How's the tech scene in Detroit

Startups in the USADigital Detroit

The Henry Ford Museum in Dearborn near Detroit. An employee shows visitors how to assemble a Model T using an original - the legendary "Tin Lizzie", the "Blechliesel" from Ford, a bestseller worldwide for decades.

The museum is an ode to the heyday of the American auto industry - which came to an abrupt end during the economic and financial crisis at the latest. And with it, the city of Detroit, Motor City, plunged into the crisis. In July 2013, Detroit filed for bankruptcy - the largest municipal bankruptcy in the history of the United States.

Back then, the city learned painfully that its great strength had become a dependency and thus a weakness. Since then, images of empty factories and run-down houses have determined her image.

"The start-up culture has changed completely in the last ten years"

Detroit has not yet really recovered from the crisis. They still exist, the abandoned streets in the extensive network of the city, which was once laid out for around two million inhabitants and today no longer has 700,000. The unemployment rate in the metropolitan region is around six percent, in the city itself it is around twice as high. But the Detroiters have made it their business to restore the battered reputation of their city.

The start-up scene should help them with this. Faris Alami has been romping around here for 13 years now. He estimates there are around 300 to 500 small tech firms in Detroit. "The tech industry has really developed. Many companies that you can find here today didn't even exist in 2004, probably not even five years ago. At that time it was said: What do you do and why do you do it? Today it says: Why not? The whole start-up culture has changed completely in the last ten years. "

Alami is the founder of International Strategic Management. The company offers start-up assistance: search for investors, marketing, protection of intellectual property. Alami and his team are giving the tech founders a helping hand. Work has gotten easier over the years. Because the number of funding programs has multiplied: "When we started a few years ago, we made a list of possible donors for business start-ups. The list was a page long. Now it's a book and it has 27 Pages!" Alami calls this network "ecosystem".

The large number of public and private incubators and donors is also a key factor for Mark Denson in the hoped-for success of Detroit as a new start-up center. The 52-year-old grew up here and now works for the Detroit Economic Growth Corporation - a nonprofit that the city oversees with economic development tasks. In a slightly ironic way, he describes what makes Detroit so attractive: It's cheap. "What brings the start-ups to Detroit are the low entry barriers. It's inexpensive. A good idea is a good idea. But a bad idea - you can fail once in Portland. If you bring them to Detroit, you can afford to fail two or three times! "

The outcome for the industry is uncertain

Denson's joke has a serious background: The cost of living and property prices on the west coast - in hipster metropolises like Portland or Silicon Valley - have exploded in recent years. In Detroit, people are now trying to attract the frustrated start-ups with, for example, much cheaper rents. And with it - and this is no joke - of all things, he gets help from the automotive industry. "Ford placed full-page advertisements for the Detroit location in newspapers in Silicon Valley and set up a website. Other companies have also advertised Detroit."

Because just like the city, the automotive industry has to reinvent itself. She also needs: start-ups. The old giants of the auto industry do not develop sensors and algorithms themselves. But they are still the most important employers in Detroit. The city and the car manufacturers - they continue to form a community of fate. The outcome for both: uncertain.

Editor's note: Research for this post was made possible, among other things, by a travel expense contribution from the US State Department.