Hidden-Tech Firms Beyond Silicon Valley

By Adam Stone | Posted May 09, 2003
Susanna Opper does not think of her small communications firm as a technology company. She's a writer in the tiny western town of Alford, Mass, population 2,000, and while she may write on technology topics, she does not run her own webhosting firm or design custom software. Yet she would be dead in the water without her PC.

"Email is the way that I communicate. Google is my homepage. As a writer and a researcher, for just about every project that I do, I will turn to the Web for information," she said.

Opper is part of what some call the "hidden-tech" community: Small firms, often home based, who are not recognized as part of the technology sector, yet who are deeply dependent on technology and whose products may be directly related to such areas as software development or the Internet. They often fly below the radar, invisible to one another and to government policy-makers.

A recent study shows just how pervasive such firms may be.

Conducted by hidden-tech advocate Amy Zuckerman, the study looked at 75 companies in Pioneer Valley region of western Massachusetts. These were firms that had identified themselves as potentially meeting the criteria of hidden-tech companies. The study aimed to assess whether, and to what degree, these self-selected companies did truly represent a heretofore-unrecognized hidden tech population.

Apparently, they do.

The valley in question is not known as a technology hub. Yet 30 percent of respondents say they develop and sell software products, 30 percent offer software-related consulting services, and another 25 percent are involved in management consulting and strategy both inside and outside the tech industry.

These firms may be small, but their connections to the world of technology give them a broad reach. More than a quarter consider themselves to be "global" companies. In all, some three-quarters of these small businesses described themselves as global, national or regional firms. They have clients in at least 20 foreign countries and on four continents, as well as in nearly half of all U.S. states.

Perhaps most significantly, these firms are economic drivers, with collective revenues of more than $10 million. They pay local salaries of approximately $1.5 million, spend another $1 million on subcontractors and part-time employees, and spend an estimated $175,000 a year on supplies and equipment.

With figures like those, the study's author suggests, hidden-tech companies deserve more recognition from policy-makers and others who have influence over the flow on commerce. "If people were to realize that these businesses are operating in this way, then they could start thinking about what services these businesses need," said Zuckerman.

Through studies like this one, she said, community planners could gain a clearer insight into the contributions of these small, technology-based firms. They could in turn do a better job of providing such services as high-speed Internet access to the areas where they are needed most.

That would be a welcome development for Rich Roth, an internet architect who struggled to get access to high-speed internet access in the rural community of Greenfield, Mass. In many cases, the providers of such services "just don't see markets that are not big markets," he said.

Roth is among those who stress the importance of hidden-tech firms identifying themselves and coming together through voluntary associations. By bringing together their voices, he said, they will be more likely to get the kind of support they need on all levels. "If the kind of company that I run is not recognized by the finance community, we are at a disadvantage. If the government agencies don't see us, we don't get proper representation," he said.

To this end, Zuckerman said she has identified some 1,500 hidden-tech companies in her region, many of whom get together either in person or via a Web site. "People are doing all sorts of talking about technology topics, swapping ideas and swapping solutions," said Zuckerman.

In the future, she said, other studies may unearth similar populations elsewhere, eventually leading to a more widespread recognition of the hidden-tech phenomenon.

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