High Tech Corridors - 1
[Leadership & Management/Business Development]
Smart Business: Technology Corridors
Hed: High Tech in Small Towns
Deck: Small Technology Companies and Small Towns Complement Each Other
Summary: Big-city technology corridors aren't the only places where high tech s feel at
home. Lately, corridors in smaller city offer lower cost of living, gracious surroundings
and professional colleagues.
Pull Quote: "A key measure of the success of any technology corridor is that you start
with a few companies that are entrepreneurial. They grow, bring in capital, perhaps go
public and then the next generation of bright young middle management looks at the
experience and says 'I can do that,' and spins off another company." – Tom Rogers,
president, Technology 2020
Technology corridors near big cities have been thriving for years, but more recently
technology corridors near small cities from coast to coast are beginning to attract
businesses. Entrepreneurs get professional colleagues, lower costs, state-of-the-art
infrastructure and great lifestyle amenities. The cities benefit from the influx of new
"Technology corridors help cities by creating jobs that provide wages above the average,"
says Marc Brailov, public communications director at the American Electronics
Association in Washington, D.C. The national private-sector wage is $31,000, and the
average in high tech is $57,000, he says. "If people get jobs at a higher average wage,
they're going to spend money, and that provides a ripple effect for businesses of all types,
both large and small."
Prior to the growth of Internet technologies, business corridors were not planned, nor
were the businesses in them actually linked, says Kenneth E. Corey, professor of urban
regional planning and geography at Michigan State University in East Lansing. They
grew randomly as highways brought together suburban and exurban areas of towns like
Washington, D.C. and Baltimore.
"The potential and reality of the new (small city) corridors is due to technology and some
real-space proximity that creates synergies," Corey says. "The exciting thing about IT-
driven technology and electronic commerce is that they bring even the smallest place and
smallest enterprise into the possibility of global linkages and commerce."
Small Businesses Sign On
Initially, small-city corridors began with large companies or universities as their anchors.
These days, smaller tech businesses are setting up shop nearby for a variety of reasons.
High Tech Corridors - 2
First: finances. "The cost of doing business in Eastern Tennessee is significantly lower
than in Silicon Valley," says Parker Hardy, president of the Oak Ridge Chamber of
Commerce, located in the Oak Ridge-Knoxville Tennessee Technology Corridor. "The
quality of life is second to none in the United States."
Infrastructure costs also are lower. Bothell, Wash., a former bedroom community 40
minutes from Seattle, is part of the state's Interstate 405 tech corridor. It attracts biotech
business s that like the idea of saving on costs of building lab space with extra
ventilation, running water and facilities for the disposal of medical waste, says Tom
Ranken, former director of the Washington Biotechnology and Biomedical Association.
Second: the spin-off phenomenon. Entrepreneurs who leave jobs at larger firms recognize
the benefits of their locations and stay to start new businesses. The ideas behind iPix, an
Oak Ridge Internet imaging company, originated in the Oak Ridge National Laboratory.
IPix CEO Jim Phillips lists the area's "incredible" electric power sources and low-cost,
very high-band telecommunications as contributing to his company's success.
Third: lifestyle amenities. Oak Ridge offers 10-minute commutes, outdoor activities in
the Smokey Mountains and a cost of living "that's practically free," says Vig Sherrill,
president of ASIC International, an Oak Ridge computer chip design firm. This helps
companies attract and retain top employees. In eight years ASIC has lost only three
engineers; in California the average tenure for engineers is nine months, he says.[.]
Fourth: support systems. Repair people are more willing to supply and service high tech
equipment when they have other clients nearby, says Erick Rabins, director of business
operations at Eden Bioscience, one of Bothell's 25 biotechnology firms.
Tech Corridors Help Smaller Cities Grow
"A key measure of the success of any technology corridor is that you start with a few
companies that are entrepreneurial," says Tom Rogers, president of Technology 2020, an
Oak Ridge public-private sector partnership focusing on technology business
development. "They grow, bring in capital, perhaps go public and then the next
generation of bright young middle management looks at the experience and says 'I can do
that,' and spins off another company."
Over the last three years, 45 technology-related companies have created 450 jobs in the
Oak Ridge-Knoxville corridor. As a result Knoxville housing and entertainment markets
are flourishing and the airport has expanded more than once.
Boise's corridor got its start in the 1970s with the arrival of one of Hewlett Packard's
printer division, and Micron, a provider of semiconductor memory solutions. Today
about 440 tech companies, many of them smaller s, do business in the area.
"They manufacture products like computer chips here, sell them in China and the money
returns here and goes back through the Boise economy," says Linda Jackson, economic
development manager at Boise Metro Economic Council.
High Tech Corridors - 3
Lower taxes and cheaper land originally drew larger tech businesses to Bothell, says Gary
Hasseler, community planning manager for the City of Bothell. "There's some prestige
associated with having internationally known businesses like Advanced Technology
Laboratories here," he says. "They give us a regional presence and attract other
businesses and people to the area."
Getting the Cash
The spawning of small companies also attracts venture capital firms that see potential in
small-city technology corridors. Each year entrepreneurs create about 25 technology-
related s in Boise, says Roger Akers, managing partner in Boise's first venture capital
company, Akers Capital, Fair Oaks, Calif. He and his partner Tom Loutzenheiser opened
their Boise office in September 1999.
"Venture capital investments are on the rise," Akers says. "For s, the angel network of
private investors is pretty robust and there are broader levels of funding from venture
sources and syndicated partners to those venture sources."
Matt Harris and Bo Peabody launched Village Ventures in June 2000 with $80 million in
commitments. Today the company has nine venture capital funds up and running in seven
locations including Boise.
"We look for markets where there will be a lack of venture capital competition," says
Kevin McCormack, senior VP of marketing at the North Adams, Mass., company. "That
gives us an advantage in terms of attracting entrepreneurs, and the cost of doing business
in these markets is generally 62 percent lower than in top venture capital markets such as
Silicon Valley, New York and Boston."
Phil Reed is currently raising money to fund his Boise software business, Duckets, Inc.
Two West Coast law firms specializing in venture capital deals -- Fenwick & West from
Palo Alto, Calif., and Perkins Coie from Seattle – have recently opened offices in Boise.
"That makes it easier to locate venture money outside the area," says Reed who views
Boise as a good technology base for his . "A number of very talented people are living
here because of the lifestyle and lower cost of living, so we could get our software
written faster and quite a bit cheaper than in Silicon Valley."
Reed and others like him are driving the country's economy. The Department of
Commerce estimates that over the last five years the high tech industry nationwide has
accounted for about one-third of the U.S. Gross Domestic Product, Brailov says. He calls
that highly significant.
<a href="http://www.aeanet.org">American Electronics Association</a>
<a href="http://www.fenwick.com">Fenwick & West</a>
<a href="http://www.perkinscoie.com">Perkins Coie</a>
High Tech Corridors - 4
<a href="http://www.villageventures.com">Village Ventures</a>
<a href="http://www.ornl.gov">Oak Ridge National Laboratory</a>
<a href="http://www.tva.gov">Tennessee Valley Authority</a>
<a href="http://www.utk.edu">University of Tennessee Knoxville</a>
<a href="http://www.orcc.org">Oak Ridge Chamber of Commerce</a>
<a href="http://www.tech2020.org">Technology 2020</a>
<a href="http://www.asicint.com">ASIC International</a>
<a href="http://www.boisechamber.org">Boise Chamber of Commerce</a>
<a href="http://www. portsmith.com">Portsmith Inc.</a>
<a href="http://www.akerscapital.com">Akers Capital</a>
<a href="http://www.inel.gov">Idaho National Engineering and Environmental
<a href="http://www.ci.bothell.wa.us">City of Bothell</a>
<a href="http://www. edenbio.com">Eden Bioscience</a>
<a href="http://www.isn-chatt.com">Intelligence Systems and Networking</a>
<a href="http://www.vizxlabs.com">Vizx Labs</a>
<a href="http://www.wabio.com">Washington Biotechnology and Biomedical
Director of Business Operations
11816 North Creek Pkwy. North
Bothell, Wash. 98011
Community Planning Manager
City of Bothell
9654 NE 182nd St.
Bothell, Wash. 98011
8436 Marina Vista
Fair Oaks, Calif. 95628
High Tech Corridors - 5
Marketing Communications Manager
1111 S. Orchard St.
Boise, Idaho 83705
9448 Fairview Ave.
Boise, Idaho 83704
Economic Development manager
Boise Metro Economic Development Council
250 S. Fifth St.
Boise, Idaho 83701
Public Communications Director
American Electronics Association
601 Pennsylvania Ave.
Washington, D.C. 20004
Senior VP Marketing
1476 Massachusetts Ave.
North Adams, Mass. 01247
1020 Commerce Park Drive
High Tech Corridors - 6
Oak Ridge, Tenn.
Oak Ridge Chamber of Commerce
1400 Oak Ridge Turnpike
Oak Ridge, Tenn. 37830-6214
1093 Commerce Park Drive
Oak Ridge, Tenn. 37830
1009 Commerce Park Drive
Oak Ridge, Tenn. 37830
8436 Marina Vista
Fair Oaks, Calif. 95628
Intelligence Systems and Networking
3923 Volunteer Drive
Chattanooga, Tenn. 37422
High Tech Corridors - 7
2815 Eastlake Ave. East
Seattle, Wash. 98102
Kenneth E. Corey
Michigan State University
241 Hannah Administration [KC1] Building
East Lansing, Mich. 48824-1046