“There’s a really strong creator culture here and right now you just see it exploding. We’re seeing a lot of companies come here, new startups and innovative people moving here because of that environment for them to thrive and grow. You can’t find parking. The demand for spaces to live is off the charts. The number of restaurants is growing, the music scene continues to grow, the arts scene continues to grow.”
A Booming Tech Hub
This picture of a booming urban community may sound similar to a tech hub; perhaps San Francisco or another area of Silicon Valley comes to mind. But those are the words of Glenn Stevens, vice president, MICHauto and strategic development, of the Detroit Regional Chamber. Considering the popular narrative of the Midwestern city, this rosy picture might come as a shock.
In fact, it’s a far cry from July of 2013, when Detroit filed for Chapter 9 bankruptcy, the largest municipal bankruptcy case in the country’s history, with courts citing the city’s nearly $20 billion debt. But anyone harping on that well-trod story has been ignoring the city’s tech boom, an influx of jobs, industry, and venture capital that is changing the face of Detroit.
In order to grow into a thriving tech community, though, Detroit faced quite the challenge. “We’ve been through some very difficult times here,” Stevens says. “In Detroit with the bankruptcy, through the recent situation with Flint, across the state with the downturn and the loss of jobs.” Despite these immense obstacles, the IT industry remained strong, only growing stronger despite the bankruptcy and related concerns.
The city government itself faced many challenges. In the fall of 2013, the Obama administration, through the Office of Science and Technology Policy (OSTP), put together a group of five municipal CIOs to visit Detroit to look at what was happening in the civic tax base. Following that year’s mayoral election, the incoming mayor chose one of those individuals, Beth Niblock, to become the next CIO of Detroit. Since taking the job, Niblock has taken on the important role of making big changes in Detroit’s tech infrastructure as well as the city’s connection to its constituents.
“Our goal is for us to have the ability to interact with our citizens and businesses however they choose to interact,” she says. “There are still people who don’t have a lot of faith in the system, and part of what we want to do is restore confidence that we are a well-functioning government.” Part of that involves a newly upgraded computerized dispatch and records management for police, fire, and EMS. They’ve even implemented an app that shows Water and Sewage Department employees and first responders which hydrants are working at full capacity before they reach the scene of an emergency.
But Detroit wasn’t always facing such an uphill battle. “When you go back about one hundred years to the early part of the twentieth century, this was the Silicon Valley of that time,” says Gabe Karp, partner at Detroit Venture Partners. “The Henry Fords of the world and the auto industry, that was the heart of innovation, so that’s deeply rooted in the DNA.”
Perhaps the most obvious factor that has catalyzed the city’s regrowth is the automobile industry, the piece of Detroit lore that rivals the bankruptcy in recent cultural consciousness. The city has become a prominent hub not only for car companies, but also original equipment manufacturers, suppliers, technology companies, and advanced manufacturing. As vehicles continue to be more connected to technology, the demand for highly capable tech professionals in Detroit and the surrounding communities continues to grow as well.
According to employment data company Emsi, employment in the IT industry has generally grown faster in Michigan and in the Detroit region specifically than in the nation as a whole. In addition, a 2013 report from Anderson Economic Group found more than 171,000 technology jobs in metro Detroit, as well as 9,428 students graduating that year with Science Technology Engineering and Math (STEM) subject degrees.
As the tech industry’s influence continues to rise, both in the region and in general, its perception has changed dramatically as well. The “next generation mobility industry” includes application development, connected cars, autonomous vehicle testing, and more. Advancements in that field include the University of Michigan’s MCity (a mock city designed for testing the potential of connected and automated vehicles), American Center for Mobility research sites in Willow Run and Ypsilanti, and General Motors’ connected vehicle research center in Flint. “Seeing competitors like Apple and Google get in the game has brought a different light on how technical the automotive industry is,” says Marcy Klevorn, CIO of Michigan mainstay Ford Motor Company. To that end, there’s a great deal of collaboration between Silicon Valley and the Midwest hub. And through it all, the state has been more than amenable to those changes. “Michigan is making sure that we stay at the forefront with regards to legislation that allows connected and autonomous vehicle testing on our roads,” Stevens notes.
Detroit’s industrial strengths extend beyond the automotive industry, particularly into the fields of IT and defense. Even through economic downturns, the city has retained a large manufacturing base, and that too is increasingly fused with tech innovation, including important ties to everything from big data analysis to the Internet of Things. “You see a lot of that supporting our big industries around here too, which would be not only automotive, but IT for farming and other kinds of industries,” says Dawn White, founder and chief technology officer of wind energy company Accio Energy. “There’s a lot of opportunity there.”
Diversity and Collaboration
Another important factor is Michigan’s diversity, which, as with most matters in the city, has its ties to the auto industry as well. “Almost every flag in the world is represented in the automotive world, and there’s a flag somewhere in Detroit at a headquarters or North American operation,” Stevens notes. And it’s not just the international manufacturers that bring in a diverse workforce; organizations like the Chamber are dedicated to casting a wide net in finding the most talented and innovative people. “We believe that immigration is a source for talent and ingenuity,” Stevens says. “We look at veterans. We look at retraining people who may have lost skills or need new skills. We look at the disenfranchised workers or people who are coming out of incarceration or the prison system.”
A driving force of this successful, diverse community is collaboration. “The tech startup scene has contributed [toward] the concept of what I see as unique to Detroit today, and that’s the spirit of collaboration,” Karp says. “Everyone who’s here—whether they’re in real estate, tech, or any sector—there’s a feeling that we’re all in this together and all ships rise with the tide. There’s a level of collaboration that I haven’t seen in other cities.” That collaboration exists beyond the borders of Detroit proper, as young startups in the city’s heart are collaborating and working with established companies in nearby suburbs and communities. The almost continuous influx of new entrepreneurs and venture capitalists means that the most recent arrivals have plenty of mentors and examples from which to learn, as well as partners with whom to work on new projects.
The Influence of STEM
In addition to the strong STEM education system, many resources and nonprofits have emerged to support professionals and growing businesses throughout Detroit. This includes coding boot camps and training programs such as Grand Circus, organizations aimed at boosting female representation in the industry like Sisters Code, and ExperienceIT, a partnership between leading tech companies, workforce agencies, and educational institutions.
Partially due to these opportunities, many of the industry’s young innovators grew up in Detroit to begin with, rather than moving to the city from elsewhere. “Southeastern Michigan produces upwards of 10,000 STEM graduates each year, which is more than Silicon Valley produces,” says Chris Pittenturf, vice president of data and analytics at Palace Sports and Entertainment, the Auburn Hills-based company behind the Detroit Pistons and other sports and entertainment ventures. “Historically, those graduates would find opportunity elsewhere, but now they are finding increasing opportunity within the city limits of Detroit.”
As young professionals stay in Detroit and the surrounding area, they see the opportunity to change the city’s culture as well as the economy. “Not only can you effectively bootstrap in Detroit, but the rise of the art and creative community within the city is an inspiring backdrop that aligns very well with how startups need to be thinking about their businesses,” says Gary Wohlfeill of CrowdRise, a Detroit-based fundraising website that helps individuals raise money for personal causes and charities. Similar to many startups in the city, CrowdRise is committed to not only supporting the tech community, but also to giving back to those in need. The organization has teamed up with Hour Detroit magazine to launch the Give Detroit Challenge, an annual fundraising event that brings together dozens of the city’s nonprofits to raise funds and link with sponsors.
“We had the classic ‘brain drain’ in the past,” Stevens notes. “The tide has reversed where young graduates are saying, ‘I want to stay here. I want to be part of this resurgence.’” As San Francisco and Silicon Valley grow more congested, other cities grow more appealing as hotbeds of tech innovation, and Detroit is positioning itself as chief among them. There’s more room, both literally and figuratively, for young entrepreneurs to grow their own businesses—and their families. “I came here with my wife and my ten-month-old twins,” says Garlin Gilchrist II, Detroit’s first deputy technology director for civic community engagement. “I wanted to build my family and build my future here in my hometown.”
Throughout all this change, both the city and the economy are growing stronger, more diverse, and more tech-friendly. “Detroit is becoming a robust ecosystem of entrepreneurial activity [again],” notes Karp. “You don’t need a Silicon Valley zip code to launch a great tech company.”