Startup economy the future for Detroit
Detroit has had its share of challenges as it’s dealt with a national recession and now bankruptcy. But these obstacles have helped persuade the city to diversify and open itself to industries other than automotive.
Automaking will continue to be a driving force behind the success of both Detroit and Michigan. But now both are also embracing technology jobs, as well as a startup mentality, to broaden its range of opportunities, and its workforce.
That’s good news for anyone looking to work here, and it’s good for the growing number of entrepreneurs starting their businesses here.
The startup culture in Detroit is burgeoning. Over the past five years, the number of venture investment professionals in Michigan increased 84 percent, according to data from the Michigan Economic Development Corp. And venture capital firms with headquarters or offices in Michigan have increased 50 percent since 2008. There are now 33.
It’s visible in a casual walk down the streets of downtown and Midtown Detroit, which are bustling with new retail shops. Tech startups fill incubator buildings around town such as the Green Garage and the Madison Block.
The noticeable shift and the appeal Detroit poses to entrepreneurs has grown, says David Kirkpatrick, founder and CEO of Techonomy, an organization that convenes leaders in technology, business and policy to discuss how the increasing pace of change affects all aspects of everyday life.
The group held its third annual Techonomy Detroit at Wayne State University this week.
“There’s been a flocking to Detroit of young, creative problem-solving types,” Kirkpatrick told The Detroit News.
“Detroit is literally a green field. You can try things in Detroit you can’t try anywhere else. There’s an openness to new ideas because the old ideas have so obviously failed.”
The biggest obstacle facing startups is access to capital. If they can get seed money, Detroit entrepreneurs can succeed and continue to grow. Companies such as Square Capital, which offers advance money to its own customers, are making that possible.
Square Capital CEO Jack Dorsey, also founder and chairman of Twitter, was in Detroit for the Techonomy conference and highlighted at least one local retail shop, Human, that has been able to grow thanks to advance capital. Human sells clothing and accessories made by Detroiters.
There are still many challenges for an economy based on technology and entrepreneurship, and nowhere is that more apparent than in Detroit.
Getting tools and resources from the city core to Detroit neighborhoods and residents with less access to such jobs is critical.
“Tech-based people have to focus ideas on inclusiveness and bring the full population into tech revival,” Kirkpatrick said. “It’s not a miracle until it’s much more broadly participated in.”
The necessity of a diversified economy is starkly obvious in Detroit, and it’s a promising sign for the city that such changes are being embraced.