Rhode Island’s efforts to drive innovation and subsequent technology jobs to the state aren’t unusual, but building a technology hub is hard. I’ve watched Austin, Texas, where I live and work, fight to get to the point where it can claim to be a technology center and then continue fighting to stay there.
To get there, a city needs three things. Money, big companies and good weather. That last one isn’t a joke; quality of life is important. For example, many people want to live in Austin, while few want to live in Houston. So even though there are a lot of huge companies, money, and a real effort by folks at places like the Houston Technology Center and Startup Houston, building an information economy there is going to be a challenge. Blame it on the humidity. The same goes for places like Tulsa, Okla., Detroit and even Chicago, where weather or other factors such as crime make it hard to convince people to live there. (Note to the Chambers of Commerce in named cities: I said hard, not impossible).
Big companies can push technology innovation in a number of ways. They can act as customers for local startups and also contribute executive talent — preferably talent that has struck it rich with stock options and can work for free or invest in other startups. Dellionaires made great angel investors during the 90s.
If the big companies were venture-backed, their investors are likely happy to back other startups in the region, especially those with executives from former portfolio companies. In Austin, Tivoli, which went public in 1995 and later sold to IBM, fueled most of the enterprise software startups that helped the city make a name for itself in industries other than silicon.
Finally, there are the venture capitalists. Austin initially only had a few of them, but Austin Ventures helped fund scores of startups and bring to the area investors from both coasts. As the boom hit, venture firms sprouted like mushrooms, but only a few remain today. Sadly, AV isn’t really funding many of the social sites that are hot today, nor does it have a clean technology focus that Austin is trying to push.
The fact that Austin is missing those key ingredients of money and big companies has left me kind of down on the city’s technology community right now. There are thousands of talented people, but few folks willing to fund them and few big public companies with growth. It’s 65 degrees and sunny today, but good weather is only part of the equation.