The Innovation Frontier No Longer Ends at Silicon Valley: Forbes 500 Inc. Companies Come from all over the United States
September 26, 2012 Leave a comment
Forbes is famous for its annual publications ranking the private sector by a variety of means- revenue, innovation, and growth among them. The lists themselves are fascinating, but even more interesting is looking into the details that explain why some companies manage to top the list and others do not make the final cut. An equally interesting question is that of where these companies come from; what is their geographic location and how does that factor into their ranking? Are the most successful companies grouped together in clusters like Silicon Valley, thriving in big cities Boston, or incorporating in business-friendly Delaware? Do the same geographic areas claim a significant portion of the list each year?
The Ewing Marion Kauffman Foundation has conducted research to answer these questions in a work entitled “The Ascent of America’s High-Growth Companies”. This study demonstrates significant geographical diversity in Forbes’ fastest-growing privately-held companies in terms of revenue between 1982 and 2010. The research “reveals that high numbers of fast-growing firms are concentrated in unexpected regions and industrial sectors”. Conclusively, this interactive data map allows the viewer to visually compare company density by location and witness the overall the geographic diversity.
Kauffman Foundation researchers Yasuyuki Motoyama and Jared Konczal have discussed some of their surprising findings from the study. First is that of all the large metropolitan areas, Washington, D.C. has the “highest concentration of Inc. firms, both in absolute number and per capita (normalized by population)” demonstrating the growth of a strong government services cluster in the last few decades. Second, typical innovation hotspots are usurped by clusters of companies in areas such as Salt Lake City, Utah, Indianapolis, Indiana, Buffalo, New York, and Louisville, Kentucky. Lastly, the researchers found that though many variables such as patents per capita, access to venture capital investments, and ivy league-level universities significantly influence the placement of innovation centers in the United States, only one relationship matters for the largest-growing firms— having a highly-skilled labor force nearby.
The Kauffman Foundation’s research ends at 2010, but the 2012 Forbes list is out. In an ever-changing economy like the United States companies are always adapting to stay efficient and relevant for the consumer, so the geographical densities are likely different but following the same trend of the last thirty years. It appears that Americans have crossed another frontier; entrepreneurs no longer have to grow their businesses in Silicon Valley, but have the resources to create revenue from anywhere. In a world increasingly without borders, innovation and business seem to be able to grow everywhere.
Posted by: Sophia Higgins