Birmingham has a understated business environment, off the beaten path of Silicon Valley, Boston, and Austin. Yet, it has all of the components that make it a great place to start up businesses. In both the 2005 and 2006 rankings of “Hot Cities for Entrepreneurs” by Entrepreneur Magazine awarded Birmingham the #3 spot in the nation for midsized cities. In fact, in 2005 Birmingham ranked No. 1 in the category of young companies with 3,176 new start-up businesses according to Justine Walden of the National Policy Research Institute in Washington, which calculated the data for the magazine. In 2004, the magazine also identified Birmingham-based Bernard Frei, owner of world-wide online soccer emporium 356 Inc., as its only listed technology-related “Young Millionaire” in the southeast.

The Birmingham region was founded in the spirit of entrepreneurship. The city’s location was chosen because of the underground deposits of coal, iron ore and limestone within a short distance. After time, the city evolved into a medical and then financial center. While the region has vestiges of the cast iron and steel industries, it is in a mature stage for medical and financial. Many of the blast furnaces are retired, and the sky is clear again. Now, if you look closely, you will see that signs of growth are emerging all over in the form of technology companies.

Even though he’s talking about Silicon Valley, David Hornik’s blog entry about the “Startup Ecosystem” is relevent in describing what makes Birmingham a great place to grow a technology company:

“Places like the Bay Area tend to have a disproportionate number of individuals who are willing to bet on risky ventures. And they have a disproportionate number of lawyers, bankers, investors, accountants who have an expertise in business creation. In combination, all these things are self reenforcing and create an even stronger startup culture, which in turn creates a stronger drive towards business creation, which in turn fuels an economy of startup-focused service providers, which in turn lubricates the funding process, which in turn promotes startup growth, which in turn creates an even stronger startup culture, and so on.”

While our region currently lacks the significant venture capital resources of Silicon Valley, the natural ingredients include the vast amount of research at the University of Alabama at Birmingham, a vibrant technology development community, a desirable quality of life, coupled with a strong body of skilled lawyers, accountants, and investors. These are but a few of the attributes that contribute to the underpinnings of current technology growth in Birmingham. In fact, two of 14 “hot startups” identified by Fortune Small Business in its February 2003 issue were UAB spinouts. NO other city had two companies make the cut.

The ecosystem that supports technology growth includes organizations focused on:

• Business Incubation / Startup & Growth Assistance
• Economic Development
• Engineering Associations and User Groups
• International Associations and Programs
• Technology Associations and User Groups
• Technology Centers and Research Institutions
• Venture Capital Funding Sources and Groups
• Workforce Development and Tech Education

In addition to organizations, a growing ecosystem benefits from the inflow of new ideas and persons to fill the expanding economy. While we are intent on training our own citizens for the future expansion of technology companies, Birmingham had a net in-migration of 1,839 young professionals between 1995 and 2000. This bodes well for the growth of our region since it shows that Birmingham scores well on the live first, work second ethic. Birmingham is also experiencing a strong “boomerang” effect where experienced natives of the Birmingham region are choosing to return from cities far and wide, desiring the quality of life they missed by moving away in decades past.

Learn more about the Innovation Depot in downtown Birmingham.