Tech businesses are leaving Silicon Valley, literally and figuratively. But where to? As an initial answer, it was perhaps 2017's biggest business story: Amazon, the online retailer, is looking for a new urban setting as an alternative to the Seattle metro area for its second North American headquarters (HQ2).

Amazon put out an RFP, and 238 municipalities of all sizes responded with proposals, many dangling luscious incentives to the expanding company — tax credits, tax exemptions, low-interest loans, in-kind rewards, acres of land, etc.

In early 2018, Amazon announced its first cut of 20 finalists. As expected, these included huge megalopolises like New York, Chicago, Los Angeles and Dallas. But a pair of smaller Midwestern cities also made the cut: Columbus and Indianapolis.

The Amazon cut and other examples signify a marked increase in the Midwest's appeal to new tech businesses. According to a recent study by the Urban Land Institute, the Midwest has become a lot more attractive to tech firms and development in general.

Tech investors, fund managers, developers, property managers, lenders and others creating so-called tech incubators are coming to the table. Incubators are companies dedicated to grooming other startup companies, mostly by offering them services like management training and lower-cost, more congenial office space.

Certainly the smaller, so-called 18-hour cities (compared to "24-hour cities" like Los Angeles and New York), with typically about 2 million residents in their metro area, have lower living costs and lower costs of doing business. The study also indicates that those cities offer plenty of advantages without sacrificing some bigger-city conveniences and amenities, such as "walkable" urban cores and progressive social and cultural venues.

The study also showed that the 18-hour cities have an existing, viable technology hub integrated into their economic base. As well, they boast the synergistic presence of at least one major institution of higher learning — one proven to enrich the community in more ways than by just supplying talented, tech-savvy workers.

And so, increasingly, investors are focusing on the Midwest in siting new tech startups. In turn, a state's respective economic development officers, competing to land new firms, have intently reviewed their economic development policies, according to a report from the Council of State Governments' (CSG's) Midwestern office.

The selection by Amazon of Chicago, Indianapolis and Columbus as HQ2 finalists has galvanized state and local officials in the CSG Midwestern district's 11 states: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. Together these states have enjoyed, over the last decade, a 3.5 percent average annual compound GDP growth rate (the U.S. as a whole enjoyed a 3.0 percent annual GDP growth rate).

For example, late last year Wisconsin, peddling a $3 billion package of incentives, managed to lure Foxconn, the world's ninth-largest IT company (after IBM), to the state. The Taiwanese electronics giant will build a huge $10 billion plant in Mount Pleasant to manufacture liquid crystal displays (LCDs). The new facility will supposedly create 13,000 jobs, with an average yearly salary of from $50,000 to $100,000.

The Midwestern states' officials seem to recognize that for every Amazon HQ2 or Foxconn video display plant seeking and/or finding a home in one of their states, dozens more 40- to 50-person firms, manufacturers and otherwise, will consider moving to the region.

Hence the council's role in reminding state officials of the 11-state region's notable strengths: relatively cheap land, plentiful water resources, connected transportation systems, quality schools, highly educated workforces and more.

Predictably, however, such incentive packages as Wisconsin's for Foxconn have been controversial. The Foxconn deal was easily the largest in the state's history. It was an easy target for officials and others who questioned whether it was too generous.

One legislative fiscal analysis concluded it would take Wisconsin 20 years to earn back its investment. Another study by the accounting firm Ernst & Young had many of the same results but showed more favorable returns when taking into account certain spin-off effects.

The council, for its part, has taken the opportunity to remind its members' state and local officials that, in judging such deals, they should not only look at government's recompense and benefit. They should also duly look at the putative benefits to the supply chain, a state's infrastructure and a healthy, robust job market.