What’s the blueprint? Preparing the heartland for AI, automation, and the future of work

VentureBeat held a two-day event in York, Pennsylvania last week, as part of our quest to find a “blueprint” for the way forward for the U.S. heartland. The event provided a fascinating insight into the challenges, and promise, of a heartland town that in many ways embodies hundreds, if not thousands of other cities in the U.S. that have missed out on the plentiful jobs and economic growth enjoyed by the coastal cities over the past two decades.

At the end of the last session of the last day of Blueprint York 2019, VentureBeat CEO Matt Marshall asked from the event stage if anyone had any final questions. There was one; an attendee in the crowd stood up and asked, “So … what is the blueprint?” It elicited a bit of a chuckle from the remaining crowd, but it was a good question. Given hours and hours of panels, speeches, chats, breakout sessions, and animated conversations over drinks in the foyer about the subject, no one had necessarily clarified what, exactly, cities like York need to do in order to secure high-quality, sustainable tech jobs for their denizens.

There is a blueprint of sorts; VentureBeat concluded after collecting input from hundreds of attendees of our first Blueprint event in Reno last year, that it has four keys:

• Lure big companies to expand jobs to your area
• Reskill your labor force to prepare it for the modern economy
• Foster the entrepreneurial ecosystem
• Double down on the regional strengths you already have

But when you drill down to a specific town, sometimes the blueprint doesn’t seem that simple. There is often no silver bullet. It’s easy to say that you should lure big companies and hungry entrepreneurs to come to your area, but what if they don’t? It turns out that there’s a bunch of prerequisites cities need to have for these things to happen, like broadband connectivity, basic cultural amenities, and some community-minded movers and shakers.

While York seems to have checked all of these boxes, there is one last one that eluded it, according to Mark Muro, a senior fellow at the Brookings Institution: an institute of higher learning with a research agenda that can both generate private spin-offs and pump a steady supply of smart labor into local high-growth companies. Muro, speaking on a day-two panel, arguably came the closest to answering the question people were still asking: If York is doing good-but-not-great, it could turbo-charge its efforts by taking a piece of the Roanoke, Virginia blueprint and bootstrap itself a local tech university.

Meanwhile, although it seems a foregone agreement that most of the new jobs communities likely want will be in technology, “technology” is a vague term that covers thousands of different types of jobs, in a multitude of fields as varied as AI, robotics, datacenters, broadband, software development, and on and on. It’s also important to parse out what type of tech jobs a given community may seek. There are high-tech jobs that require a degree (if not a graduate degree) in computer science, as well as mid-tech jobs that require specialized training, but no degree at all, perhaps.

And of course, simmering behind all of that is the fear that the technology that’s coming along with some of these opportunities involves automation, robots, and AI that could kill off existing jobs.

Through the lens of York

What works in York will not work in every community. It’s a small Pennsylvania town of about 44,000 people, perhaps best known to outsiders for its delicious namesake, York Peppermint Patties. Like many cities in this part of the country, it’s an hour or two drive to larger cities like Baltimore, Philadelphia, and Washington, D.C. It has a nearby airport, but flying there (on a last-minute booking) would have been double what it cost me to fly into Baltimore, even after coughing up $90 to take a rideshare for the hour-and-twenty-minute drive from the airport.

It has a rich history of advanced manufacturing, but like so many Rust Belt towns, things have dried up in recent decades. Although gorgeous restored mini-mansions are to be found along York’s streets, other historic buildings have fallen into disrepair; there was a concerted campaign to rehab the (now lovely) Appell Center theater where Blueprint was held. York’s downtown area is larger and has more character than you might expect from a town its size, but bits of blight poke through among the fine dining and charming cafes.

The old town is pushing hard for a comeback, and so came the York Plan — err, the York Plan 2.0. The original version, as York Exponential‘s John McElligott explains again and again, was an initiative that the people of York created as they saw WWII approaching. They got together and took a creative and comprehensive approach to manufacturing, life, and work that carried them through the war and into the decades beyond. The York Plan 2.0 takes a similar approach, leveraging and honoring the county’s advanced manufacturing heritage to launch and draw in new companies and create jobs around automation and robotics.

York Exponential is an early embodiment of the effort. A robotics company that iterates on a robot arm that can do a great number of tasks, especially when outfitted with different “hands,” it offers these robot arms for rent and can design integrations that other companies need. A cheeky example at Blueprint was a drink station at which the touch of a button prompted a robot arm to prepare you a mixed cocktail. York Exponential (“York Ex,” for short) currently employs about 30 people, but McElligott has a far, far grander vision. He sees York Ex as a company that could one day employ thousands, or tens of thousands of workers, with a global customer reach. To hear him talk, he’s almost counting on it. “I don’t want to be an entrepreneur,” he says. “I want to be an industrialist.” He cites names like Carnegie and Rockefeller, and talks about how those giants of industry took their time building 100-year companies, quite unlike the frenetic pace of tech startup culture and its quick exit strategies.

Such grandiose statements make McElligott sound a little nuts. But whether or not he truly believes them, he makes you think he believes them, and that’s all part of the sell. Indeed, for McElligott, nothing is by accident, not even his appearance. In his past, he was a marine, and also an emo rock-star wannabe (he’ll show you the pictures on his phone). When he was in Silicon Valley, he retained the look of the latter; now an entrepreneur in the heart of Trump country, he’s leaned hard toward military chic. A great big knife hangs in a sheath from his belt. (“They all have them,” one attendee told me, referring to the employees of York Ex.) He wore combat boots to the event and sports an olive green (York Ex-branded) bomber jacket, and he grew his beard long and bushy. His carefully coiffed salt-and-pepper hair and dark-framed glasses are the only aesthetic vestiges of his West Coast startup culture past.

Above: York, Pennsylvania Mayor Mike Helfrich

Image Credit: John Heyward

McElligott’s most public champion is York Mayor Michael Helfrich, who comes off as the perfect small-town mayor. Always dressed in a suit and tie throughout our time in town, he steers every conversation to York — York’s marvelous eateries, York’s proud history, York’s progress, York’s potential. (Like McElligott, he’s always selling.) He’s self-deprecating, with a gravelly voice that belies his magnanimity towards others. Everybody seems to know and like him, including the staff at Molly’s Courtyard Cafe, which we chose at random for afternoon coffee.

So what happens when an impassioned, knife-wielding entrepreneur works with Mayor Mike to bring tech jobs and sustainable businesses? They hire another person to help. In this case, that person is Skyler Yost, who holds the title of “Ecosystem Builder.” More than one Blueprint attendee said they hadn’t heard of anyone with that title before, but it’s truly descriptive: Yost is tasked with figuring out the tricky puzzle that is the economic system of an area and all the things it needs to make it grow. He’s such an important component of York 2.0 that Helfrich talked about him in his mayoral election acceptance speech.

Brick by brick

Americans love a good “started-in-a-garage-with-two-people” narrative, and it would be tempting to point to McElligott and Mayor Mike and apply a version of the same story. “Local boys make good,” it would go. But the story of York’s success so far shows just how many steps, people, and problems are involved in accomplishing anything at all.

For example, even after deciding that they needed a guy like Yost, who’s an educated and trained professional community developer, they had to go find special funding to hire him. (It’s not a shock that a small town didn’t have a line item in its personnel budget for “Ecosystem Builder.”) The need for broadband infrastructure was fortunately settled by the United Fiber and Data project — a 400-mile stretch of fiber providing gigabit speeds from New York City to Virginia. But according to local news outlet the York Dispatch, even that project was funded in part by York-based rock band Live. (Yes, that Live, of Throwing Copper fame, circa 1994.)

The York Ex folks discovered early on that they didn’t have enough workers who had the expertise they needed to service and show the robots, so they put together a 15-week course that includes on-the-job training. No degree is required. Meanwhile, they mounted a (successful) campaign to draw in high-tech talent, partially on the promise of having a superb standard of living at an astonishingly low cost. But lots of locales have cheap housing, so it took city officials like Mike, and local businesses, to sell York to these potential hires. (When was the last time you went on a city tour, hosted by the mayor, as part of a job interview?) It worked; they snagged young computer engineers from university programs that often place their grads in Silicon Valley.

Above: Incoming U.S. CTO Michael Kratsios

Image Credit: John Heyward

York also benefits from proximity to Washington, D.C., although York folks have hustled to gain key access there, leveraging key relationships that they’ve fostered in the Capital over the years. When the freshly nominated U.S. CTO, Michael Kratsios, came to speak at Blueprint, the York Ex guys snagged him for a tour of their facility. This is not to mention the Department of Defense contracts that York manufacturers already have, which they can potentially convert to new contracts as they move into new technological territory.

But of course, none of York Ex’s mission would be possible at all without the $6 million in funding the company secured.

The success York is beginning to see — again, York Ex employs just about 30 people so far, but is looking at growth — is a combination of vision, prior experience, existing but outdated generational expertise, key hires, political buy-in at the local level, access at the federal level, hustle, dumb luck, and a pile of cold hard cash. That doesn’t exactly comprise a handbook for how to bring tech jobs to other locales.

The problems and possibilities

There are so many problems and hurdles a given community may have to solve. Infrastructure is a big one; a lack of at least broadband access is a non-starter, and gigabit-speed fiber is all but necessary. People need to physically be able to easily get to the community, by air, rail, or car. It’s helpful to be in a region with a collectively larger population. (York and Lancaster getting chummy is a modest example; the mass of driving-distance cities in North Carolina is a more dramatic one.)

“Reskilling” and job training is a huge challenge. Access to higher education and training programs is a huge help, but even so, there are barriers. It’s unrealistic to ask a 50-year-old who’s 30 years into his manufacturing career to go spend four years learning to be a coder — and for that guy, telling him that he can just retrain to operate a robot that’s going to take his current job is a tough sell. Ideally, those folks provide a sort of in-between solution, reskilling enough to work with robots, with a new generation of workers coming up behind who can enter the workforce with more education around actually programming and managing the machines.

Muro, of the Brookings Institution, discussed some of that fear in a fireside chat at Blueprint, pointing to the firm’s recent research showing that people are feeling economically vulnerable. It’s strongest in regions with a low level of educational attainment and a greater density of manufacturing jobs that are most at risk of being lost to automation. Ironically, those are places that probably need the next wave of technology jobs the most, pointing to how much friction enterprising folks like McElligott can face when they try to convince their small-town neighbors to lean into it.

And then there’s the very real problem of trying to understand where to even start a program like the York Plan 2.0 if you’re a small-town Midwest mayor who doesn’t know anyone in Silicon Valley or D.C.

Frustrating as all that may be, the good news is that there are plentiful resources for those trying to bring sustainable, high-quality tech jobs to their locales. Matt Dunne of the Center on Rural Innovation explained how his organization helps start innovation hubs in rural areas. Shelley McKinley represented Microsoft’s AirBand program, which uses publicly available TV spectrum to help underconnected areas get broadband access. Rodney Sampson’s Opportunity Hub in Atlanta develops talent and supports innovative startups, with a focus on diversity and inclusion that draws in people who may otherwise have an unfair fight with representation in the startup world.

Peter Haas of Brown University offered some clarity around the “robots steal jobs” trope, noting that there’s a big difference between jobs that can be automated and those that are automatable. For instance, one person could manage two or three robots in a manufacturing facility, or even remotely operate robots that perform menial tasks. Some of those jobs would not require extensive training or reskilling. And then there are training programs like the Kenzie Academy, where you learn coding skills but don’t pay any real money until you’re gainfully employed, and the Flatiron School, where you can customize an education program that suits your technological interests and work/life schedule.

One America Works is a nonprofit that connects growing companies with expansion opportunities across the country. The idea is that Silicon Valley companies may find that Green Bay or York or Reno are ideal locations for what they need, but they don’t know what they don’t know. One America Works has a sort of D.C.-style advocacy strategy where they recruit people who are located in the Bay Area but are originally from other regions. They call it the “diaspora.” The idea is that those people know the strengths of their home communities and also have the connections and access to Silicon Valley tech companies and venture capital.

Perhaps most surprising is how much money is available if you know where to look. One Blueprint panel represented four venture firms — Next Frontier Capital, Rise of the Rest Seed Fund, Verizon Ventures, and HighRidge Venture Partners — that are investing outside of Silicon Valley. In another panel, representatives from multiple government agencies, including the U.S. Department of Commerce, U.S. Department of Energy, and U.S. Small Business Administration (SBA), discussed how much federal funding is available. It’s astonishing; the SBA alone is trying to connect problem-solving tech entrepreneurs with some $3 billion dollars in funding. Most of that is grant money, so companies give up no equity in exchange for the capital, and they’re practically begging for people to apply.

An outline of the blueprint

But to take advantage of those resources, and all the others that are available in larger and smaller capacities around the country, there must be connective tissue. That, more than anything, seems to be the key. Marcia Kadanoff of Maker City explained what that really looks like in an email follow-up to a conversation we had at Blueprint. “York, PA has the first ever ecosystem builder in the U.S. In other areas of the country, this function can be accomplished through a native son or daughter who made good as a tech entrepreneur and now returns home to share what they have learned and invest both labor and money directly into the ecosystem,” she wrote. She pointed to people like the aforementioned Matt Dunne, and Nick Smoot of the Innovation Collective. She noted that some locales rely on economic development boards and the like instead of one or two key people, but regardless: “The cities and towns that are thriving have relentless people who are providing leadership in a way that serves as an example others can follow.”

This is in addition to the need for broadband internet, proximity to and connections with institutions of higher learning, and what Kadanoff calls placemaking — “a coworking space, affordable living for professional-class workers […], a cafe, art center, or makerspace/innovation or startup accelerator.”

One key theme throughout Blueprint was that for these local leaders to build the tech-based work opportunities their towns need for the future, they have to know the unique strengths of their area and figure out how to evolve them to capitalize on key future technologies like AI and automation that will drive the future of work in the U.S.

Those are all big ideas that can feel ethereal, but sometimes theory and promise can produce practical results that appeal to those who just want a chance at a stable profession and a good life. Headed back to the hotel after a day of Blueprint panels, I told my Lyft driver about the York Ex program. A chatty Haitian refugee with a thick accent and a taste for Nigerian pop music, he was displaced by the 2010 earthquake at age 19. He said he works 12-16 hours per day (he was boasting, not complaining) doing whatever jobs he can. But he got quiet when I told him about the 15-week program that could train him to work on robots. “Who does this?” he asked after a pause.

“York Exponential, here in town,” I said. He asked me to repeat the name, and repeat it again.

“Robots,” he mused aloud. “That sounds pretty good.”