100 best places to live and launch

Population: 39,185
Pros: Highly educated workforce, the resources of Penn State
Con: Everything in town is dominated by Penn State

State College, located in central Pennsylvania, is home to Pennsylvania State University. The university, with its 40,000 students, is the city's largest employer, thanks in part to the 75% tuition discount it offers employees. But it also offers businesses a highly educated workforce, a small-business development center, and a strong source of innovation.

The manufacturing industry has slowed over the years, but growth has emerged in health services and business-to-business technology - top employers outside of the public sphere include defense contractor Raytheon and Jostens Printing and Publishing. Startups can grow in the city's 20,000-square-foot-incubator, which offers spaces specifically tailored to IT businesses, technology, and biosciences.

Residents enjoy a vibrant downtown full of restaurants, galleries, the State Theater and The Pennsylvania State Orchestra. Canoeing, hiking and cycling are just a few miles out of town in the Allegheny mountain region. -Peter McDougall and Mina Kimes

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