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Portland, Ore., Invests in Homegrown Software Community

The Rose City isn’t aiming to be the next Silicon Valley. A public-private partnership hopes software development can drive economic recovery.

The Portland Development Commission and Mayor Sam Adams want to expand the region’s software industry to help rebuild the troubled economy of Oregon’s biggest city.

The city has invested almost $600,000 as part of an initial attempt to nurture the local software community. However, Portland’s objective isn’t to compete with the technology hubs like California’s Silicon Valley and Seattle. Rather, the mayor plans to lean on Portland’s “do it yourself” ethic to garner support among local software companies and encourage entrepreneurs to grow the sector themselves.

“The actual end product is going to be developed by the industry,” said Gerald Baugh, business and industry manager for the development commission. “We want to grow jobs and have a very stable and diversified economy and software is one of the places we think can do that and make a tremendous contribution.”

Over the past year, Portland’s software industry has been on the rise. At least 10 companies have brought in $68 million of venture capital, said Baugh. Unlike years past, the companies decided to stay in Portland instead of taking the money and moving to nearby larger technology markets.

“The thinking was that you didn’t have the talent here to grow a software company,” said Baugh.

What’s changed is that Portland is now being viewed as an unsaturated market that comes with a better quality of life than Silicon Valley, said Baugh. In a recent city-commissioned survey, lifestyle was ranked among local software companies as a higher priority than financial success.

Currently the number of software engineers and companies in Portland is higher on average than the national average, said Baugh, and open source technology is also garnering local enthusiasm.

To encourage entrepreneurship, the Portland Development Commission invested $35,000 into Portland Ten, a consulting firm for small emerging software companies, with the goal of bringing 10 startups to $1 million in revenue within 18 months. One company already received $3 million in venture funding last spring, said Baugh.  

The development commission also started a $500,000 seed fund earlier this year to aid software entrepreneurs. “Access to capital is critical,” Baugh said.

The community is as enthusiastic as the city about the government-industry partnership.

At a recent Portland Software Summit, more than 200 software developers — from emerging entrepreneurs to corporate software developers — joined Adams, the development commission and the Software Association of Oregon. The objective was to discuss what the community’s and government’s ultimate goals are and how to get there.

“We didn’t pretend to be smarter than software programmers about software,” Baugh said. “…We listened and were very serious about what we were doing. It’s about a community-sourced solution.”

Baugh said the next step is for various agencies to create a network for software companies to mentor one another and exchange ideas — the top request from the meeting attendees.

“The first resource is time and talent of people,” said Baugh, who added that this is a learning process for everyone. “We still need to figure out what success looks like.”


Miriam Jones is a former chief copy editor of Government Technology, Governing, Public CIO and Emergency Management magazines.