In the past 20 years, Boston has added one company to the S&P-1500 technology sector companies, while Silicon Valley has added 19 companies.
The following chart plots the founding dates for the S&P-1500 Tech companies for each of the metropolitan regions mapped previously. Each line represents a different metropolitan region; a marker on the line indicates the founding of a company. The x axis is the year the company was founded. The y axis is the cumulative number of companies founded.
The S&P-1500 Tech companies are the 256 information technology sector companies that are in the S&P-1500 stock index. Recall that S&P does not categorize companies such as Amazon as part of the information technology sector.
The fuchsia line represents the San Francisco and San Jose area companies as shown in the previous map.
The green line represents the Los Angeles and San Diego area companies.
Both of these areas show a relatively consistent founding of companies.
The other four lines are: Blue for Boston, Plum for NYC, Brown for NJ, and Sky Blue for Seattle.
Here are a few observations.
Clearly, Silicon Valley has consistently created companies that have grown into established companies.
Interestingly, the Los Angeles area also has consistently created established companies.
Though at a reduced rate, Boston kept pace with Silicon Valley until 1987. Since 1987, Akamai, founded in 1998, is the only company in the S&P-1500 Tech that was founded in the Boston area. See note below describing why the 1999 marker is not a true founding date.
Certainly, technology companies were started in the Boston area since 1987. They just aren’t making it onto the S&P-1500. There are 5 possibilities for the current status of these companies:
- The company is public, but its market cap is below the threshold to be listed on the S&P-1500.
- The company exists, but is still privately held.
- The company was acquired, and exists as a sub-entity of the acquiring corporation.
- The company was acquired, but no longer exists.
- The company was closed, and no longer exists.
Neither of these possibilities is as attractive as being in the S&P-1500 to shareholders, to employees, and to the local economy.
This period of time, during the past 20 years, saw the broad adoption of the Internet economy, broadband to the home, mobile communications, digital media, personal computing, social media, and other significant new markets. Much of the innovation, thinking, and technology basis for these market transitions began in Boston. However, Boston grew only one company during this period, while Silicon Valley grew ~20 companies, and each of the other areas shown on the chart grew more than one.
Side note: In the above chart, the 1999 marker on the Boston line is Varian Semiconductor Equipment Assoc. (VESA), which spun out of Varian Assoc. in 1999. VESA’s operation began in 1971 as Extrion Corp. before being acquired by Varian Assoc. in 1975. Hence, with no diminished regard, VESA is more representative of a 1971 founding.
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Boston Area Companies (1), Founded Since 1989:
Akamai Technologies Inc.
San Francisco / San Jose Area Companies (19), Founded Since 1989:
|Blue Coat Systems Inc.||Juniper Networks, Inc.||Polycom, Inc.|
|CyberSource Corp||McAfee, Inc.||Salesforce.com|
|eBay Inc.||NetApp, Inc.||Taleo Corp.|
|Equinix Inc.||Netgear Inc.||VeriSign Inc.|
|Google Inc.||NVIDIA Corporation||Yahoo! Inc|
|Informatica Corp.||Palm, Inc.|
|Intevac Inc.||Pericom Semiconductor Corp.|