As Arizona Demonstrates the Network Effect of Public-Private Partnerships, Here are Three Places Investors Can See This in Action

As the top producer of copper ore in the United States, Arizona has been referred to as the “Copper State” for decades. However, it looks like a new moniker is long overdue. 

With traditional industries offering increasingly limited upside for future economic growth, Arizona has gone through a period of rapid transformation to carve out a new role as a high-tech hub for the United States. 

The state now plays an extremely important role in the innovation economy, helping to increase U.S. production of advanced semiconductor technology that will underpin the future of AI. 

After committing $165 billion to build a "GigaFab" cluster of six fabrication plants in Arizona, TSMC’s facility began producing NVIDIA Blackwell Chips at the end of 2025 to support the expansion of AI data centers and supercomputers across the country. 

Arizona is now the top state in the U.S. for international investment, with more than $195.7 billion announced between 2020 and 2025. Meanwhile, cities like Phoenix are also experiencing a surge in funding, where investments grew 146% from 2014 to 2024. The state also has nearly 28,000 projected jobs, with activity spanning semiconductors, aerospace, broadband infrastructure, and artificial intelligence. 

The success story playing out in Arizona, unbeknownst to many, is in part the result of a series of strategic and ambitious public-private partnerships. 

This points towards an important trend that could see a high presence of collaboration within cities become an important metrics for investors. 

Rather than copying the Silicon Valley playbook, the state has created its own set of rules that focus on building innovation through collaboration. For instance, the traditional startup model accepts that a high percentage of early-stage ventures will fail to cross over the "valley of death" and scale successfully. 

Collaboration between the public and private sectors helps to ensure that innovation is focused on areas of unmet need that offer stable translation pathways. This not only helps to reduce the failure rate of ventures, but also helps the public sector access innovation without it becoming a tax burden. In turn, this approach has a powerful network effect as the rate of collaboration increases, the trickle-down benefits spread across the economy. 

We can see this playing out in Arizona if we look at the latest public-private initiative in the state, between the Arizona Commerce Authority (ACA) and tech giant LG Electronics. This includes the launch of an AI venture studio to promote and scale local AI-first enterprises in energy, healthcare, sports and entertainment. 

Looking ahead, investors are beginning to focus on the rate of public-private partnerships as a key indicator when assessing new investment opportunities. Here are three places we can see the network effect of public-private partnerships in action. 

How Arizona became a premier innovation state 

The new playbook for innovation that has turned Arizona into a premier innovation state is thanks to the ACA’s focus on nurturing high rates of collaboration. In particular, increased support for public initiatives hasn’t been a drain on commercialization, but rather a driver of growth for the state. 

Here, the government has put policies in place that support business. “We have a really, really compelling recipe in our state,” explained Katie Sieker, Senior Vice President of Venture Partnerships at the ACA. “It's easy to do business in Arizona, and we pride ourselves on that.”

Arizona is also leveraging the power of events and networking to bolster connections and strengthen public–private partnerships. The ACA has been steadfastly promoting the state to funders and founders alike, including hosting its own decentralized conference as the first-ever Arizona Tech Week in April, with more than 400 events statewide. 

The decision to launch an AI studio builds on this headway to accelerate progress further. The studio will benefit from the pre-existing presence of major employers from fast-growing industries that include the production of EV batteries and semiconductors, through to software and biotech. 

The venture is also benefiting from the presence of collaborative pathways built up by investment funds active in Arizona. 

Ali Diallo, Founder and CEO of Aurion Capital, is working with this initiative to scale high-growth AI companies in the energy, health and business sectors with the goal of delivering measurable, economic and industrial impact through NovaWave Capital, and building translational pathways that allow ideas to scale. 

"By bridging Silicon Valley innovation with the fast-growing ecosystems of regional and international markets, we are seeking to build the next generation of AI, energy and health companies that will accelerate America’s innovation economy," said Diallo. 

The story taking shape in Arizona gives investors a clear example of why collaboration is an important KPI. With turbulent geopolitical conditions and economic pressures, public-private partnerships turn innovation into a much more strategic model that offers reliability for investors.

Publicly traded companies to watch in Arizona include GoDaddy (GDDY) and Avnet, Inc. (AVT), one of the world’s largest electronic components distributors. 

Strategic investment platforms in Puerto Rico

Another location that has moved from traditional industries to high-tech innovation by focusing on public-private collaboration is Puerto Rico. Here, the island has taken a page from the Arizona playbook by furthering growth with favorable conditions for companies in the high-tech space. 

Puerto Rico has made it extremely attractive for tech firms to establish operations on the island, with incentives such as receiving 50% of R&D expenditure in tax credits. In addition, Puerto Rico does not collect federal income taxes and the local income tax rate is only set at 4%. 

However, this doesn’t mean that the public sector is losing out. These incentives have been key to building a critical mass of activity that will attract more investors, business and talent thanks to the network effect. 

Accelerators here are also playing an outsized role in building synergistic public-private partnerships. Parallel18 is one of the key leaders here. After ten years of supporting Puerto Rico’s entrepreneurial ecosystem, Parallel18 received approval to establish an official investment platform. Launched at the start of 2026, this means the organization is even more of a strategic player in Puerto Rico’s innovation economy, a shift that strengthens the island’s ability to attract capital, scale startups, and fuel long-term economic growth. 

It also gives the city more control over how investment is allocated to support initiatives that will further bolster economic growth. This strategic focus on capital resources through public-private collaboration signals that Puerto Rico is likely to see more investment in the long term.

Publicly traded companies to watch here include Evertec (EVTC) and Red Cat Holdings (RCAT).

Public-private partnerships are growing internationally

The investment opportunities associated with private-public partnerships aren’t limited to the U.S. either. We can see similar strategies found in the Arizona playbook being leveraged by Latin American innovation hubs. 

A prime example of this can be seen in Medellin, Colombia, where the innovation ecosystem now ranks in 5th place in all of Latin America. This can be attributed to the high rate of collaboration seen across the city, bolstered by the presence of initiatives like Ruta-N and the CTi Ecosystem Pulse, in which public organizations work to support private innovations. 

At a local level, companies in the city are also active players in these collaborations. Software development company Source Meridian is also the organizer of the leading AI event in the region. TECH SPHERE 2025 was held here with a university and brought businesses and researchers together to find collaborative solutions to real-world problems with AI. Source Meridian also played a leading role in the launch of medical resource platform 360 Health Data, which was custom built for Spanish-speaking physicians in Latin America. 

Educational institutions are driving innovation elsewhere in the region. Chihuahua, Mexico, is home to a local campus of Tecnológico de Monterrey (TEC), the leading tech university in the country. The Chihuahua campus is renowned for its on-site accelerator program, Orion Startups, and a technological park. In a recent paper, Orion Startups directors Luis Miguel Almanza-Rueda and Odille Sanchez-Dominguez argued for the effectiveness of their form of outcomes-based models for startup ecosystems. 

This signals that investors can look to the rate of public-private partnerships when assessing opportunities in emerging international markets. 

Elsewhere in Mexico, global full-cycle digital transformation enterprise Ness Digital Engineering recently opened its new LatAm office in Guadalajara´s Puerta de Hierro, one of the most prominent business and real estate districts in Zapopan.

Collaboration is the new KPI for investors 

When considering which cities to focus on in 2026, the story shaping up in Arizona shows us that the most stable investment opportunities lie in the places with the strongest levels of collaboration. 

This collaboration matters in particular in the age of AI, where increasingly founders are leaning on one another --and on organizations-- to move quicker. According to Nate MacLeitch, who founded Healthcare Chatbot by QuickBlox, ‘Too many AI tools still assume you have time, technical resources, or patience to ‘figure things out.’ Most businesses don’t.”

It was in part the pull of these markets in the U.S. that international solutions including Revenue OS by ADvendio, Deep Care, Planno and others have been expanding into the country. 

With strong public-private partnerships and mutual support between organizations, these cities have a network effect that is greater than the sum of their individual parts, making this a strategic KPI to pay attention to when assessing investment opportunities.