Youngstown, Ohio: The Rust Belt's Silicon Valley? In the Rust Belt city of Youngstown, Ohio, a high-tech incubator is producing successful software companies. Nearly 300 people are working for a cluster of companies that have huddled together to create cutting-edge products. Even in this extremely depressed area, in the midst of a deep recession, entrepreneurship is flourishing and creating jobs.

Youngstown, Ohio: The Rust Belt's Silicon Valley?

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INSKEEP: Given news like that, the first half of this next sentence is rare, and the second half is, if anything, even more rare. There is good economic news, and it comes from Youngstown, Ohio. Part of the city is seeing a renaissance, due to high-tech start ups housed at what's called the Youngstown Business Incubator. Dan Bobkoff of member station WCPN brings us that story.

DAN BOBKOFF: Youngstown is not the kind of place you'd ordinarily look for an economic success story. Halfway between Pittsburgh and Cleveland, the city has been down so long, it's become shorthand for the Rust Belt. It never recovered from the decline of steel mills over the past couple of generations, and the massive GM plants up the road is now a source of uncertainty. So when I heard that a block of Youngstown is beginning to look like a tiny Silicon Valley, I drove down there to check it out. What you see, is a burgeoning complex of buildings on a street that, not too long ago, was dangerous and virtually deserted.

Mr. JIM COSSLER (CEO, Youngstown Business Incubator): Right across the street was a former Higbee's Department Store. It had been abandoned for at least a decade.

BOBKOFF: Much of the transformation here is due to the hard work of this man. Jim Cossler is the Youngstown Business Incubator CEO, but he prefers another title: chief evangelist.

Mr. COSSLER: We've been able to take down eight uninhabitable buildings, creating some urban green space, creating a parking lot.

BOBKOFF: He takes me inside, and it looks like dorm for infant tech companies. Funded mostly by the state, start-ups here get free rent and utilities to focus on growing their businesses.

Mr. COSSLER: So three companies in this (unintelligible). At the end of the hall, you have Zita(ph) Software.

BOBKOFF: Many of these companies are little more than a couple of guys huddling around a laptop, trying to get a service ready for market. But they all have similar goals and problems, and that's the point. They can collaborate. When Cossler took over a then floundering Youngstown Business Incubator in the late 1990s, he moved it away from the traditional model of funding lots of unrelated businesses, and instead laser focused on business-to-business software farms, companies that make high-tech products for other companies to use. That's something he knew could thrive anywhere, even Ohio, if given the tools.

Mr. COSSLER: Yes, in fact, you can start a successful technology-based company in Northeast Ohio. You don't have to be young on the coasts. You don't have to be in the Silicon Valley. You don't have to be in Research and Triangle.

BOBKOFF: And one company in the Incubator has proven that, beyond even Cossler's expectations.

(Soundbite of phone ringing)

Unidentified Woman: Turning Technologies. May I help you, please?

BOBKOFF: In a sparkling new building next to the Incubator, Turning Technologies shows the other startups what's possible. In 2007, Inc. Magazine ranked it the fastest-growing software company in the nation. Turning makes what are called audience response systems. You've probably seen them in game shows, little wireless keypads that let people enter their answers to questions. They've been taking off in schools and colleges. Mike Broderick is Turning's CEO.

Mr. MIKE BRODERICK (CEO, Turning Technologies): Technology companies don't come out of Youngstown, Ohio. Well, we think Turning and other companies and Youngstown Business Incubator have changed that mindset, because we've proven that good technology companies can.

BOBKOFF: Broderick says he doesn't need to go to the coast to attract world-class talent. Most of his young staff comes from Ohio, and the company's success has attracted some from farther away. Brad Gant moved from Florida to run Turning's education division. He knew the popular image of Youngstown.

Mr. BRAD GANT (Turning Technology Education Division): Certainly, the area has a reputation that I don't think is fair. And so once I had the opportunity to come up here and meet people and learn more about Youngstown, certainly, any reservations I had passed.

BOBKOFF: And that's the power of the Incubator, says Youngstown State Management Professor William Vendemia. He says its creation of nearly 300 jobs is nice, but it's effect on the region's image is much bigger.

Professor WILLIAM VENDEMIA (State Management, Youngstown State University): It's not like it's turning around the economy, but it really, I think, it's important - when we go into classes and, you know, you try to point out successes that you have someone right down the street that says this is a success. These are the local guys, and they've made it.

BOBKOFF: But back at the Incubator, you'd forgiven if you thought you're at a Silicon Valley startup watching staffers are playing foosball and air hockey.

(Soundbite of banging sounds)

BOBKOFF: First growing Turning hasn't been immune to the economic downturn. Last month, it laid off 30 staffers after the company didn't grow as fast as expected. Still, the company is forecasting 10 to 20 percent growth this year, and in this economy and in this region, that's nothing to scoff at.

For NPR News, I'm Dan Bobkoff in Cleveland.

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