< Previous84 JULY 2024 SITE SELECTION from Richard Sams, CEO of London-based MOHARA, the global startup studio organization with offices also in in Cape Town, Bangkok, Manila, Guadalajara and Toronto: “I am actually using StartupBlink data as the basis of our expansion strategy into the U.S. I say it’s central to our growth decisions.” Each year the firm publishes the Global Startup Ecosystem Index Report, ranking ecosystems using more than 40 parameters. The organization’s global map of all 147,326 startups allows you to zoom in and out to see the numbers of startups thriving across the report’s universe of 100 countries and 1,000 cities. The magnification gradations are fine enough that you can ascertain clustering patterns at various megaregional and sub-regional levels — i.e. the U.S. Northeast, the Bay Area, the more than 10,000 startups in and around London, etc. — while also seeing how smaller communities outside the major startup hubs are contributing to the whole. The StartupBlink rankings of the 1,000 cities include their home countries, but not their states. I examined just the top 100 and found that 34 of them were U.S. metros. California led the way with five of those, the top three of which make our composite ranking: San Francisco (1), Los Angeles (4), San Diego (22), Santa Barbara (88) and Sacramento (92). After our rankings were prepared, both StartupBlink and Startup Genome issued fresh rankings just at press deadline time for this issue, with Tel Aviv and Paris exchanging positions in StartupBlink’s ranking but nothing else changing much in the top 10 except for the Bay Area increasing its score. However, that top ranking could be in peril if a LinkedIn post from StartupBlink CEO Eli David Rokah after a week in Silicon Valley is to be trusted. The positives? “This place is a flywheel,” he wrote. “Everyone who is building on scale is here with impressive campuses of innovation.” And an open mentality lends itself to making connections. The negatives? “The number of people in downtown San Francisco with drug or mental health issues is SITE SELECTION JULY 2024 85 overwhelming,” he wrote. “There is a clear failure in providing those individuals a path to a better life or ensuring the safety of residents who live in this reality daily. This situation is unsustainable and will have consequences for the startup ecosystem.” Moreover, he continued, the sense of connection risks being broken by a “frankly, horrible” public transportation system. The bottom line, he wrote, is that the Bay Area “risks accommodating only the ultra-rich and those on the fringes of society who can ignore the current system. The middle class might realize that the value of services and safety they receive compared to the cost they pay is irrational … Silicon Valley remains the best startup ecosystem globally. However, many ecosystems globally are doing their best to replace or offset its dominance. If you are already winning massively, what’s the point of helping them? New York is waiting patiently.” Startup Genome’s fresh findings (again, updated from the rankings performed for the composite chart above) include Silicon Valley still at the top, STARTUP GENOME’S TOP 10 STARTUP ECOSYSTEMS IN 2023 1. Silicon Valley, California 2. London, England, United Kingdom 3. New York, New York 4. Los Angeles, California 5. Tel Aviv, Israel 6. Boston, Massachusetts 7. Beijing, China 8. Singapore 9. Shanghai, China 10. Seattle, Washington86 JULY 2024 SITE SELECTION followed by a tie for second between New York and London. More findings: • Seoul moved up three spots to No. 9, and Tokyo has entered the global Top 10 for the first time, marking the most significant improvement among the Top 10 ecosystems. • “Europe is the most represented region in the Emerging Ecosystems Ranking, with a 42% share in the Top 100 Emerging Ecosystems, followed by North America with 27%.” That includes Madrid’s jump up by 12 positions, making it the No. 1 Emerging Ecosystem. Meanwhile, the Greater Lausanne Region, home to IMD and a top-ranked smart city (see Smart Cities, p. 56) moved up 16 positions, reaching No. 11 in the Emerging Ecosystems Ranking. • “Mexico City has shown impressive growth, reaching the 21-30 range in the Emerging Ecosystems Ranking from the 41-50 range in 2023.” STARTUPBLINK’S TOP 10 STARTUP ECOSYSTEMS IN 2023 1. San Francisco, California 2. New York, New York 3. London, England, United Kingdom 4. Los Angeles, California 5. Boston, Massachusetts 6. Beijing, China 7. Shanghai, China 8. Bengaluru, India 9. Tel Aviv, Israel 10. Paris, France SITE SELECTION JULY 2024 87 PitchBook’s VC Ecosystem Rankings compare global cities based on the size and maturity of their startup networks. “The list is based on a scoring system that uses PitchBook’s proprietary data on private companies,” Pitchbook says. “Development and growth scores are based on data related to deals, exits fundraising and other factors from the last six years.” The rankings score cities based on the size, maturity and growth rates of their VC hubs to help stakeholders identify areas of interest. San Francisco remains in the pole position, Pitchbook found. An analyst note remarked, “While 65% of the hubs with the highest growth rates are in Europe, only one European city landed among the top 20 most developed VC ecosystems.” Meanwhile, Dubai is No. 1 by rate of growth. Emerging Entrepreneurs Hail from Already Humming Hubs The National Minority Supplier Development Council (NMSDC) in April announced the ninth cohort of its Emerging Young Entrepreneurs (EYE) program, a nine- month experience designed to “provide the next generation of minority entrepreneurs (ages 19-35) with skills, tools and strategies to start or grow their innovative businesses.” When I got their list of 50 young U.S. founders, I immediately asked the NMSDC for their locations. It turns out that two-thirds of the 50 could be found within the top 30 startup ecosystems listed in our global index. Top EYE hubs? Eight of the 50 can be found in the Atlanta metro area, including the communities of Smyrna, Dacula and Stone Mountain. Seven more hail from the nation’s capital region, including locations in Silver Spring and Bowie, Maryland, and Reston, Virginia. Five are based in the Big PITCHBOOK’S VC ECOSYSTEM TOP 10 1. San Francisco, California 2. New York, New York 3. Beijing, China 4. Shanghai, China 5. Los Angeles, California 6. Boston, Massachusetts 7. London, England, United Kingdom 8. Shenzhen, China 9. Seoul, South Korea 10. Tokyo, JapanApple region, including entrepreneurs in Rahway and Paramus, New Jersey. And three come from the Los Angeles area, including one each in Irvine and Alhambra. Just as intriguing are the locations where the remaining 17 young entrepreneurs are located. Judging by their home regions’ performance in our overall startup ecosystem index, it could be said that emerging startups are coalescing in emerging startup locations. Charlotte (No. 96 in our composite index) Las Vegas (No. 90) and Minneapolis-St. Paul (No. 42) claimed two EYEs each. One comes from Dallas, Texas, which just missed out on our top 30 at No. 31. Others could be found in these communities, some of which are no doubt hatching new ecosystems as we speak (Site Selection composite rankings in parentheses where the area ranked in one of the three contributing indices): • Columbia, South Carolina • Norwalk, Connecticut • St. Louis, Missouri (127) • Providence, Rhode Island (215) • Detroit, Michigan (68) • Nashville, Tennessee (94) • Baltimore, Maryland (91) • Richmond, Virginia (158) • Virginia Beach, Virginia • Glenpool (Tulsa), Oklahoma The EYE cohort members will compete in a pitch competition at the 2024 Annual Conference in Exchange taking place in Atlanta in October. Detroit’s startup ecosystem figures to be further energized by the very grand reopening of Michigan Central Station in June, six years after its acquisition by Ford for restoration. With 640,000 sq. ft. of future retail, hospitality, event and collaborative innovation spaces, “The Station will support the 30-acre Michigan Central innovation ecosystem by accommodating larger tenants and established companies, attracting and retaining technology talent and drawing in diverse businesses,” said a Ford release announcing a reopening celebration featuring such musicians as Diana Ross, Jack White, Common, the Detroit Symphony Orchestra and Big Sean. “The landmark will also be a stop on Detroit’s greenway plan, uniting dozens of local neighborhoods across the city to create a more connected Detroit.” Ford’s completion of a six-year restoration of Michigan Central Station as “the centerpiece of the Michigan Central technology and cultural hub located at the gateway between the historic Corktown and Southwest Detroit neighborhoods,” symbolizes Detroit’s emergence as a “next-generation” startup hub in a place with generations of innovation to its credit already. Photo courtesy of Ford 88 JULY 2024 SITE SELECTION90 JULY 2024 SITE SELECTION Get On the Bus for e Best of Texas A journey through the communities of the TexasEDConnection by ADAM BRUNS adam.bruns@siteselection.com TEXAS ECONOMIC DEVELOPMENT CONNECTION INTELLIGENCE REPORT S ongwriter Paul Simon put it simply: “Hop on the bus, Gus.” So did novelist Ken Kesey: “You’re either on the bus or you’re off the bus.” A bus tour announced in June by Day One Experts, in partnership with Texas Economic Development Connection and TAC Brokerage and Consultant, exclusively invites international Certifi ed Commercial Investment Member (CCIM) Institute members to explore the vibrant economic Founded in Waco, Dr. Pepper was bottled for years in Mount Pleasant in eastern Texas, where restored murals celebrate a heritage as unique as its taste. Photo courtesy of TexAmericas Center; cover photos: Getty Images For more information about e Best of Texas Bus Tour and to register, CCIM members should visit dexperts.com/texas-tour. SITE SELECTION JULY 2024 91 landscape and cultural richness of Texas via “The Best of Texas Bus Tour” October 1-5, 2024. The concept has worked well for the Revolution organization led by Steve Case as part of its “Rise of the Rest” efforts to show investors startup energy and innovation away from the coasts. And it comes on the heels of this summer’s SelectUSA Investment Summit in Maryland, designed to whet the appetite of international investors. “Participants will engage with top economic developers, community leaders, and industry innovators,” the announcement stated, as they traverse the Gulf Coast, Upper East Texas, the DFW Metroplex, and Central Texas with highlights that include visits to the new TI chip manufacturing plant, Toyota headquarters and various cultural sites. In a sense, it combines the best of a profession (CCIM certified) with the best of economic development: Texas and its metros have ranked at or near the top for many years in Site Selection’s annual Governor’s Cups, Top Metros and other rankings. “This tour is more than just a sightseeing trip; it’s a deep dive into the economic heart of Texas,” said Super Dave Quinn, CEO of Day One Experts. “We’re thrilled to offer this unique opportunity to CCIM members, providing them firsthand knowledge of Texas’ potential for business expansion and investment.” TexasEDConnection member communities (see a full directory on p. 97) know a thing or two about business expansion and investment. Approximately 30 towns, counties and metro areas belong to the organization dedicated to matching small to medium-sized businesses with Texas towns and cities. A search of those communities in Site Selection’s Conway Projects Database — which qualifies corporate end-user facility location and expansion projects by capital investment (at least $1 million), new jobs created (at least 20) or new square footage (at least 20,000) — found more than 60 projects had landed in TexasEDConnection territories since January 2023. For those whose details are available, the sum Upon completion, Subaru of America’s multi-purpose expansion project in Coppell, Texas, will total 500,600 sq. ft., including 30,000 sq. ft. of new office space (Dallas Business Center), and a 170,000-sq.-ft. expansion of its existing regional distribution center. Photo courtesy of Subaru of Americatotal of those investments is well over $1.6 billion. Consider this document an unfolded road map to local prosperity. Texans Like Keeping Score Anyone familiar with the Lone Star State knows how they love their sports. In that spirit, here’s the project scoreboard report for TexasEDConnection communities: Top performers Coppell and Wylie are part of the Dallas-Fort Worth- Arlington metro area that also includes TexasEDConnection towns of Melissa, Rowlett and Sanger, bringing the metro’s project tally to 11 overall. But the borderzone community of Laredo tops them all by a long shot with 20 projects, most of them in that small to medium-sized sweet spot befitting a region of 267,000 people — a total that TOP TEXAS ECONOMIC DEVELOPMENT CONNECTION COMMUNITIES BY PROJECTS SINCE JANUARY 2023 COMMUNITY PROJECT COUNT Laredo 20 Coppell 6 Kilgore 6 Waco 5 Huntsville 3 Mount Pleasant 3 Buda 2 Wylie 2 Denison 2 Texarkana 2 Sulphur Springs 2jumps to more than 667,000 when you consider the folks in the sister city of Nuevo Laredo, Tamaulipas, Mexico just across the border. And consider them is exactly what the Laredo Economic Development Corporation does: “Known locally as Los Dos Laredos, Laredo and Nuevo Laredo are actually one city divided only by the Rio Grande,” the LEDC website explains. “Originally settled by the Spaniards in 1755, Laredo/Nuevo Laredo became the first ‘official’ Port of Entry on the U.S./ Mexico border in 1851. Now, the Laredo Customs District handles more trade than the ports of Southern California, Arizona, New Mexico, and West Texas combined.” Transport infrastructure converging in and emanating from Laredo only makes its case stronger: “Laredo is the only U.S./Mexico border city strategically positioned at the convergence of all land transportation systems,” says the LEDC. “Mexico’s principal highway and railroad leading from Central America through Mexico City, Saltillo, and Monterrey, the industrial heart of Mexico, converge at Laredo to meet two major U.S. rail lines, Interstate 35 and other roads which fan outwards to the urban centers and seaports of Texas and beyond.” The largest projects in the area since January 2023 are a $22 million, 100- job investment from Missouri-based Mid-Continent Steel & Wire and a $30 million, 30-job distribution facility from Charlotte-based RXO. Fittingly, Mid- Continent, one of the nation’s largest producers of nails and agricultural fencing, is owned by Deacero, a family- owned company that got its start in a small warehouse in Monterrey, Mexico, about a 2.5-hour drive from Laredo. Texas Gov. Greg Abbott appeared at the ribbon-cutting for the company’s Next >