A convergence of factors in information technology and capital markets have helped propel a boom in venture capital-backed startups in recent years. While well-established regions such as San Francisco-Silicon Valley, Boston-Cambridge, and New York account for the lion’s share of startup activity and funding, significant evidence suggests that a non-trivial amount of early stage capital is dispersing geographically throughout the United States.
As startups begin to proliferate beyond the traditional technology centers, regional and national leaders are increasingly looking to these companies as a source of economic growth. As they do, officials are confronted with the reality that innovation-driven entrepreneurship differs markedly from traditional small business activity, which means that cultivation strategies are radically different.
In this regard, regional development leaders need to recognize that ideas, talent, capital, and a culture of openness and collaboration are all vital to regional startup communities, which are best thought of as innovation ecosystems involving complex interaction among entrepreneurs, investors, suppliers, universities, large existing businesses, and a host of supporting actors and organizations.