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In Reno, Nev., Homegrown Startups Fuel Tech Transformation


The tech industry is reshaping cities far from traditional hubs like Silicon Valley and Seattle. Today in All Tech Considered - how tech companies choose a home base and what happens to cities when the industry moves in.


SHAPIRO: First we go to Reno, Nev. It's been enjoying a tech boom for a few years. Apple and Google are building data centers there. Tesla has an aptly named Gigafactory. As NPR's Arun Rath found, homegrown startups are helping to drive Reno's tech transformation.

ARUN RATH, BYLINE: Capstak is a tech startup that until recently had operations spread across San Francisco, New York, Tel Aviv and Reno. They needed to consolidate.

UNIDENTIFIED MAN: Good. How are you?

RATH: Capstak went with Reno, moving into this space called the Innevation Center, a home for startups sponsored by the University of Nevada, Reno. Michael Schnabel is Capstak's CEO.

MICHAEL SCHNABEL: The university embraced us with this facility, and it just made a lot of sense for us to say OK, no, we're not going to be in New York. We're not going to be in San Francisco. We're going to be here.

RATH: It's not just about lower rent and taxes than New York and California. The university provides human capital, students like computer science major Alex Sanchez who had been intending to move after graduating.

ALEX SANCHEZ: Ultimately I decided that OK, I'm going to graduate, then I'm probably going to relocate to either California, Washington, Seattle or Denver in one of the big tech hubs where just the tech scene is just bursting.

RATH: Sanchez is now interning with Capstak. His boss, Schnabel, says Reno's offerings are starting to compete with what those other tech hubs can offer.

SCHNABEL: You're seeing a lot of similarities in the energy, the number of startups, availability of capital, and all of those things are important for a successful startup culture.

RATH: The growth of the local startup culture here is no accident. The Economic Development Authority at Western Nevada has been working to encourage entrepreneurship since the crash. Bryan McArdle is with the authority.

BRYAN MCARDLE: We were so beaten down by the recession, and we didn't have a highly diversified economy. So it really was just construction, gaming, mining. And something happened where there was a resurgence of pride.

RATH: The authority established the Reno Collective, another home for new startups to work, collaborate and meet with clients. McArdle says it's had to expand several times and just took over a massive former recording studio downtown.

MCARDLE: And it sort of changed the dynamic that now we have people working downtown, which predominately was just casino workers. Now we have actual tech people working down there.

MONICA DUPEA: We have a major housing crisis and shortage in Reno right now. And we're building like crazy, but we can't build as fast as people are moving in.

RATH: Monica DuPea is the executive director of the Nevada Youth Empowerment Project. She worries about how the young people who aren't getting internships at tech startups can afford to live here.

DUPEA: The majority of our young people are, you know, not entering college, are not gaining the skill and the knowledge that would help place them at these great companies.

RATH: At the same time, for those who do have the education and ability, these companies can make the difference between staying in Reno or leaving for good. Alex Sanchez, the UNR student who's interning with Capstak, already has a full-time job lined up with the company after he graduates.

SANCHEZ: The original plan was to move out because I couldn't find many job opportunities, but now it looks like Reno is pulling me into staying because of all the tech companies that are - come in.

RATH: A lot of the local entrepreneurs say that for the longest time, going back through several boom and bust cycles, there was a feeling that if you wanted to do something with your education, you had to leave town. For young people like Alex Sanchez, there's now a feeling that you don't have to move away to move up. Arun Rath, NPR News. Transcript provided by NPR, Copyright NPR.

Beginning in October 2015, Arun Rath assumed a new role as a shared correspondent for NPR and Boston-based public broadcaster WGBH News. He is based in the WGBH newsroom and his time is divided between filing national stories for NPR and local stories for WGBH News.