D.c. Emerges as Internet Capital – Industry Trend or Event

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Add Washington, D.C., to the growing List of regional hotbeds of Internet activity. For years, companies Like America Online, Network Solutions, MCI WorldCom, Nextel and countless other start-ups have made their homes along Northern Virginia’s I-66 Dulles Corridor. Now, the activity is moving into the already crowded capital, and that’s resulted in more telework and home-based jobs in the D.C. area.

As capital leaders realized they were missing out on the revenues generated by the businesses locating just outside D.C., the local government began offering tax credits and incentives to companies moving in, says Liz Sara, a D.C. resident and teleworker with SpaceWorks, the Rockville, Md.-based business-to-business Web services company she founded.

Office and residential buildings are being renovated to house Web companies. D.C., once known as the world’s political epicenter during the day–and a veritable ghost town at night–is emerging as a haven for high-tech companies and Internet start-ups.

In fact, the greater D.C. region ranks fourth in the U.S. in terms of high-tech employment with 177,700 workers, behind San Jose, Boston, and Chicago, according to a “Cybercities” report from the American Electronics Association and the Nasdaq Stock Market. The region leads the nation in software services employment, with 70,400 workers, the report noted.

This has been both a blessing and a curse, says Paul Sherman, editor of Potomac Tech Wire, a D.C.-based daily electronic magazine tracking the region’s Internet business. Growth has added revenues and jobs, but has also further clogged already congested streets and highways. “Telework is very popular in this area because of the traffic,” he says.

The Internet business has become a boon for home-based workers, adds Lisa Martin, president of LeapFrog Solutions Inc., a Fairfax, Va.-based Web design and development firm that employs 12 home-based subcontractors, some of whom work from D.C. This year, the company is focusing on how to incorporate telework into its growth plans. As the region becomes more crowded, keeping employees off the congested streets could be the best answer, Martin says.

The growth has come as companies shift from serving government and defense industries to working in the consumer market, says Sherman. Several companies have targeted Northern Virginia and D.C. as home because MAE East, the regional switching point for the Internet, is Located in Vienna, Va. With businesses come the venture capitalists, who have made greater D.C. one of the nation’s top-five funding regions, Sherman says.

“Ten years ago this was a government town. Now there are more technology workers in this area than government workers,” Sherman adds. “No one ever in their wildest dreams would have expected that to happen so quickly.”

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