San Antonio’s innovation sector saw fewer startups form last year, and less investment, according to a new report released Wednesday.
A consortium of four local institutions developed the 2026 San Antonio State of Innovation Report as a regional baseline for “growth, investment and action.”
The report looks at how the city is doing when it comes to jobs, startup formation and investment across its biotechnology, software, cybersecurity, defense and aerospace industries.
Chief Technology Officer and entrepreneur Nathan Anderson described the report as “a lot of good hard truths, a lot of optimism.”
“We have a lot of potential, and it’s a matter of connecting the right groups in San Antonio to kind of capitalize on that,” he said. “But we definitely struggle compared to other major cities.”
That’s not a surprise to anyone involved in this ecosystem, Anderson added.
The four groups who collaborated on the report include the business incubator Geekdom, industrial and tech campus Port San Antonio, the technology nonprofit Tech Bloc and bioscience campus VelocityTX.
San Antonio’s economic development nonprofit Greater:SATX served as the lead data partner in the project, which assessed the city’s innovation economy.
The consortium released the report on the morning following an historic midterm election outcome that left attendees feeling hopeful, Anderson said. “We’ll see. I am myself very optimistic.”
Strong innovation economy
The point in highlighting the hard truths in such a report is to do something about it, said Rene Dominguez, president and CEO of VelocityTX.
“It was an eye opener,” he said. But, “what really surfaced from the report was we’re not starting from scratch. We have the elements of a very strong innovation economy.”
The report analyzed employment, wages, startup formation, capital investment, federal research funding and patents in the San Antonio metropolitan area to create a baseline for future studies.
In 2025, innovation employment grew while the number of innovation establishments declined slightly, according to findings in the study.
Innovation sector jobs numbered 55,054 in 2025 and 53,703 the prior year.
But it also found that while San Antonio is adding jobs in innovation sectors, those industries account for a smaller share of employment locally than the national average.
The Austin metropolitan area saw the fastest employment growth among major U.S. metropolitan areas by 3.1%, while San Antonio came in second at 2.5%, just ahead of Charlotte with 2.2% and Dallas at 1.3%.
Port SA President and CEO Jim Perschbach said the city needs to focus on employment in the innovation sector: “Because if there’s one thing that Port San Antonio has shown it is that by investing in people, investing in optimism, and investing in growth, there can be massive success.”
The study also identified that fewer new startups were established in 2025, and venture investment and patent grants fell.
Twenty-three new startups launched in 2025 versus 49 the prior year while venture investment fell by 31% and patents declined by 24%.
Venture capital per San Antonio resident is down 77%, and early-stage venture capital — which totaled $127.5 million in 2024 — decreased 92%.
The region is building on a decade of groundwork, but the constraints ahead are real, according to the report.
“Building a stronger local market requires a deeper cycle of company creation, investor participation, and long-term reinvestment, so successful founders and investors can help finance what comes next,” it states.
The draw to Silicon Valley
The report cites Geekdom CEO Charles Woodin, who said San Antonio lacks an ecosystem where founders building real companies and investors with money can find each other at the moment it matters.
“It’s a problem because as an entrepreneur myself, it makes it very difficult to stay here and get funding here,” said Anderson, who owns a tech consulting firm.
“There’s a lot of draw to Silicon Valley or Austin for funding to physically locate there and pull me there physically,” he added. “A major investor will want me to relocate my headquarters there … they want to be closer to their asset.”
On the positive side, the number of STEM degrees awarded by the university network and research institutions in San Antonio rose in 2024, the latest year measured in this report. STEM completions increased 1.3% last year, it states.
The report also analyzes federal research and development funding that’s come to San Antonio in recent years and points to concentrations of those dollars in several spots.
Southwest Research Institute has received the largest concentration of San Antonio’s total $2.55 billion qualifying federal research and development contracts, followed by Port San Antonio with almost $224 million, and the San Antonio International Airport with $88 million. UT San Antonio has received nearly $35 million, the South Texas Medical Center, $16 million.
Along with overall capital investment, patent grants also declined — by 24% in 2025 versus the prior year which was a five-year high.
The report states that the kind of innovation critical to San Antonio’s economy relies on the “physical proximity” of things like test cells, lab benches and airspace.
While several entities provide those spaces, the city needs more of them.
“We have all the right elements,” Dominguez said. “But converting those to economic outcomes has been our issue.”
