Space, software innovation along Lake Superior: the U.P. ‘s $105M tech hub

Where can you drive a boat to work and build a rocket? The Upper Peninsula.

Some of the state’s – and the nation’s – most innovative technology is being developed along the rugged shoreline of Lake Superior.

In one year, tech companies across the U.P. generated $105.9 million in sales, according to data collected by Michigan SmartZones, a technology business accelerator funded by the state.

From space to electric vehicles to streamlining industries like hospitality, manufacturing, and logging, tech companies in Michigan’s far north are capitalizing on a Midwest work ethic and the technical prowess of public research universities.

Being rural, remote and cold are no longer deterrents in the age of remote work, said David Rowe, CEO of MTEC SmartZone in Houghton.

From October 2021 to September 2022, entrepreneurs formed 34 new tech companies, creating 294 new jobs in the U.P. Additionally, 1,076 people there kept working tech jobs.

“We tend not to make excuses for location any longer. We sell it as a feature,” Rowe said.

Yoopers are peeling away their “aw shucks” humility and rebranding themselves as the lucky ones who live and work where the rest of the population vacations. Investors and innovators alike have taken note and are willing to invest.

Related: ‘Michigan’s secret weapon:’ U.P. business is missing link in semiconductor solution

When Tom Dolaski returned to Munising in 2008, it felt like the city was stuck in time. The paper mill, the prison, the cruise ships – not much had changed since he left in 1997.

Dolaski, 43, went from high school to the Air Force and then used his electrical engineering background to create DeployedTech or DTech, a general technology contractor for hotel openings. He carved a career path in hospitality in Florida and California. Then a family emergency brought him home a decade later.

Setting up shop in Munising during a recession was not the planned trajectory for his growing tech business. Dolaski may have been one of the Upper Peninsula’s first remote tech workers as he continued to foster relationships from the Caribbean to Miami to Manhattan to Chicago.

When DTech picked up steam, Dolaski traveled 300 days out of the year, he said. Traveling in and out of a small regional airport with changing schedules became untenable, and Dolaski moved to Manhattan for a year.

While New York offered convenience, Michigan had the infrastructure to build a foundation and grow. In 2013, Dolaski returned and bought a vacant building to house DTech’s Munising office. Still, he describes the economic development at that time as static.

“There were just a lot of things that weren’t happening that I felt should have been happening,” he said. “So we just did it. We put our money where our mouth was.”

Fast forward 10 years, and Dolaski’s company has invested more than $12 million into the community. On the tech side, DTech has three offices, including Munising, and employs 18 people full-time.

On the development side, Deployed Capital owns and operates nine businesses ranging from a gas station convenience store to a coffee roastery and concert space.

“We managed to build experiences for the workforce that increased the value proposition of downtown being seen as a place to work,” Dolaski said.

When Dolaski was building his team of design engineers, he wasn’t zeroing in on degrees or past internships. He wanted the right personalities.

“I can always teach [skills], so I found the people who were in love with the U.P., who truly wanted to be here, and we built our talent pool around that mentality,” he said.

CEO Brad King said that brain power has never been a problem for Orbion Space Technology in Houghton. And it’s not just because King has been a professor of space systems engineering at Michigan Technological University for 23 years – although that certainly helps.

“There’s this perception if you have a startup company and it’s in technology, and you should be in Silicon Valley. You can’t compete with Silicon Valley companies. I completely reject that,” King said.

“We have an advantage that our lifestyle is so pleasant in Michigan and northern Michigan that we don’t have any problems with employee turnovers,” he said.

In six years, Orbion has skyrocketed out of startup territory with $30 million invested into the company’s development and manufacturing of plasma propulsion systems for small satellites.

At first, there was a stigma to break, King said. Investors from Boston to San Francisco weren’t convinced there would be a large enough talent pool in the U.P., much less a line of career engineers eager to uproot to a remote, rural location.

But that’s exactly what happened.

Engineers left careers at NASA, the Massachusetts Institute of Technology, and aerospace industry giants in California and Florida. King estimates half of the 50 engineers on his team are Michigan Tech alum.

The remoteness of the U.P. is no longer something to fear – a sentiment King, 51, has seen change over his lifetime as a native of tiny Calumet on the Keweenaw Peninsula.

“Growing up, the geographic isolation was always seen as an impediment,” he said. “Over 30 years, it’s evolved to what we feature. That’s what we brag about, and that’s our identity. And now people come here because of that.”

Orbion staff has an informal competition for the coolest commute: canoes in the summer and snowmobiling in the winter.

“We always joke about where you can take your boat to work and build rockets,” King said.

When Jeff Halonen, 29, was looking for investors for his Calumet-based software company in 2022, the secret of the U.P.’s growing tech hub was out.

“Zero times did I ever have to explain for or apologize or say, ‘I know we’re in the Midwest, but.’ There was none of that,” he said.

Growth at Halonen’s company Steelhead Technologies has been swift since its founding in 2021. Last year, they raised $2.5 million in investment and expanded their team to 20.

Halonen, a Michigan Tech alum with a degree in mechanical engineering, graduated with a General Motors job offer in 2016. Four years later, he, his cousin, and his uncle pivoted to go-to-market technology business ventures, working as contractors to launch products or services.

Through this line of work, they diagnosed a problem plaguing small job shops: there was too much paperwork to track each step. And so, Steelhead, a plant operating system, was born.

The U.P.’s low cost of living, coupled with resources at Michigan Tech, has kept the headquarters firmly planted up north for the technical team even as the sales team spreads out across Michigan and the Great Lakes region.

The last secret ingredient? Midwest grit.

“People from the Midwest just show up and get the job done,” Halonen said. “There’s not a ton of drama. It’s been working out extremely well for us,”

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About the Author: John Ravenporton

John Ravenporton is a writer for many popular online publications. John is now our chief editor at DailyTechFeed. John specializes in Crypto, Software, Computer and Tech related articles.