A new report from the nonprofit Progressive Policy Institute and D.C.-based technology network Technet, says it time for policymakers to recognize and support emerging startup hubs across the country, including Philadelphia, that are “Next in Tech.” The report named Philadelphia as one of the nation’s top 10 emerging vibrant startup ecosystems.
To determine the areas that are “next in tech,” researchers developed the “Metro Startup Economy Index,” which measures the “intensity” of each metro area’s startup ecosystem. The index is calculated by determining the percentage of job postings in a given area that use the word “startup.” That percentage is then normalized by dividing by the median percentage for all metro areas analyzed, according to the report. Indeed.com reports that the percentage of job postings using the word “startup” increased by 60 percent from November 2014 to November 2016, the study says, an indicator that the country’s startup landscape is producing more jobs and spreading beyond the traditional tech metro areas.
The study found that the areas traditionally deemed “startup hubs” — San Francisco, San Jose, Seattle, New York, Boston — were predictably at the top of the index and following right behind these locations were the top 10 “Next in Tech” cities including Philadelphia, Washington D.C., Portland, Atlanta, and Denver.
And because regions that produce more high-quality startups show better economic performance — in 2014, companies in their first five years created 2.2 million jobs, while firms older than five years created just 450,000 jobs — policymakers should reduce barriers to startup formation and encourage their growth, the report concludes.
Here’s how Philly can accelerate its startup economy and further what AOL founder Steve Case calls the “rise of the rest,” according to the report:
- State and local governments should bring together universities and private businesses to create talent pools that attract businesses.
- Policymakers should make it easier for immigrant entrepreneurs to build new companies by instituting a permanent startup visa program.
- National leadership should limit regulatory obstacles that hamper startup growth like strict rules governing crowd funding and investor tax credits.
- Startups should get access to overseas markets, which means policymakers should support cross border data flows and fewer trade barriers.
- Computer Science and STEM should be taught in every school. While students need an emphasis on basic STEM and coding skills, they should also be taught how to start a business.
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