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Five Cities That Are Becoming Tech Epicenters

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When it comes to technology, Silicon Valley remains a metonym for the industry as a whole. Small tech startups often open up shop in the area -- if only to make a name for themselves -- and many of America's greatest tech companies and venture capitalists reside there as well.

But technology hubs can be found beyond the rolling green hills of the South Bay. As the industry continues to grow at an economy-defying rate and venture capitalists pour millions into burgeoning niches like the education-tech sector, new firms no longer feel the need for an office with a San Francisco or San Jose zip code. Further aiding this expansion to other cities, municipal governments and local organizations recognize that these economy-resistant technology jobs can help slumping employment numbers: Tax breaks and comprehensive infrastructure are luring top-flight tech companies to new locations all over the world.

The following five cities -- including a few you might not expect -- are on their way to becoming powerhouses in the tech field, fueled by local interest and the success of companies that have already made these places their home. Before long, they may challenge Silicon Valley for tech epicenter supremacy.

1) New York City

New York has become famous enough in the technology sector to warrant its own nickname: Silicon Alley. The city's status as one of the biggest and most economically important metropolises in the world, with many established industries, has contributed to this uprising -- but local incentives and success continues to drive New York's reputation as the next big hub. Expanding and diversifying the local tech scene has been a city government priority: The Bloomberg administration spearheaded campaigns to map out hundreds of the city's tech firms, incubator spaces and investors, and there are plans to develop a science and engineering graduate campus on the city's recently renovated Roosevelt Island.

New York's tech scene is anchored by some of the biggest tech startups in the industry, such as Kaltura, Kickstarter and 2U, and even big corporate names -- including eBay, Microsoft and Facebook -- have already expanded to the city or plan to do so soon. These companies, along with hundreds of smaller startups, have made New York the fastest-growing tech hub in the country, with the Center for an Urban Future reporting that tech-related jobs in the city have increased by 28.7 percent over the past five years.

2) Jerusalem

While nearby Tel Aviv gets most of the fanfare, the ancient city of Jerusalem is becoming a notable tech player in its own right. Jerusalem, for one, has "national development zone A status," allowing investors and tech firms access to Israel's biggest tax incentives and grants, such as corporate tax reductions down to 6 percent by 2015 and government grants up to 24 percent of tangible fixed assets. There are also rental subsidies, unique grants for young companies moving to Israel and expansion grants for startups.

Jerusalem's highest profile technology hub is the Jerusalem Technology Park, an area of 15 acres mostly devoted to hi-tech sector companies. Some notable tenants in the park include IBM's Research & Development Labs, communications company Deltathree and Answers.com. Biomedical infrastructure is also a strong point for the city, particularly the BioMed Park at Ein-Kerem. Over 2,300 people now work for Jerusalem's many life sciences companies, a number that is growing every day as Mayor Nir Barkat and influential VCs push for a tech boom in the holy city.

3) Los Angeles

Having sat in the shadow of Silicon Valley long enough, over the last decade L.A. sought to make technology companies as ubiquitous as its celebrities and traffic jams. Large companies like Yahoo! and Google have opened satellite offices in Santa Monica, but the city has also produced its own notable firms like Hulu, Demand Media and Evite. Originally, a lack of L.A.-based investors (seeing as the Valley itself is nearby) forced many companies to think practically, building businesses from the ground up without angel investment.

Today, Los Angeles is gaining the kind of buzz that NYC did a few years ago. People are excited to work in L.A.'s balmy, beachy atmosphere, and more tech talent and investors choose to stay in the area rather than leave after graduating college or completing a big deal, respectively. Celebrities -- like Justin Timberlake, Ellen DeGeneres and Kim Kardashian -- are more eager than ever to attach their name to new apps. And "Silicon Beach's" proximity to Hollywood has many people thinking the movie industry could see the next big tech disruption. More than from a municipal effort, L.A. is seeing a cultural shift that embraces technology.

4) Hong Kong

For years, multinational corporations and tech firms looked to cozy up to Beijing and Shanghai, two leading cities in the emerging market of China. But after a concerted effort by the Hong Kong government to lure tech companies and talent -- particularly in spending millions on "Cyberport," an "ultra-modern" tech campus with a startup incubator program -- the tide is turning towards this former British colony.

Hong Kong lacks many of the restrictions that plague the country's mainland, including the government's Great Firewall of China, regulated and limited mobile operations and Internet censorship. Additionally, setting up a business is simple and straightforward in Hong Kong, and they can receive payment in any currency, making the city a much easier place to conduct business. Notable companies located in Hong Kong include 2the Max and VTech.

5) São Paulo

Brazil is one of the world's fastest growing economies, driven by its immense population and a new, determined effort to grow its technology sector. The whole country contributes to the tech boom, but São Paulo is the powerhouse: Brazilian tech giants such as Globo and Terra Internet are headquartered there, as are multinational firms like AT&T, HP and LG Electronics. Just 60 miles north of São Paulo, the "Brazilian Silicon Valley" of Campinas has a high concentration of technology parks, universities and hi-tech companies -- despite a lack of government incentives or reliable infrastructure.

At this point, Brazil's tech scene is decidedly focused on national interests rather than foreign expansion, but their local success has been explosive. Information technology is a $112 billion industry, with 11 percent growth last year. But São Paulo companies will have to help boost the country's 2.3 percent export of IT services in order to become an international player like some of the other hubs on this list.

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