The financial engine of Silicon Valley seems to be driven right out of the Midwest. America's urban coastal cities experienced a boom in their technology sectors. New York's Silicon Alley and Boston's biotech corridor are world-renowned incubators of talent and startups. Austin, Texas, Seattle, Washington, Washington, D.C., and even Miami Beach are vying for a piece of the digital economy (and silicon-like nicknames).
But what about Columbus and Indianapolis and Kansas City? After years in the doldrums, their fortunes are on the rise. Venture capital firms set up shop. Startups cluster in old industrial strongholds. But the region's tech sectors look different from their coastal cousins.
The Midwest sees the rise of “mid-tech.”
In addition to the traditional high-performance software jobs that abound in Silicon Valley, mid-tech jobs, loosely defined as technology jobs that require less than a college degree, are growing rapidly in the Midwest. Although not an official name, mid-tech jobs can be defined as skilled technology work that doesn't require a college degree: just intense, focused training on the job or in vocational programs like those of the professionals of the industrial past.
As software and hardware become the US institution meconomic development, More and more technical jobs are becoming blue-collar. “The modern factory job is a mid-tech job,” says Patrick McKenna, an entrepreneur and investor at High Ridge Venture Partner in San Francisco, which focuses on finding such jobs in the Midwest.
At the request of Quartz, the Brookings Institution's Metropolitan Policy Program, a nonprofit public policy research group, collapsed data from the Bureau of Labor Statistics to understand where such jobs were concentrated and if they were increasing. We sampled 12 large US cities (most of them in the Midwest) with strong industrial pasts and analyzed their employment numbers and broke them down by occupation and education level. Mid-tech jobs were defined as “computer and math occupations” in which 30% or more of those employed did not hold a Bachelor's degree. Even on this very narrow definition (many more low-tech jobs are not captured by the government data), the subset includes 914,000 people in computer systems analysts, computer network architects, and support specialist roles.
The results show a clear trend. Mid-tech jobs made up more than a quarter of all tech employment in major Midwestern metropolitan areas, including Columbus, Ohio. Cincinnati, Ohio? St. Louis, Missouri? Detroit, Michigan? Nashville, Tennessee? and Minneapolis-St. Paul, Minnesota-Wisconsin. More than 100,000 people were employed in such jobs in these cities alone. That percentage never dropped below 20% in the metropolitan areas of the Bay Area, the heart of Silicon Valley. Although the analyzes did not include all cities, they reveal the evolution of the technology sector in the Midwest in different directions than Silicon Valley.
Growth in middle-tech jobs is also concentrated in Midwestern cities where the cost of living (and salaries) can be a third of the cost of living in the Bay Area. The exception is San Jose, which serves many of the Valley's biggest businesses (what Brookings calls a technology “application” center rather than the creative hubs of the North), and a few university towns with high-tech sectors but relatively few middle-class jobs. technology. Overall, high- and medium-tech jobs grew at a compound annual rate of about 5%.
But what do these jobs look like? In Kentucky, technical skills that once applied to things like calculating mine blast trajectories are being transferred to Javascript. The software company Interapt has create a training program in Eastern Kentucky to turn former miners and others with technical skills into software developers. The program compresses a software engineering education into about nine months. Those who complete the program (not all) see their annual salaries increase from as little as $16,000 to between $36,000 and $60,000, Interapt claims. Healthcare companies such as Humana have tapped Interapt graduates to help build their patient care applications. “Not all miners can be developers,” admits Interapt CEO Ankur Gopal, but he believes he can graduate about 50 new workers per class who continue to learn after entering the tech workforce. “My vision for the future is to have them work for nine months and then train for three months,” he said in an interview.
Even fewer technical jobs flow into the region's economy. The Australian closed captioning company Ai-Media came to Youngstown, Ohio in 2017 after McKenna helped connect business and political leaders. The company just closed a deal with caption on the new Facebook Live Streams, and plans to add hundreds of new technical jobs to the area, McKenna says. Now he's asking Midwestern cities like Youngstown to institute that kind of matchmaking by sending emissaries to the Bay Area who secure jobs back home.
Investors are also piling in. New business ventures Rev1 Ventures and Drive Capital, as well as initiatives such as that of AOL co-founder Steve Case Rise of the Rest, All are pouring money and attention into Midwestern startups. While most aren't as glitzy as their Silicon Valley cousins, the region has racked up multibillion-dollar exits, such as Salesforce's $2.5 billion acquisition of Indianapolis-based Exact Target in 2013 and its takeover of McKesson of $1.1 billion in Ohio, based on Ohio20-M. .
But the future challenge in the Midwest will be the same as everywhere else. No place is immune from rapid technological change and automation. And most Bay Area-based venture capitalists have but set up shop in the area. The Brookings analysis shows that the composition of mid-tech jobs has changed dramatically over the past five years, as traditional IT employment has declined amid growing demand for experts to manage cloud computing.
