Phoenix Could Be a Startup Hub in Waiting After the Pandemic
Because of COVID-19, startup culture has largely been somewhat on hold across the country. This doesn’t mean that no new businesses have emerged. By and large though, it just about goes without saying that the environment for prospective business founders has been less than ideal. And this will remain the case for as long as the pandemic is upon us.
As we’ve seen with vaccine distribution in Arizona though, efforts to immunize the public are slowly but surely ramping up. To this point, these efforts have been less than ideal, and Arizona has actually struggled even more than most sports to control the virus. But with appointments now available for people in the most vulnerable groups, and the newly installed federal government promising dramatic improvement in distribution, there is, as they say, light at the end of the tunnel.
The hope among many is that when we reach that light, and we begin to put the pandemic behind us, we’ll see something of a business boom. It’s not altogether uncommon for catastrophic economic events to be followed by waves of innovation, after all, which means lots of new startups could be on the way. And if this does prove to be the case, there are a few reasons to believe that Phoenix is positioned to become something of a hub for growth.
Foundations in Funding & Organization
Startups need funding, which is one reason that hubs tend to snowball. Where venture capital money surfaces, startups follow; where startups grow, economies expand; where economies expand there is more capital for funding, and so on. Phoenix, despite being a very large city, has not always been known specifically for its venture capital scene. But recent years have seen numerous sources citing an improving environment in this regard. At this point more than any other in recent history (the pandemic notwithstanding), there is considerable funding potential for area startups.
In addition to a favorable funding scene, Phoenix offers considerable ease in organizing and registering new companies. Setting up a business in Arizona takes little effort, particularly where popular entities like sole proprietorships and LLCs are concerned. Processes differ somewhat between entities, but at most startup founders will need to compete a few state government documents. This is actually true in much of the country, which is good for the broader startup culture. But ease of organization coupled with funding options makes for fertile ground for new businesses.
People don’t always lump Phoenix in with the truly massive cities of the U.S. It isn’t known for any particular financial district or downtown area, nor is it marked by famous skyscrapers or monuments. And yet, by both land area and population, it is one of the 10 biggest cities in the country — a sprawling urban environment, but one that lacks some of the public transportation perks of, say, New York or Chicago. This can actually be a deterrent to prospective company founders, given that it can make for a somewhat challenging or inconvenient working environment.
This is not the kind of thing that changes overnight. But the recently approved grant for Phoenix’s light rail extension — totaling $530 million — is certainly a good start. Part of a larger $1.35 billon project to improve public transportation into and within the city, this grant has specifically been described as something the is “going to create jobs” following COVID-19. This will happen in part because new rail systems will make Phoenix a more appealing destination for startup founders.
Bioscience at the Center
On top of the points above that have to do with the structures and foundations the city offers new startups, there is also specific industry focus to consider. In this regard, Phoenix’s prominence in bioscience is a very important factor. Of late, the city has become known for being home to some of the most innovative and successful biosci companies in the entire world — which is ideal for the present moment.
This does not necessarily mean that Phoenix will be at the center of new growth and research in bioscience following the pandemic, though that does seem likely. However, given the intense focus (and funding) this industry is going to receive once COVID-19 is behind us, Phoenix will be more recognizable as a hub of innovation than it has ever been before. Reputation matters in startup culture, and given the snowball effect we alluded to above, significant attention on Phoenix’s bioscience success is likely to bring about more startup opportunity in general.
All of this will take time to develop into tangible outcomes and real results. And we can’t predict exactly when the post-pandemic era will begin. When that time does come though, Phoenix will be in a position to rise in the ranks of the United States’ most appealing startup destinations.