A decade ago, Richard Myers was the director of the Department of Genetics at the Stanford University School of Medicine, where he enjoyed the fruits of a rich endowment and his pick of faculty members and graduate students. So he left behind some befuddled scientists when, in 2008, he left Palo Alto, Calif., for Huntsville, Ala., to launch an independent research lab, the HudsonAlpha Institute.

"'My God, you're leaving Stanford for Alabama?'" Myers recalls colleagues asking. "'What's wrong with you?'"

Huntsville may not seem like an obvious place to base a center for genomics, a branch of biology concerned with DNA sequences that requires expensive hardware and even greater investment in human capital. Alabama ranks in the bottom 10 U.S. states for educational attainment and median income.

Yet Huntsville, nestled in a hilly region in the northern part of the state, turns out to be a great place to recruit high-tech workers. As of May 2014, 16.7 percent of workers in the metropolitan area held a job in science, technology, engineering, or mathematics—STEM, for short—making it the third most technical workforce in the country after San Jose, Calif., and Framingham, Mass., a Bloomberg analysis of Labor Department statistics shows.

Huntsville is one of a growing number of smaller U.S. cities, far from Silicon Valley, that are seeking to replace dwindling factory jobs by reinventing themselves as tech centers. Across the Midwest, Northeast, and South, mayors and governors are competing to attract tech companies and workers.

Like many high-tech locales, Huntsville owes its 21st century economy to an initial burst of funding for government research. It was a town of 16,000 residents working in cotton mills and on watercress farms when, in 1950, the U.S. Army relocated a team of rocket scientists to Redstone Arsenal, a local installation that produced chemical munitions during World War II. In the decades that followed, NASA designed, assembled, and tested the rockets that put the first men on the moon. Boeing, Lockheed Martin, and dozens of lesser-known aerospace and defense companies have swarmed to Huntsville.

Those companies pay good salaries that end up supporting public schools, restaurants, and a symphony orchestra—amenities that in turn make the city an appealing place to people like Myers and the high-skilled workers he employs.

But building a tech economy is easier said than done. The South is littered with cities that haven't regained the jobs lost when the apparel mills closed; the same is true for the rust belt and heavy manufacturing.