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Innovation that Matters examines and ranks 25 cities’ readiness to capitalize on the inevitable shift to a digital economy. It carves out critical trends every U.S. city leader can learn from and offers recommendations local leaders can adopt to strengthen their region’s digital competitiveness.

We are at the dawn of an extraordinary technological revolution, and it is transforming every part of the U.S. economy. Beyond social media and e-commerce, advances are coming to every industry and leaving a wake that could be either disastrous or transformative to every city in the country. In the same way a handful of cities became major commerce centers in the industrial era, new cities will emerge as leaders in the digital economy. Yesterday’s expertise will not guarantee tomorrow’s economic wins. Without leaders who understand this and act to help their communities transition, cities will fall behind.

Of the 25 cities examined, five rose to the top:

While the San Francisco Bay Area is the clear leader in total startup activity, its lack of a cohesive community and declining quality of life for residents helped move Boston to the top spot.

  1. Boston
  2. San Francisco Bay Area
  3. Denver
  4. Raleigh-Durham
  5. San Diego

While the San Francisco Bay Area is the clear leader in total startup activity, its lack of a cohesive community and declining quality of life for residents helped move Boston to the top spot. Denver and Raleigh-Durham were surprise stars: They have fewer startups than larger cities like New York and Los Angeles but stronger ties between the startups and institutions in the community. San Diego performed well thanks to its strong talent and capital base, dense community and growing specializations in health and IT.

Given the findings of this study, there are key steps local leaders can take to keep their communities at the forefront of technological change and secure a prosperous future for their citizens:

  1. Understand the inevitable trajectory of the digital economy
  2. Imagine a new future that includes history; where technological possibility intersects with legacy assets and unique strengths
  3. Focus beyond startups to include corporations, universities, nonprofits and local government
  4. Work proactively toward a new governing framework that marries technological possibility and regulation

Then, leaders can get started by establishing the basics to make way for the big opportunity.

Critical questions loom. How will every American city respond? Which ones will emerge as the economic powerhouses as this massive economic shift takes hold? There is no single model of success, but Innovation that Matters provides key observations, shares specific city insights and rankings, and delivers a framework that can enable cities to embrace and lead the digital era.

Read the full report >