Hidden tech – Move over Silicon Valley. Places like Grand Forks, North Dakota, Wenatchee, Washington, Bozeman, Montana, and Amherst, Massachusetts are about to steal your thunder.

It used to be that when you thought of high-tech corridors the geography was pretty limited to Silicon Valley, Boston’s Route 128, North Carolina’s Research Triangle Park, and a few up-and-comers like Austin, Texas.

No longer. With the rapid adoption of inexpensive broadband technology, and the cost of urban living still high despite the downturn, tech communities are popping up in unlikely places. Migratory entrepreneurs have set up shop in places as diverse as Grand Forks, North Dakota, Wenatchee, Washington, Bozeman, Montana, and Amherst, Massachusetts – scrapping the rat race and cutting back on their business costs, to boot. Many of these businesses are home-based and unincorporated, literally hidden from view and flying under the radar of government statisticians. Still, these "hidden tech" communites are getting VC attention.

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Steve Reynolds, a senior manager at AOL, moved to Amherst from Maryland in the summer of 2002. He set up shop in his attic, where he has been managing a portion of AOL’s marketing support operations. News coverage on the area’s tech community convinced him there was a good cluster of like-minded techies to provide camaraderie off hours. Almost two years later, he’s happy to be off the D.C. Beltway and is spending more time with his family and the outdoors. "Commuting took a lot of years off my life," he says.

Nearby is the office of Larry Jackson, a veteran Hollywood producer/director who spent 23 years as an executive with the Samuel Goldwyn Company, Orion, and Miramax, and was a senior producer for films such as Silence of the Lambs and Mystic Pizza. Mr. Jackson now operates a distribution company for independent films from a home office – he says he got tired of the Hollywood hustle and decided to try the simpler life. Mr. Jackson, who signs emails with "Lawrence of Cyberia," says the move required some initial adjustment, but he has settled into the slower pace. And the move, he adds, has been great for his kids.

Then there are David and Myra Kurkowski, who left the Philadelphia suburbs several years ago to operate a pharmaceutical market research business in Cape May, New Jersey, a resort town on the state shore famous for its beachfront attractions. What has surprised them, they say, is the proliferation of recent transplants. "All of our permanent staff are immigrants to Cape May, as are we," Mr. Kurkowski notes.

Who are these people and why are they leaving organizations to set up shop in places like western Massachusetts or North Dakota?

A recent study, "Hidden Tech and the Valley: At the Cutting Edge of the Global Internet Economy" (Western Massachusetts Electric Company, fall 2002), helps to profile this new form of businessperson. Like Mr. Reynolds, hidden tech entrepreneurs often pick places already populated with like-minded techies or business professionals. They are flexible, running "virtual companies," technology-driven operations with one or two principles, where the work is carried out remotely through subcontractors and business alliance partners.

Going solo certainly has its upside, according to the study: hidden tech entrepreneurs often pull six figures, and claim clients as powerful, and diverse, as the Vatican, the Thomas Register, and Boeing.

Joel Kotkin, a hidden tech researcher and author of The New Geography: How the Digital Revolution is Reshaping the American Landscape (Random House, 2001), calls these locales, many of which are college communities, "Valhallas." He cites a critical shift in the population that is moving from urban centers. "A growing percentage of the new population consists of knowledge workers," he says. "For the first time, vocational choice has expanded to allow these elite workers the option of locating not only outside the city, but outside the metropolis itself."

Why does the hidden tech trend matter?

In a "jobless recovery," with the government reporting growth in self-employment nationwide, economic development experts believe that the hidden tech population may be a badly needed shot in the arm for the American economy. In some cases, with manufacturing increasingly moving offshore, these entrepreneurs may be the only growing economies in some regions, especially in rural areas.

Delore Zimmerman, president of CEOpraxis, an economic development consulting group in Grand Forks, North Dakota, agrees with Mr. Kotkin, saying that "the lifestyle entrepreneur, the hidden techie, is changing the landscape and workscape of America. In doing so, they are creating demands for the creation of entrepreneur networks that are electronically driven to connect them to national and global markets."

These new communities are also fresh, fertile ground for venture capitalists, as Village Ventures of Williamstown, Massachusetts has discovered. Analysts there have identified 101 emerging tech communities nationwide – from Lexington, Kentucky to Charleston, West Virginia – and have located new funds in areas such as Tucson, Arizona, and Lexington and Worcester, Massachusetts.

Will entrepreneurs leave the concrete jungle in droves for the charms of the countryside? Probably not, but with capitalism getting a breath of fresh air, hidden tech will probably come out of hiding soon.