Hidden tech Move over Silicon Valley. Wenatchee, Washington is about to steal your thunder. February 5, 2004 It
used to be that when you thought of high-tech corridors the geography
was pretty limited to Silicon Valley, Boston's Route 128, North
Carolina's Research Triangle Park, and a few up-and-comers like Austin,
Texas.
No longer. With the rapid adoption of inexpensive broadband
technology, and the cost of urban living still high despite the
downturn, tech communities are popping up in unlikely places. Migratory
entrepreneurs have set up shop in places as diverse as Grand Forks,
North Dakota, Wenatchee, Washington, Bozeman, Montana, and Amherst,
Massachusetts – scrapping the rat race and cutting back on their
business costs, to boot. Many of these businesses are home-based and
unincorporated, literally hidden from view and flying under the radar
of government statisticians. Still, these "hidden tech" communites are
getting VC attention.
ADVERTISEMENT |  | Steve
Reynolds, a senior manager at AOL, moved to Amherst from Maryland in
the summer of 2002. He set up shop in his attic, where he has been
managing a portion of AOL's marketing support operations. News coverage
on the area's tech community convinced him there was a good cluster of
like-minded techies to provide camaraderie off hours. Almost two years
later, he's happy to be off the D.C. Beltway and is spending more time
with his family and the outdoors. "Commuting took a lot of years off my
life," he says.
Nearby is the office of Larry Jackson, a veteran Hollywood
producer/director who spent 23 years as an executive with the Samuel
Goldwyn Company, Orion, and Miramax, and was a senior producer for
films such asSilence of the Lambs and Mystic Pizza.
Mr. Jackson now operates a distribution company for independent films
from a home office – he says he got tired of the Hollywood hustle and
decided to try the simpler life. Mr. Jackson, who signs emails with
"Lawrence of Cyberia," says the move required some initial adjustment,
but he has settled into the slower pace. And the move, he adds, has
been great for his kids.
Then there are David and Myra Kurkowski, who left the
Philadelphia suburbs several years ago to operate a pharmaceutical
market research business in Cape May, New Jersey, a resort town on the
state shore famous for its beachfront attractions. What has surprised
them, they say, is the proliferation of recent transplants. "All of our
permanent staff are immigrants to Cape May, as are we," Mr. Kurkowski
notes.
Who are these people and why are they leaving organizations to set up shop in places like western Massachusetts or North Dakota?
A recent study, "Hidden Tech and the Valley: At the Cutting Edge
of the Global Internet Economy" (Western Massachusetts Electric
Company, fall 2002), helps to profile this new form of businessperson.
Like Mr. Reynolds, hidden tech entrepreneurs often pick places already
populated with like-minded techies or business professionals. They are
flexible, running "virtual companies," technology-driven operations
with one or two principles, where the work is carried out remotely
through subcontractors and business alliance partners.
Going solo certainly has its upside, according to the study:
hidden tech entrepreneurs often pull six figures, and claim clients as
powerful, and diverse, as the Vatican, the Thomas Register, and Boeing.
Joel Kotkin, a hidden tech researcher and author of The New Geography: How the Digital Revolution is Reshaping the American Landscape
(Random House, 2001), calls these locales, many of which are college
communities, "Valhallas." He cites a critical shift in the population
that is moving from urban centers. "A growing percentage of the new
population consists of knowledge workers," he says. "For the first
time, vocational choice has expanded to allow these elite workers the
option of locating not only outside the city, but outside the
metropolis itself."
Why does the hidden tech trend matter?
In a "jobless recovery," with the government reporting growth in
self-employment nationwide, economic development experts believe that
the hidden tech population may be a badly needed shot in the arm for
the American economy. In some cases, with manufacturing increasingly
moving offshore, these entrepreneurs may be the only growing economies
in some regions, especially in rural areas.
Delore Zimmerman, president of CEOpraxis, an economic
development consulting group in Grand Forks, North Dakota, agrees with
Mr. Kotkin, saying that "the lifestyle entrepreneur, the hidden techie,
is changing the landscape and workscape of America. In doing so, they
are creating demands for the creation of entrepreneur networks that are
electronically driven to connect them to national and global markets."
These new communities are also fresh, fertile ground for
venture capitalists, as Village Ventures of Williamstown, Massachusetts
has discovered. Analysts there have identified 101 emerging tech
communities nationwide – from Lexington, Kentucky to Charleston, West
Virginia – and have located new funds in areas such as Tucson, Arizona,
and Lexington and Worcester, Massachusetts.
Will entrepreneurs leave the concrete jungle in droves for the
charms of the countryside? Probably not, but with capitalism getting a
breath of fresh air, hidden tech will probably come out of hiding soon. Send a letter to the Editor. | 
