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Post-Covid U.S. Tech Economy: Top 20 Cities Venture Capital 2021

Bloomberg CityLab | Richard Florida | Mar 9, 2022

Top citires venture capital U.S - Post-Covid U.S. Tech Economy:  Top 20 Cities Venture Capital 2021Even as the U.S. seems to be getting back to some semblance of normal, the fallout from the Covid-19 pandemic continues to reshape the ways Americans live and work. The rise of remote work gives people of means and education the freedom and flexibility to consider a broader range of places. Some believe the pandemic is also upending the geography of innovation, with techies, entrepreneurs and venture capitalists shifting away from superstar hubs like San Francisco and New York to up-and-coming ones like Austin and Miami.

See:  Startup Genome: Canada Ranks 14th in The Global Startup Ecosystem Report 2021

But a look at the data suggests this narrative is overstated. Many cities across the U.S. have seen a surge in tech investment and employment. As overall investment in innovation has surged in the U.S. over the last several years, more U.S. metro areas are indeed starting to benefit, with stronger startup ecosystems and job growth.

Venture capital

To get a clearer picture of what’s happening, I delved into data on the geography of venture capital investment with my University of Toronto colleague Karen King. Venture capital invested in startup companies provides a useful marker of commercially relevant innovation, measuring the actual dollar value of investment in new enterprises that create new technologies and products. We used Pitchbook data to identify the distribution of venture capital investment in high-tech startups across U.S. metropolitan areas and to chart the change in that investment from 2012 to 2021, as well as in the more recent, pandemic period of 2019 to 2021.

Add it up, and just three mega-regions — the Bay Area; the Northeast corridor from Boston to Washington, D.C.; and Southern California — account for nearly 80% of all U.S. venture capital investment.

20 U.S. Venture capital cities 2021 - Post-Covid U.S. Tech Economy:  Top 20 Cities Venture Capital 2021

See:  Alternative forms of capital will be key to develop sustainable economic systems

Austin, Miami, and the rise of the rest

This is not to say that the rest aren’t rising. A recent report by Steve Case and his colleagues at Revolution, an investment firm focused on supporting startups outside of Silicon Valley, found huge gains over the past decade in venture capital investment going to places like Nashville (480%), Tampa (460%), Salt Lake City (410%), and Dallas (400%). To some degree those gains reflect the enormous overall rise of venture capital investment across the country, which grew sixfold from 2011 to 2021. This huge wave of venture capital has enabled the development of larger and more viable startup ecosystems across a much broader range of locations.

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