Silicon Valley, Boston and Austin may have some new competition--and not just from Bangalore, Shanghai and Singapore.
The latest kids on the tech block are places like Twin Falls, Idaho; Oklahoma City; and Jonesboro, Ark. These are among the smaller cities or rural areas of the United States where information technology companies have been locating or expanding facilities.
The companies, ranging from IT services start-up Rural Sourcing to computer giant Dell, can save on wages in these communities, thanks partly to inexpensive housing there. And in some cases, the companies are pitching operations in midsize America as an alternative to
shipping work abroad.
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Tech companies are locating operations in smaller U.S. communities, such as Oklahoma City and Jonesboro, Ark., where wages can be much lower than in computer industry hubs like Silicon Valley.
Bottom line: Facilities in midsize American cities may offer a low-cost domestic alternative to offshore outsourcing. And some involved in the "homeshoring" trend can imagine small cities eventually challenging San Jose and Boston when it comes to tech innovation.
A key to what's been dubbed "homeshoring" is tapping a little-noticed talent pool. Kathy White, Rural Sourcing's founder and
an Arkansas native herself, argues that technology professionals in major metropolitan centers often come from smaller communities. "We're just reaching the ones that don't want to leave," she said.
To be sure, states like Oklahoma, Arkansas and Idaho aren't stealing the show when it comes to generating tech jobs. California ranked as the top state by far in terms of new IT positions posted on major job boards in December, with New York and Illinois also among the leaders, according to a study from job search service NimbleCat.
California's Silicon Valley--long the center of the technology world--continued to
bleed jobs last year, but saw venture capital investments increase by 15 percent. The state now accounts for 35 percent of the nation's venture capital, up from 14 percent a decade ago.
Meanwhile, the practice of sending application development work and other technology projects overseas
does not appear on the verge of ending.
Challenging the tech meccas
Even so, U.S. communities other than the traditional computer meccas--Boston, Silicon Valley, Raleigh-Durham, N.C., and Austin, Texas--are starting to see their technology fortunes rise. In some cases, the cities are fairly large.
A U.S. Department of Commerce report concluded last year that pockets of economic development based on science and technology, or S&T, are "exploding" in Minneapolis; Seattle; Boulder, Colo.; and Salt Lake City. "Interestingly, all these areas have strong concentrations of S&T resources, including research universities and private-sector research centers," the report said.
Universities are part of the reason still smaller communities are attracting technology operations. Rural Sourcing has partnerships with several universities, including Arkansas State University in Jonesboro, where most of the company's roughly 30 employees are based.
The company also has a pilot project on the campus of Eastern New Mexico University in Portales, N.M., and is planning to open an office at a technology incubator in Greenville, N.C., where it is working with East Carolina University. Over the next two to three years, Rural Sourcing hopes to employ more than 100 people in Greenville.
Chicago area-based Decision Design is another IT company expanding outside of typical technology centers. The 20-person software developer recently announced new offices on the fringe of Silicon Valley--in Pleasanton, Calif.--that should hold another 10 or more employees.
Systems integration company Ciber appears to have even more ambitious plans for planting technology operations in smaller U.S. communities. In January, Greenwood Village, Colo.-based Ciber said it opened a facility in Oklahoma City, the first of several low-cost, "made
We have been tracking the markets for over a year now and the hottest market these days is Ohio. Yep. Ohio. Tax incentives are driving major corporations to open up technology centers there. JP Morgan is opening up shop among others. Expect to hear about the shortage of IT workers in Ohio soon if not already.
I was in Ohio last month, and the media there is advertising heavily for Tech support personnel, with lots of benefits that the traditional centers are going to find hard to compete with.
I would agree with this tactic of utilizing medium sized cities, which have a lower cost of living and a social atmosphere that many people prefer.
I recently moved to Huntsville Alabama, and it has worked out well. I bought a larger house 40k cheaper than I paid in St. Louis. We always live in the best school district available. In terms of college entrance scores, Hunstville's Grissom High School is dead even with the top districts our children attended in St. Louis and Dallas.
Socially, we were happy to find a very educated and diverse environment, probably due to Marshal Space Flight Center, and Huntsville having the second largest research park in the country. Many of our new friends and neighbors are literally rocket scientists.
Someone told me that Huntsville has been rated as the sixth best place in the country to raise a family, due to low cost of living, low crime rate, and good educational system. After living here, I would say that is a pretty accurate rating.
The abundance of high tech workers with low mortgages gives Huntsville a big restaurant scene, and many recreation opportunities such as adult leagues for baseball and soccer. I highly recommend the Huntsville Fencing Club.
Everyone has to make their own decisions for career and family. This time my wife and I have decided that we wont move unless I'm physically thrown out of my present job.
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Facilities in midsize American cities may offer a low-cost domestic alternative to offshore outsourcing. And some involved in the "homeshoring" trend can imagine small cities eventually challenging San Jose and Boston when it comes to tech innovation.
Kieran Mullen
Chris Rock - "I don't care where you live in America, if you're on Martin Luther King Boulevard, there's some violence going on."
Sad but true.
I recently moved to Huntsville Alabama, and it has worked out well. I bought a larger house 40k cheaper than I paid in St. Louis. We always live in the best school district available. In terms of college entrance scores, Hunstville's Grissom High School is dead even with the top districts our children attended in St. Louis and Dallas.
Socially, we were happy to find a very educated and diverse environment, probably due to Marshal Space Flight Center, and Huntsville having the second largest research park in the country. Many of our new friends and neighbors are literally rocket scientists.
Someone told me that Huntsville has been rated as the sixth best place in the country to raise a family, due to low cost of living, low crime rate, and good educational system. After living here, I would say that is a pretty accurate rating.
The abundance of high tech workers with low mortgages gives Huntsville a big restaurant scene, and many recreation opportunities such as adult leagues for baseball and soccer. I highly recommend the Huntsville Fencing Club.
Everyone has to make their own decisions for career and family. This time my wife and I have decided that we wont move unless I'm physically thrown out of my present job.
Dr. David Young
Alabama Supercomputer Center