MW A 'hidden gem' of a city wants the tech world to take notice
By Jon Swartz
Although it's home to 11 Fortune 1,000 companies, Richmond, Va. has a 'modesty problem'
A hidden gem in the Mid-Atlantic region has plenty to brag about, if it could only muster an bit of braggadocio.
Although it's home to 11 Fortune 1,000 companies, including CarMax Inc. $(KMX)$, Arko Corp. $(ARKO)$, Markel Group Inc. $(MKL)$ and Dominion Energy Inc. $(D)$, Richmond, Va., has a "modesty problem," according to Garret Westlake, associate provost at Virginia Commonwealth University's da Vinci Center, an innovation center for higher education located in the heart of the city.
Richmond needs to balance its penchant for humility with the will to tout its achievements, he said, adding that "you need a certain amount of bravado" to successfully compete with similar-sized cities.
While the Virginia capital is not big enough to compete in every kind of market, it still has "an opportunity for things like [education technology] and healthcare," Westlake said. That's why he and others consider Richmond a rising tech hub that can compete with cities like Raleigh, N.C.; Jacksonville, Fla.; Charleston, S.C.; Columbus, Ohio; and Pittsburgh.
The city has a number of big projects coming in the next several years: a 7,500-seat amphitheater in 2025, a 26-story headquarters for CoStar Group Inc. $(CSGP)$ in 2026 and a $1 billion manufacturing plant for Lego Group in 2027.
And in October, the Biden administration designated the Richmond region as an advanced pharmaceutical manufacturing tech hub.
"We're trying to position Richmond as the leading edge of artificial intelligence and machine learning, so that if you're a company that is in that space, this is a good place to find talent and to headquarter here," said Nick Serfass, the CEO of the Richmond Technology Council, a 200-member association of companies including $Bank of America Corp(BAC-N)$.( BAC) and CarMax.
"The ecosystem is super tight-knit," said Lloyd Turner, the director of innovation and design at VCU's da Vinci Center. "Richmond is small enough so folks know each other, which leads to a healthy overall ecosystem."
That's the reason Erica Cole decided to locate her company in Richmond. Cole is the CEO of No Limbits, a company that manufactures clothing for people with disabilities. Cole said she plans to announce deals with two major retailers this year.
Nearly a year ago, Vice President Kamala Harris visited Babylon Micro-Farms, a manufacturer of small-scale hydroponic farms that grow fresh vegetables indoors. The $15,000 microfarms are being used at companies including Intuit Inc. $(INTU)$ and Ford Motor Co. F and at universities to grow lettuce and flowers indoors.
Thriving startups are also emerging from Startup Virginia, a nonprofit incubator housed in one of the city's converted tobacco warehouses. Its tenants include Brandefy, a mobile app for finding inexpensive alternatives to luxury beauty products, and the Endowment Project, which brings private-school funding methods to public high schools. In Richmond, "everyone is pulling in the same direction versus political fiefdoms," said James Kresge, chief technical officer of the Endowment Project.
The benefits of being small
Being a comparatively small city in close proximity to major metropolitan areas - Richmond is the capital of Virginia, with roughly 1.35 million people in the region and quick highway access to Washington, D.C., Baltimore, Raleigh, and Charlotte - comes with benefits.
Richmond's small size and the familiarity its tech participants have with each other make for a lot of "useful collisions," Matt Briggs, vice president of AI and machine learning at $Capital One Financial Corp(COF-N)$. $(COF)$, said in an interview. "We give people a ladder to climb but don't climb it for them."
Capital One is headquartered in Washington, D.C., and about 13,000 of its 60,000 employees are in Richmond.
Richmond was founded in 1737, predating the American Revolution, and is home to universities such as VCU, which dominates the downtown, along with the University of Richmond and Virginia Union University. The University of Virginia, William & Mary and Old Dominion University are all nearby.
Affordability is a major selling point for employers, with the average cost of a three-bedroom home at $357,000, about $100,000 less than the national average. The airport is ranked the most efficient in the country. And the return-to-office rate, at 74% during the last week of March, is well above averages in the U.S. as a whole (51%) and nearby D.C. (46%), according to market researcher Kastle.
Navigating the path toward becoming a major tech hub without growing too large or losing its culture and identity is a challenge that Richmond is willing to take on, Serfass and others say.
Although the city's downtown does need some development, such as "an arena and entertainment center to draw young people," Serfass said: "We don't want to be Austin [Texas], with cranes galore and traffic." Richmond, he said, is a "hidden gem."
-Jon Swartz
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(END) Dow Jones Newswires
April 22, 2024 12:41 ET (16:41 GMT)
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