receive support from established companies.

Next week, entrepreneurs and small business owners from many of these cities will descend on the nation’s capital for the U.S. Chamber of Commerce’s America’s Small Business Summit. We’ll kick off that three-day event with an in-depth discussion about the Innovation That Matters report and what entrepreneurs and city leaders can do to better foster innovation and business growth in their communities. For more information about the summit, check out the ASBS homepage here.