By Lisa Segelman
From the September / October 2023 Issue
The term ”Tech Hub” entered the lexicon when a high density of established and start-up companies began clustering together and became part of the economic infrastructure of the community. The first tech hub and birthplace of companies like Google, Apple, Facebook, Adobe, HP, and Netflix was in Silicon Valley, in the southern part of the San Francisco Bay area.
Now the concept has spread to scores of other regions and cities and goes well beyond tech as we knew it. Tech hubs have expanded their portfolios to include life sciences, medical device manufacturing, EV (Electric Vehicles) clean tech (renewable energy), AI (artificial intelligence), cybersecurity and creator and gaming industries.
These regions have become sought-after entities for site selectors for the resources they offer now, but also for what they promise is on the horizon.
Regardless of the type of company in search of a new location—a software giant, startup biotech concern, or a research & development think tank, site selectors are setting their sights high. Factors on their growing list of resources include economic incentives and partners, a robust labor pool, and the educational and training resources that support it. They’re carefully watching regulatory issues, supply chain logistics, competitors, neighbors in the region from supporting industries, the overall business environment, and quality of life.
Here are a sampling of regions across North America with established and developing tech hub status.
Ontario, Canada: Ethical AI, Biotech And Fintech Innovation
Canada’s second largest province, Ontario, encompasses an area larger than France and Spain combined and is a tech hub beacon. Cities such as Toronto, Ottawa, and Kitchener-Waterloo are hubs for start-ups and tech giants alike, but the province also graduates over 65,000 STEM graduates and leads the way in areas such as artificial intelligence.
“Ontario’s dynamic ecosystems and elite talent are drawing global investors. Invest Ontario is here to guide and support their success by helping businesses access the tools and programs to thrive,” says Trevor Dauphinee, CEO of Invest Ontario. The agency’s Business Development and Investor Services teams has created an innovative program to help Site Selectors identify Ontario sites for their clients. “We arrange tours across the province to various sites, and provide introductions to municipalities, utilities, and institutions. Our team knows the province and are here to help when clients are considering expansion projects,” adds Dauphinee.
The region has been successful in keeping its automotive edge sharp. The blend of historic roots and modern innovations in tech positions allows Ontario to utilize its 100-year automotive manufacturing history to put them at the forefront of the Electric Vehicle (EV) transition and have attracted $24B in automotive investments in the last three years.
“Ontario is one of the fastest growing tech hubs in North America with over 408,000 highly skilled IT workers and nearly 25,000 tech businesses,” said Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade. “With state-of-the-art research and development facilities, a world-class workforce and competitive business environment, Ontario has everything tech companies need to invest and grow. We continue to innovate in a wide range of areas including ethical AI, biotechnology and fintech, and we look forward to welcoming more tech companies as we grow the sector.”
Saratoga, New York: Local Commitment, Long Range Vision
Saratoga County and New York State have been pioneers in leading the effort to make the area a thriving tech hub. The region hosts a myriad of established industries and promising emerging companies in sectors like tech and electronics, digital game development, materials processing, semiconductors, nanotechnology, cleantech/renewable energy.
“The commitment of local governments and county leaders, the funding of critical infrastructure and strong support of the business community has made a difference and propelled ambitions.”
— Tori J.E. Riley, VP,
Saratoga Economic Development Corp.
“The commitment of local governments and county leaders, the funding of critical infrastructure and strong support of the business community has made a difference and propelled ambitions,” says Tori J.E. Riley, Vice President, Saratoga Economic Development Corporation. “This makes our region well-situated for continued growth and we’re excited to see our efforts multiplied across our state. We’re experts in navigating regional attributes, incentives and resources and are committed to working at the speed of business.”
Connecticut: Top Tier Assets, Valuable Fintech, Insurtech History
Eighteen technology companies have found success in Connecticut because of the state’s world-class assets and support since 2021, creating over 2,000 jobs for Connecticut. Mirador, a growing FinTech moved its headquarters to Stamford in 2022, Refined Payments relocated from New York City metro area to Shelton in February 2023, for its proximity to New York and Boston, access to workers and the growing number of highly innovative companies in Shelton. Internationally, India-based IT Services firm Larsen & Toubro Infotech opened a new Engagement Center in Hartford in 2022 to enable workforce transformation.
“Here in Connecticut, we have an incredibly strong offering for tech companies due to our amenities, quality of life, and lower cost of living, considerations which are critical given the ‘work-from-anywhere’ culture so prevalent in the tech sector,” says Peter Denious, CEO AdvanceCT. Yale University and the University of Connecticut are two anchor institutions with deep and expanding commitments to innovation, R&D, and company creation. We also have vibrant and growing ecosystems in fintech, insurtech, medtech, and quantum computing. We enjoy the benefit of drawing on one of the most highly educated workforces in the country – a reason Hartford has been named one of the best places for tech talent in the U.S.”
Greenville, North Carolina: Established Hub, Exciting Homegrown Gaming
This rising tech hub is a region of eastern North Carolina 75 miles inland and 85 miles east of Raleigh, and home to East Carolina University and Pitt Community College.
The region has a rich history in pharmaceutical and advanced manufacturing as well as clusters in marine, chemicals, and plastics. Pharma companies date back to the 1970s when Burroughs Wellcome chose Greenville for their manufacturing facility. The biotechnology sector in Greenville hosts multinational companies such as Thermo Fisher Scientific and Catalent.
“We’re proud to be an established hub, but also excited about an inordinate amount of interest in our in homegrown gaming and creator companies such as MrBeast and Grover Gaming,” says Josh Lewis, President/CEO of the Greenville Eastern North Carolina Alliance. “MrBeast is the most-subscribed YouTuber and Grover Gaming is a software development and design company that specializes in electronic gaming. These companies employ hundreds of people and are attracting young, skilled talent to the area. East Carolina University and Pitt Community College are a viable exciting resource for growing tech entities looking to locate or relocate to Eastern North Carolina.”
Georgia: Cybersecurity Center, Global Connectivity
“Georgia is known as ‘Transaction Alley’ with more than 200 companies offering banking, blockchain, information security, and data analytics services and over $300 billion in transactions processed in the state annually. The state is home to Visa, Deluxe’s FinTech innovation Center, and Invesco’s global headquarters, as well other established companies including Equifax, Fiserv, Global Payments, Intercontinental Exchange, Capital One, and Microsoft. Morgan Stanley alone employs more than 4,000 Georgians.
“We have a robust talent pipeline supported by unique educational opportunities like Georgia Tech which known for its nationally top-ranking programs. And schools across the state operate innovation labs that foster research and learning.”
— Kristi Brigman, Deputy Commissioner of Global Commerce,
Georgia Department of Economic Development
Cybersecurity is another key sector for the state. Augusta is home to the Georgia Cyber Center, the U.S. Army Cyber Command, the U.S. Army Signal School, the U.S. Cyber Center of Excellence, and the NSA Cryptologic Centers. Cutting-edge technology and digital health startups have spun out of the state’s robust fintech ecosystem.
“Companies are attracted to our highly skilled workforce, global connectivity, and business-friendly environment,” says Kristi Brigman, Deputy Commissioner of Global Commerce, Georgia Department of Economic Development. “We have a robust talent pipeline supported by unique educational opportunities like Georgia Tech which known for its nationally top-ranking programs. And schools across the state operate innovation labs that foster research and learning.”
Atlanta ranks fourth in the nation for tech talent diversity, and the state continues to attract diverse young professionals from cities across the East and West Coast.
“Companies can locate in an affordable metro with global connections, find world-class talent, and deliver on DE&I initiatives – all in one place.” adds Brigman.
Federal ‘Tech Hubs’ Program Aims To Support Regional Growth
NOFO (Notice of Funding Opportunity), the first phase of the government’s Tech Hubs program, gives underserved regions a chance to perform on the global stage.
Emerging regions aren’t alone in their pursuit to attract site selectors and the companies they represent. The Biden Administration has offered federal support that resulted in legislative action. Congress passed three laws during the 117th Congress (2021-2023) that offers nearly $80 billion in place-based programs. The government is directly investing in underdeveloped regions that align with national economic goals. The idea is to support local economies which includes tapping into local talent, resources, academic institutions, and ecosystems.
To generate excitement and a sense of competition for coveted funding, in May of this year the U.S. Economic Development Administration (EDA) posted a Notice of Funding Opportunity (NOFO) for the Regional Technology and Innovation Hubs (Tech Hubs) program. At its core is an official chance for regions to compete against each other for funding that can help propel them onto the world stage if they can prove they’re ready for the challenge.
“We took that charge to heart,” says Paul Levoie, Chief Manufacturing Officer for the State of Connecticut. ‘We looked at our region, instead of just our state. We are so tightly tied in with neighboring Rhode Island when it comes defense and maritime industries, it just made send for us to apply for NOFO as a single entity. It’s a great way to stimulate growth within a region. This teamwork will make us incredibly more productive and much safer as a country. These transformative projects will cut across the department of defense and commerce.”
For example, if Connecticut receives designation from EDA, it will be invited to apply for an implementation grant for its Model-Based Enterprise Tech Hub. The NOFO for Phase 2 implementation, is expected to be released in Fall 2023. Implementation awards will be $65 million each. On the strategy side, Connecticut would receive $500,000—the state would provide a $125,000 match, to amass $625,000 total.
“This will help us bring what we’ve already learned about the adoption of model-based definition in the defense sector to the commercial sector,” adds Levoie.
Existing and emerging tech hubs see this program are excited that this program will start pumping federal tax dollars back to their states. What it means to regional consortia nationwide is that they’re being offered a chance to grow in regions that have been historically overlooked. Remote and rural areas that have been amassing resources now have a chance to jumpstart their marketability if they can prove they’ve got what it takes to lead and succeed globally.
Envisioned by Brookings Metro and the Information Technology and Innovation Foundation in 2019 and structured by the Chips and Science Act, the Tech Hubs Program is considered an important part of the federal government’s push to foster real development across the nation’s regions. That, they believe, will result in the creation of more good jobs in more communities throughout the nation.
Dallas, Texas: Impressive Tech Workforce, Biotech Talent
Known for its strong tech ecosystem, established and emerging companies call Dallas home due to their quality workforce and the resources its universities provide.
Dallas has the 5th largest tech workforce in the U.S. and the region is home to almost half a million jobs in information, telecommunications, and professional, scientific, and technical services.
“What’s new in Dallas is its distinction as an emerging biotech hub,” says Majed A. Al-Ghafry, Assistant City Manager, Economic Development and Convention. “Dallas-Fort Worth attracted $1.6 billion of life sciences venture capital funding between 2018 and 2022, the 8th highest in the US.” The region also received $406 million in NIH funding in 2022, led by over $272 million to UT-Southwestern”.
Everything may be bigger in Texas, and that includes the footprint of many tech hub companies. Dallas is home to Pegasus Park, which includes BioLabs, 37,000 sq. ft of state-of-the-art, flexible lab, training, and office space for life science innovation. Bridge Labs will be opening an additional 135,000 sq ft of intuitional-quality, non-incubator R&D space in 2024.
“What makes us a reliable and viable site for established and emerging companies is that we’re a home to biotech talent,” adds Al-Ghafry. “Our city’s life sciences labor pool has grown by 17% since 2019 to more than 26,000 workers and the number of life science researchers has grown by 33% over the past five years. We’ve got the human/talent resources companies need for the longer haul.”
Memphis, Tennessee: Digital Delta, Growing Advanced Manufacturing
Memphis is home to some of the nation’s fastest-growing companies including Very Special Games, Evolve Bank, and Travel Nurses. These companies have found success in no small part thanks to Memphis’ tech resources.
Memphis is ground zero for Supply Chain 4.0. It is home to over 3,600 supply chain and logistics firms spanning warehouse and distribution to supply chain intelligence and autonomous vehicles. With nearly 120,000 employees across the region, supply chain and logistics have witnessed a remarkable 16% growth since 2017. Home to FedEx’s global HQ and the four Rs—river, rail, road & runway—the Digital Delta can reach 95% of the world’s GDP within an impressive 72 hours. More freight moves through the region than nearly any other city globally, with minimal weather delays.
Greater Boston, the San Francisco Bay Area, and San Diego once again reign supreme as the top three U.S. markets for life sciences, according to a new JLL report. Read more…
Memphis also boasts a strong track record of commercializing new technologies. Alchemist Accelerator recently launched its only U.S. hub outside of Silicon Valley in Memphis to focus on supply chain and logistics startups. And Ridgeline VC recently located its headquarters in Memphis to better access early-stage technology companies.
Memphis is the undisputed tech hub for supply chain and logistics technology, but what has changed in the last five years is a growing advanced manufacturing sector. Companies from around the world are choosing Memphis not only to move their products but make them as well. The region is home to the second largest orthopedic device manufacturing market in America, for instance, and one of the fastest growing regions for advanced manufacturing.
Memphis is making a mark for itself in diversity and site selectors are noticing.
“We’re poised to become the country’s most diverse tech hub, potentially generating an abundance of African American owned patents and leadership in advanced technologies,” says Gwyn Fisher, Chief Economic Development Officer, Greater Memphis Chamber.
“In Memphis we have an African American tech ecosystem that features assets that will support the adoption and scale of new technologies including entrepreneurship ecosystem builder organizations, 95% of which are located in opportunity zones; eight African American companies previously started by a tech incubator; and dozens of mobilized African American mentors in tech incubator and accelerator programs within the city.”
Today, one in every four individuals holding a tech position in the region is African American, giving Memphis the largest saturation of this population’s tech talent based on available roles.
“Other resources like Code-Crew and Tech901 are training kids and adults for careers in tech. They’re one of the main reasons Memphis has the highest concentration of African American tech talent in the nation,” adds Fisher.