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This is a contributed post by Rep. Tim Ryan, D-Ohio, and Rep. Ro. Khanna, D.-Calif. At the end of February, Ryan (who represents Youngstown, Ohio) and Ro Khanna (who represents Silicon Valley) led a delegation of 12 venture capitalists on a tour of heartland cities to learn what it will take to get more investment flowing to these cities. They met with local business people, elected officials and incubators in each, with the goal of having VCs learn about the startup activity and investment opportunities outside the coasts.
Our country faces an ever-growing number of challenges in the 21st century, but all too often our political dialogue can’t even begin to scratch the surface. While Washington remains mired in its usual partisan fights, entire communities across the country — especially in the Midwest — have been locked out of an economy that has moved away from the manufacturing base that helped build the strongest middle class the world has ever seen.
Though it may not always feel like it, we have the perfect opportunity right now to help rebuild and rejuvenate struggling communities by connecting them with resources traditionally concentrated on the coasts — resources that can help retool their local economies and promote sustained growth and development.
That is why we led a Comeback Cities Tour with a delegation of 12 venture capitalists to explore new ways to drive investment into the places that need it the most. Together, the venture capitalists’ firms have made more than $14 billion in investments — into companies like SpaceX, Airbnb, Uber and Facebook, among many others. But they had little experience investing in companies outside a few major cities.
At each stop, we met with local business people, elected officials, business incubators and community leaders so the venture capitalists could learn about the startup activity and investment opportunities right in our backyard. Our underlying premise was that cities like Youngstown, Akron, Detroit, Flint and South Bend all have individual strengths and resources that can benefit greatly if meaningful connections can be established with places like Silicon Valley, New York City and Boston.
Fixing the venture capital imbalance is a code that must be cracked. A whopping 80 percent of all venture capital investment goes to just three states: California, New York and Massachusetts. Only 4 percent makes it to the Midwest. Those lopsided numbers are not representative of the exciting opportunities and projects going on inside the coasts, and our tour effectively made that case.
At every stop — whether it was the Youngstown Business Incubator in Youngstown, the Bounce Innovation Hub in Akron, the transformative Detroit Foundation Hotel, Skypoint Ventures in Flint, or the 1.3 million-square-foot old Studebaker plant turned mixed-use technology campus in South Bend — these gatherings produced eye-opening discussions that were engaging to everyone involved. Through these meetings, partnerships were forged and ideas exchanged. Both of us were heartened that one thing kept coming up again and again: There’s more that unites the heartland and the coasts than divides them.
It makes economic sense for companies to invest in the Midwest. So many people go to Silicon Valley with their ideas, but there is a recognition now that they could slash a huge percent off their overhead costs by instead moving to areas like Youngstown or Detroit. At a time when municipalities like Silicon Valley are struggling with affordable housing and overcrowded infrastructure, spreading these operations would be beneficial to both regions.
After three days on a bus, there’s undeniably a real opportunity here to facilitate more of these connections. So much so that we believe — as fun as bus tours are — that the Department of Commerce should take a leading role in facilitating this kind of collaboration. They do it abroad; there’s no reason why we can’t do it here at home.
There’s a real hunger for new, innovative solutions to our economic problems. It only takes a couple hours outside of Washington to see just how strong that hunger is. The Comeback Cities Tour reinforced what we already knew: We need to boldly move forward, take chances and, above all, work together to create a new formula for economic growth and cooperation that doesn’t leave anyone behind.
Congressman Tim Ryan is an advocate for working families in Ohio’s 13th District. He was first elected to the U.S. House of Representatives in 2002 and was sworn in on January 3, 2003. Successfully reelected seven times, he is now serving in his eighth term. He currently serves as a member of the powerful House Appropriations Committee, which controls the expenditure of money by the federal government, and as co-chairman of the Congressional Manufacturing Caucus, he is a leader in the fight to strengthen America’s manufacturing base and reform U.S. trade policies. Reach him @RepTimRyan.
Congressman Ro Khanna represents California’s 17th Congressional District, located in the heart of Silicon Valley, and is serving in his first term. He sits on the House Budget and Armed Services committees and is a vice chair of the Congressional Progressive Caucus. A dedicated political reformer, Khanna is one of just six elected officials to refuse contributions from PACs and lobbyists. He also supports a 12-year term limit for Members of Congress and a constitutional amendment to overturn Citizens United. Reach him @RepRoKhanna.
This article originally appeared on Recode.net.
