Tuesday, March 01, 2011

Govering magazine strikes again - headlining Youngstown to successful state-based economic development within comprehensive article

"In the shadow of the iconic 1919 Home Savings and Loan Company building downtown, a managed cluster of high-tech startups is injecting new energy into the city.

It’s the Youngstown Business Incubator (YBI), a nonprofit corporation, and it’s not only redefining the industry of this hardscrabble valley on the eastern edge of Ohio; it’s changing the notion of what cities and states can do to spur innovation and investment. "
"Now more than ever, states are playing the part of venture capitalist -- and despite the recession, it turns out they’re uniquely suited for the role.

As the recession froze private-sector investment, venture capital firms began avoiding early-stage deals, saving their money for less risky, later stages of development. That created a void.

Governments began to realize they could fill the gap by providing seed money to new startups in all sorts of emerging industries, from biotech and health care to nanotechnology and solar power."
and ending...
"“This is a city that essentially was dying,” says the SSTI’s Berglund. “And they’ve taken a really innovative approach with their incubator program.”

While some may consider it a waste of taxpayer money to heap funds on luring high-tech firms to the Rust Belt, Cossler says Ohio’s venture capital investment is critical.

And, he says, it’s not even all that different from the industry that built Youngstown in the first place. “If you reduce software to a common denominator, it’s a steel company,” he says. “You’re taking raw materials and blending them together to create a value-added product. It’s all manufacturing.”"
click here to read the whole story.

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