Why the Midwest Is Becoming the New Silicon Valley

When you think of Silicon Valley, you probably imagine the bustling businesses along the California coast, or even the tiny tech startups stacked on top of each other in New York City. Along both the East and West coast, tech companies have flourished, but what’s been left behind in the middle? The Midwest. At least… so we thought.

In fact, the Midwest is quickly on its way to becoming the new Silicon Valley. Just ask Mark Kvamme, a top venture capitalist from Silicon Valley itself. According to The New York Times, in 2013, Kvamme left the heart of the tech industry to become an investor in the Midwest—Columbus, Ohio, to be exact. After a slow start at the beginning, his firm raised $550 million, while investing in 26 different companies. The NY Times states: “Its bet is that the middle of America amounts to an undervalued asset, rich in markets, new business ideas and budding entrepreneurs. The Midwest, the thinking goes, is not only untapped, but also an antidote to the scalding-hot tech market on the West Coast.”

Quartz claims much of the rise in tech in the Midwest is due to the increase in “mid-tech jobs.” Mid-tech jobs refer to those skilled tech jobs that don’t require a college degree, but instead emphasize focused job training or vocational programs. Similar to blue-collar trades in the industrial past, mid-tech jobs are becoming more and more available to the blue-collar workers of the Midwest.

In their article, Quartz also cited The Brookings Institution’s Metropolitan Policy Program, a nonprofit public policy research group. The program calculated results from the Bureau of Labor Statistics in 2016 to learn more about where these mid-tech jobs were concentrated. In the data, mid-tech jobs were defined as “computer and mathematics occupations” in which 30% or more of those employed did not have a Bachelor’s degree. The sample included 12 major cities in the United States with an industrial past.

Their findings demonstrated a strong rise in these jobs in the Midwest area. Mid-tech jobs involved more than a quarter of all tech employment in major Midwestern cities, such as Columbus, Ohio; Cincinnati, Ohio; St. Louis, Missouri; Detroit, Michigan; Nashville, Tennessee; and Minneapolis-St.Paul, Minnesota-Wisconsin. In fact, more than 100,000 people were employed in mid-tech jobs in these Midwestern cities alone, demonstrating how tech companies are on the rise in the area.

Why is the Midwest quickly becoming the next Silicon Valley? In short, it’s often a better financial investment for companies. Cost of living tends to be significantly cheaper than the coasts, as well as salaries. In fact, the cost of living and paying employees’ salaries can be one-third of what it costs to live in the Bay Area. There also is a notable amount of untapped talent in the Midwest. VentureBeat states, “The Midwest receives 25% of all research dollars in America and graduates more computer science degrees than any other region or country on planet earth.” With this Midwest talent, of course, comes Midwest culture, which often includes a certain humility and extremely dedicated work ethic. This type of culture can go a long way when building and maintaining a tech startup.

Chris Olsen, co-founder and general partner at Drive Capital writes: “… there are more entrepreneurs building billion-dollar companies in the Midwest today than in the past 50 years combined. Think about that. These entrepreneurs have together created an engine of growth that will shape and reshape the U.S. economy.” While we may have always imagined Silicon Valley and tech startups as strictly a coastal phenomenon, the Midwest is fighting for their piece of the pie, and proving that they have a right to it. The shift has already begun, now the question becomes: Where will you go in the process?

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