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Incubator promotes new economic identity for Ohio city

by Mary Jo Milillo

February/March 2009

The Akron Global Business Accelerator’s Global Technology Commercialization Initiative, winner of NBIA’s 2008 Incubator Innovation Award, is leading the transformation of Akron, Ohio, from a manufacturing economy to one that’s cutting-edge, technology-driven and based in biomedical research – a bold and innovative step with a two-year record of success.

Once known as the “Rubber Capital of the World,” Akron was struck a huge blow when the B.F. Goodrich Tire & Rubber Co. announced in 1983 that it was closing its Akron manufacturing operations. Over the next few months, more than 12,000 jobs in the city vanished.

As a response to these job losses, the University of Akron, the city of Akron and Summit County formed a partnership to create the Akron Industrial Incubator, initially named the Akron-Summit Business Incubator. The 30,000-square-foot incubator operated as a mixed-use organization, attracting light manufacturing, assembly and chain distribution start-ups. It was fully occupied 18 months after it opened in a former steel warehouse owned by the University of Akron.

To meet the need for additional space, the incubator moved in 1990 to a 60,000-square-foot building that once housed a department store in the city’s central business district. Although the structure did not meet all the incubator’s needs, the building provided more space and gave Incubator Director Mike LeHere time to identify a place that could meet the needs of various types of businesses.

In 1993, a 200,000-square-foot, nine-story building, more adaptable to the incubator’s requirements and once part of the Goodrich complex, became available. The city led a $3 million project to revamp the building’s first five floors, mainly for manufacturing start-ups, and the incubator moved into its present location in 1995. Manufacturing continues to be a key component in Ohio’s economy, but the Congressional Budget Office reports that from 1979 – the year manufacturing jobs peaked – to 2004, the manufacturing sector in the United States had lost about 5.2 million jobs.

A move from one economic base to another

In Ohio, the decline in manufacturing opportunities led LeHere and Accelerator Board Chairman Bob Bowman to initiate a comprehensive analysis of the direction of local, small business innovation before embarking on a renovation of the top three floors of the Accelerator. Research conducted by the Battelle Institute, an international science and technology enterprise, determined that Ohio’s economy is driven by core competencies in biomedicine, advanced materials and energy, electronics and information technology.

“There’s a huge market for technology companies that need labs and upscale facilities,” LeHere says. “We wanted the incubator to address that market, but without the facilities, we had to turn potential clients away.”

With research in hand, management initiated a project to renovate the facility’s top three floors in 2003 to meet the needs of entrepreneurs in the core competency areas Battelle had identified.

Three years later, with $1.75 million from the U.S. Department of Commerce’s Economic Development Administration and matching funds from the city’s capital budget, the Accelerator unveiled a space that provides labs, upscale offices, state-of-the-art conference rooms and other spaces designed for technology-driven businesses. Additionally, the Akron-based Goodyear Tire and Rubber Co. donated about $1 million worth of scientific equipment to the expansion project.

“This new program has allowed us to commercialize technology in biomedicine, advanced energy, wireless communication and information technology,” LeHere says.

To honor the man who has managed the program since its inception, Akron Mayor Don Plusquellic announced at a celebration of the Accelerator’s 25th anniversary in September 2008 that the top three floors would be known as the Michael LeHere Technology Incubator.

Akron’s global focus

To reflect its evolution from a mixed-use incubator to one focused on to medical research and product development – as well as to attract businesses from around the world – the city of Akron, the Akron Development Corp., the University of Akron and the state of Ohio renamed the incubator the Akron Global Business Accelerator in 2007.

As one way to attract global business, the Accelerator partnered with Akron’s International Business Outreach and Sister City programs with positive results. In November 2008, Akron’s mayor hosted a ribbon-cutting ceremony to celebrate the opening of a technology company from Chemnitz, Germany, Akron’s sister city, at the Global Business Accelerator. The Chemnitz-based firm, Advanced Machinery and Technology for Experimental Chemistry, became the Accelerator’s 40th client.

Two years prior to AMTEC’s entrance into the Accelerator, the Greater Akron Investment Partners, a for-profit investment group of private and public investors including the city of Akron, invested $1.5 million in Targetech, one of Israel’s 27 technology incubators. In exchange for the investment, GAIP is a limited partner with 50 percent equity in Startvest 2006, the Israeli limited partnership operating Targetech. Graduates of Targetech who plan to open offices in this country will establish their U.S. presence in Akron, providing the city with local jobs and income tax revenue, plus dividends from part ownership in the companies.

LeHere expects other international companies to select Akron as their U.S. base. His list of global contacts interested in exchanging technology and expertise and, in some cases, locating their U.S. offices in Akron’s Accelerator, includes China, Saudi Arabia, Italy and Finland.

“We are chasing the technologies of tomorrow,” says LeHere. “We attend trade shows in Europe. Eventually those companies will come to the U.S. Why not here in Akron? We can offer a package to help them succeed.”

The Accelerator and the Biomedical Corridor Initiative

Besides reaching out to foreign companies working in technology areas key to the region’s economy, the Accelerator assists in the creation of new, domestic, technology-based enterprises and is a key player in the city’s business development efforts.

In 2006, the mayor announced the formation of the city’s Biomedical Corridor Initiative, an “Innovation District” in downtown Akron anchored by Akron General Medical Center, Akron City Hospital and Akron Children’s Hospital. The project calls for the city to purchase land in the corridor for construction of businesses that offer goods and services to local hospitals, and conduct medical product research, testing, creation, development and sales.

A year later, the Accelerator and Akron General’s Office of Technology Transfer, Commercialization and Innovation signed an agreement to collaborate on efforts to develop the corridor and attract businesses with biomedical products and services.

“This collaboration offers the Accelerator a unique opportunity to be a catalyst for innovation and to facilitate the commercialization of biomedical technologies within Akron’s Biomedical Corridor,” LeHere says. “This is a first and important step to promote regional economic development opportunities with Akron’s strong biomedical research and development community.”

Akron today

With assistance from civic and community leaders, the Akron Accelerator’s Global Technology Commercialization Initiative includes global business partners and new technology growth sectors and demonstrates how a former manufacturing center can reinvent itself.

LeHere credits forward-thinking local officials and their ability to create partnerships and collaborate with other public and private sectors for much of the city’s progress.

“The mayor and his administration have a vision to be continually involved in the development process,” he says. “Akron is a different place to visit. It has an extremely vibrant and busy downtown. There are lots of good things here.”

2008 Incubator Innovation Award

Global Technology Commercialization Initiative
Akron Global Business Accelerator
526 S Main Street
Akron, OH 44311
www.ci.akron.oh.us/aii/

The problem: For 150 years, Akron, Ohio, was known as the rubber tire capital of the world. When those jobs moved out of state, Akron lost its economic foundation.

The solution: In 2006, Akron Global Business Accelerator created the Global Technology Commercialization Initiative to support new domestic start-ups and to attract foreign firms involved in advanced materials, advanced energy, biomedicine, information technology, and instrumentation/controls/electronics. The initiative provides clients with enhanced services, risk assessment and evaluation; advanced market identification; and increased networking opportunities.

Keywords: best practices, economic development, soft landings, technology incubator

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