Question: "While everyone is preaching regionalism, why does the Tech Czar get so excited about moving a company from one part of NEO to Cleveland proper? It's a net wash for the region. And the region is where the potential is."
Glad to be answering questions - and if you have more please forward them to Dan Hanson the greatest geek at Great Lakes Geek. I am thrilled that this question was posed since at first blush many people would assume that moving a company from one part to Northeast Ohio to another is just a wash. Turns out it is not. But first let me provide some history as to why I decided to focus on a core group of tech companies in the Northeast Ohio area. When I first accepted the Tech Czar position it was suggested to me early on in my tenure that I would soon be getting a budget and staff. Neither of which materialized. Also, the City never would reimbursement me for regional travel and rarely had money for travel to other parts of the U.S. (I did make one trip to Silicon Valley with the Say Yes to Cleveland contingency and did make some interesting contacts. One group did in fact come to Cleveland reviewed the local landscape, fell in love with space in downtown but decided not to pull the trigger due to lack of specialized IT talent. So - when I had the opportunity to travel I did make the most of it.) And don't believe the hype that the region is where the potential is...the region means nothing if Cleveland is not strong and vibrant. There are 2,500 tech companies in Northeast Ohio (as measured by the Major Metropolitan Area or "MMA" - which reviews multiple counties in Northeast Ohio - Cuyahoga, Summit, Portage, Lake Geauga - I may be missing a few as well). Those 2,500 tech companies represent a population larger than what you find in Austin, TX; Reston, VA, Minneapolis, MN - typical tier b tech regions in the U.S. So why aren't we getting the love on a national basis as being a serious tech hub? The reason is those 2,500 are spread out over a vast geographic expanse. They are not clustered in a tight geographic area. If you were to review the hot tech areas - Boston's Route 128, Silicon Valley, Austin, San Francisco and New York - what you find is an amazing density of tech companies in tight geographies. In New York it was represented by "Silicon Alley." A number of the regional economic development groups in Northeast Ohio make the situation in Cleveland and NEO worse by spreading incentives and real estate offerings over this large NEO area. But special things begin to happen when you create a cluster. For example - think of all the tech companies in Playhouse Square - BlueBridge Networks, Neural Tandem, Pantek, Switch & Data, Broadvox, Intellinet, Platform Lab, ASMGi, Thommen Medical, ASM International, JurInnov, FIT Technologies/SchoolOne, Lendable.com, Game Communications, Bounty Technology, SearchPath, eVentus and Assurint to name a few. All of sudden you have rising rental rates (improved property values that offer a better tax base), a large group of IT specialists and engineers (higher paying jobs again paying employment tax), more restaurants opening (think Bricco opening in the Hanna Building or Moko's in the Bulkley Building), more specialized retail shops, new housing (the $350.0 million Avenue District), parking needs (there are taxes on the parking rates), improved entertainment options (the new Hanna Theatre redevelopment), and a known tech area that drives investment. A number of the companies above have received outside investment - and the investors are thrilled they don't have to drive all over NEO but rather one downtown location. And now Playhouse Square has been selected as the first phase in the Design District which will only enhance the vision for the "tech district" at Playhouse Square. The first rule of economic development is density - the more companies, as in the case of Playhouse Square, that are located near one another the better the local economics are going to be. There is a financial effect that occurs again with density, simply spreading the number of companies over large geographic expanse you begin to lose all the great economics of those companies. And why sell out the City of Cleveland - does Beachwood have the second largest theater district in the U.S? Does Independence have the two of the finest health care facilities clustered around one area like University Circle? Does Westlake have the largest fiber pipe between New York and Chicago? So why should I as an employee of the City of Cleveland sell out the City? My job was to strengthen the City not the region. I was one person against a whole slew of regional economic development groups with a lot more money and people. And ask them, like you asked me, did you happen to bring in 36 tech companies into Cleveland or Northeast Ohio? I doubt you will find the answer you are looking for. Top of Page
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