Venture Capital in Arizona Remains Far Below National Average
Venture capital is funding provided for young commercial enterprises, particularly those involved in innovative high-technology activities, by individuals or organizations other than those who own the enterprises. The investments typically are both high risk and high return. Venture capital invested in Arizona companies has been far below the national average for more than a decade after adjusting for population. The 2012 per capita figure was 62 percent less than the U.S. average. The venture capital data are compiled by PricewaterhouseCoopers and the National Venture Capital Association.
In the 21st century, innovation—introducing something new—mostly derives from technological advances. Innovation drives the modern economy, leading to gains in productivity and prosperity. In order for a community to realize such gains, it must provide a foundation for innovation.
The foundation includes a strong educational system, a solid physical infrastructure, a base of research and development activities, innovator access to financial resources, and other factors. Science and engineering—in the educational system and in the workforce—are of particular importance. Indicators of human capital, financial capital, and high-technology activities are presented in the Innovation section of Arizona Indicators.