Study: San Diego 4th best place in the country for startups!

San Diego appears to be making headway in its quest to become a tech mecca.

The city now ranks as the fourth best place in the country for startups, trailing only Boston, the Bay Area and Philadelphia, according to a new report from the U.S. Chamber of Commerce. The area’s honorable-mention status is an improvement over last year, when San Diego placed fifth on the Chamber’s list.

San Diego also fared better than its Southern California cohort, Los Angeles, which fell from seventh place in 2016 to fifteenth place this year, according to the report.

Titled “Innovation That Matters 2017,” the Chamber’s third annual report ranks U.S. cities based on how well each region’s startups are able to become permanent contributors to a city’s economy. The report specifically considers technology startups that are a part of what it calls “next-wave” industries, meaning healthcare, education, energy and transportation.

“Our theory is that in decades ahead (next-wave industries are) where you’re going to see the most impactful innovation on communities,” said J.D. Harrison, the report’s co-author and senior director for strategic communications at the U.S. Chamber of Commerce.

Given the more narrow focus, the report’s startup rankings might surprise some, Harrison said, particularly given that Boston outranked all other metros, including the Bay Area, for the second year running.

The agency’s research is based on both a survey of local startup founders and third-party data, with a focus on six categories: capital (or financial resources), connectivity (or ties to top players and universities in the community), culture (or the regulatory environment), density (or startup concentration), industry specialization and talent (or the availability of qualified workers). Third-party data was sourced from Mattermark, the “Young and Restless” report by City Observatory and the U.S. Cluster Mapping Project.

San Diego ranked highest against the 24 other markets considered in the density and capital departments. However, the region’s startup community improved most in the connectivity category, jumping from eighteenth in the category last year to thirteenth this time around.

Connectivity scores were based entirely on founders’ survey responses, meaning San Diego entrepreneurs reported a marked improvement in their perception of city leaders’ efforts to support the tech ecosystem here. The report specifically highlighted Mayor Kevin Faulconer’s efforts to champion local startups, as well as Qualcomm’s contributions to area startup development.

“A lot of what we’ve heard from startups is that it’s not necessarily that a mayor or civic leader has to be opening up their checkbook or running complex programs, but they can foster connectivity if they can create collision opportunities,” Harrison said. “The most important thing is that they bring everybody to the table.”

Meanwhile, in the financing domain, San Diego followed a national trend of fewer startups raising larger amounts in the third quarter, according to venture capital-tracking agencies. During the period, 39 San Diego area companies raised $426 million, PitchBook’s Venture Monitor found. That compares to 58 companies raising $327 million in the same quarter last year.

As for boosting tech talent, regional leaders are currently in the midst of a social media and word-of-mouth campaign, called “San Diego. Life. Changing,” meant to convince mid-level job-seekers with science, technology, engineering, arts and math backgrounds to relocate or remain here.