Feds laud Detroit for emerging downtown IT sector

When federal officials have spoken about Detroit in recent years, they have usually been critical of things like the automotive industry or the public school district. That dynamic continued to change last week when a top federal appointee came to Motown with kind words about the emerging cluster of growing IT companies in the greater downtown area.

"I'm impressed when I come to Detroit," says John Fernandez, assistant secretary of commerce for economic development. "I am impressed with the public-private partnership."

A number of IT firms, such as GalaxE.Solutions and Strategic Staffing Solutions, have begun a trend downtown called on-shoring where they are doing a lot of IT work that has been outsourced to developing countries in recent years. This work is now financially viable because overhead costs, such as office space and labor, are low enough in Detroit that they are competitive with overseas prices. Plus, on-shoring this work to Detroit removes a language barrier and brings it within a time-zone or two of the customer.

Fernandez toured a number of these downtown-based companies, which also employ a few hundred knowledge-based workers. He credited collaboration between local entrepreneurs and officials on making these operations viable, along with other new programs geared toward building up the city's core, such as Live Downtown and DTE Energy's local-sourcing initiative.

"When you do that you find there are tremendous (incentives) for small businesses to start and grow," Fernandez says.

Source: John Fernandez, assistant secretary of commerce for economic development
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.
Signup for Email Alerts