But Gray wasn't going to dispel Lynn's economic funk purely by providing jobs. Intent on proving that what was good for Shore.Net was good for Lynn, Gray three years ago started pressing the town's economic-development honchos and other businesspeople to pave the way for a cyberdistrict smack in the center of town. His argument was simple: Internet companies like to be located close together so that they can save money on access, use one another's services, and swap ideas. Bring a few of those companies to Lynn and more would follow. Gray was happy to play rainmaker among his fellow Internet entrepreneurs; some of them were his customers, and city officials referred others. "They're techies," says DeVeau. "They like to talk to one another. It's social as much as economic. Lowell was the big attraction."
But there was a catch-22: no one wanted to develop Lynn business properties that didn't have renters, and potential renters didn't want to commit to a city without developed properties. Meeting with landlords and city officials, Gray urged them to break the standoff by pulling together attractive office space laced with high-speed Internet access. Deals have now been signed for private development of a three-square-block downtown area bolstered by an initial $1.5 million of HUD money.
To help promote its fledgling cyberdistrict, the city created an annual business-plan competition and a "cybercouncil" that gives entrepreneurs an opportunity to meet regularly with city officials. The effort appears to be paying off. Some 15 Internet-related companies have moved into town over the past three years or signaled their intention to do so. Last year intense wooing by Lynn officials won the city its starriest prize: Vancouver-based Worldwide Fiber, headed by former Microsoft chief financial officer Greg Maffei, announced that it would make Lynn the $15-million U.S. terminus of its transatlantic fiber-optic cable. Worldwide's presence should attract a number of companies seeking direct access to overseas traffic, DeVeau predicts, and could position Lynn as a 21st-century telecommunications switching hub. In Worldwide's wake another telecom company has already signed a letter of intent to set up a local facility, and a third is considering doing the same. "It all seems to be fitting together nicely," says DeVeau. "We finally feel like we're involved in a growth industry."
Meanwhile, Shore.Net is outgrowing its current building, and Gray, who was recently named Small Business Person of the Year for 2000 by the Massachusetts office of the U.S. Small Business Administration, is hunting for a replacement in Lynn. Might he be preparing to hit up the city for more help? It's not a prospect that worries DeVeau. "We'll continue to bet on him," he says.
David H. Freedman is a contributor to Inc. and the author of Corps Business: The 30 Management Principles of the U.S. Marines (HarperBusiness, 2000).
How Green Is Your Silicon Valley?
Lynn's nascent cyberdistrict may be lifting that city's fortunes on a digital tide, but not every depressed area has an equal shot at becoming a technology center. One problem is that everyone is trying to get in on the game, according to Donald F. Smith Jr., director of the Center for Economic Development at Carnegie Mellon University, in Pittsburgh.
What determines which neighborhoods succeed? Access to high-tech academic and research centers and the talent they produce is factor #1, according to Smith. "Lynn has a real advantage because it's close to Boston, which is the leading university center in the country," he says. Pittsburgh, he notes, has undertaken a "Digital Greenhouse" initiative to feed off the pool of researchers at Carnegie Mellon, the University of Pittsburgh, and Pennsylvania State University.
A local business environment conducive to high-tech companies is also critical. "In the manufacturing era what mattered was cheap land, cheap inputs, and cheap people," Smith explains. "Now what's required is a flexible and accommodating regime. The cost climate has to be competitive, but that doesn't necessarily mean cheap. Quality is important in this industry." Other magnets that Smith cites include technology parks integrated with retail and recreational facilities, big bandwidth, and proximity to desirable residential communities with good school systems.
And once those desirable companies start trickling in, cities need to get the word out. "Good PR is very important," Smith says. "You want articles in the media to pervade the awareness of colleges and the business community so that talent and companies start thinking of you as a player." Ideally, a successful company like Shore.Net will provide the business equivalent of a celebrity endorsement. "It's one thing for the chamber of commerce to send out brochures, but it's another for a leading company to announce to the world that it has a phenomenally successful relationship with the place," says Smith. "People like to follow the smart money."
For a detailed list of Inner City 100 companies, please see The Inner City 100: America's Urban Superstars.
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