Why Big Tech’s congressman is betting on Iowa

California Rep. Ro Khanna vaults up the stage in one long stride, ignoring the steps that lead up the wooden platform.

It's a frigid December night, and the congressman is in Jefferson, Iowa, in a 120-seat theater in the back of a historic-furniture store. (Think salt boxes and trestle benches built with 18th-century tools.) His audience is a blend of tech executives and local educators, Silicon Valley innovators and community leaders. Everything smells of sawdust.  

Khanna is here to talk about bridging divides. From the podium on stage, he brings up opportunity and inequality, and how we need to find a way to unite rural and urban America. “It’s what will allow our country to be stronger and win in the 21st century,” he says.

From where most Americans stand today, Big Tech has fallen short in a big way. Data privacy and diversity issues, compounded by partisan politics, have dogged some of the industry’s leading names. Jobs and and talent still tend to cluster in big cities and leave smaller towns behind – in fact, the gap has only widened since the Great Recession – despite hopes that telecommuting and the internet might make it easier to spread the wealth around. Amazon’s recent decision to build its new headquarters in New York and Washington, D.C., was proof positive to skeptics that the industry has no desire to shake up the status quo.

Khanna, however, has made it his mission to find a way for technology to fulfill its potential. His reasons seem at once rational and romantic: Sustainably “outsourcing” well-paying jobs to rural areas could mean a drop-off in migration into his district, where a bunch of the world’s top tech firms are based. Over time, he says, that could curb the overcrowding, congestion, and soaring housing prices he’s been elected – twice now – to deal with.

But Khanna also seems to genuinely believe in the promise of equity and opportunity that made Silicon Valley the world’s tech hub in the first place. If there’s even a chance this work could help revive struggling rural communities, close the widening wealth gap, and blur the cultural and political fault lines that have sharpened along the way, then he sees no reason not to try.

That’s why the congressman is in Jefferson, an agricultural and manufacturing town of about 4,300 an hour northwest of Des Moines. And it’s why he’s asked the likes of Microsoft’s Kevin Scott and LinkedIn’s Allen Blue to be here, too.

“This is not just about economic integration,” Khanna tells me later, at a dinner for guests and community leaders at a photography studio downtown. “It’s also about stitching this country back together. And it starts with respect.”

‘We want to be part of the future’

The event that brought Khanna to Jefferson reflects the broader hopes for revival that exist in small towns across the United States. Community leaders are here to sketch their vision for a renaissance. The Silicon Valley execs have come to pledge their support. Plans by one firm to create a few dozen software jobs here in the next few years are the talk of the town.

Khanna himself is just one piece of the story. But he is positioned to help promote an American future where small towns and Big Tech don’t travel on separate tracks.

Raised outside Philadelphia in Bucks County, Pa., Khanna grew up nurturing a blend of pragmatism and optimism inspired by his family’s immigrant roots. His grandfather was a freedom fighter and later a politician in India. His parents’ decision to come to the US to build a better life for their children planted the seed for his ideas about wealth and opportunity.

In 2016 – after two previous runs – Khanna was elected to Congress on a platform that embraced the tech industry’s responsibility to share its success with the rest of the country. “Silicon Valley needs to answer the nation’s call to service,” Khanna says when we meet at a coffee shop outside the Capitol in Washington, a few weeks ahead of his Iowa trip. “I really believe that it’s a fundamental shift in the economy, and that people in the Valley are uniquely poised to help with it.”

Throughout his first term, Khanna brought that message with him to so-called flyover country. In Paintsville, Ky., he met with coal mining families and Republican congressman Hal Rogers to talk about iOS and Android skills training. In Youngstown, Ohio, residents shared with him their hopes for a future in 3-D printing. In Beckley, W.Va., students at West Virginia University Tech showed him their health data devices and intelligent musical instruments.

Khanna began to see a pattern. “The country is saying, ‘We want to be part of the future, but our problem is we don’t see how we get there,’ ” he says. “The future can’t be [that] they’ll move to San Francisco or Silicon Valley. We want to make sure people have optionality, that they have choices. Just like in my district.”

‘No magic pill’

In an op-ed for The New York Times, economics writer Eduardo Porter calls agglomeration – the flow of investment to places where innovation and talent are already concentrated – “one of the most powerful forces shaping the American economy over the past three decades.” It’s one reason rural revitalization programs keep falling flat, he writes.

There’s also the unhelpful idea that technology is some kind of cure-all for struggling communities, says David Swenson, an associate professor of community and regional planning at Iowa State University – as though all it takes to buck a decades-long trend of urbanization and rural aging and decline is to have a couple of high-tech companies set up shop in a rural outpost and teach locals how to code.

The fact is, Professor Swenson says, most of the work has to come from communities first. Stable, well-paying jobs might encourage people to come, but infrastructure and amenities – a solid school system and daycare centers, high-speed internet and good restaurants – are the reasons they stay.

“There are successful processes that communities can work through,” Swenson says. “But they involve dialogue, communication, goal setting, solving problems, eliminating barriers and hurdles. There is no magic pill.”

Chris Deal thought as much when he first suggested that Pillar Technology, a Columbus, Ohio-based software services company, open offices in his hometown. Mr. Deal, a mechanical engineer whose family has run an apple orchard in Jefferson for a hundred years, had helped design a Des Moines “forge” – what the firm calls its operations – for Pillar two years ago.

Deal had moved back to Jefferson after years working abroad and around the country. He and his wife wanted to raise their kids in the kind of community they had growing up. But unlike Deal, others who had left Jefferson and surrounding Greene County never came back. The population dropped nearly 4 percent between 2010 and 2017. Unemployment was also down, but only because fewer people were around to take the jobs.

Still, the local Main Street group had launched an overhaul of Jefferson’s downtown, pushing the city to buy and renovate the dilapidated buildings that dotted the town square to encourage businesses to move in. There was talk of passing a school bond that would put about $21 million into the construction of a new county high school and a regional career academy, to be staffed by Iowa Community College. Another returnee, Jamie Daubendiek, had taken over his family’s local telecom business and outfitted the whole town with high-speed internet.

When Deal saw what was going on, he went to Linc Kroeger, the Pillar executive in charge of the company’s development in the state. Mr. Kroeger, another small-town Iowa native, jumped on the idea. The software company already has forges in Ann Arbor, Palo Alto, and Des Moines. Why not build the next one in Jefferson?

“Things just seemed to fit into place really well,” Deal says.

In April, Greene County residents voted 68 percent to pass the school bond issue. The same month, Jefferson won a $100,000 grant from the Iowa Economic Development Authority to turn a century-old building downtown into the new forge. The plan now, Mr. Kroeger says, is to form a career pipeline that will kick off with 25 to 35 company jobs that would pay between $55,000 and $75,000 a year – huge in a town where the median household income is just under $45,000. The new forge is set to open midway through 2019. 

By the time Khanna heard about the plans this past summer, Jefferson was ready for outside help. “He asked me questions for two hours,” Kroeger says. “And at the end he said, ‘This is one of the most important projects happening in the country. How do I help you succeed?’ ”

‘Lightning in a bottle’

At the December gathering, guests and community leaders take turns talking about why they want in on the Jefferson project.

Microsoft’s Mr. Scott talks about his upbringing in rural Virginia and how hard it was to leave his hometown to pursue a career in tech. He announces that the Scott Family Foundation will donate $25,000 in scholarships to local students at the new career academy.

Brad Garlinghouse, chief executive of currency-exchange service Ripple, plans to fund a computer lab for the academy. Venture capitalist Greg Sands, who runs Costanoa Ventures, says his firm will host a version of “Shark Tank” in Jefferson, awarding $50,000 to the most innovative business idea. Zach Mannheimer, a Des Moines-based community planner, unveils a vision for all of Greene County – complete with an artist colony, parks, and apartments.

The event closes out with LinkedIn’s Mr. Blue. “You have an amazing bit of lightning in a bottle here,” Blue, whose own father hails from Iowa, tells the crowd. “Jefferson could be a place where it's a lighthouse for attacking this problem all across the United States.”

There are plenty of challenges ahead. Jefferson’s next big problem is housing: Most of the homes in the area are aging and not the kind of places up-and-coming singles or young families are interested in living in. There are some concerns about gentrification, though it seems residents – at least those who show up to the event – are more troubled by a lack of change in their town than too much of it.

Khanna has got his work cut out for him, too. When the new session starts in January, he plans to introduce a bill that would establish a multibillion-dollar grant program to build technology institutions at universities in parts of the country that look like Jefferson. Khanna will need bipartisan support to push it through – a tough ask in a Congress at least as divided as the country, if not more so. And he says Jefferson needs to succeed before he can even think about scaling.

Still, as folks file out of the theater to dinner down the street, the chilly air is bright with optimism. “I honestly think it's one of the most exciting evenings that we’ve had and one of the best opportunities that's ever been presented to rural Iowa,” says Douglas Burns, publisher of the local area newspapers and a longtime member of the regional economic development board.

Khanna is also cautiously hopeful. “I think people coming here showed that they understand that talent and intelligence and work ethic are in rural America,” he says. “Reciprocally, I think Jefferson understood that these folks from Silicon Valley are patriots, that they grew up all over America, that they care about communities in America.

“That kind of mutual respect and understanding, transcending stereotypes, is what we need,” he adds. “This is how we’re going to bridge the divide in this nation.”