The US has long been the global powerhouse in innovation and entrepreneurship. But since the Covid-19 pandemic, and the popularisation of remote working in the tech industry, there has been a notable shift. The number of US cities ranked among the top 1000 global start-up ecosystems has fallen from 383 in 2020 to 252 in 2023, according to StartupBlink’s 2023 Global Startup Ecosystem Index.

However, the US continues to lead in the number of cities ranked in the index. The four biggest US tech hubs — the San Francisco Bay Area, New York, Los Angeles (LA) and Boston — made up about two-thirds of venture capital (VC) deal value in 2023, according to PitchBook-NVCA Venture Monitor. 

Despite headlines about the terminal decline of the big coastal hubs, our research suggests the climb of rising ecosystems may be slowing. San Francisco’s experience reveals much about the current macro environments of start-up ecosystems due to a halt in funding, making it harder for start-ups that rely on VC to survive. 

San Francisco dominates the critical artificial intelligence (AI) cluster. Many successful companies, such as OpenAI and DataBricks, are based there. The ecosystem’s total score, 3.4-times higher in 2020 than that of its closest competitor, New York, has seen a gradual decrease — it fell from 2.9-times higher in 2021 to 2.5-times in 2022. As of 2023, this gap has stabilised at 2.4-times that of New York. This exemplifies the cooling off of rapidly emerging start-up ecosystems and the resilience of established leaders.

New York is also in a league of its own. Despite some talent leaving the city for other, cheaper hubs, New York remains a dominant tech ecosystem — its score is nearly double that of third-placed LA. 

New York, with its outstanding fintech sector and having the most important stock exchange globally, makes it the only city that can compete with San Francisco in the long term. As we move down the list, the score gaps with these coastal hubs become much larger.

In the third tier of the ranking, LA and Boston have alternated positions over the past few years, with LA recently gaining an advantage. The city has become a hub for business-to-consumer start-ups, exemplified by WhatNot, the largest livestream shopping platform in the US, valued at over $3.5bn. 

Contributing to LA's superiority are factors such as the presence of influential start-up figures like Elon Musk and a higher volume of start-up activities. This includes a greater number of start-ups, accelerators, and co-working spaces than Boston. However, it's important to recognize that both cities maintain a considerable lead over others that rank lower, based on their total scores.

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In tier four, Seattle holds a comfortable lead over other ecosystems. Seattle’s strength primarily stems from historical successes and having the headquarters of tech giants such as Amazon and Microsoft. A diverse range of ecosystems are in the fifth tier, with Chicago, Washington and San Diego leading the group. 

Denver, Colorado, currently ranked 12th, is particularly notable. Major tech companies including Meta, Zoom and Microsoft maintain offices there, which draws top talent to the city.

The Salt Lake City-Provo area of Utah has climbed 15 spots in the previous two years, marking one of the largest national jumps. Its overall climb resulted in it surpassing Raleigh-Durham (see opposite), an ecosystem that was ranked 14th in 2020 and 16th more recently. Salt Lake City outperforms Raleigh-Durham in many areas related to ecosystem quality, including the impact of unicorns and number of exits.

Boulder, Colorado, is another city worth mentioning. Despite a population of less than 200,000, it still ranks among the top US tech hubs. It is the home of well-known pre-seed investor Techstars and has been on a steady growth trajectory since 2020, climbing from 24th to 20th place.

Despite the emergence of new tech hubs in the US, none have managed to eclipse San Francisco with its unique blend of talent, capital and innovation. Rising ecosystems offer new opportunities, but they continue to chase the benchmark set by the front-running West Coast ecosystem.

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Eli David is the CEO of StartupBlink, a research consultancy that tracks and advises on the development of start-up ecosystems.

This article first appeared in the February/March 2024 print edition of fDi Intelligence.