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Smaller Cities Becoming Hotbeds for High-Tech Growth

By utilizing the strengths of existing business as well as government and academia, smaller cities are becoming hotbeds for the biotech, IT, renewable energy technologies, aerospace/defense, digital media, and a host of other high-tech endeavors.

November 2010

Austin, Texas (1/8)

More than 3,700 high-tech firms employ 91,000 people in Austin. The capital city of the Lone Star State draws its work force from the 122,000 students in the area. Higher education, especially the renowned research centers at the University of Texas at Austin, propel the high-tech sector.

Next: Baltimore

Baltimore, Maryland (2/8)

Charm City is emerging from the shadow of Washington, D. C. with its formidable biotech sector. The city uses its strategic location to attract companies that need access to metros such as New York and Philadelphia. Lauded research centers at Johns Hopkins University keep the cluster's innovation fresh.

Next: Huntsville

Huntsville, Alabama (3/8)

Huntsville's roots in aerospace and defense run so deep it's earned the moniker "Rocket City." Its tech landscape includes more than 300 defense and aerospace firms, and more than half of jobs in the area are within those industries. Now the city is expanding its high-tech cluster beyond its traditional sectors.

Next: Orlando

Orlando, Florida (4/8)

Disney's influence extends far beyond the eponymous amusement park. Orlando's Disney Entrepreneur Center helps innovators turn their visions into reality. Coupled with universities such as the University of Central Florida and a booming population - of which a third is between 18 and 44 years old - the city is poised to rapidly expand its high-tech cluster.

Next: Pittsburgh

Pittsburgh, Pennsylvania (5/8)

Pittsburgh is shaking off its Rust Belt identity and preparing for a high-tech future. The city is focusing on green technology, research and development, and investing in education. It's particularly competitive in robotics, and was dubbed "Roboburgh" by the Wall Street Journal. Even President Obama has lauded the city for its ability to transform in the midst of economic difficulty.

Next: Raleigh-Durham

Raleigh-Durham, North Carolina (6/8)

Some of the nation's top research institutions anchor this region known as the Triangle - Duke University, the University of North Carolina at Chapel Hill, and North Carolina State University. Research Triangle Park, one of the country's oldest and largest research parks, gave the Triangle its nickname when it was founded in 1959. Today it houses more than 170 companies that employ over 42,000 workers.

Next: San Antonio

San Antonio, Texas (7/8)

With its large military presence, San Antonio is quickly becoming a hub for cyber security research and operations. The U.S. Air Force selected the city for its new Cyber Command at the 24th Air Force. Universities and private entities are also joining in the high-tech investments.

How do you build a technology city? Cities such as Los Angeles, San Francisco, New York, Seattle, and Boston already have a substantial technology base and are considered to be vast technological hubs. How can smaller cities hope to rival such tech strongholds?

It's not easy. A technology city is an intricate set of networks and social relationships - simply building a science park isn't going to work. A city needs a comprehensive plan that encompasses the following:

• At least one major success story - A brand name draws world-class talent to a city. It also generates a stream of talented workers who often venture off and start their own spin-offs.

• A major research institution - An example is the Massachusetts Institute of Technology, which over the years has spawned more than 4,000 companies employing more than one million people.

• High-tech talent - Whether from area universities or existing companies, only a place with a rich talent pool can claim to be a tech city.

• Venture capital - Venture capitalists in Austin, Baltimore, Orlando, and other smaller cities are finally starting to understand the high risk/high rewards of the technology industry.

• The proper infrastructure - This includes Web designers, high-speed Internet connections, and law firms, banks, and business services that focus on high tech.

• And collaboration is needed between business, government, and educational institutions.

By incorporating all of these crucial elements, the following cities are making their marks in the high-tech arena:

Austin, Texas
Austin is one of the top emerging hot-technology cities, with more than 91,000 people employed by approximately 3,700 technology firms. Reportedly the second-fastest growing city in the United States, Austin's population is young (70 percent are under 45) and highly educated.

Tech firms have a lot of local talent from which to draw. There are about 122,000 college students in the five-region area attending some nine institutions of higher education. These include the University of Texas-Austin - one of the top research institutions in the country.

Technology firms already are a major economic driving force in Austin, comprising about 25 percent or $8.3 billion of the regional payroll. As a result, Austin recently formed the Greater Austin Technology Partnership, focused on improving the city's global competitive position for technology innovation.

One of the technical target markets is the semiconductor industry. Samsung Electronics, already a strong base in the region, recently announced a $3.6 billion expansion of its Austin facility. The city also is strong in clean energy/renewable energy, biotechnology and medical, software and nanotech, and digital and creative media.

A newcomer to the city, HostGator LLC - a provider of shared, reseller, VPS (virtual private servers), and dedicated web-hosting - just opened its business in Austin in July 2010.

"Because of the nature of reseller hosting, HostGator customers are frequently web designers or developers who have chosen to provide hosting services to their clients," says Lance Custen, president and CEO of HostGator. "Austin's deep talent pool provides our company with the skilled work force it needs to assist these clients."

Baltimore, Maryland
Baltimore may be nestled in the shadow of the nation's capital, but it is emerging as a technological tour de force, particularly in the biotech field. "Baltimore is a great place for a life science company due to the highly educated work force that is heavily skewed toward biotechnology," says Richard Hughen, vice president of sales, marketing, and business development for CSA Medical, which has been in Baltimore since 2005. The company produces a therapeutic medical device that freezes and kills cancer and pre-cancerous tissue inside the body. Hughen also notes that Baltimore's "business and political community strongly supports start-up companies."

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