During the past
few years, everyone from
Forbes
and
U.S.
News to the
Small Business &
Entrepreneurship Council and the
U.S.
Chamber of Commerce – not a left-leaner in the bunch, mind you – has lauded
the Evergreen State as one of the nation's top spots for small businesses, big
corporations, importers, exporters . . . pretty much the whole enterprise gamut.
The specific
criteria vary from source to source, but common elements repeatedly show up.
Among them:
- economic and
infrastructure incentives;
- business-friendly
regulatory climate;
- healthy talent
pool;
- manageable cost
of living;
- access to
recreation;
- pristine
environment; and the state's
relatively low taxes.
That last item
rankles folks who make political points, and sometimes careers, out of crying
about Washington's "punitive" taxes, but what can you do? Facts are facts.
That's why just last month, the non-partisan Tax Foundation ranked Washington
sixth out of the 50 states in its annual
State Business Tax Climate
Index. To clear up any misconceptions, that's sixth from the top, as
in, sixth-best.
Now comes a new
piece of recognition, of a type and specificity that most people probably never
imagined. But the fact that our largest city, Seattle, comes in fourth in a
global
ranking of high-growth technology startup ecosystems is quite a new-economy
coup. Silicon Valley, not surprisingly, tops the list. Next in line are Tel Aviv
and Los Angeles, then Seattle. And who did the Emerald City beat out? Well,
pretty much everyone else. Here's a
link
to the entire list, but notable "ecosystems" placing down the chart include
New York and Boston here in the U.S., and a long list of international tech
hotbeds – London, Toronto, Paris, Sydney, Sao Paulo, Moscow, Berlin and
Singapore, to name a few.
To produce the
comprehensive report,
Startup
Compass (SC) essentially put the entire world under its microscope to judge
"ecosystems" on eight counts – which we'll list here verbatim, along with SC's
description. They're pretty interesting. <
-
Startup Output Index: The startup output
index represents the total activity of entrepreneurship in the region,
controlling for population size and the maturity of startups in the region.
-
Funding Index: The funding index measures
how active and how comprehensive the risk capital is in a startup ecosystem.
-
Company Performance Index: The Company
Performance Index measures the total performance and performance potential of
startups in a given startup ecosystem, taking into account variables such as
revenue, job growth, and potential growth of companies in the startup ecosystem.
-
Mindset Index: The mindset index measures
how well the population of founders in a given ecosystem thinks like a great
entrepreneur, where a great entrepreneur is visionary, resilient, has a high
appetite for risk, a strong work ethic and an ability to overcome the typical
challenges startups face.
-
Trendsetter Index: The trendsetter index
measures how quickly a startup ecosystem adopts new technologies, management
processes, and business models. Where startup ecosystems that stay on the
cutting edge are expected to perform better over time. There's a good chance the
trendsetter index is a leading indicator of the future success of a Startup
Ecosystem. The trendsetter score for example corroborates with the prevailing
excitement expressed about the Berlin and Sydney Startup Ecosystems, while also
aligning with the anecdotal evidence we have received about the conservative
culture and slow pace of adaptation in the Chicago and Tel Aviv startup
ecosystems.
-
Support Index: The support index measures
the quality of the startup ecosystem's support network, including the prevalence
of mentorship, service providers and types of funding sources.
-
Talent Index: The talent index basically
measures how talented the founders in a given startup ecosystem are, taking into
account age, education, startup experience, industry domain expertise, ability
to mitigate risk and previous startup success rate.
-
Differentiation Index: The differentiation
index measures how different a startup ecosystem is to Silicon Valley, taking
into account the demographics and what types of companies are started there.
Since Silicon Valley is the #1 ecosystem it is assumed that other ecosystems
will perform better if they differentiate themselves from Silicon Valley and
establish their own strengths.
Conventional
wisdom says small businesses are, depending on which anatomical metaphor you
prefer, either the backbone or the heart of our state's, any state's, economy.
And technology startups are, at least at the beginning, small businesses. Some
never go beyond that point, and many cease to exist before the ink on their new
stationery is dry. But Microsoft was a startup. Amazon, too. Farther afield,
there's Twitter, and Google, and Zynga, and Instagram (which was recently
snapped up for $1 billion by another former startup called Facebook). These
enterprises and others like them, including the ones that are just a notion in a
future billionaire's brain right now, are STEM in action. They're not the only
part of the new economy – we still need dry cleaners and machine shops and that
great little restaurant that's going in down the street – but they're a
significant part of how Washington can thrive in the 21
st century.
So eat your heart
out, Chicago and Melbourne and Bangalore, and good luck next year.
To read this story in Spanish, please
click here.
