Twenty Top Entrepreneurial Ecosystems Across America
June 10, 2020
Elizabeth MacBrideSenior Contributor Forbes.com
An analysis from a new think tank, Heartland Forward, identified 20 top entrepreneurial ecosystems across America based on the share of employment by small firms, and the number of college-educated employees in those firms.
The analysis found that those two factors explained a surprisingly large amount of job growth in metropolitan and micropolitan areas. “There’s no other single measure that explains more of the job growth,” said Ross DeVol, CEO of Heartland Forward, a new think tank focused on economic development in the middle of the United States. I interviewed him early this month.
“Many economic development officials know this and believe this. But there hasn’t been enough strong, compelling evidence to show politicians that this is how you maintain a vibrant economy.”
The Heartland Forward study found employment grew 15% faster in metropolitan areas with strong entrepreneurship ecosystems between 2010 and 2017.
“If young firms employ more people at a greater rate we can expect more overall growth of a region. And this has been the intent from a policy perspective to boost startups in many places,” said Siddharth Vedula, assistant professor in the Entrepreneurship division at Babson College.
Some of the metropolitan areas with strong entrepreneurial ecosystems were not a surprise. To create the ranking, the authors of the Heartland Forward study looked at the combination of small firms’ share of employment in the metro area and the number of college-educated employees at those firms.
San Jose, Calif., home of Silicon Valley, is at the top. Boulder, Colo., has benefitted from a National Laboratory, a venture capital industry, and an outdoors lifestyle that has drawn newcomers. Resort communities in Florida have drawn population from elsewhere, driving high demand for goods and services, DeVol said. That means they have a high number of small firms, even if those firms don’t have a particularly large number of college-educated employees.
1. San Jose, Calif.
2. San Francisco, Calif.
3. Boulder, Colo.
4. Oxnard, Calif.
5. Madera, Calif.
6. Provo, Utah
7. Punta Gorda, Fla.
8. Naples, Fla.
9. New York, NY
10. Cape Coral, Fla.
The Heartland Forward analysis also found that metro areas where the small firms employed a high number of college graduates saw particularly fast job growth. The micropolitan areas with knowledge-intensive entrepreneurial ecosystems were:
1. Los Alamos, NM
2. Hudson, NY
3. Summit Park, Utah
4. Vineyard Haven, Mass.
5. Torrington, Conn.
6. Keene, NY
7. Tullahoma-Manchester, Tenn.
8. Shelby, NC
9. Concord, NH
10. Breckenridge, Colo.
Los Alamos was the secret home to atomic bomb development during World War II. The area has transformed into a research hub for scientific fields ranging from supercomputing to medicine since the end of the Cold War.
Communities and individual can play a big role in driving entrepreneurship. Summit Park, Utah ranks third among micropolitan areas for its dynamic economy. A local group, Park City Angels, has made over 1,200 investments, mostly in Utah, since 2008, the report notes.
How To Recover From COVID-19
The report also offered some ideas for communities that want to use entrepreneurship to help spur jobs growth as the economy recovers from COVID-19:
• Support young firms with training that increases management expertise, peer networks and access to finance.
• Forge partnerships with research facilities and national laboratories, emphasizing connections to life sciences and the ability to commercialize innovations.
• Look beyond traditional software-related industries for areas in which to build ecosystems and hubs that support fast-growing firms. In particular, DeVol said, telecom might be a good bet as rural broadband could become a priority.
• Draw people from established economic hubs. Powerful people – whose power may take the form of money or social capital — end up creating entrepreneurial ecosystems around themselves. If you get enough of those people, such as the clusters that exist in Boulder, Colo., or Jackson Hole, Wyoming, they can drive company creation and growth.