Innovation happens in many different ways and in many different parts of the country, but some markets have a stronghold on it. Steve Case, 2017 HIVE keynote speaker, talks about how a shift needs to take place in thinking about innovation and not tying it exclusively to places like Silicon Valley.

The next round of innovation will come from middle America, but it will take a shift in thinking.

The tech industry has widely ignored middle America, which is in desperate need of jobs in the new economy, said venture capitalist Steve Case.

"Silicon Valley has been a little tone deaf," Case, who co-founded venture capital firm Revolution, told CNBC's "Squawk Alley" on Thursday, from the Code Conference in Rancho Palos Verdes, California. "While people can appreciate what they can do on their smartphones, they worry about their future. They worry about their jobs. I think we need to do a better job of reaching out and have a more inclusive innovation economy."

Case, who co-founded and ran AOL, looks for companies all over the country, particularly in areas that aren't served by traditional tech investors. About three-quarters of venture capital went to California, New York and Massachusetts last year, he said.

While Case applauded executives like Facebook's Mark Zuckerberg for visiting the rest of the country, he said more needs to be done.

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