Spokane’s affordability, universities and job growth have landed it on a national business magazine’s top 50 cities to launch a business.
Inc. has ranked the Lilac City at No. 31 on its Surge Cities list, a guide to the 50 best U.S. cities for startups in 2020, between Lakeland, Florida, at No. 30 and Ogden, Utah, at No. 32. Spokane ranked even higher in other categories, placing sixth for rate of entrepreneurship, 14th for population growth and 19th for early-stage funding deals.
“Logistics and manufacturing companies thrive in Spokane, Washington, where costs are low and the Pacific Northwest’s largest cities are all a few hours’ drive away,” the magazine says of Spokane. “It’s also still remarkably affordable, which tends to serve as an added inducement for transplants.”
Inc.’s ranking of Spokane was highlighted Thursday during Greater Spokane Incorporated’s 2019 Legislative Forum at the Historic Davenport Hotel in downtown Spokane.
“Being named in the top 50 Surge Cities in the nation by Inc. recognizes the innovative and entrepreneurial momentum the Spokane region has experienced over the last eight years and validates our Hacking Washington initiatives, which is part of the One Spokane strategic plan.” Mayor David Condon said in a statement.
Inc. partnered with innovation policy firm Startup Genome to analyze data for cities across the country and developed a scoring system based on each area’s growth, opportunity and innovation. The firm also used public data and insights from Inc. 5000, a list of the fastest-growing privately held companies in the United States, to compile rankings for each city, yielding the top 50 listing.
Austin, Texas, topped Inc.’s list of best places to start a business. Boise ranked fifth, primarily driven by its affordability. Seattle ranked 12th because of strong wage growth and job creation by Amazon and Microsoft, among other companies.
The Inc. ranking comes as no surprise to area business experts.
Resources for businesses and startups have expanded in the past decade with more collaboration occurring among entrepreneurs in the region, said Ryan Arnold, director of Regional Entrepreneurial Strategy at North Idaho College.
Arnold is a co-manager of the Northwest Entrepreneur Competition, one of the largest entrepreneurial events in the Inland Northwest in which high schools, colleges and universities pitch their best business ideas and compete for more than $50,000.
Arnold said a cultural shift also has occurred in the region, with many business owners wanting to stay and launch their companies in Spokane rather than relocating to a larger metro area.
“The attitude has changed in the whole region,” he said. “People believe they can start a company here. They believe they don’t have to leave to do great work.”
Spokane University District CEO Lars Gilberts said business leaders in the 1980s recognized local companies needed access to early-stage capital to thrive. The discussions among business leaders led to creating several strategies to grow local businesses, he said, noting angel investor group Spokane Angel Alliance was a result of those strategies.
Gilberts said because Spokane is affordable, it allows startups to form teams sooner and dollars stretch their further compared with larger cities.
He added businesses from Dallas and San Francisco are looking to relocate to the area because their research shows Spokane is fertile ground for startups.
In addition, efforts by the West Plains Public Development Authority – a partnership of the county, the city of Spokane and Spokane International Airport – are paying off with several companies relocating to the West Plains.
Amazon is expected to open its $181 million fulfillment center by mid-2020. Kenworth Sales Co., Selkirk Pharma and California-based Mullen Technologies are also planning to open manufacturing facilities on the West Plains.
“We’re in a very interesting position right now. We are laying the foundation for the next round of innovation and entrepreneurship,” Gilberts said.
In addition to startup companies, Spokane has “household innovators” who are working on an idea for a product in their garage, Arnold said.
“It’s kind of fun to witness how we are working together to support all these entrepreneurs, no matter where they come from,” Arnold said.
Spokane’s recognition by Inc. is well-deserved and the result of many years of behind-the-scenes work by several businesses, organizations and individuals, said Tom Simpson, CEO of Ignite Northwest, a life sciences and technology business accelerator.
“We really do have a thriving entrepreneurial community in Spokane with a large number of companies starting here,” he said. “Spokane is an attractive region to start a company. It’s attracting better entrepreneurs and better ideas, which is attracting more funding and resulting in more success.”
Secondary cities like Spokane are poised to absorb overflow from labor- and real estate-constrained metropolitan areas like Seattle and the Bay Area, said Simpson, who is also president of the Spokane Angel Alliance and co-founder of online retailer Etailz.
“A number of entrepreneurs are viewing those cities as overcrowded and expensive, so they are choosing to come to places like Spokane to start their business,” he said.
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