June 13, 2017 | Liz Austin

When it comes to growing a new business, it helps to be surrounded by likeminded entrepreneurs.
Cities that boast a healthy startup ecosystem — and the innovative attitudes that typically accompany them — benefit from what is known as high entrepreneurial density. First coined by Boulder-based VC expert Brad Feld, the term “entrepreneurial density” indicates the ratio of entrepreneurs and startup employees to the whole adult population of a particular city. The formula determining entrepreneurial density is as follows:

Entrepreneurial density = (# entrepreneurs + # people working for startups or high growth companies) / adult population

When entrepreneurs are in close proximity to each other and frequently interact, they’re likely to create new and successful ventures together, spur job creation, refine local legislation in relation to small businesses, and lay the foundation for robust financial futures across their home city.

The Recipe For Success

Essential to the success of any tech hub are the following interdependent ingredients: talent, density, culture, capital, and regulatory environment. Capital attracts density, in turn facilitating culture, which impacts a city’s regulatory environment, and so on. All are equally important. Skilled labor typically comes in the form of nearby universities that not only provide a steady flow of job-seeking graduates, but have the necessary tools and facilities to accommodate high-level research.

Once a city’s entrepreneurial community has gained enough momentum to nurture and sustain a concentration of new and growing companies, the impact on the local economy is swift and powerful. Clusters of emerging businesses lead to the creation of new jobs and increase demand for local vendors, creating a powerful network of people with shared interests. As a result, local government organizations and politicians are compelled to serve those communities when forging partnerships and drafting new legislation — providing increased stability for entrepreneurs and offering tax incentives for investment, risk taking, and capital formation.

Entrepreneurial Density: Who’s Doing it Right?

Young tech companies benefit greatly from entrepreneurial density, as the community infrastructure that supports one company — skilled workforce, academic research resources, engaged consumers — typically supports them all.

And while many large US cities like New York and San Francisco are practically synonymous with technological innovation, it’s smaller, tech-centric neighborhoods within those cities that truly embody this idea of entrepreneurial density and its potential to transform a community. These microcosms include San Francisco’s SoMa neighborhood, New York’s Union Square, Boston’s Kendall Square, and parts of Boulder.

A Midwestern Twist

St. Louis is rapidly emerging as a major entrepreneurial center in the midwest. The city’s Cortex innovation district is a 200-acre urban hub designed to help entrepreneurs thrive in close proximity to one another. Conveniently located in Midtown and part of the city’s robust Central Corridor, the district takes strategic advantage of nearby mass transit options and is within easy reach of all that St. Louis has to offer. The district is home to an impressive list of businesses — from nascent startups to tech behemoths like Microsoft — each of which has access to shared, tech-enabled office spaces designed to facilitate collaboration. Since its inception in 2002, Cortex has created and helped facilitate the 15,000 jobs.

Located just a few miles away in downtown St. Louis, technology incubator and coworking space T-Rex offers 160,000 square feet of space to 110 startups. When taken into account alongside the affordability, high quality of life, and expansive infrastructure St. Louis has to offer, communities like Cortex and T-Rex play a crucial role in rapidly nurturing city-wide community of collaborative entrepreneurs.

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