One of the most profound real resets from the Great Recession has been the movement of talent, capital and companies back to America’s cities and dense, transit-accessible inner suburbs. It shows up in venture capital, too, according to a new study from the Martin Prosperity Institute.
Richard Florida’s team did a deep analysis of 2011 data for 11 metro areas and the combined regions of the San Francisco Bay Area and Washington-Baltimore. Seattle netted more than 66 percent of the metropolitan area’s venture capital investments and walkable suburbs attracted another 10.7 percent.
The trend was widespread, but especially pronounced in Austin (88 percent), New York (nearly 81 percent), San Diego (85.5 percent) and San Francisco (nearly 52 percent). Florida wrote in the Atlantic Cities:
Firms want access to talent, and talented people like to cluster in dense urban areas with thick labor markets, abundant amenities and services, and a vibrant social life. Density is also much more efficient for young companies who want to rent cheap office space and offer employees access to the amenities like gyms, restaurants, and coffee shops that they’d have to provide for themselves on a suburban campus. And these companies can now thrive in smaller urban spaces, as much of tech is increasingly focused on software, apps, and social media, which do not require large campuses.
The chief downside is shrinking affordability, not only the much publicized situation in the Bay Area, but also in Seattle, as my colleague Sanjay Bhatt wrote about Sunday.
But it is here to stay. The zenith of the far-flung, car-dependent office “park” is over, even if such developments will remain the backbone of many metros. The challenge for leaders will be finding ways to keep cities livable. Seattle and Eastside leaders should read the report and realize each other isn’t the enemy — the competition is coming from the best cities.
And Don’t Miss: How American cities waste space and money on too many parking spaces | BusinessWeek
Today’s Econ Haiku:
Wall Street goes bonkers
Over Michael Lewis’ book
He must have it right