Industry Towns – Where You Start A Company Matters

This post is by Elad Gil from Elad Blog

Industry towns[1] emerge due to the critical mass of having employees, entrepreneurs, suppliers, business partners, potential customers, and investors in the same geographic location. Some industry towns are driven by their geography - for example manufacturing sites on the Mexican side of the US-Mexico border, Houston for oil & gas, or wineries in Napa (where the right conditions exist for grapes to grow). Other industry towns emerge due to early founding effects - for example Detroit largely emerged as an automotive center as Henry Ford and Ransom Olds happened to live there when they set up shop (Ford Motor Company and Oldsmobile)[2]. Other companies and suppliers moved to be close to Ford and Oldsmobile and an industry town was born.

If you were going into the movie business, you would be encouraged to move to Hollywood, Lagos, or Mumbai. If you wanted to go into finance, New York, London, and Hong Kong would be amongst the primary places to move. Industry towns exist for most major industries, including energy, finance, movies and entertainment and other areas.

Oddly, it is now controversial to say industry towns also hold true for tech - if you want to start a company that will be worth $10 billion or more, the best places to start it are Silicon Valley[6] (for the US), Beijing (China), and Bengaluru (India). There are also regional centers of excellence (Jakarta for Indonesia, Singapore, Sao Paolo for Brazil, etc.) and then secondary centers in the main markets (London, Stockholm, (Read more...)