San Francisco attracts people for many reasons: the Golden Gate Bridge, the Warriors, 49ers, or Giants, and, of course, technology. Tech continues to be the number one reason people flock to the Bay Area. The San Francisco and San Jose metropolitan areas have formed what we know as Silicon Valley, the world’s premier hub for innovation and startups galore spanning computer vision to food innovation.
San Francisco has graced the number one spot — for the third year in a row — in AT Kearney’s Global Cities Report ranking the top 135 cities based on global standing and projected influence. This is reflected in Computing Technology Industry Association’s recent study finding that Silicon Valley added the most tech jobs over the past year. And, there’s no sign of slowing down. According to the US Bureau of Labor Statistics, tech employment is estimated to grow 13% by 2026, faster than the average of other industries.
As technology changes the way we drive, eat, and communicate, innovation hubs are here to stay. And while cities such as London, Tokyo, and Hong Kong continue to grow, there is something that keeps people coming back to San Francisco — in fact, there are three: venture capital, innovation and R&D centers, and disruption.
The Bay Area — including San Francisco, San Jose, Oakland, and Mountain View — has led American innovation for quite some time. It grew from contributing only 4% of U.S. patents in 1976 to 16% by 2008. Where technology goes, investment follows. In 2018, 40 % of the United States venture capital investments were poured into the Bay Area. Most of these investments were focused on information technology, biotechnology, internet, digital entertainment, and cleantech. Over the course of a week this February, investments reached nearly $900 million with high growth companies like DoorDash and Jobvite. It is this maintained momentum that has lured top tier venture firms resistant to coming to San Francisco to finally give in — see Andreesen Horowitz’s plan to make the move.
Innovation Centers and R&D Labs
It is a common oversight that Silicon Valley is only home to tech giants. While companies such as Google, Uber, and Airbnb reside in the Bay Area, there are also legacy Fortune 500 companies that operate a number of innovation and R&D labs. Even though Walmart, Verizon, Johnson & Johnson, and General Motors are not headquartered out of Silicon Valley, they have strategically created innovation centers in the heart of emerging technologies. One example is Boeing HorizonX, an innovation center focused on investment, market development, and disruptive horizons. While Boeing remains the world’s largest aerospace company, they understand the importance of accessing and implementing next generation technology into business opportunities. Recently, Boeing announced its investment in Robotic Skies, “a services provider that connects manufacturers and operators of commercial unmanned aircraft systems (UAS) with a global network of more than 170 civil aviation authority-certified repair stations.” As the technology for autonomous aircraft continues to evolve, Boeing wants to be ahead of the curve.
In recent years, the coined term “unicorn” has described startups valued at over $1 billion. The phrase is used to give tech companies the magical and rare qualities similar to the mystical creature. And, yet, the rarity is not applicable to the San Francisco Bay Area. Currently, there are 88 unicorns in the Bay Area, more than any other region in the world.
Beyond reaching unicorn status, the movers and shakers of the Bay Area are redefining entire industries. Just note companies like Uber, Airbnb, Netflix, Tesla, and Intuit. What will the next big industry shift be? Many are putting their money on real estate and construction. The real estate and construction industries have lagged behind with an average of less than 1% re-invested into research and development compared to other industries 3-8%. However, technology has not faltered; the introduction of smart sensors, AI, robotics, and space-as-a-service is re-shaping the way we buy and build. So, naturally, entrepreneurs have entered the market. Katerra and Open Door, two of the top highest funded startups in 2018, are located in — you guessed it — Silicon Valley.
Become Part of the Silicon Valley Innovation Ecosystem
For corporations and startups alike, location is a critical factor for strategic growth. With over 50 innovation and R&D centers, 88 unicorns, and 40% of all U.S. venture capital investment in 2018, it is no wonder San Francisco has continually ranked #1 for innovation and influence.
Are you ready to utilize the innovation ecosystem in San Francisco?
Since 2011, RocketSpace has partnered with Fortune 500 corporations to drive new areas of growth utilizing our innovation ecosystem in Silicon Valley and beyond. RocketSpace provides corporations with proven methodologies to not only bring tangible business value through external innovation, but also to inspire teams and change the innovation mindset of a company. Learn more about RocketSpace Corporate Innovation Services.