Tuesday, July 24, 2012

US Economic Geography Of Startups

For your startup, you'll need access to financial capital, talent, and experience. Generally, this favors established geographies such as Silicon Valley. Forces of agglomeration dominate the Innovation Economy. Other considerations are leaking into the conversation. The new geography of entrepreneurship:

However, small towns do have their advantages. For starters, you’re almost certainly looking at a lower cost of doing business. And, as Sorenson and Dahl’s study suggests, you’re also much more likely to have a community to rally around both you and your startup. ...

... As startup communities continue to sprout up in areas such as Durham, N.C. and Pittsburgh, Pa., organizations like American Underground and AlphaLab are there to help innovative technology companies launch quickly and successfully. By providing work space, mentoring, seed capital, and other resources for aspiring entrepreneurs, they make it possible to focus on launches instead of leases.

Pittsburgh isn't the next Silicon Valley. There can only be one.The point is that the Innovation Economy is beginning to diffuse, as opposed to continuing to agglomerate. One doesn't have to be in the Bay Area or Boston to succeed.

But don't push this story too far. The Pittsburgh boom does not mean we can stick a fork in Silicon Valley. As the Rust Belt makes plain, dominance takes decades to unwind. The descent is gradual, with an occasional spectacular collapse.

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