Trends 2013 Preview: Cities, States Invest in High-Tech Hubs

Eager to attract investment and spur startup activity, city and state officials launched entrepreneurship programs, high-tech R&D centers, and sector-specific facilities as part of the innovation hub trend in 2013.

Research suggests that cities and regions with strong, established tech sectors tend to produce more startups. For example, a white paper from the Kauffman Foundation found the recent adoption of entrepreneurship programs in many cities is more an indication of the underlying strength of the region and its base of talent on which those programs can build rather than a cause of startup activity.

Using an appendix of the top metro areas by startup density in high-tech and ICT sectors for 1990 and 2010, the study examines the relative performance of the areas over the past 20 years in terms of high-tech entrepreneurship. Specifically, the author wanted to find out what areas saw the biggest increases or decreases in high-tech startup density, compare relative performance by different size MSAs, and discover whether or not the top metro areas identified for 2010 were the same as in 1990. Findings indicate many areas currently considered new startup hubs actually have either a history of strong technology sectors or experienced strong growth among technology startups over the past two decades. Read the paper.

Many of the announcements for new tech hubs this year came from areas where a large concentration of such companies already exist. However, some of the examples are from regions not considered tech hot spots that are trying to gain traction.

Last month, New York Gov. Andrew Cuomo announced plans to build a state-of-the-art campus to house high-tech and advanced manufacturing companies as part of the Buffalo High-Tech Manufacturing Innovation Hub. Two California-based companies will invest $750 million each and the state will contribute $225 million to establish infrastructure at the site. The companies are moving major parts of their operations to the new hub.

Hoping to turn downtown Albuquerque into a high-tech R&D hub, officials at the University of New Mexico (UNM) and the city of Albuquerque are trying to raise enough funds to acquire facilities for the Innovate ABQ initiative. The project has secured $6.5 million, including bond funding from the city, a donation from the New Mexico Educators Federal Credit Union, and a grant from the U.S. Economic Development Administration. UNM's Board of Regents will vote on a proposal to invest $13 million in the project, which is modeled around the Florida Innovation Hub, reports the News Observer. Under the plans, UNM's Science and Technology Corp. would locate its operations at the new site, create its own single-member liability company to oversee tech transfer through Innovate ABQ, and form a nonprofit organization to administer the downtown site with public- and private-sector partners.

Following several months of debate, the Little Rock Technology Park Authority Board agreed on downtown Little Rock as the location to create a technology corridor. Funding for the project was approved in 2011 by taxpayers who voted to funnel $22 million from sales tax proceeds for initial infrastructure. Board members are split on a vision for the tech park with one side advocating a campus-like center for university research-driven biotech and nanotech commercialization while the other side wants a core building in an urban neighborhood with startup incubators, reports the Arkansas Times.

Officials involved in the N2 Innovation Initiative hope to transform areas in Newton and Needham, MA, into an innovation hub similar to Boston's Innovation District, reports Boston.com. The project is still in the planning phase, with suggestions including incubator-type space for startups and more places to socialize, such as coffee shops and restaurants. Another goal of the project is to bring back the spirit of Boston's original Route 128. Officials aim to forge connections with local colleges along the 128 beltway, the article states.

In October, California Gov. Brown signed AB 250 to expand the state's Innovation Hub centers, or iHubs. The legislation formally establishes the program and the state's network of 12 iHub centers within the Governor's Office of Business and Economic Development and creates a new account within the state Treasury for collecting private funds to spend on the centers. The iHubs leverage assets such as research parks, technology incubators, universities, and federal laboratories to provide an innovation platform for startup companies, economic development organizations, business groups, and venture capitalists.

Earlier this year, a startup technology hub called 1776 launched in downtown Washington, D.C., as an outgrowth of Startup D.C., a local division of the Startup America Partnership. 1776 serves as a global hub for startups tackling major challenges in education, energy, health care, government, and other critical industries. Although billed as a "hub," 1776 also provides co-working spaces within its campus and officials plan to launch a three-month accelerator program.

Look for SSTI's 2013 trends report in January 2014.