Yesterday, I reported on a new study from a nonprofit called the Economic Innovation Group on the distribution of “distressed” and “prosperous” neighborhoods in the U.S. Unsurprisingly, the most prosperous communities tend to be urban or suburban — nearly 90 percent of communities in the U.S. that are classified as “distressed” have fewer than 50,000 people. Many of the most prosperous cities — Austin, San Francisco, San Jose, and Seattle — are also tech hubs.
However, the study also reveals just how poorly many of the former industrial hubs of the Midwest and Northeast are doing. In the Rust Belt states of Michigan, Ohio, Indiana, and Illinois, more than 40 percent of their ZIP codes have fewer jobs and businesses than they did in the year 2000.
The way that Rust Belt cities can turn it around, according to EIG cofounders John Lettieri and Steve Glickman, is to diversify their economy. The Rust Belt cities that are faring the best are college towns like Ann Arbor and Columbus. Thanks to their high populations of young people, these towns have been able to become R&D hubs in the Midwest that can support a more diverse array of businesses.
While the EIG report does paint a bleak picture of just how hard some cities will have to work to catch up to prosperous West Coast tech hubs, the good news is that states are starting to diversify their economies, slowly but surely.
A report that came out yesterday from trade group Software.org: The BSA Foundation showed that Heartland states like Kansas and Indiana are experiencing some of the largest percent increases in software jobs. From 2014 to 2016, Kansas added 6,100 jobs in the software industry, while Indiana added 8,880 jobs.
“Every single state’s economy or workforce is adding jobs and/or has added GDP from software directly,” Victoria Espinel, president of Software.org, told VentureBeat.
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Heartland Tech Reporter
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