The Shifting Geography of Innovation in the Era of COVID-19: Exploring Small Business Innovation and Technology Awards in the U.S.

This research examines the shifting geography of small firm innovation in the U.S. by tracking the location of small business innovation research (SBIR) and small business technology transfer (STTR) awardees between 2010 and 2024. The SBIR and STTR are “seed fund” awards coordinated by the Small Business Administration (SBA) and funded through 11 U.S. federal agencies. Of particular interest is whether the number of individual SBA awards, awarded firms, and/or funding amounts are (1) becoming increasingly concentrated within regional innovation hubs and (2) exhibiting a shift toward or away from urban centers and other walkable, transit-accessible urban neighborhoods, particularly since 2020 and the COVID-19 pandemic. While the rise of remote work and pandemic-related fears may have reduced the desirability of urban spaces for both living and working, there remain significant benefits to spatial agglomeration that may be especially crucial for startups and other small firms in the knowledge- or information-intensive industries. The results suggest that innovative activity of smaller firms has indeed trended toward more centralized, denser, and walkable urban areas in recent years while also remaining fairly concentrated within major metropolitan innovation hubs. The pandemic appears to have resulted in a measurable, though potentially short-lived, cessation of these trends.