Click to Print

Next!

There's only one Silicon Valley, but hopes of being Silicon Something has tech communities popping up nationwide.
September 1, 1999
URL: http://www.entrepreneur.com/article/18284

Once upon a time, in a valley rimmed with rolling, mustard-colored hills, the small but revolutionary computer industry was born. This now infamous place has long since come to be known as Silicon Valley, of course, and through the years, the now-multibillion-dollar high-tech industry flourishing has spawned thousands of storybook endings, from Yahoo! to Apple

But the fairy tale doesn't end there. Enticed by the abundance of opportunity and prosperity created in the Valley, cities with strong technology bases such as Austin, Texas, and Boston as well as dark horses like Lynn, Massachusetts, are vying to become the next chapter in this seemingly never-ending story. "After nine years of expansion in Silicon Valley, other cities really want to create that type of wealth," says Mark Horn, senior vice president of the emerging-technologies division of Santa Clara, California-based Silicon Valley Bank, which specializes in serving emerging technology and life-sciences companies.

You can't blame a city for building a high-tech corridor, technology district or cyberpark. High-tech centers typically lend a hand in revitalizing economically depressed downtowns, spurring population resurgences and creating climates ripe for all types of businesses from retail and service to high-tech. They're a win-win-win equation for local governments, businesses and residents alike.

Those erecting tech hot spots find top-notch universities and technical talent are two very important parts of the equation, says Wayne Clough, president of Georgia Institute of Technology in Atlanta. For instance, Instenet service provider MindSpring Enterprises and other high-tech start-ups operating in midtown Atlanta are attracted to the wealth of expertise from nearby educational institutions like Georgie Tech and Georgia State University. They also draw from the knowledge base of nearby corporations, including Hitachi, Bell South and Siemens Semiconductor Group.

But it takes more than knowledge to make the real difference. The fact that Atlanta's venture capital base isn't as substantive as it needs to be presents the city with a real challenge, Clough says. And while that's changing, Clough admits the city still has a long way to go. "The metro area doesn't quite yet understand how to nurture start-up businesses," Clough says. Enlightened government policies such as tax credits and other incentives from the city and state, easy access to mass transportation and freeways, a stable of legal professionals and business experts, and plenty of affordably priced office space all have an important place in the creation of tech meccas.

Meanwhile, Lynn, Massachusetts, a city with a population of 87,000 just 15 minutes outside Boston, is experiencing growing pains far different from Atlanta's. This city is doing everything possible to nurture its small base of Internet start-ups and Web designers. Lynn has passed generous tax credits and initiatives for redeveloping several downtown blocks, and has also formed partnerships between governments and private industry. Meanwhile, the annual Lynn Cyber District Business Plan Competition awards winners free rent and a variety of professional services.

Lynn's image, however, is firmly rooted in its manufacturing past. The city has a reputation as a working-class, blue-collar community--not as a place where cutting-edge innovation and high-tech talent unite. "We're trying to let people know that's changing," says Jose Rodriquez, program manager with the Lynn Small Business Assistance Center. "We're stepping into the technological age, but first we're having to [fight Lynn's current] reputation."

No doubt, few areas will ever be presented with as ideal an environment as Silicon Valley. A professor at Stanford University from 1974 to 1982, Clough experienced firsthand the Valley's early rumblings. He says the area's excellent academic institutions like Stanford and the University of California at Berkeley, coupled with plenty of undeveloped land and free-flowing venture capital, presented an incomparable climate. Moreover, it had something even harder to reproduce en masse: entrepreneurial spirit.

"There was real excitement in the air," remembers Clough. "People were truly pioneers. They realized you could start your own [tech] business and do all kinds of landmark things. There was a sense of enormous opportunity."

Horn agrees: "It's not just about [building] one successful company or entrepreneur--it's about developing a spirit that's pervasive throughout the community so [successful high-tech ventures] can be replicated."

Bank On It

Where, oh where. . .? Everybody's on the lookout for the technology industry's next fertile field, but few are staking claims. One institution that's ahead of the game: Silicon Valley Bank. With three locations in the Valley itself, it's a good bet the bank's other locations are properly positioned for burgeoning tech:

Where It's At

With all the interest in the next tech mecca, you'd think there'd be some sort of mathematical formula for finding it. Well, the Milken Institute has put together a composite index of cities' overall contributions to the technology industry. So which ranked highest, and are you in the middle of it all?

1. San Jose, CA

2. Dallas

3. Los Angeles

4. Boston

5. Seattle

6. Washington, DC/Maryland/Virginia/West Virginia

7. Albuquerque, NM

8. Chicago

9. New York City

10. Atlanta

The Silicon Valley is still tops. And not far behind . . . the rest of California:

1. San Jose

3. Los Angeles

13. Orange County

14. Oakland

17. San Diego

22. San Francisco

37. Sacramento

With Dallas taking the second spot--albeit a distant second--Texas is filled to its far-reaching borders with tech possibilities. Check out the Lone Star cities that made the list:

2. Dallas

21. Austin/San Marcos

23. Houston

33. Lubbock

41. Fort Worth/Arlington

46. San Antonio

Going Coastal

By Laura Tiffany

Let's face it: There's no catching up to Silicon Valley. Really, the big challenge is to place as the second hottest tech area, and the upstart Digital Coast (i.e. Southern California) is ready and willing to take its place as second best.

"When broadband happens, the Internet will shift from being just an information and communications medium to being also an entertainment medium," predicts Jason McCabe Calacanis, editor and CEO of Rising Tide Studios, producers of the SiliconAlleyDaily.com and DigitalCoastWeekly.com newsletters. This, Calacanis says, should create a market for online motion pictures, and L.A. will naturally be ready to take the best supporting role.

Contact Sources

Silicon Valley Bank,mhorn@svbank.com, http://www.svb.com

Lynn Small Business Assistance Center,lsbac@shore.net, http://www.lynnma.net/economic/sbac