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By Fast Company Staff | 06-11-2012 | 7:30 PM
United States of Innovation
Greenville, South Carolina
Hobbs, New Mexico
Durham, North Carolina
New Haven, Connecticut
Grand Rapids, Michigan
Salt Lake City
Charleston, South Carolina
New York, yeah. Silicon Valley, of course. But Greenville? Cleveland? Baltimore? These cities are famous for many things. Their lively tech scenes aren’t one of them. Yet as we’ve revealed in a series of articles over the past few months, some of the most innovative businesses and ideas are springing up in the least likely places. The reasons for the shift are complex and differ from one city to the next, but in many cases, they boil down to this: The Internet has lifted the cost and geographic barriers of starting a business. That, combined with the proliferation of local incubators and other support networks, has freed entrepreneurs all over the country to innovate, and take risks, without losing their shirt. Barriers remain: Talent still hugs the coasts and funding can be woefully hard to snag, even for the most dogged entrepreneurs. But the momentum persists. Who knows? Maybe the next Facebook will emerge from Phoenix, Arizona, or Grand Rapids, Michigan. Here, we zero in on thriving tech communities in 15 places you’d never think to look.
Greenville's economic engine has chugged through the recession. The region boasts $1.1 billion in new capital investments and has created more than 6,000 new jobs in the last five years alone. Much of that activity is rooted in a new generation of tech businesses. You can glimpse the future of health care in the media-rich in-patient Hospital Room 2020 or sign on to LoftResumes, a platform that generates jazzy CVs that give job seekers an edge. These entrepreneurial efforts are being supported by skilled labor and a growing number of initiatives such as NEXT, a Chamber of Commerce program dedicated to turning new ideas into viable businesses through advocacy and infrastructure development.
Some people call it Silicon Forest, and it's easy to see why: Portland has given rise to MyOpenId, Voyager Capital-backed AboutUs, interactive TV company Ensequence, which raised $20 million in 2009, and ShopIgniter, which closed a $3 million round from Seattle's Madrona in 2010. The city still lacks many second-generation entrepreneurs to provide mentorship and angel investing. But thanks to the affording cost of living, myriad small-scale startups have settled here. Portland is also drawing startups from beyond its borders. In 2004, Jive Software, maker of social marketing tools, decided to move to Portland from pricey New York. Five years later, it posted annual revenue of $30 million.
America's most innovative neighborhood covers 15 square miles in New Mexico. The population? Zero. The Center for Innovation, Testing and Evaluation (CITE), a shiny new research community rising in the desert of Hobbs, New Mexico, will test everything from wireless networks to self-driving cars, all without a single permanent resident. This empty city--which will come complete with a downtown, a retail district, residential neighborhoods, and collar communities, just like a real city--is expected to address one of the great obstacles to the commercialization of new technology: that “valley of death” between early-stage R&D and the deep pockets that are willing to invest in products once they have hard data behind them. Construction on CITE gets underway this summer.
Durham’s innovation scene is kindled by tech giants like IBM, Lenovo, and about 140 other companies with stakes in the ground at the 7,000-acre Research Triangle Park. It’s an unincorporated area, a swath of land belonging to no municipality, dedicated to R&D. Its secret sauce is a steady stream of computer science graduates from nearby Duke University, NCSU, and UNC-Chapel Hill, making the area a tech recruiting oasis, an electromagnet for technology companies in the American South, and a place prominent U.S. startups like Airbnb choose to outsource their design and development.
Savannah is the largest port city in the south and, as a result, maintains a strong manufacturing base: Jetmaker Gulfstream, International Paper, and construction equipment maker JCB count among its corporate titans. Its startup scene, meanwhile, is rife with technology, e-commerce, and graphic and motion design firms like Rails Machine, CommerceV3, and Paragon--a niche further fortified by the Savannah College of Art and Design (SCAD) and Georgia Southern University.
New Haven has long been a hotbed of startup activity: Eli Whitney invented the cotton gin here, as well as interchangeable parts for guns, creating a small arms-manufacturing industry that encompassed Winchesters and Colt revolvers. Today New Haven still offers rich opportunities for entrepreneurs. Home to biotech and financial giants like Bristol Myers Squibb, Covidien, GE, and, United Technologies, New Haven counts Kayak, Priceline, and SeeClickFix among its homegrown startups. Other recent IPOs include an $88 million exit in 2011 for Tangoe, a telecom expense management solution, and $100 milllion in 2010 for HigherOne, a service facilitating student-loan payments. The city is also strong on social enterprise; YouRenew, a Connecticut-based refurbisher of used cell phones, was named one of “America’s Most Promising Social Entrepreneurs” in 2011.
“I love the normalcy of Cleveland," Drew Carey once said of his native city. "There’s regular people there.” Embedded in that backhanded compliment is a salient, if undercelebrated, fact of Cleveland's talent pool: The city has a plethora of middle-aged workers with great ideas and experience in spades. John Dearborn, president of Cleveland's top nonprofit VC firm JumpStart Inc., estimates that his average applicant in his mid-40s and out of traditional industry. “Older workers bring not just experience with them, they bring a whole network of people," he says.
Western Michigan still vibrates with the hum of the Motor City and its auto manufacturing cluster, but these days, the buzz is just as likely to come from a growing group of tech-minded entrepreneurs. Startups can secure finacial support through Start Garden, a new, $15 million venture capital fund. Grand Rapids also has a host of established businesses, such as Fifth Third Bank, Steelcase, and Cascade Engineering, that assist young entrepreneurs during weekly office hours.
Utah has one of the most business-friendly climates in the country. Relatively low operating costs, a low corporate tax rate, above-average employment, a growing population, and a burgeoning tech sector led Forbes to label Utah the “Best State for Business and Careers” in the magazine’s annual 2010 and 2011 surveys. In Salt Lake, the University of Utah was ranked no. 1 in creating startups based on university research in 2009 and 2010, topping powerhouses such as MIT and CalTech, according to the annual survey by the Association of University Technology Managers. Salt Lake City is also home to The Foundry, a training ground for entrepreneurs that is challenging some long-held notions about how startup incubators should work--and captivating the attention of everyone from Armenian businessmen to Zappos CEO Tony Hsieh.
Gertrude Stein once famously said of Oakland, “There is no there there.” But modern Oakland is proving Stein wrong. The city has attracted tech companies as varied as Pandora and Ask.com. It also consistently ranks among America’s most sustainable cities and as a result lures green-energy startups galore, like First Solar and Sungevity. Cheap rents, good public transportation, and proximity to San Francisco count among the reasons Oakland--a city better known for bad crime and worse cops--is transforming into a hotbed of innovation.
In the 2012 Thumbtack.com Small Business Survey, Oklahoma City snagged top rankings across nearly every category, from hiring costs and tax codes to training programs and networking opportunities. The city has a clutch of informal resources and organizations aimed at nurturing startups, including VentureSpur, an Oklahoma-based accelerator / incubator; the Oklahoma City Chamber of Commerce; and the Presbyterian Health Foundation Research Park, where bioscience ventures can apply for low-rent space. Startups that serve the region's thriving oil, natural gas, and aerospace industries, are especially well-poised to succeed.
Brotherly love is finding its way back to Philadelphia, thanks to a determined community of technology entrepreneurs. In 2010, Philadelphia-based InviteMedia, an online ad exchange bidding company, sold to Google for $81 million. The next year, MyYearbook.com sold its Pennsylvania-born social network for $100 million. In the wake of these, startups like Monetate, The Neat Company, and DuckDuckGo have surged in popularity. What's changing? Resources, such as coworking spaces, incubators, and investment dollars, are dripping into the area. And perhaps for the first time in recent memory, young people are moving to Philadelphia.
Charleston is ranked as one of the top 10 fastest growing cities for software and Internet technology, even though it's only the 75th largest metro area in the United States. TwitPic and Amazon's CreateSpace count among the household names to emerge from Charleston. Additional prominent companies with footprints here include Blackbaud, Boeing, and Google. Much of the momentum can be attributed to a supportive local government, the Charleston Digital Corridor (which includes incubation and coworking space), and the quality of life; Vanity Fair has called Charleston “America’s Paris.”
Home to education powerhouses like Johns Hopkins University, Maryland Institute College of Art, and the University of Maryland, Baltimore has a startup market pumped full of youthful energy. These burgeoning entrepreneurs can tap into a slew of resources, such as Accelerate Baltimore, a business accelerator, and Innovate Maryland, which forges partnerships between schools and tech companies. Baltimore's proximity to D.C. is another benefit, allowing startups to service the government and military from outside the Beltway.
Startups to emerge from Arizona include household names such as LifeLock, Go Daddy, and iCrossing. But the region's real specialty is data security. Landlocked and flat, Phoenix and the surrounding area lack the natural disasters that beset other large cities. As a result, major companies like JPMorgan Chase, Toyota, and State Farm Insurance keep gigantic data centers near Phoenix.
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