Does Columbus Deserve Its Own Silicon Valley?
That is a complicated question. We do our best to answer it, looking at the past, present, and future of Ohio’s shining capital!
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Does Columbus deserve its own Silicon Valley? That is a complicated question. Silicon Valley evolved in the late 20th century, decades before Columbus even entered the running. Columbus is part of a new generation of Silicon Valley-style hubs of technological advancement. We get to see it develop in front of our own eyes, and it will certainly follow a different path than Silicon Valley did decades ago, but the signs are pointing towards Columbus becoming a major hub for technological advancement in the future. Sound interesting?
Read on for more information about
- Venture Capitalism and the role it plays in technological innovation
- Developments in Columbus in the next few years
- Will Columbus become the next Silicon Valley?
How Venture Capitalists Drive Technological Innovation
There are a wide array of bright minds both young and old working their way through grade school, university, or are already in the workforce. Sometimes they develop an entrepreneurial idea that they decide to follow through with and turn into a business. Being an entrepreneur or a small business owner is not easy, but it can be incredibly rewarding.
There are a wide array of difficulties in starting up your own business, and one of them is money. At every stage of the journey, it is difficult to come up with enough funds to continue. That is where Venture Capitalists, or investors, step in. They often do not have any direct input on the ideas the company is working with, rather they provide funds, or “capital,” to ensure the startup can continue on to the next stage of its journey.
What Makes a “Silicon Valley”
Silicon Valley is a region in the San Francisco Bay Area. In the 1970s, it was dubbed “silicon” valley due to the region’s developments of the silicon transistor, which was a huge technological advancement in that time. Since then, many tech companies started to call that place home, and it has attracted many entrepreneurs and start-up companies due to the fame and the companies already there. As the companies gathered, more and more technological-minded people gathered there, and the companies began to boom.
Soon, investors took notice of all the opportunities there. Shortly following all of the tech companies, several large venture capital firms opened up, and the region has prospered in the following years.
What do Venture Capitalists do?
Venture Capitalists help startup companies grow by investing in them, or providing them with “capital.” That is, the money they need to commercialize their business. Start-up companies with great ideas often turn to investors to fund that big step, often in exchange for a large share of their company.
Although Venture Capitalists fund start-up companies, they often do not fund “ideas” for a company, rather they are looking for companies that are growing on their own and are lacking the funds for the next major step of their plan. Waiting for companies that have settled in a little bit is a way for Venture Capitalists to allay the considerable risks of their profession.
Venture Capitalism in Columbus, Ohio
Many years ago, Columbus, like many cities in the Midwest, had a lot of manufacturing facilities. Over the last 80 years or so, that focus has shifted to more contemporary institutions, like insurance and technology. In recent years, that shift has encompassed a lot of start-ups, as well. As in the creation of “Silicon Valley” the prospering healthcare, finance, retail, and other fields have slowly drawn more and more people with entrepreneurial minds to this town.
VCs from Sequoia
In the mid-2010s, two investors, Mark Kvamme and Chris Olsen left Silicon Valley to open their own venture firm, Drive Capital, in Columbus, Ohio. Nine or so years ago, this was very uncommon. Silicon Valley was the place to be for investors and venture capitalists, but these two were interested in what Columbus might have to offer.
As it turns out, Columbus was a fertile ground for investors, venture capitalists, and entrepreneurs. These two investors found that there was a lot of money spent on research and finding out newer and better ways of running processes on all scales. Drive Capital has backed some incredibly successful projects in their time there, including Olive AI, a hospital software company, and Root, a car insurance startup. Both of these companies are prospering in Columbus.
Mark Kvamme and Chris Olsen believe that Columbus has a bright future in the technology development space. There are many bright minds working to create successful companies of their own, and as more investors start to notice all of the opportunity that is waiting in Columbus the number of startups starting to commercialize their product will grow and grow.
The Groundwork is Already Done
It takes more than Venture Capitalists to start a “Silicon Valley” style ecosystem. Columbus has an incredibly strong economy, and is a very central location in the United States. It is within 500 miles, around an 8 hour drive, from half of the US population. Similarly, it is within that same range of much of America’s GDP. It is also currently the 14th largest city in the United States, and it is growing. Columbus is not an up-and-coming city to look out for. It’s already here.
Future Plans for Columbus
Columbus has grown and prospered in the recent past and shows strong signs of continuing to do so in the future. When examining the startup ecosystem, it is important to look far into the future. These changes do not happen overnight, rather, over the course of decades. Silicon Valley showed signs of technological prosperity long before it was known across the world as the technological supercenter that it is today.
We have the pleasure of seeing Columbus in the middle of this transformation. It is showing many promising signs of technological development over the next five to ten years without the name recognition (or multi-season television show!) that Silicon Valley has. That means now is the perfect time to jump into the scene, and see all that Columbus has to offer!
Intel’s Announced Construction of Chip Factories in Central Ohio
Intel just announced plans to construct a pair of massive chip factories in central Ohio. They are hoping to alleviate the worldwide chip shortage as well as keep this manufacturing in the United States. This is huge news in many circles. A massive construction set to reach full production around 2025, these Intel factories bode well for Ohio’s future.
Factories Drive Businesses
While Intel is constructing the $20 billion factories in Columbus, those factories require a wide network of other companies to best support them. Almost on their own, they project a hub of technological interest that attracts companies and minds from all over. They create a market for all the businesses that support chip manufacturing and open doors for experienced workers to find jobs in the area, as well.
They Chose Ohio
Intel has a number of factories in the United States in Oregon, Arizona, and New Mexico. They do not choose their locations on a whim. Finding the right place for their factories is an incredibly important decision, and the fact that Intel chose Ohio for their 2025 factories speaks volumes about the success and growth of Ohio’s technological prowess.
In the past decade or so, Facebook, Amazon, and Google have all built data centers in the region around Columbus. Similar to Intel’s factory, these centers drive jobs and like-minded people into the region. These colossal companies have all seen the opportunity to create successful factories and centers in central Ohio, and in doing so they have only increased the strength of Ohio’s technological ecosystem.
The Jobs they Bring
As these major companies have planted down roots in Ohio, jobs in their centers and factories have become a major place to work for those living in and around Columbus. Intel’s two factories are projected to bring on 3,000 skilled company jobs, and that is only after the monumental construction of the 1,000-acre site, which is projected to bring on 7,000 construction jobs. Alongside that, the factories are projecting supporting tens of thousands of additional jobs in the procurement of supplies and partners working with the factories.
This, again, is fantastic news for central Ohio, and brings them closer to breaking out into a new “Silicon Valley.” Columbus already has an excellent startup scene, and the arrival of a new, massive factory will drive the startup scene in new, exciting directions.
Will Columbus Have Its Own Silicon Valley?
The term “Silicon Valley” has gotten a bit too specific to define what is going on in Columbus. Columbus is booming. Its startup scene is thriving, Venture Capitalists are arriving, the housing and job markets are hot, and major companies are investing billions of dollars in the surrounding area. There is a big difference in how jobs and tech are developing in 2022 versus how they developed in the late 20th century. To keep it simple — yes! Columbus will have its own Silicon Valley in the next several years. But, read on for the longer answer to this complicated question.
Housing Market is Hot
Columbus is projected to have the 5th hottest housing market in 2022. That is huge. Housing sales and asking prices will likely rise at around twice the normal rates. While that sounds bad, people are still moving out to Columbus, and, well, the housing market would not be doing that well if people were not purchasing houses left and right.
Even though the Columbus housing market is a buyer’s market, people are still saying that the prices are affordable. Much of that comes with the job market in Columbus. Much like the housing market, the job market is hot! The startup scene, the tech jobs, and the incoming Intel factories are all creating excellent, high-paying jobs in and around Columbus that make the houses seem more affordable.
Columbus Will be its Own Technological Hub
Columbus has turned into a great place to start a business or open another headquarters. Its recent success has made it a much less risky place to invest a lot of money, as Intel has shown, and as the two Venture Capitalists who founded Drive have shown. There is a fantastic startup ecosystem moving about in and around Columbus, Ohio. One thing to keep in mind, however, is that it will take a lot of time for Columbus to mature into a fully developed “Silicon Valley.” It is showing strong signs, but only after developing for decades will it be able to boast the technological mastery that is associated with a place like Silicon Valley.
On a similar note, an above-average amount of young residents are putting down roots in Columbus. Home to Ohio State University, Columbus sees many young professionals come in from all around the globe. A much higher than normal percentage of graduates from Ohio State University are deciding to stay in and around Columbus, and others are moving there from the surrounding area. Around fifty percent of graduates from OSU stay in Columbus for more than two years.
This is excellent news for the future of Columbus as a Silicon Valley-esque technological hub. Many bright minds from the area and all over the world are congregating in Columbus, and while some will go on to other cities and others will join the large corporations, others will enter into the startup scene and begin creating groundbreaking products from their successful companies.
More than a Silicon Valley
And less than a Silicon Valley. Nowhere will ever replicate the magical rise of Silicon Valley in the late 20th century. It was unheard of for a place to gain that fame in such a relatively short period of time. Now that we’ve seen it, it is unlikely that the same feat will be repeated.
Now, that does not at all mean that Columbus won’t evolve into a hub of technological advancement, just that it will do it in its own way. The tech scene has changed immensely in the past fifty years, and the way that Columbus becomes its own unique tech hub will be similar to, but not the same as how Silicon Valley did it in the past.
What are you most excited about in the near future of Columbus? Let us know in the comments!
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