As of May 2020, Silicon Valley was home to 2,000 tech companies — the greatest concentration anywhere in the world. Between 2011 and 2019, Silicon Valley startups received more than $113 billion of funding. Add in an incredible concentration of talent generating and building on innovative ideas plus top tech corporations hungry to gobble up new companies, and it’s been an environment impossible to emulate anywhere else in the world.
But times are changing, and Silicon Valley’s reign as an epicenter of technology innovation is coming to an end. In 2019, startups in the Bay Area saw a decrease in new funding, from $63.6 billion to $45.9 billion, while funding deals outside of Silicon Valley have been slowly increasing in recent years.
Pam Springer, an Ohio-based serial entrepreneur, startup advisor and investor, says there are clear signs that the startup ecosystem is becoming more geographically diverse. “Mass attracts mass, and Silicon Valley no longer has a corner on it,” she says. “When you start to have success, it causes the ecosystem to become denser, and suddenly, others outside of Silicon Valley are invited to the conversation.”
Startups Will Have No ZIP Code
Historically speaking, a frenzy of innovation never settles forever on a single location — think of Detroit in the late 1950s, Italy during the Renaissance and ancient Greece as philosophers laid the groundwork for modern democracy. It takes the right environment to make innovation blossom.
Silicon Valley’s environment is no longer ideal, in part because of the massive inflation in the cost of living over the past decade — the median home price is upward of $1 million, and even a six-figure salary isn’t necessarily enough to put you out of the low-income bracket. People started fleeing the area a few years ago in search of more affordable living, a trend that’s only accelerated with the massive shift to remote work during Covid-19.