Startups Are Abandoning Suburbs for Cities With Good Transit - CityLab

July 23, 2019

 

 

A new study finds that new business startups are choosing cities with good public transportation options over the traditional suburban locations.

 

During the late 20th century, startup companies were quintessentially suburban, in standard-issue office parks dubbed “nerdistans.” Think of Silicon Valley, the North Carolina Research Triangle, and the suburbs of Seattle where Microsoft is located.

 

But high-tech startups have become increasingly urban in the past decade or so, gravitating to dense neighborhoods in downtown San Francisco and Lower Manhattan, which have supplanted Silicon Valley as the nation’s leading centers for such startups.

 

Now a new study finds a close connection between transit access and startups of all types—not just high-tech startups. The study, by Kevin Credit from the Center for Spatial Data Science at the University of Chicago, uses advanced spatial econometric techniques to examine the connection between transit and business startups in five cities. Two of them, San Jose (Silicon Valley) and Austin, are well-documented startup hubs with underdeveloped transit infrastructure; two others, Philadelphia and Cleveland, have reasonably well-developed transit systems but low rates of startup activity; and Boston has both a high level of startup activity and an established transit system.

 

He tracks startups using detailed data from the National Establishment Time Series (NETS, a private provider of data on U.S. businesses) on location, industry sector, and year of birth, classifying businesses by four industries: retail, services, and food; high-tech; producer services; and a broad knowledge-based category spanning information, finance, real estate, and management. The study calculates the proximity of startups at the block level at 0.25 and 0.5 mile increments from three types of transit: commuter rail, light rail, and heavy rail, in the census blocks for all counties in each Metropolitan Statistical Area (MSA) containing rail transit stations.

 

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