America's New Tech Hubs? Look to Its Small Cities
WHY YOU SHOULD CARE
Because if technology can be applied anywhere, can’t anywhere become a tech hub?
By daisy Carrington
OZY and JPMorgan Chase & Co. have partnered to bring you an inside look at how entrepreneurs and business leaders are coming up with innovative methods to help the communities around them. Enjoy the rest of our special series here.
Exposed pipes run above a pod of hot desks, crammed with hoodie-clad software engineers tapping at their laptops. Though millions of dollars are being generated here, it’s not your typical corporate environment; the buzzy room is brightened by floor-to-ceiling windows, bean-bag breakout areas and a scattering of succulents. In fact, it’s pretty much the exact picture one conjures when you think “coworking space”; it’s also located in a state that, last year, deployed $362 million in venture funds to startups and raised an additional $420 million in new venture capital. But we’re not in California or New York. We’re in Columbus, Ohio.
While tech companies have fast become the major drivers of every industry across America — disrupting everything from health care to food delivery to manufacturing — the likes of Silicon Valley have so far reaped the lion’s share. And yet this shift presents more democratic opportunities: Because if technology can be applied anywhere, then can’t anywhere become a tech hub? That theory is now coming into sharper focus thanks to an emerging crop of tech communities in “second cities” like Columbus, including Portland, Oregon, and Wilmington, Delaware. And the major upshot is this: Should they thrive, and should other cities follow their example, then job growth and economic health could be more evenly distributed across the country.
Columbus has more new businesses that grow to 50 or more employees in their first 10 years than any other major U.S. metropolitan area.
The rise of these new tech hubs is down to a combination of factors. For Phil George, co-founder of MentorcliQ, a “software as a service” provider, “Columbus is truly a fantastic place to start a B2B business because there are so many great companies in the area.” George had lived in California but moved to Columbus to launch his enterprise; the move not only brought down operating costs but also helped him take advantage of a boom time for new business here. According to the Kauffman Index of Entrepreneurship, Columbus has more new businesses that grow to 50 or more employees in their first 10 years than any other major U.S. metropolitan area.
At least part of that success is down to Columbus’s proximity to nine of the nation’s 10 largest GDP producers — such as New York, Illinois and Pennsylvania — and resultantly a host of Fortune 500 companies. The latter point has played no small part in attracting investment here.
But there are also more nuanced catalysts. In Delaware, nonprofit coding boot camp Zip Code Wilmington is retraining a workforce left floundering when its two largest employers, both chemical manufacturing giants, closed up shop. “These people have years of experience working in highly analytical jobs, and with a slight pivot in their skill set could prove to be highly effective programmers,” explains Tariq Hook, Zip Code’s Director of Education.
The boot camp was launched by venture capitalist Ben DuPont in partnership with JPMorgan Chase. So far, 96 percent of graduates have found jobs in local companies; 50 of those individuals are at JPMorgan Chase, filling a need for locally based software developers. Therein lies the beauty of such schemes: Upskilled workers remain in the area and “pay it forward” by contributing to the city’s ongoing growth.
All this said, it would be remiss to suggest these “second cities” haven’t been blessed with specific advantages. For Columbus, it’s location; Wilmington, a ready and willing workforce, combined with a large conglomerate capable of employing them. In Portland, top-drawer educational institutions, like Portland State University (PSU) and Oregon Health and Science University (OHASU), have helped the city become a leader in health technology. “Being sandwiched between two universities is extremely helpful,” admits Matthew Johnson, general manager at APDM, a Portland-based wearable-tech company that, among other things, has worked with athletes from the national men’s gymnastics and diving teams.
APDM itself emerged from PSU’s Business Accelerator, which is ranked among the top 25 university business incubators by research firm UBI Global. It has also partnered with OHASU on projects totaling more than $10 million in worth — largely funded by the National Institutes of Health.
But if technology is changing every industry, then perhaps other cities can start to create their own advantages. Some appear to be doing just that; coding bootcamp directory Course Report lists more than 100 such schools across the country, while the government’s TechHire initiative, which aims to accelerate training to build local tech sectors, now has a network of almost 240 providers.
Certainly this is beginning to look a lot like a new opportunity for America — one in which a greater spread of local economies can thrive.
- daisy Carrington