After two years of research and some 3,000 miles logged in my Honda Element on a road tour through the Rust Belt, my new book, Silicon Heartland, is launching.
Kevin Stevens, Editorial Director, Imagine Books
(distributed by Penguin Random House)
Kevin Stevens, Editorial Director, Imagine Books
(distributed by Penguin Random House)
Predictions that China could win the superpower tech race were once considered ludicrous. Now the U.S. is fighting this increasing threat by reinvigorating the U.S. innovation economy with a massive federal agenda to spur the growth of new technologies, startups, and regional innovation hubs.
China has advanced swiftly in artificial intelligence, 5G communications, electric vehicles, robotics, and other futuristic technologies. Having dominated China’s markets while Facebook, LinkedIn and Google were blocked, Chinese companies also have invested heavily in Southeast Asia and Africa, while Alibaba, Tencent and other tech titans were penetrating Hollywood, Silicon Valley and the Rust Belt before regulatory crackdowns largely halted those deals.
Anyone who has traveled to China knows or seen the televised Olympics sees the stark comparison with America’s decaying bridges, highways, rails, and airports. China is building for the coming decades.
China’s swift catch-up to the U.S. in high-tech innovation and R&D is remarkable. , and is gaining on the . has surged to become the world’s second-largest, and . China’s ByteDance, the maker of , worth $140 billion. Meanwhile, America’s share of
To rebuild and retain America’s technology leadership will take turbo-charging emerging startup ecosystems throughout the country, from the Heartland region as well as the dominant coastal cities. New tech hubs that have sprung up in the midlands such as in Columbus are a starting point in transitioning Middle America’s once-dominant economies from industries of the past to tomorrow’s growth engines. But more support is still needed for many former steel towns, auto cities and coal mining lands that are struggling to latch on to the new digital economy.
Legislation sweeping through Congress ─ the America Competes Act and the U.S. Innovation and Competition Act ─ rightly promises increased funding and resources that can filter into overlooked inland markets. This effort can revitalize coal mining regions of the Appalachians and the industrialized Great Lake states, and even create Zoom towns in remote places.
But federal spending can only go so far. To fully recover from the Rust Belt days, more venture capital investment is needed for the Heartland. goes to startups in California, New York, and Massachusetts. Only a fraction goes to the midland states.
Increased venture spending in mid-America can drive much-needed development in economic wastelands that still suffer from poverty, drug addiction, lack of opportunities, and hopelessness. This comprehensive approach to rebuild can help the U.S. counter China’s technology innovation gains and restore confidence and pride.
Traditional jobs in factories are not coming back. What’s needed to boost the former industrialized Midwest is diversification from past industries that went overseas or were automated. This drive forward needs to be accompanied by retraining of blue collar workers for higher-skilled jobs, an increase in vocational education, and more mentors and role models to inspire tomorrow’s tech entrepreneurs. With the right resources, the former Rust Belt can emerge as a Tech Belt. Entire business sectors from insurance to healthcare to transportation can be impacted.
Intel’s plans to invest $20 billion to build chip-making plants in central Ohio – alongside Google, Facebook, and Amazon data centers ─ sends a strong signal that America is building back. Other specialized tech-centric innovation zones in former Rust Belt cities such as Pittsburgh and Cleveland are gaining strength with technology startups. These innovation clusters have developed in the toughest, most unexpected places, out of necessity. In a Build Back Better challenge initiated by the Department of Commerce, 50 finalists made the cut, including advanced manufacturing hubs in Cleveland and Detroit, information technology in Pittsburgh, and digital health in Louisville.
Now, increased funding and resources from both the
public and private sector can further develop regional tech hubs in new MidAmerican
frontiers. To commercialize innovations from this frontier, it will take entire
communities, uniting universities, incubators, economic development organizations,
and R&D labs. This effort will reshape the digital divide in America,
leading to a Silicon Heartland in the center of the U.S. It will speed up the
adoption of new technologies. It will spread throughout overlooked regions that
missed the tech boom. It will fuel economic growth in still-struggling cities
of the Heartland.
The beginnings of this revival are already here: biotech spin-outs from Cleveland Clinic, robotics and autonomous driving breakthroughs from Carnegie Mellon University, and advancements in 3D printing, additive manufacturing from the Youngstown Business Incubator, and security technology in Dayton from the Air Force Research Laboratory. See photo of author standing in front of last steel mill in the Pittsburgh metro.
Developing innovation zones such as in Cincinnati are getting on the bandwagon too, fostering entrepreneurship, and attracting more millennials and Gen Z’ers who want to live and work there. These districts as tearing down or repurposing abandoned factories, dilapidated buildings and empty shopping malls. They can be turned into massive tech parks like I’ve seen in Shanghai, Beijing and Shenzhen.
It’s urgent that America acts now to maintain its global technology leadership. Building up innovation hubs in the Heartland should be an important part of this rebuild effort. An American prosperity requires that all pockets of America benefit. It’s time that “flyover country” becomes known as “fly in country.”
By Rebecca A. Fannin, author of Silicon Dragon (2008) and Tech Titans of China (2019)
The silicon chipmaker's bold investment will draw more high-tech employment to central Ohio and spur the development of a Silicon Valley in the Heartland. Already, Google, Facebook and Amazon operate data centers here, in this New Albany rural suburb of Ohio's capital city. My hometown of Lancaster, just 30 miles southeast, has attracted Google too.
These investments come as Silicon Valley continues to decentralize. With this move toward the interior of the U.S., the old images of Rust Belt and cow towns could fade fast.
The emergence of America's Heartland as a tech center comes at a crucial time for the U.S. as it fights back China's rise, deals with supply chain shortages, and jobs lost to lower-cost centers in Asia and Mexico.
The arrival of Intel to the Midwest signals another Silicon territory, like Silicon Beach, Silicon Alley and Silicon Dragon. Call this Silicon Heartland.
Over the next decade, Intel plans to spend as much as $100 billion in eight factories spanning 10,000 acres of farmland. The Silicon Valley-based giant also intends to partner with local universities to foster new talent. This build out will spur the growth of an already budding tech ecosystem in central Ohio.
Heartland America has been eager to develop new jobs, and has looked to technology and startups as sources. Now budding tech centers are gaining momentum, feeding upon the region's strong universities and research centers, and digitization of traditional businesses in insurance, healthcare and manufacturing.
A growing number of talented millennials have been drawn away from the coasts and into the center of the country. The attraction is increased job opportunities in more inland startups and emerging businesses. Other factors driving this trend are lower cost of living and the ability to work remotely.
Columbus is in the forefront of Midwestern clusters that are forming far away from long dominant Silicon Valley. CBus, as it's known, is emerging as the biggest of the once-sleepy giants. The population has surged 15 percent to nearly 900,000 over the past decade, the largest increase of any major Midwestern city.
The metro's tech cluster is fueled by the arrival of venture firm Drive Capital and its Silicon Valley style. Drive Capital, set up by two former Sequoia Capital partners from California, has invested in dozens of tech startups in 10 years, and is building businesses for the future from healthcare to insurance to robotics. Further sparks come from spinouts at Ohio State University, startup studios Rev1 Ventures and Converge Ventures, and inventions at world-leading research outfit Battelle Memorial Institute, creator of vehicle cruise control and the bar code.
Ohio Governor Mike DeWine -- and other Midwestern states -- have been angling for a chunk of this new distributed Silicon Valley. The Buckeye state has allocated billions to develop urban innovation districts in Columbus as well as Cincinnati and Cleveland. The goal? Create thousands of jobs in high-tech, healthcare and smart manufacturing, and educate students in science and technology fields. Now, this Intel facility is touted as the single, largest investment in the state's history, and boosts Ohio's economy that suffered when the steel mills and auto factories left.
The San Francisco Bay Area continues to be the epicenter of venture capital, attracting half of VC spending nationwide. But the sands are shifting. Investment in Silicon Valley startups recently declined to below 30 percent nationwide for the first time in 10 years. Meanwhile, venture deals in the Midwest have quadrupled over the past decade.
Unicorn-valued startups, high-ticket acquisitions, and IPOs have popped up in Columbus as well as tech clusters in Pittsburgh, Indianapolis, and Detroit. Each city leverages its strengths in technology to specialize. For instance, Pittsburgh is a hub for autonomous driving. Indianapolis is strong in software as a service. Detroit is into advanced manufacturing and electric vehicles.
Over the past 50 years, Silicon Valley saw its orchards transformed into high-tech parks. Now, central Ohio is starting to see its fertile pastures changed to data-driven centers. It will take some time for the culture to change for more of a risk-taking nature that is common in the Valley. As an early spotter of major tech innovation trends such as in China with Silicon Dragon, I'm convinced that a Silicon Heartland will show its power.