Oct 23, 2013

Why the Midwest is better for startups than saturated Silicon Valley

Excerpted from VentureBeat
By Matt Lautz

Traditionally, top talent flocks to the coasts for the in-demand and most coveted technology jobs. The Midwest is rarely seen as a technology hub, if at all. In recent years that has been attributed to the “brain drain” phenomenon — the idea that talent created and nurtured in Midwest cities leaves for larger cities that are more well-known for their business and tech culture.

However, new research is beginning to paint a different story of rising job growth and business prosperity in the Midwest.

A quarterly report published this June by global human resources consulting firm Manpower ranked the top 10 cities hiring in the third fiscal quarter of 2013 and surprisingly Silicon Valley and New York weren’t listed. Coming in at number one on the list was a sleeper — Des Moines, Iowa, with a projected 26 percent net employment outlook. Grand Rapids, Mich., and Columbus, Ohio, also made the list.

Other cities like Milwaukee and Madison, Wis., have begun to transform from manufacturing meccas to growing pockets of tech innovation and are supporting a new wave of entrepreneurship in the process. In fact, Wisconsin Governor Scott Walker recently passed a budget that will fund several initiatives aimed at encouraging entrepreneurship and innovation. This includes $6 million for seed accelerator and capital catalyst programs through Wisconsin Economic Development Corp.

Midwest cities are also getting the attention of venture capital firms. One VC firm, Hyde Park VC, just announced that it is looking to pour $25 million in funding into Midwest-specific startups. And a report from venture fund Venture51 shows VC growth in the Midwest increased by 103 percent, compared to Silicon Valley’s 12.6 percent and NYC’s growth of one percent between 2005 and 2010.
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