A Change of Scenery for Startups

Sometimes significant news doesn’t make much of a splash, and that was the case for a major transaction last week. PetSmart Inc. announced the acquisition of Chewy.com LLC for $3.35 billion, the largest e-commerce deal ever. Also notable is that Chewy.com, which sells pet products online, is based near Fort Lauderdale, Florida, rather than San Francisco or Seattle or New York. Might we be at a point where startups and e-commerce drive economic growth and job creation in many regions of the country, not just a few of the more famous (and expensive) areas?

Between 1940 and 1980, poorer American cities gained economic ground on the wealthier cities, at an average rate of 1.4 percent a year. About 1980, however, this convergence stopped. Since then, the poorer cities haven’t gained ground in relative terms. There is a chance now that this trend will flip again.