In Portsmouth, the new high-tech companies fit comfortably among the coffee shops, bakeries, restaurants and boutiques lining the narrow main streets. They tend to be housed in historic brick buildings or rambling, clapboard Colonials, like most of the city's more traditional firms. But inside, they are crammed with large-screen computer terminals, video animation systems and software capable of making Web sites explode with 3D images.

Clearly, the young entrepreneurs who work with Internet companies enjoy the city's funky-cosmopolitan atmosphere. Businesses tout their casual work environments to potential employees. Jeans, khakis, sports coats and sweaters are common, while suits are scarce in most places. On any given weekday, groups of 20- or 30-somethings walk briskly along the sidewalks, stopping at outside tables and benches for coffee and conversation. "We have a terrific community here," Welch says. "There's lots of diversity. We have arts, culture -- everything we want, right here."

Portsmouth is indeed a lively, upbeat but mellow town, attributes that haven't gone unnoticed. The city has been selected as one of the 10 best places for young professionals by Cosmopolitan magazine, one of the 50 "most enlightened cities" by Utne Reader magazine and the fifth best place to live in America by Money magazine.

Not bad for a community of 23,000 that saw major layoffs at two of its largest employers in 1991, when Pease Air Force Base closed, putting more than 4,500 people out of work, and the Portsmouth Naval Shipyard cut some 7,000 employees. Real estate values took a dive about the same time, and many New Hampshire banks failed.

When the high-technology industry discovered New Hampshire, it made the Seacoast the comeback story of the region. There are some startling numbers demonstrating New Hampshire's appeal to high-tech businesses. In January 1999, the American Electronics Association announced that the state has the highest concentration of employment in new technology in the nation. The high-tech sector accounts for 50,000 of the state's 600,000 total jobs. The AEA also ranked New Hampshire seventh among the states that are most successful in making the transition to the new economy. Employment concentration in the prepackaged software industry is 2.5 times the national average; it used to be 30 percent below average.

About a year ago, some of the Seacoast's high-technology insiders looked around and realized they weren't alone. In January 1999, they organized the Greater Portsmouth Chamber of Commerce Technology Roundtable. A dozen people turned out for the first meeting, including bankers, lawyers, public relations experts and a few representatives of one-person high-tech businesses. Now the roundtable hosts monthly "e-Brew" socials, where newcomers and old-timers (those who have been around for a couple of years or more) get together, swap ideas and business cards and listen to occasional speakers.

One of the roundtable's first priorities was to spread the word that a new high-tech community was growing up less than an hour away from Boston, which is the number-two high-tech market in the country, after Silicon Valley. It was this group that started calling the area the e-Coast, creating a Web site with the same name and aggressively promoting the e-Coast as the best place to go for high-tech services or opportunities.