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Houston named among the best large cities for early-stage startups

Houston came in at No. 5 for best cities — with populations of more than 1 million residents — for startups. Photo by Tim Leviston/Getty Images

When it comes to cities with over a million residents, Houston's at the front of the pack, according to a new study. But, there's a catch.

Last month, Commercial Cafe rounded up the 20 top cities for early-stage startups and entrepreneurs, and Houston missed the list. Now, the commercial real estate blog has broken down the data into three top ten lists based on city size, and Houston has claimed the No. 5 spot on the list of cities with 1 million or more residents.

The study took into account education, affordability, startup financial success (calculated from Kickstarter data), millennial population growth, among other aspects. Houston in particular was called out for being the most affordable major metro and for having the third best startup survival rate.

"The city is home to the fourth-largest percentage of millennial residents out of the total population, and saw the fourth-largest growth in number of millennial residents," the report reads. "Houston ranked fifth in group for the share of population holding a bachelor's degree or higher in a tech discipline. The rate at which the number of such residents has increased placed Houston seventh for tech education growth."

Outpacing Houston on the larger cities were Dallas at No. 1, San Diego, California, at No. 2, San Jose, California, at No. 3, and Los Angeles at No. 4. San Antonio also made the list, coming in at No. 7.

Texas cities were sprinkled throughout the two smaller cities list. Austin came in at No. 1 for the cities with 500,000 to 1 million residents, as well as claimed the top spot in the best cities regardless of population. Fort Worth ranked as No. 10 on this mid-sized city list.

On the small cities list for metros with less than 500,000 residents, Arlington came in at No. 6 for its location and startup density. The city also made the top 20 regardless of size, sliding into the No. 19 spot. Dallas, which topped the large cities list, came in at No. 15 on the size agnostic list for top startup cities.

Recently, Texas was named a top city to start a company by personal finance website, WalletHub, based on similar statistics.

"[I]t's clear why Texas would come in at No. 1," Susan Davenport, senior vice president of economic development for the Greater Houston Partnership, says responding to that study. "These are all areas where the Lone Star State consistently excels and why Texas continues to attract both entrepreneurs and existing companies across industry sectors."

Houston's ready for the artificial intelligence revolution. Yuichiro Chino/Getty Images

How ready is Houston for the rise of artificial intelligence? More ready than you might think.

In the recently released Global Cities' AI Readiness Index, Houston ranks ninth in the world among large cities (those with 5 million to million residents). Singapore topped the large-city list; Dallas appeared at No. 8.

"The age of technology is here, and we cannot afford to sit idle," Houston Mayor Sylvester Turner says in a recent release. "We must leap, not stroll, into the future."

The Oliver Wyman Forum, part of management consulting firm Oliver Wyman, based its AI ranking on surveys of residents and leaders in 105 global cities, along with a review of publicly available socioeconomic data. The group says its goal in compiling the ranking was to "start a data-informed conversation about how to address the very real opportunities and challenges of AI disruption."

"Houston has been working diligently over the past several years to grow a robust digital tech ecosystem," says Susan Davenport, senior vice president of economic development at the Greater Houston Partnership. "Previously, most surveys ranked Houston in the 30s in this area. When we see ourselves ranked ninth among large global cities and U.S. metros in AI readiness, it's a positive signal of our trajectory."

Signs of Houston's trajectory in the AI universe abound:

"When you think about Houston's core industries like energy, life sciences, and manufacturing, these are all data-intensive businesses that are ripe for disruption by AI and other digital technologies," Davenport says. "There is significant activity with AI already happening in the market, but I think we're still early on the growth curve, with a great deal of upside potential."

A recent search of job website LinkedIn found more than 200 AI-focused jobs available in the Houston area at employers like Shell, Accenture, Deloitte, Capgemini, HP, and EY.

Over the past year, the Greater Houston Partnership has led several trips to Silicon Valley to meet with companies involved in AI, cloud computing, and other technologies that enable businesses to harness the power of data.

"We are finding these innovative companies are very interested in tapping into the customer base here in Houston," Davenport says, "and we expect to see growth in this sector to continue over the next few years."