Urban Start

Previous research has identified the clustering of high-tech industries, entrepreneurial start-ups, and venture capital across metropolitan areas. Using detailed ZIP code data on start-up activity and venture capital investment, this research tests three hypotheses informed by urban theory on the clustering of innovation, entrepreneurship, and high-technology industry: (1) that start-up activity and venture capital investment will concentrate in distinct microclusters within metro areas, (2) that a substantial level of start-up activity and venture capital investment will cluster in dense urban neighborhoods or ZIP codes, and (3) that the clustering of start-ups and venture capital investment will vary by industry or type of technology. The authors find evidence to support all three. Start-up activity and venture capital investment are concentrated in a relatively small number of ZIP codes in the United States, the majority of which are in dense urban neighborhoods, and this clustering varies by industry and type of technology