Is a Different Type of Silicon Valley Possible?

DURHAM, N.C.—Downtown, sprawling factories are constant reminders of this city’s past life. A few decades ago these massive buildings were owned by tobacco companies and bustling with blue-collar workers. After the tobacco business contracted in the second half of the 20th century, and factory jobs disappeared or were relocated, the buildings—and much of Durham’s downtown—were abandoned.

Now, the city is in the midst of an ongoing, carefully orchestrated plan to boost the economy. These vast spaces are once again teeming with with jobs and workers, but of a completely different variety: white-collar entrepreneurs hoping to make Durham a major destination for start-up ventures.

This did not happen by chance. After the decline of Durham’s manufacturing, the city found itself in need of a revamped economy. Luckily, it had the tools to build one: massive amounts of open, unused office space thanks to the abandoned tobacco manufacturing plants, low (at the time) property prices, and proximity to illustrious academic institutions. So the local government started courting start-ups. In 2011 the city’s Chamber of Commerce launched programs providing free office space, wi-fi, and start-up advice to new companies. That same year the governor of North Carolina implemented a tax credit for developing businesses in the city, geared toward interactive digital media. The Chamber of Commerce has also offered monetary compensation for opening up businesses in the downtown district, and for creating jobs.

In many ways the city’s push has been successful so far. It’s hard to keep count of the incubators, coworking spaces, networking groups, and facilities meant to cater to entrepreneurs. In turn, the city’s start-up community is producing highly-touted, award-winning companies; Durham-based start-ups won Google’s Demo Day pitch competition in both 2014 and 2015. American Underground (AU), one of the larger start-up incubators in the city and one of nine Google Tech Hubs throughout North America, has seen significant growth. The organization started by hosting 25 startups in 2012, and now has 10 times that number on its current roster. Its businesses have brought in over $29 million in funding and added more than 400 jobs to the local economy, according to the group’s most recent annual report.

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