Compared to nine national benchmark regions, Western New York continues to rank last in the number of technology-based businesses per 100 firms. This year's revised set of classification codes reaffirms the expected status of Silicon Valley, Boston, and Atlanta as leaders in the technology and information economy. Western New York, while last among the benchmark areas, has a proportion of technology-based businesses fairly similar to that in comparable northeastern and midwestern metropolitan areas, such as Pittsburgh and Cleveland. Among metropolitan areas in upstate New York, Western New York lagged in cultivating technology-based businesses. While many high-tech businesses begin as small operations, a region with a strong technology business sector is likely to have a mix of firm sizes, as the more successful small enterprises gather venture capital to grow, develop products, and hire more workers.
Half are very small, with one to four employees.
The predominance of small technology enterprises in the region emphasizes the importance of access to venture capital for these firms, so that startups with strong potential can grow to become significant players in the regional technology and information economy. The high proportion of very small enterprises in the region suggests that more attention should be given to assessing the adequacy of private sources of capital and government assistance programs, so that successful regional technology firms can grow and compete on a larger scale. These revisions result in lower and more accurate proportions of high-tech firms in the regional economies analyzed, but do not significantly affect relative rankings among national or statewide regions.