Boston has been ranked the best city in the country for new companies and start ups, beating out Silicon Valley.

A report by 1776 and the US Chamber of Commerce Foundation chose the top 25 startup incubators in the US by ranking cities based on their readiness to foster entrepreneurial growth and innovation in the next wave of the digital economy.

While the San Francisco Bay Area is still in the lead for overall startup activity, Boston’s place in the number one spot is based off of the, “clear emphasis on next generation tech companies specializing in education, energy and healthcare industries; high quality of life ratings; and a welcoming regulatory environment for startup communities.”

The competitive nature of the San Fransisco region brought it down to the second spot, due to decrease in collaboration between start ups and other institutions in the area. Boston was also rated with a higher quality of life.

Tech companies are flooding the Downtown Boston area, according to the BBJ and this report further exemplifies why.

Start ups and tech companies are flocking to this new destination for more than just an office building, they want a community and surrounding amenities that fit in with their brand, lifestyle, culture and overall mission.

Downtown Crossing and other locations throughout Downtown Boston provide local brands, cafes and restaurants that these companies are interested in, as well as less commercial chains.

As these companies grow and more start ups develop they will more likely be looking for space in this area. Boston has been successful in recycling money back into creating and growing the start ups and fueling the next generation and this ranking proves that.

Read the full report here.