Not too long ago if you had a great idea for new technology, you pretty much had to move to or have a strong connection in Silicon Valley. Today is an increasingly different story. Indiana former startups like ExactTarget and Aprimo have capitalized on a critical transformational trend and represent living examples of the importance of startup technology businesses in the Hoosier state.
If you’re not already convinced, why are startups – especially technology-focused startups – important? Consider the fact that companies less than five years old created 44 million jobs over the last three decades and accounted for all net new jobs created in the U.S. over that period, according to a federal jobs report from The White House. While there’s nothing wrong with starting up a franchise operation or opening up a small service business, firing up a technology business brings a whole ripple effect of economic benefits. A little over a decade ago ExactTarget, Aprimo and other Hoosier tech companies were startups – today they are global companies employing hundreds of professionals.
Techcrunch, the online technology development publication, recently profiled an interesting global project called Startup Genome, which holds major implications for Hoosier startup technology development. As Techcrunch reported, Startup Genome is beginning to launch a thorough and comparative analysis on which regional economic development ecosystems give startups a better chance, and provide critical data about how (and at what rate) the world’s top entrepreneurial hubs are evolving and leading the way. Armed with such information, entrepreneurs with the next great idea can migrate to one of these regions to improve their chances of building a company based on their new tech idea.
As part of its scope, the Startup Genome project identified the 20 top startup capitals around the world. Not surprisingly, Silicon Valley near Stanford University still leads the world for successful technology startups and capital formation. What is surprising is the fact that London, England (3rd); Toronto, Canada (4th) ; Tel Aviv, Israel (5th) and Moscow, Russia (10th) all came in front of Boston (18th), home of the venerated Massachusetts Institute of Technology (MIT). Given the fact that Chicago ranked 15th, Indiana should be able to leverage its considerable intellectual assets and vault upwards.
What do these regions have that attracts high-impact entrepreneurs and produces success??
They generally have four things in abundance: 1) A regional business culture that favors helping support and guide entrepreneurs through the complex startup process. 2) A ready supply of academic or seasoned business mentors who have been there and can guide early stage entrepreneurs. 3) Available capital formation well beyond the family and friends investment networks. 4) High-speed digital connectivity to bring everything together, whether programmers in Bangalore, India or engineers in West Lafayette.
Just a little over a decade ago, Indiana had almost none of the above. Today is far different.
In 2012, Indiana has numerous incubators, technology parks and university-based commercial research facilities, all of whom are engaged to one degree or another in technology transfer and commercialization: getting discoveries off of the lab bench and into the commercial marketplace.
Facilities and organizations across the state – like SproutBox in Bloomington and Developer Town in Indianapolis – offer real-time developmental and mentor assets needed by startups. Discovery Park at Purdue has secured a world-class reputation and is celebrating its first decade of being on the forefront of multi-disciplinary scientific, healthcare, information technology, social and management advancements.
Venture capital and angel investor networks can be found all over the state, reversing an investor drought that once paralyzed almost any thought of technology startups. And companies like Smithville Digital in Indiana help Indiana be a leader in high-speed fiber-based gigabit connectivity, a critical element required for global commerce, distance learning for workforce development and telemedicine to provide expert medical support for all 92 counties in the state.
In the 1990s, Indiana was looking up a sheer cliff of per capita income decline and no real prospects for reversing that crippling economic trend. In 2012, the situation is considerably different. We see numerous assets for technological advancement, including the beginnings of an all-new energy development and storage region collaboratively powered by the $2 billion Naval Surface Warfare Center (NSWC) at Crane, Purdue and Indiana universities, and the eight-county Radius Indiana economic development partnership. We need an increasingly dominant medical device and orthopedic cluster in north central and northeast Indiana. And the list goes on.
A new technology-friendly ecosystem is emerging in Indiana, which – like it has been for Chicago and other Startup Genome cities – could well be the greatest advancement and benefit the state has seen for many a decade. Successful technology start-ups just don’t add new jobs – they transform an economy, as they have and will in Indiana.
To search the archive of Perspectives articles, go to the Search page