The 7 Most Innovative Cities

Patents, venture capital, and startups are the signs of success when it comes to the tech sector. Which cities to the best job of creating innovation-friendly environments?

The US technology sector has in recent years been one of the brightest stars in the nation’s economy. According to a new report by CompTIA, the sector employs more than 6 million Americans, and created 129,000 new jobs between 2013 and 2014 alone.

Statistics like that have prompted a number of cities to launch initiatives aimed at growing their tech sectors, including incubators to help startups get off the ground and economic incentives to get burgeoning companies to locate in the city.

The personal finance website NerdWallet recently took a look at the cities doing the best jobs of becoming technology hubs. The list includes a number of predictable cities, but is also includes lesser-known metropolitan areas. One other surprising finding? The top cities are entirely on the West Coast. Indeed, of the Top 10, only 2 cities—Burlington, VT, and Boston, MA—are in the Eastern half of the US, and they placed ninth and tenth, respectively.

To compile its list, NerdWallet looked at 3 statistics: the number of patents (per 1,000 residents) originating from that city from 2009-2013, the amount of venture capital funding per capita in the city in 2014, and the “tech startup density,” a measure of how many new companies formed in the city. The startup density metric comes from the Kauffman Foundation.

What follows are the top 7 cities on NerdWallet’s list.

Provo cracked the top ranks of the list thanks largely to its venture capital funding. At $833.42 in VC funding per capita, the city is bested only by handful of other cities. It also boasts a relatively strong startup density, well above the national average. The city is home to large tech firms including genealogy site Ancestry.com, and the online survey company Qualtrics.

Image by Ken Lund/Creative Commons License

Fort Collins is one of 2 Colorado cities on the list. We’ll get to the other one in a few moments. Fort Collins is home to Colorado State University, and its tech startup density is 3 times the national average. That’s enough to offset a very low $42.03 in VC funding per capita. Large tech companies in the city include processor firm AMD and computer-maker HP.

Image by Travis Swan/Creative Commons License

This one is likely no surprise to techies. After all, Internet retail giant Amazon makes its home in Seattle and software behemoth Microsoft is just a few miles down the road in Redmond. Seattle has strong scores in all 3 metrics used by NerdWallet to make its rankings. The city had $333.74 in VC funding per capita—a good score, though significantly lower than the smaller city of Provo.

This western Oregon city might be a surprise to many readers. However, it bears similar traits to other cities on the list. Its home to Oregon State University and one of its largest employers is HP. The city boasts a robust 12.29 patents per 1,000 people during the years used for this study, 2009-2013.

Image by Doug Kerr/Creative Commons License

San Francisco is a giant of the tech industry, tallying a staggering $3,485.31 in venture capital per capita in 2014, according to NerdWallet. The list of companies calling San Francisco home contains too many to name, though its startup density is far from the highest on the list, at 2.4, or just more than double the national average.

The highest-ranked Colorado city on the list is also best known for its university, the University of Colorado. However, NerdWallet notes that the region’s TechStars startup incubator has been very successful at launching firms, creating a startup density 6 times the national average, and 10.20 patents per 1,000 people.

Image by Brian Boardman/Creative Commons License

Silicon Valley tops the list, a fact that will come as no surprise. However, some of the numbers might be. San Jose is the only city with more VC funding than San Francisco ($3,585.68 per capita), and its residents booked 27.39 patents per 1,000 people. Adobe Systems, Cisco Systems, and Ebay are all based in the city.

To read NerdWallet’s complete list, including data for the top 50 metro areas, visit their website.