2nd Annual High-Tech Hot Spots

High tech is not just the language of Silicon Valley anymore. There are 49 other hotbeds with your tech start-up's name written all over them.

These days when someone says "start-up," they mean high-tech. Nationwide, there's a feverish rush to create the next hot tech start-up, the new Yahoo! or eBay (and do note the word "nationwide"). High-tech entrepreneurship has spread well out of Silicon Valley, and as the new millenium dawns, few areas of the United States aren't focused on tech. Vivid proof: In this year's ranking by Dun & Bradstreet (D&B) and Start-Ups, the Silicon Valley area doesn't even place in the top 10.

Sure, the Valley is still the planet's most techcentric slice of real estate-D& B estimates 100 percent of the business activity around San Jose is high-tech related-and it's home to the biggest tech names around: Intel, Hewlett-Packard, Sun, Oracle and more. But between the treacherously high cost of real estate (in some parts of the Valley, "fixer-upper" homes start at $1 million, and office rents are no cheaper) and a drum-tight labor market, many start-ups are launching elsewhere.

So the race for tech start-up capital is wide open. What's it take to become a hotbed of tech entrepreneurship? Experts wrangle over the exact ingredients, but there's general consensus that to be fertile turf for start-ups, a region needs several things: lots of brains, supported by good universities that churn out a quality labor force; investment cash, and that money could come from government programs, venture capitalists or angels; ethnic diversity-the more scramble a region, the tastier the tech omelette; and a supportive government-as much as that means a government the erects few hurdles that thwart start-ups.



 

It hurt in 1959 when Texas had to change the wording of its state song, "Texas, Our Texas," to edit out "largest," as Alaska had claimed that spot. In its wisdom, the state legislature scratched out "largest" and stuck in "boldest," and, OK, they produced a really boring "boldest and grandest, withstanding ev'ry test." But nowadays, Texas has every good reason to sing its song, because it can claim five of the top 10 tech hot spots: Austin (#1), San Antonio (#2), Fort Worth (#4), Dallas (#8) and Houston (#10). Wow! Maybe it's time to kick back with a longneck Lone Star and learn the rest of the words to "Texas, Our Texas."

Check out the complete list of the top 50 high-tech hot spots.

Texas may be in the lead, but it cannot claim a monopoly. Among the leaders, New Jersey, for instance, claims #6 (Middlesex/ Somerset/ Hunterdon counties) and #11 (Monmouth/ Ocean counties). California owns #13 (San Jose), #16 (San Francisco) and #18 (Orange County). Florida, too, has multiple top 20 towns-Orlando (#5) and Ft. Lauderdale (#19).

What may be most exciting about this year's ratings is the geographic spread. That's why the big lesson from the D&B rankings is that wherever you are, it's safe to think start-up. Today, tech is everywhere.

Want sharper insights into precisely which regions are shining? Read on for snapshots of some of this year's highest-ranked cities.

How did we create this list?

You think our ratings are screwy? Argue with Dun & Bradstreet, the folks who put them together for us. (They didn't use Tarot cards or a Ouija board, either.) This was serious number crunching, with the final scorecard shaped by two key sets of numbers:
1) The percentage of businesses in the region that count as high-tech.
2) The percentage of those businesses that qualify as entrepreneurial start-ups.

D&B looked at 60 MSAs (metropolitan statistical areas) that qualify as large (more than 1 million residents) and another 79 that are midsized-between them, these categories include every major city in the nation and many minor ones, too. For its raw material, D&B used its voluminous business information file, which includes pretty much every company around. So some regions may dislike these rankings-but they are the facts, just the facts.

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This article was originally published in the November 2000 print edition of Entrepreneur with the headline: 2nd Annual High-Tech Hot Spots.

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