Silicon Cities
How Entrepreneurship is Helping Baltimore Bounce Back
Varun Nayar | September 22, 2016

Sometimes referred to as America’s Charm City, Baltimore has recently become an increasingly charming destination for innovators and entrepreneurs, and those groups are in turn helping the city emerge from the economic doldrums.

Every month, Free Enterprise takes stock of one of America’s up-and-coming Silicon Cities; that is urban hotspots where small businesses are helping to foster innovation and build a vibrant technological sector. In September, we looked at how Baltimore is getting back on its feet after decades of decline in its once-robust manufacturing and shipping industry, with a little help from a growing startup ecosystem and technological innovation. Here’s what we found:

A Community-based Approach to Entrepreneurship

Between 2000 and 2010, the number of 25- to 35-year-olds with college degrees living within three miles of Baltimore’s downtown business district rose 92 percent. Part of the reason for that fast growth is a strong sense of local community support that helps rising entrepreneurs thrive.

Groups such as Baltimore’s Emergency Technology Centers (ETC) are crucial in this regard.

“I saw all the time that entrepreneurs need three Cs: capital, creativity and connections. But they also need community and collaboration to last,” explained Deb Tillett, president and executive director of ETC, which has been providing services such as business classes, co-working spaces and low-interest business loans to resident entrepreneurs since 1999. Since its inception, the organization has worked with more than 400 companies and brought in approximately $2.2 billion in outside capital to the region.

Other organizations, such as the Propel Baltimore Fund, invest in local early-stage companies. A non-profit called D.R.E.A.M (Developing Resources to Empower All Minds) Foundation offers a free summer entrepreneurship programs called Y.E.S (Youth Entrepreneurship Startup Program) to high school students in underserved communities.

A Growing Hub for the Video Game Industry

While Baltimore’s tech and video game entrepreneurs haven’t garnered a ton of attention on the national stage (yet), they have helped the city become one of the most successful gaming regions in the country, only slightly behind well-established hubs in Los Angeles, San Francisco, Seattle and Austin, according to a report by the Economic Alliance of Greater Baltimore. The city also benefits from Maryland’s $5.5 billion digital media industry, which generates $15 billion a year in economic activity, according to a 2010 study by the Maryland Department of Economic Development.

In response to the gaming industry’s success, many local colleges have begun offering gaming and animation degrees. The University of Baltimore and the Maryland Institute College of Art both provide classes and programs that prepare students for a career in video game development, ensuring that local gaming companies have a steady pipeline of talented workers to hire.

“Baltimore is a smaller market, and so the cost of living is much lower. There’s also a talent pool here because of the concentration of universities that teach design, ” said Ben Walsh, founder of Baltimore-based Pure Bang Games, a company he says he can’t see himself running anywhere else.

A Dedicated Community of Black Entrepreneurs

While startup activity in the city has increased 7.4 percent since 2010—more than double the national average for that period—the optimistic figures mask serious social and economic challenges. More than one-fourth of Baltimore’s African-American population lives below the poverty line, and the city gained national notoriety after riots sparked by the death of local resident Freddie Grey ignited national conversations about racism and inequality.

In response, many of the city’s leaders are trying to fight poverty by creating new employment opportunities for underserved residents. “Entrepreneurship, regardless of where you’re from, is important, especially in African-American communities,” explained Omar Muhammad, director of Morgan State University’s Entrepreneurial Development Assistance Center. “Where there are black entrepreneurs in black communities, there is less crime and more jobs.”

Muhammad is one of many leaders who oversee programs that help students, staff and residents launch successful businesses. He and his team also run an annual conference that teaches young people from marginalized communities the value of entrepreneurship.

The idea isn’t just to create a thriving startup economy and culture in Baltimore, but also to develop role models and supportive communities for future generations. According to an academic study published in the Urban Affairs Review, entrepreneurship plays a key role in lowering youth violence and crime rates. This is just one of many ways small businesses are transforming a city that has had its share of struggles.