The secret to 'new' startup hubs

Some surprising U.S. cities are becoming startup hot spots. What's their secret?
Written by Tyler Falk, Contributor

While it might seem like Google Fiber spurred a new startup scene in Kansas City and other smaller metropolitan areas in the United States, the reality is startup hubs don't just pop up overnight, according to researchers.

A new paper from the Kauffman Foundation suggests that the secret to these "new" startup hubs with growing entrepreneurial programs? A long-established technology sector.

"What Kansas City's growing tech density demonstrates is that the metropolitan area had a strongly growing technology sector prior to recent milestones, such as the advent of the high-speed Internet service potential of Google Fiber," said Dane Stangler, director of Research and Policy at the Kauffman Foundation and the paper's author.

But Kansas City does stand out when it comes to a comparative ranking of "startup density" in 1990 and 2010. Many cities with high startup densities more than two decades ago are still among the startup leaders today. Kansas City is one of the few metro regions to move into the top 20 regions with the highest cluster of startups.

While nearby colleges and universities also play a role in spurring entrepreneurial activity in a region, "the most fertile source of entrepreneurs is the population of existing companies." And while this may seem obvious, the paper says, "this insight has not yet seeped into economic policymaking, economic development strategies, or the rapidly expanding entrepreneurship industry."

Read more: Kauffman Foundation

[h/t Bloomberg Businessweek]

Photo: Flickr/MRHSfan

This post was originally published on Smartplanet.com

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