Without cheap rent, it's very difficult to experiment. In places where space is plentiful and inexpensive, you can try setting up a quirky shop or cafe. In an overcrowded and expensive market like SF, you can't rent commercial property without a proven business plan. Where rent is cheap, you can spend a summer "funemployed", work on your hobby project and pick up a couple bucks doing odd jobs. If you pay $4,000/mo for an apartment, you need to be employed full-time all the time.

Personally I find that innovative ideas can be brought to maturity in places where you can find people to develop them, often in cities. But the germ of the ideas will happen when you have some time and space to yourself. I think there's a happy medium where there's access to people and infrastructure, but not the oppressive overdevelopment of Silicon Valley.