The Midwest’s ‘Mid-Tech’ Renaissance

The Midwest’s ‘Mid-Tech’ Renaissance

While coastal cities like San Francisco, Seattle, and now Boston have gotten a lot of attention for their explosive growth driven by the tech industry, a different kind of tech job is emerging in the manufacturing powerhouses of the Midwest that were once the heart of industry in the US and the key to the country’s unprecedented prosperity. Quartz’s Michael J. Coren defines these “mid-tech” jobs, which are springing up in Midwest cities such as Columbus, Indianapolis, Detroit, and St. Louis, as “skilled tech work that doesn’t require a college degree: just intense, focused training on the job or in vocational programs like those of blue-collar trades of the industrial past.”

Also known as “middle skill” jobs, these opportunities are popping up as a result of the massive expansion of high-tech products and services and savvy companies taking advantage of labor and office costs much lower than in their coastal outposts. Coren points to several examples of mid-tech development in the region, including a program set up in Kentucky by software firm Interapt that trains coal miners and workers with “technical aptitude” to become software developers, and Ai-Media, a company contracted to caption Facebook’s live streams that opened up an operation in Youngstown, Ohio last year.

“The modern factory job is a mid-tech job,” Patrick McKenna, a San Francisco-based entrepreneur and venture capitalist who helped broker the Ai-Media deal, told Coren.

The Midwest’s startups have also gained attention from venture capitalists, particularly after acquisitions like McKesson’s recent purchase of the Ohio-based company CoverMyMeds for a $1.1 billion. Overall, 2017 was a banner year for the region’s startups, with 37 Midwest-based startup companies exiting for a total value of $5.1 billion, according to VentureBeat.

Big tech companies are also rapidly expanding into Midwestern cities to take advantage of prime labor and real estate markets. Tiffany Apczynski, a vice president at Zendesk, spoke very highly of the company’s expansion into Madison, Wisconsin in a recent interview with Venture Beat’s Anna Hensel:

[O]nce we visited Madison, it was clear that this was a city that had values and the rich culture that reminded us of San Francisco. We knew we’d continue to get a good pipeline of candidates from the university.

What’s more, Madison’s affordability means we can continue to grow there as a business. Even more importantly, it means our employees can thrive there. The fact that employees can afford to buy or rent homes and still have a high quality of life means that we will have better retention and less disruption in our organization.

This is exactly the kind of business investment Wisconsin is hoping to attract, though with its low unemployment rate, it faces the additional task of persuading millennial professionals to move to Madison and Milwaukee for a growing number of unfilled jobs.

The growth of mid-tech jobs in the Midwest is illustrative of the tech sector’s growing interest in investing in new parts of the country. When Google broke ground on a $600 million data center in Clarksville, Tennessee earlier this month, CEO Sundar Pichai noted that the tech giant was spending an additional $2.5 billion to open or expand data centers in Alabama, Oregon, Virginia, and Oklahoma.

What Zendesk and Google are doing aligns with a strategy Jennifer Levitz described in a Wall Street Journal article last year, in which companies are looking beyond the expensive labor markets of the nation’s biggest cities and setting up shop in smaller cities with large numbers of workers who are underemployed for their skill sets. The tech sector’s expansion into parts of the country they once overlooked is certainly good news for the people who work there.