Since the 1970’s Silicon Valley has been the undisputed leader of technological innovation. But what was it that made this area such a hot bed for innovation? The Silicon Valley story began sometime after World War II. Frederick Terman was a professor at Stanford University. In 1951 Terman spearheaded the creation of the world’s first tech focused office park. The Stanford Industrial park was built on Stanford University’s land in Palo Alto, California. The rest is history.
So what does this story have to do with Tennessee? More specifically, what about Chattanooga has many calling it the “next” Silicon Valley. Chattanooga over the past couple years has been mentioned in nearly every tech related article. President Obama, in a speech on January 14th, 2015 described the Chattanooga area as a “tornado of innovation”. This is because Chattanooga is currently home to the largest, fastest, and most comprehensive fiber and smart grid network in the entire United States.
The City of Chattanooga launched its 100% fiber network through their municipal electricity distribution and telecommunications company EPB (formerly the Electric Power Board of Chattanooga). The fiber optic network covers a footprint of over 600 square miles and provides 1 Gigabit-per-second internet speeds to over 150,000 homes and businesses in the area.
In addition to faster internet speeds, the fiber network has also created the nation’s first “true” Smart Power Grid. The Smart Grid is a milestone in-and-of itself. The EPB grid consists of over 6,000 miles of electrical line with over 170,000 components. This includes electrical meters, poles, transformers, and the like. Rather than each component living or dying on its own. The Smart Grid functions much like a living organism, allowing components to talk to one another. This allows the grid to automatically report outages, and in many instances repair itself without any human intervention at all.
Chattanooga has screaming fast internet speeds as well as one of the most reliable power utilities in the country. This is any tech-geeks version of “having your cake and eating it too”. But what does it mean for business and high-tech innovation? Will having this network really create the next Silicon Valley? Better yet, what does that require?
There are three components that spurred the initial creation of Silicon Valley. Of course there was the Stanford Industrial Park property itself, but what else was needed? Manuel Castells in his book “The Rise of the Network Society” named 3 factors that were essential to the creation of Silicon Valley (1) a large pool of scientists and engineers from local universities (2) funding from the Defense Department (3) plenty of venture capital investors.
So what we need to create the next Silicon Valley is talent, money, and more money… Right? Well that is what was needed in the 1950’s at least. It is old news that the internet has changed the traditional trajectory of business innovation. But what is Chattanooga doing to attract talent and money to the region?
Chattanooga has been re-branding itself for some time now. That re-branding has paid off and the term “Gig City” is the name that stuck. Essential to the early years of Silicon Valley was the Stanford Industrial Park. Innovation needed an address to call home. In Chattanooga, the “place” where innovation is set to explode is known as the “Innovation District”. The Innovation District is planned to be an innovation hub within the city. With an emphasis on creating a walkable, dense urban core designed to serve the needs of the tech industry both big and small.
Anchoring the Innovation district is The Edney Building, a 90,00 square foot 10 story building on the corner of Market and 11th Street. The designation of the Innovation District was only the first step in Chattanooga’s transformation. The next task was the creation of “The Enterprise Center”. The Enterprise Center is responsible for establishing Chattanooga as a hub of innovation. They plan to improve people’s lives by leveraging the city’s digital technology to create, demonstrate, test, and apply solutions for the 21st Century.
Another program receiving nationwide attention in Chattanooga is called “Gig Tank”. Gig Tank is a 12 week training program designed to connect high-speed entrepreneurs with the tools, capital and connections to take their ideas to market. GigTank is a “boutique accelerator for seed-stage startups developing ultra-high-bandwidth business applications”. It is a pro-active attempt not only to provide businesses with high speed internet and a trendy space. But to go the step further with guidance from many of the world’s leading industry experts. Another opportunity set to begin in the near future is “startup week” in Chattanooga. The next startup week will be hosted from October 12-16, 2015 with more information on the Startup Week Chattanooga website.
The last component to the viability of the next Silicon Valley, is the existence of venture capital investments. Venture capital is no stranger to the tech industry, or to Tennessee for that matter. A great resource for start-up’s is launchtn.org. Launch Tennessee has been responsible for over 1,000+ jobs created and nearly a billion dollars of venture investment in the state. This is just third party investment. Add to that the some of the nation’s best incentive programs. Tennessee, and the City of Chattanooga both have plenty of programs designed to win business at the state and regional level.
Of course it is great that Chattanooga is taking steps to create a healthy environment for seed-stage tech entrepreneurs. But what about the more traditional business? What impact will “Gig City” have on Chattanooga’s bread and butter industries like manufacturing? This was a topic taken up by Chief Executive Magazine in February of 2015. The article named “5 Great Cities for Growing your Manufacturing Business In” looked across the country in an attempt to identify the top 5 locations for manufacturers to re-locate to or expand in.
With the presence of a world class power utility, screaming fast internet, and the cities new emphasis on Technology. We at SVN – Investec Realty Services, believe the region is set to explode in the next couple of years. If you have read this article and want to learn more about the Chattanooga Region, the specific economic incentives that may be available to your business, or our current listings. Please call Stephen Nault at 615-878-8144.