There was Wall Street then Silicon Valley. The South is Next.
Everyone knows about the current boom taking place in Silicon Valley. Silicon Valley is the United States’ tech hub. The majority of our successful startups that blossomed into big businesses were founded in Silicon Valley. They have a plethora of technology talent in close proximity, so of course venture capitalists have clustered around the area that is driving new ideas and ultimately revenue. Silicon Valley is the place to be; however, how long will that last?
Theorists are already predicting that Silicon Valley’s buzz will bust. It is extremely expensive to live there let alone start up a company, and founders are getting savvy on this reality. San Jose, Santa Cruz and San Francisco rank #2–4 of the most expensive cities to live in the US according to Yahoo. With odds that 20% of businesses fail within the first year, high overhead is another factor decreasing startups’ likelihood to survive. Because of all the odds against founders in Silicon Valley, it makes sense for them to explore other cities to start their businesses.
One of Silicon Valley’s gravest concerns is the lack of diversity and poor treatment of minorities and women. While women are starting businesses at an incredible rate (up 72% between 1997 and 2014 according to Institute of Women’s Policy Research), they are also only receiving 2.7% of venture capital. And for black women, triple the amount of businesses being founded and cut the funding to virtually nothing. Along with minimal support, there is a slew of sexual harassment lawsuits across the Valley. To say it is a hostile and lonely environment for outsiders would be an understatement.
In an article by The New York Times, statistics indicate that Black-Americans are migrating to southern cities like Atlanta, Dallas, Miami and Houston because of the cheaper cost of living and large black upper and middle class present. It is not at all coincidence that Entrepreneur Magazine released an article indicating the top cities for minority founders are Atlanta (#3), Austin (#8), Dallas (#7), Houston (#1), Miami (#2) and Orlando (#9). Six out of ten of those cities are located in the south, and it can be argued that the only reason the other cities are listed are because of their existing ecosystem that minorities were probably painfully able to penetrate.
With America’s growing minority population and overall disappointment in lack of opportunities and representation of minorities in the brands they support, the south is well-positioned to be the next big economic hub. It won’t be the next Wall Street nor the next Silicon Valley; the southern city that will be the next major urban center will have its own title because it couples the financial savviness of Wall Street, the technological prowess of Silicon Valley while incorporating a social consciousness into their mission ( and actually executing within their organization and out).
As seen with brands like Warby Parker, consumers are drawn to companies with a social mission. New Orleans is a city that has embraced organizations dedicated to improving the greater good because of the catastrophic effects from Hurricane Katrina. The Big Easy is currently undergoing a remarkable renaissance, experiencing a large increase of tech startups as well as non-profits focusing on rebuilding the city economically and socially. New Orleans is a great example of a city that has been able to maintain its rich culture while looking forward.
Ultimately, the city that can learn from the mistakes of the past and embrace this new era of American business that encompasses technology, social good and diversity into the fabric of their city will be the next _____.