Technology is reshaping the economic geography of the United States. Much of the media and pundits assert that the tech revolution is bound to be centralized in the dense, often “hip” places where “smart” people cluster.
According to an analysis by the Praxis Strategy Group, the fastest growth over the past decade in STEM (science, technology, engineering and mathematics-related) employment has taken place not in the most fashionable cities but smaller, less dense metropolitan areas.
The old tobacco town of Durham is ablaze with tech know-how, home to companies large and small. Many are part of American Underground, a community started on the former campus of the American Tobacco Company.
The American Underground launched in 2010 in the basement of the Strickland Building on the American Tobacco Campus, North Carolina’s largest historic renovation project. This project totaled over one million square feet of space and transformed what was once an eyesore of abandoned tobacco warehouses into a bustling hub for entrepreneurs. CNBC deems The American Underground to be “the Startup Capital of the South.”
In 2013, Durham got a boost to its startup scene with a 22,000-square-foot hub called American Underground@Main.
The space holds 40 startups, spread across co-working space and small private offices. They work alongside nonprofits, other businesses, and universities like North Carolina Central. But the startup vibe dominates: the building features a 50-foot slide, a giant Mayor McCheese head, and The Vault: a former bank vault now equipped with TVs, video games, and hangout space. At night, American Underground@Main opens up to the community for networking events.
In yet another victory in 2013 for the Durham, NC business community, technology giant Google chose Durham’s American Underground to join the Google Entrepreneurs Tech Hub Network, which includes just six other cities in the United States and Canada: Minneapolis, Chicago, Denver, Nashville, Detroit and Waterloo.
The designation means an undisclosed cash infusion from Google, as well as Google technology products for startups. It also means mentorship and networking with Google software engineers. As for Google, it means more companies start with its technology.
Today, Black and Latino/a students earn 18% of computer science bachelor’s degrees. Yet Blacks and Latino/as make up only about 5% of the tech workforce at the industry’s leading companies. Figuring out how to attract, recognize, and retain diverse talent is critical for tech companies’ growth and survival.
Creating a more inclusive tech sector is critical for communities of color as well. Tech jobs are some of the fastest growing with some of the lowest unemployment rates. The average tech worker makes more than the median household income of a Black family and a Latino family combined. Tech can dramatically alter the economic trajectory of individuals, families, and communities of color.
CODE2040 is a non-profit founded in 2012 that focuses on getting more African Americans and Hispanics into the tech workforce. The group’s name refers to the year the population of minorities in the U.S. is expected to overtake whites.
Google began backing a new pilot program from CODE2040, Entrepreneur in Residence, in Chicago, Austin and Durham, NC in 2015, giving minority entrepreneurs in each city a one-year stipend and free office space. While building their start-ups, the three CODE2040 entrepreneurs in residence will build bridges to technology for minorities in those communities.
Google Tech Entrepreneur in Residence 2015 Talib Graves-Manns and Adam Klein, chief strategist, American Underground wrote in 2015 that The American Underground had established a bold goal at the start of 2015: To build the most diverse start-up hub in the country inside of two years.
This statement raised some eyebrows but, after nearly a year of experimentation and hard work, Durham is building not only a thriving start-up scene but a richly diverse one.
Nationally, only about 1% of start-up founders are black and 8% are female, according to CB Insights. But as a result of carefully considered decisions made at the American Underground, 15% of companies here are led by African Americans and 29% by women. These figures are up from the beginning of 2014 when it was reported that 5% of American Underground companies were led by African-Americans and 7% by women.
While still in the early stages, the issue is of national importance because research increasingly shows that diverse work forces, brainstorming teams and leadership systems help to generate higher revenue and rates of return for companies compared to their homogeneous counterparts. Developing more diverse entrepreneurial ecosystems also creates more opportunity for people of different backgrounds to succeed.
The American Underground now encompasses close to 100,000 sq ft of space in three locations in Durham and one in Raleigh as well as a strategic partnership with open source leader Red Hat to offer an office in Silicon Valley.
It has paved the way for a new wave of startups – over 225 – who have set up shop in downtown Durham to take advantage of the growing startup culture and the city’s abundant creative class. Now, the city center bustles with coffee shops, a beautiful performing arts center, and the shouts of minor league baseball games – a far cry from the Durham of a decade ago.
Meet three people that are the Future of Tech in the Triangle…