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vcdeals-per1000What’s makes for an innovative startup hub? Researchers have been diving into that topic for years, analyzing everything from the existence of large research institutions to the importance of risk capital.

Now, researcher Richard Florida, co-founder and editor at large at The Atlantic Cities, takes a deep look into the topic and finds some fascinating stuff. Most importantly, Florida notes an urbanization trend, with money and talent flowing to city centers.

vc-liberalconservative“Firms want access to talent, and talented people like to cluster in dense urban areas with thick labor markets, abundant amenities and services, and a vibrant social life,” writes Florida in a blog post announcing his new study. “Density is also much more efficient for young companies who want to rent cheap office space and offer employees access to the amenities like gyms, restaurants, and coffee shops that they’d have to provide for themselves on a suburban campus. And these companies can now thrive in smaller urban spaces, as much of tech is increasingly focused on software, apps, and social media, which do not require large campuses.”

Florida also dives into the demographic make-up of these urban innovation zones, noting that they tend to have other attributes. For example, they have a highly-educated workforce, tend to be more liberal in nature and have strong gay and lesbian communities.

dealsper1000Gays and lesbians do not start high-tech enterprises with more frequency, but Florida notes that startups are more likely to be started in places that “are open to new ideas and accepting of different kinds of people.” As to the liberal-conservative divide, Florida writes that communities which voted for Obama are more likely to have burgeoning startup scenes.

In some ways, Florida could almost be describing Seattle — a highly-educated liberal bastion with a strong gay and lesbian community.

And Seattle, as the accompanying charts show, does well in terms of venture dollars allocated on a per capita basis. The city saw 3.3 deals per 100,000 people and $25.8 million invested per 100,000 people — a strong showing but still behind places like San Francisco, Boulder and Boston.

“When combined with walkable, mixed used suburbs, urban centers account for substantial shares of venture capital investment in most leading high tech metros,” writes Florida. “Suburban high tech is not going away — established companies that need large footprints will continue to occupy suburban campuses. But the newest and most innovative developments in the industry are likely to emerge from urban and urban-like locations.”

That’s certainly playing out in Seattle, even though the region boasts one of the largest high-tech campuses in the suburban community of Redmond.

Amazon.com relocated its headquarters to the middle of Seattle from the Beacon Hill neighborhood a few years ago, and it continues to gobble up office space and transform the city. All four of the last tech companies to go public — Tableau, NanoString, Zillow and Zulily — have ever-expanding headquarters in the city. And Seattle’s startup ecosystem is strongly rooted in Seattle, with organizations such as TechStars, SURF Incubator, Impact Hub and Startup Weekend all located in the city.

Suburbs vs. city? In the the Seattle area, it appears that city is winning out.

You can read the full report here.

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