The Spread of Start-Up America and the Rise of the High-Tech South

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Start-up culture is taking root in lots of places -- and not just the usual suspects. Some of the hottest hotbeds are in the South.

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The United States has been and continues to be one of the world's great start-up incubators, but with innovation no less than with agriculture, some places are much more fertile than others. What gives some cities and regions such extraordinary creative and entrepreneurial vitality -- and what holds others back?

Start-Up NationPaul Graham, who is reinventing venture capital for our time, has perhaps the clearest insights into what makes for a successful Start-Up Hub, the term he uses for places like Silicon Valley. He used to look at the external environment for clues. But in a recent essay, he says that the more he studied and the more he lived the start-up life through his own very successful high-tech accelerator, YCombinator, the more he came to realize that a very powerful force of culture was at work. Most places, he says, might as well be sprayed with "startupicide." Startupicide is what damps down and repels startups and those who would build them. "I could see the average town was like a roach motel for startup ambitions," he writes. "Smart, ambitious people went in, but no startups came out." 

Startups are fragile things by their very nature -- few succeed even under the best of circumstances. What makes Silicon Valley and a very few other places different, he noted, was that their culture contained an antidote to Startupicide -- such places embrace an ethos that encourages rather than crushes startups and the broader mentality from which they grow. "The problem is not that most towns kill startups. It's that death is the default for startups, and most towns don't save them," Graham notes. "Instead of thinking of most places as being sprayed with startupicide, it's more accurate to think of startups as all being poisoned, and a few places being sprayed with the antidote."

Jane Jacobs identified almost exactly the same dynamic when I asked her some years ago why only a handful of places pioneer innovations and unleash the creativity of their residents, while most are content to sputter along, stagnate, and even die. "Each and every community," she told me, "is filled with lots and lots of creative and innovative people." The trouble is with a small core of people she dubbed "Squelchers," who are instinctively opposed to doing anything new or different. Unfortunately, these people are often a town's business and political leaders. You've probably seen them in action; maybe you've even bumped up against them yourself.

Only a handful of places are endowed not only with a great research university, but a culture that tolerates and actively encourages risk-taking. Most places prefer to play it safe. But doing more of the same is hardly an option when your prospects are as bleak as they are for so many cities these days. The economic crisis has brought us to a great tipping point, what I have elsewhere termed a Great Reset -- an epoch when creative destruction spreads from technologies and industries to society, culture, and geography at large; when new business models, new institutional systems, and new geographic clusters of innovation and risk-taking come to the fore. A Great Reset is one of those rare occasions when "Squelchers" and their old squelching ways are transcended, when more and more people and places can get access to the antidote to startupicide.

And any halfway-sentient person can tell that this is precisely what is happening today. The old order is dying, and despite governments' best efforts to blow life back into it, it cannot be resuscitated. More and more people, and more and more places, realize that the key to the future no longer lies in waiting for a big company to take you under its wing, in flipping stocks (like Wall Street does), or flipping houses. The limits of a trading economy are there for all to see, manifest in the wreckage of the recent crisis.

Now is a time to build. And the urge and the mechanisms to build are what drives the Start-Up Nation. Not just tech startups a la Silicon Valley, but the start-up ethos writ large -- the builder's ethos, the ethos of creating something altogether new. It is an ethos shared by musicians forming bands, filmmakers financing their movies with credit cards, social innovators and entrepreneurs pursuing new approaches to solving global as well as local problems. It is the ethos of the Creative Class.

Despite what the die-hard Squelchers might want you to believe, the Start-Up Nation is growing. Part of this growth pattern is borne of necessity. With the economy in tatters and government all but broke, there's little choice but to go out and build something for yourself with your colleagues, fellow-travellers, and friends. Startups are much less capital-intensive than they once were. Partly because of the better tools we have at our disposal (the Internet, advanced software, etc.), partly because we live in a more modular economy that allows critical functions, from manufacturing and distribution to design and marketing, to be subcontracted out. Some of it is because others have done it, and we've seen what they can do. And a lot of it is from a cultural revolution: the fading of an old dream that saw a good job, a big house, and a big car as the goals by which success was measured, and the emergence of a new one that sees the challenge of building something novel and unique as the key to true fulfillment.

The geography of start-up America is spreading, slowly and gradually, but inexorably.

For all these reasons, the geography of start-up America is spreading, slowly and gradually, but inexorably. It's taking root in lots of places, from Portland, Oregon to Brooklyn, New York, and from Boulder, Colorado to Portland, Maine. And the South is an important part of it as well. Too many of us paint regions with too broad a brush -- North versus South, East versus West, Sunbelt versus Frostbelt. Those once-convenient categories make little sense anymore, if they ever made sense at all.

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Richard Florida is Co-founder and Editor at Large of CityLab.com and Senior Editor at The Atlantic. He is director of the Martin Prosperity Institute at the University of Toronto and Global Research Professor at NYU. More

Florida is author of The Rise of the Creative ClassWho's Your City?, and The Great Reset. He's also the founder of the Creative Class Group, and a list of his current clients can be found here
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