The Link Between Technology and Economic Vitality

Posted by on Sep 12, 2014 in events, General News | No Comments


Techonomy Detroit explores how technology can boost the economic growth and competitiveness of cities

Back for its third year, Techonomy Detroit is admittedly one of our favorite and most anticipated events here at Grow Detroit — as it brings Entrepreneurs and executives to Detroit including the likes of Jack Dorsey, CEO, Square; Chairman, Twitter, Tony Scott, CIO, VMWare Inc, Zach Sims, Co-founder and CEO, Codecademy. The conference explores how technology can boost U.S. economic growth, job creation and urban revival, and is a must attend.

In anticipation of the Techonomy Detroit conference on September 16th, we spoke with Techonomy Founder David Kirkpatrick & Detroit Entrepreneur Josh Linkner. We’ve included the full transcript here:

ALEX: Techonomy Detroit is really an event about the economic and civic competiveness of all cities; but, Josh, could you first address what you see as Detroit’s unique value proposition today? And, David, could you talk a little about the factors that seem to be common among all major cities in their quest to attract people and investment?

JOSH: Detroit is in a unique spot right now—and a very exciting one, with tremendous momentum. From a technology and entrepreneurial standpoint, I view Detroit as one of the best places to build a company. We have an extremely low cost basis compared to either coast for everything from real estate to talent. Moreover, this region is busting at the seams with amazingly talented and experienced people in all areas of business, including software engineering.

The biggest element, though, is that you, as an entrepreneur, have the opportunity to leave your fingerprints on the greatest turnaround story in American history. You can be a participant and help shape the future of a great American city. Not that New York and San Francisco aren’t wonderful cities, but those places already have been developed. So the chance of your coming to New York and leaving a major mark 10 years from now are slimmer than you’d find in Detroit.

It’s a city with a soul–there’s this real grit, determination and scrappiness that form a breeding ground for entrepreneurship and innovation–combined with a low cost basis, a very supportive business and governmental community, combined with an opportunity to make a real social difference and a chance to make history, to tell your grandkids that you were part of something bigger than just yourself. Those are incredibly powerful beacons of opportunity.

DAVID: Techonomy has been running a series of interviews with Detroit startup entrepreneurs, and every one of them talks about the concrete advantages of being in Detroit. One said that in Detroit, when they have a challenge or question, a whole community of people is eager to help one another out and to nudge everybody along collectively. It’s kind of moving to me as a New Yorker to see that happening.

In terms of cities as a whole, however, there’s a flipside to Detroit’s enthusiasm. Even though it’s so clear Detroit has unique things going for it, Detroit faces a bigger challenge than some people may realize. Almost every city in the United States and the world has figured out that this entrepreneurship, innovation, young-people, maker-movement nexus is key to their long-term health. There’s not a major city in America that isn’t talking about incubators, startups and the energy of young thinkers and entrepreneurs, and every city is trying to figure out how to attract those people and keep them. Every city now wants to be a startup city and an innovation capital. This is true even of Lagos, Nigeria, or Beirut, Lebanon, which has an astonishing community of entrepreneurs, startups and incubators. It’s a global phenomenon.

That said, Detroit’s cost basis is a huge asset. It’s cheaper—and easier–to live there, and that’s a big advantage. Cost is such a consideration when startups think about where to locate and how to operate, and if you can reduce your cost, it’s really a big deal. So I think you can hardly find a place where it’s more affordable to do business than Detroit.

Further, there is a very widespread phenomenon which, happily, Detroit is very much participating in—people who have grown up in a region now are increasingly feeling they don’t have to move to some remote location to start a company. That’s a big deal, too. Many young entrepreneurs are staying in Detroit or coming back to Detroit from Silicon Valley.

JOSH: I agree everyplace wants to be startup city. However, if you’re in some random little town, it’s one thing to say it but you may not have the resources to really do it. We have the low cost basis. Others may have lower but may not have the necessary resources to make it a startup city. We have real infrastructure and a real airport with direct flights everywhere, spitting distance from some of finest universities in the world. It’s a big small city with real advantages.

DAVID: Yes, I’ve heard, for instance, that southeast Michigan has the largest absolute number of engineers of all types of any region in the country. Startups and cities thrive on diversity of all sorts—designers, automotive engineers, industrial engineers. The more diverse sources of ideas that a city can aggregate, the more dynamic its economy will be. Still, it’s easy to get caught up in the excitement. There’s heavy competition.

ALEX: Techonomy Detroit explores the impact that Technology has on cities and the people who inhabit them, David, what are the biggest trends impacting the economic and civic competitiveness of cities today?

DAVID: One important trend is governments seeking to create a landscape conducive to entrepreneurship and investments. In the U.K., governments are way ahead of the U.S. in terms of actively attempting to create a much more tech-friendly economy. For example, in London, local and national governments recognized that technology is a key driver for their economy. They created Tech City, a region of London where they gave tax benefits, low rent and other incentives to group startups in one neighborhood and made sure that broadband availability was extremely generous. They hired away Facebook’s head of European operations to run Tech City. Now there are thousands of startups in London, and people are moving there like they did to Silicon Valley

One thing I find exciting about Detroit right now is that the new city government under Mayor Duggan has some very good ideas. I’m excited that the city of Detroit’s CIO, Beth Niblock, will be on stage at Techonomy, interviewing Jack Dorsey from Twitter and Square—that will be a fantastic combination. She’s really thinking about how the city can help itself and its community and industry all as one big economic system, and the need to think in those terms is much more evident today than in the past.

ALEX: How much should a region like Detroit leverage the legacy strengths it holds versus jumping off into new directions and embracing different technologies or different industry verticals?

DAVID: There are really major new trends emerging that impact this question. We’re now entering an economy where anyone with the energy and ideas can have an economic impact much more quickly. The scary flipside of that is that, if somebody comes from mindset of the old economy and is just sitting around waiting to get a job, they’re very likely to be disappointed. One of the big challenges that Detroit and other cities face is how to bridge the gap between these energetic. TechCrunch-reading young people and the large number of people who were employed in the old economy and have lost their jobs because automation and robotics are changing the employment landscape. Cities that appreciate that this transition is underway and take concrete methodical actions to try to help make that transition for people are the ones that will succeed. I see evidence of some of that in Detroit, but I think there needs to be more.

JOSH: I believe we have to diversify the economy. Certainly we should leverage our history—we have a thriving auto industry, and I’m not saying let’s blow that up—but we suffered because we were a one-industry town for so many years. It’s critical that we factor economic diversity into the equation so our entire fortunes don’t rise and fall with one industry.

Bringing technology into the area makes sense because it’s a capital-efficient platform that can scale quickly, with high-paying jobs, and is a mechanism to attract and retain our best and brightest in the city. I think not all dollars of revenue in industry are equal. A dollar of old-school manufacturing revenue is not as valuable as a startup technology company because that tech company could serve as a beacon of opportunity and innovation to others.

I’d say to entrepreneurs, Detroit is the best place around to make your mark. My company, ePrize, was the largest Internet company in Michigan, and we attracted enormous attention from media. If I had this sized company in California, I wouldn’t even be on the back page. Detroit presents an opportunity to get access to investors, clients, technology and talent. The chance to stand out from the pack and leverage assets here at our disposal is profound.

I think someone would be crazy to start a company in Silicon Valley today. Good luck standing out, good luck overpaying to get a D-level engineer, good luck retaining your people. Entrepreneurs stand for finding opportunity where others do not and taking the path less traveled. Following the herd mentality to a place where people think they ought to be is the antithesis of what entrepreneurship is all about. Real entrepreneurs are ones who forge their own path, and I think Detroit is a great place to do it.

ALEX: This will be the third consecutive year for Techonomy Detroit, one of my favorite C-level/decision-maker events in the region. Josh, what kinds of organizations in the Detroit area would benefit from being part of this discussion?

JOSH: It applies to almost everyone. It would be a shame if executives from GM don’t attend and an equal shame if great startup leaders miss this conference. It’s an opportunity for honest, thoughtful dialogue around the topics of our community and injecting technology and attacking new challenges rather than just dealing with the old ones. It’s an important opportunity for business leaders of all shapes and sizes to learn and grow and support that path moving forward together. We intend that anyone who comes to the conference—government, university, big company, startup–goes back to their workplace with new ideas that make them more effective and more insightful.

For more information about Techonomy Detroit and to get registered, click here.