When people like Richard Florida talk about today’s “superstar cities”, the usual suspects include London and New York for finance, the San Francisco Bay Area for tech, Milan for fashion and design, and so on.
And you can certainly find the data to back up these claims. For instance, if you look at venture capital dollars invested, many of these same cities reappear near the top: San Francisco, San Jose, New York, etc.
One city that doesn’t often appear on these sorts of lists, though, is Seattle.
However, clearly something special is taking place in the city. For the second year in a row, Seattle has been named the construction crane capital of America. No other American city comes close right now. (However, Toronto is still #1 in North America.)
At the same time, if you think about all of the companies that have come out of Seattle over the years, you start to realize that maybe VC dollars invested isn’t enough to tell the entire entrepreneurial story.
Venture capitalist Fred Wilson once said on his blog that if you look at dollars in and dollars out, Seattle outperforms – by a lot. And that’s very interesting to me. Is this simply the lasting legacy of Microsoft? Or are there other – transferable – lessons to be learned here?
There’s a lot of talk about how venture capital investment has shifted from the suburbs to cities and how it is also concentrated in certain metro areas. But a new report from the Martin Prosperity Institute has dug even deeper to look at the top 20 neighborhoods (zip codes) in the US for venture capital investment.
Here’s a summary of what they found:
“The top 20 neighborhoods or zip codes for venture investment include nine in San Francisco, five in San Jose, three in Boston-Cambridge (one in suburban Waltham and two in Cambridge close to MIT) and one each in San Diego (close to the University of California, San Diego), Dallas, and New York (close to New York University).”
And here’s the full top 20 list:
Initially I looked at this list and thought that neighborhoods such as Menlo Park and Redwood City shouldn’t be labeled as San Francisco, since they are outside of the county. But technically they still fall within the San Francisco Metropolitan Area.
It’s amazing how San Francisco dominates this list.
I’m always on the lookout for great websites and communities dedicated to cities. And today, thanks to a friend of mine, I found a new one called City Observatory. It’s my new favorite site for city geeks.
They describe themselves as a “data-driven platform for sharing, analyzing and discussing the success of cities.” As soon as I read that, I immediately subscribed. I’m a big believer in using data to elevate the discussions happening around our cities and to cut through the bullshit.
I’m looking forward to digging into more of their articles, but I did already take a look at the first report they published, which is called: “The Young and Restless and the Nation’s Cities”. Click here to download the PDF.
What the report talks about is a demographic group that they refer to as “Young and Restless”, and which they define as being 25-34 years old and having a 4-year degree. And they focus on this group because they see it as critical to driving local economic development.
They’re the next generation who are going to start those companies and drive growth and innovation. And since the data shows that as people age, they become less willing to relocate (which intuitively makes sense), cities today are quickly realizing that they need to capture this group of smart people while they’re still restless (i.e. mobile).
So if this is important, which cities (in the US) are winning right now? Here are the top 10 cities via City Observatory:
Washington D.C. 8.1%
San Francisco 7.6%
Boston/Cambridge 7.6%
San Jose 7.5%
Denver 7.5%
Austin 7.0%
New York 6.6%
Minneapolis 6.6%
Raleigh 6.5%
Seattle 6.1%
The percentage represents the portion of the population that’s 25-34 years old and has a 4-year degree. I’ve just listed the cities here, but in reality they reference the entire metro areas.
Do any of the cities on this list surprise you? None are surprises for me. It’s more or less what I would have expected to see, except maybe for the absence of Chicago (it’s 12th according to this ranking).
Is your city doing enough to capture this group?
Image: Flickr