By Jenny Vickers
From the September/October 2014 issue
When it comes to High-Tech Hubs, it seems like everyone has woken up at the same time with the same epiphany: the surest path to sustainable growth rests on a solid foundation of high-technology enterprises. These hubs are springing up in some places where you might not expect them; the long-established frontrunners continue to expand their leading edge.
So for this year’s annual report on the high-tech sector, we give you an inside look at some of the emerging players as well as an update on the usual mega-hubs. We’ve also decided to expand our definition of advanced manufacturing: There are a number of old-line industries who’ve made major investments to revolutionize their production lines with the latest high-speed technology, improving quality and efficiency at the same time. We’re giving them a place in our showcase as well.
Of course, you’ll also find on these pages a close-up look at some of the dazzling advances that promise explosive growth in the 21st century. Whether they’re digital, robotic, laser-driven or nano-scaled, today’s manufacturing innovations are moving from the lab and into commercial production in the blink of an eye.
Perhaps the brightest bulb that has snapped on over the brows of economic development planners across the country is the realization that a regional approach to advanced manufacturing—nurtured by some generous and timely federal funding—is the best way to ensure that the U.S. grabs the pole position in the implementation of technologies that, in most cases, were invented in America.
TECH WAVE RISES IN PITTSBURGH
Pennsylvania is leading a new wave of technological transformation. Innovation and technology are driving growth across key industries including advanced manufacturing, energy, ICT, financial and business services, and healthcare and life sciences.
In 2013, the Pittsburgh region captured 302 economic development deals—a 12 percent increase over the previous year. Advanced manufacturing was the most active sector with 65 wins in 2013.
“High-tech/advanced manufacturing is one of our sweet spots and a differentiating strength for the region,” said Patty Horvatich, VP of Business Investment for the Pittsburgh Regional Alliance (PRA), an affiliate of the Allegheny Conference on Community Development and the 10-county Pittsburgh region’s economic development marketing organization.
Historically, the Pittsburgh region has been a hub of manufacturing. Today, advanced manufacturing and technology have converged into an industry powered by 3,000 advanced manufacturing facilities employing 96,000 people. Traditional manufacturing factories have been replaced with sophisticated, streamlined and highly efficient facilities which produce a wide array of innovative products, including specialty metals, medical devices, robots and parts and components for a booming energy sector in the region.
“Advanced manufacturing is the region’s largest and most active industry,” said Jim Futrell, VP of Market Research for the PRA. “It’s the third largest in terms of GDP, generating about $12 billion annually, which is 10 percent of the regional economy.”
Advanced manufacturers calling the Pittsburgh region home are meeting the demands of their customers—many of them global—from newly constructed, state-of-the-art facilities, as well as existing facilities that have been creatively adapted for re-use.
For example, Pittsburgh’s Allegheny Technologies Incorporated (ATI), one of the largest and most diversified specialty metals producers in the world, has replaced a 60-year-old mill with one of the most advanced manufacturing facilities in the world.
Located in Allegheny County, ATI’s Allegheny Ludlum Brackenridge Works $1.2-billion state-of-the-art hot-rolling mill will utilize leading edge technology to produce wider steel that is in demand now for tanks and tubes.
“This project is interesting because there is nothing else like it in the world,” said Dan Greenfield, Vice President, Investor Relations and Corporate Communications for ATI. “It’s fully automated, faster and more powerful than anything we’ve seen. Because of the technology, we can produce the longest, flattest coil in the industry.”
ATI has shifted in the past decade from a traditional stainless steel company to produce specialty metals such as titanium and nickel-based alloys targeted for the aerospace, oil and gas, electric energy and medical device markets.
“We located in Western Pennsylvania because of the people who have been working with us for generations and their knowledge,” said Greenfield. “We have access to engineers from the universities, a high-tech manufacturing environment and stable sources of energy, like natural gas. This is an advantage because we are competing all over the world and to be successful you have to do something better and do something that no one else in the world can do.”
ATI currently employs 3,000 in Western Pennsylvania. The facility expects to be ready for some production by the end of the year and full time production by the end of 2015. “Technology touches every industry in the region, including our energy sector,” said Horvatich. “The Pittsburgh region sits on top of the second largest gas play in the world.”
In 2012, Shell Chemical LP chose the Pittsburgh region as one of its preferred locations for a proposed ethane cracker—a large petrochemical complex. If the region is chosen, the project could create thousands of new jobs and lay the groundwork for a resurgence in manufacturing.
The region’s advanced manufacturing industry is supported by a robust ICT sector, which currently employs 32,000 individuals across 1,600 companies. Over 30 colleges and universities churn out 1,700 ICT graduates every year putting the region 2nd only to Boston among U.S. benchmark cities. The region also is home to 120 corporate and federal R&D centers and $1 billion is invested annually in university R&D.
Carnegie Mellon University (CMU) has an impressive track record of spinning out companies—over 300, which have added more than 9,000 new jobs. Tech giants Google, IBM, Ness Technologies and Smith Micro Software have all been drawn to the region due to its highly skilled talent pool, great university system and low cost of doing business.
“Google is a story we like to tell over and over,” said Futrell. “Google has been a story of continued expansion since they opened in Pittsburgh in 2005.”
Google recently announced it is once again expanding in its current location at Bakery Square, formerly a Nabisco bakery factory, in Pittsburgh’s East End neighborhood, adding another 50,000 sq. ft. and 75 new employees. The East End has become a hub for the tech sector and includes high-tech companies such as Tech Shop Pittsburgh, CMU Software Engineering Institute and UPMC’s Technology Development Center.
“There is a fascinating melding of manufacturing and ICT that has manifested in some of our most interesting startups in recent years,” said Futrell.
Seegrid, which was named one of 2013’s “Most Innovative Companies” by Fast Company magazine, produces driverless robotic industrial trucks for the material handling industry. ALung Technologies have developed a revolutionary device, Hemolung RAS, used for patients with acute respiratory failure. The company is located on Pittsburgh’s historic South Side—once a mecca for the steel industry but now a growing hub for life sciences and biotech companies.
CMU Spinout 4moms is fusing robotics technology and electronics to create innovative baby gear products, including the origami® stroller and the motion-making/baby-soothing mamaRoo®. The company has caught the attention of celebrities including Sir Elton John, Hillary Duff and Victoria Beckham.
Based in Pittsburgh’s former warehouse district, The Strip, 4moms announced plans in May 2014 to expand operations and acquire additional space—a $4.7 million investment—which will create 120 new jobs. 4moms received funding from the Department of Community and Economic Development, including a $200,000 Pennsylvania First Program grant.
“At the end of the day, building a business is all about people and Pittsburgh offers some of the most talented people anywhere,” said Robert Daley, CEO of 4moms. “There’s no better place for us to build 4moms as we look to continue our rapid growth.”
In September, 4moms joined other high-tech companies for a PRA and CMU-hosted “Pittsburgh Tech Crawl.” Other companies that participated in the tech crawl included CMU-spin outs RE2, which specializes in defense robotics with an emphasis on intelligent modular manipulation for mobile robotic platforms, and Deeplocal, an internationally acclaimed innovation studio whose projects include a World Cup Soccer ball with HD, live-steaming “eyes” for Adidas and the first telerobotic pitch for Google Fiber.
“We took journalists on a very deep dive crawl into a number of companies and places that are driving a tech revolution in the Pittsburgh region,” said Philip Cynar, senior communications specialist at the Allegheny Conference on Community Development. “The tech crawl allowed them to meet techies and entrepreneurs to find out why they those chose Pittsburgh and encourage new investments.”
HIGH-TECH HUB ON THE POTOMAC
Over the past decade, the nation’s capital has risen through the ranks as one of the leading technology hubs in the U.S. With a Five-Year Economic Development Strategy aimed at creating 100,000 new jobs and generating $1 billion in new tax revenue, Washington, DC’s tech scene is rapidly expanding making the District an exciting headquarters for technology startups.
“Considerable resources have been committed to support this growth and strengthen the technology and innovation businesses in the city, including strategic planning, targeted incentives, training and funding,” said M. Jeffrey Miller, Interim Deputy Mayor of the Office of Planning and Economic Development. “We are excited to see continued growth of the tech sector, which has outpaced other business sectors since 2010.”
Referred to by some as “Silicon Hill,” Washington, DC ranked first in the number of startups and fundable investors per million residents, among states like New York, California and Nevada, according to a 2013 report by Fast Company.
DC has attracted digital media companies such as CBS Radio, with six local stations coming under one roof at its new 33,000 square foot broadcast facility on the Riverfront, and incubators like 1776, a co-working space for entrepreneurs which doubled its footprint last year and has graduated a number of firms into new space in the city.
In March, the Washington DC Economic Partnership (WDCEP) and the District of Columbia partnered with the DC tech community to promote the District’s growing technology base at SXSW Interactive in Austin, TX.
SXSW was used as a platform to promote “Digital DC,” a marketing and branding campaign and economic development initiative, intended to foster continued investment in innovation and technology. The initiative is focused on attracting talent to DC, marketing new business and investment opportunities in tech, and highlighting tech and innovation-based businesses in the District.
The Digital DC Tech Corridor is a clustered ecosystem of tech talent located near the District’s expanding tech hub within Gallery Place/Chinatown. The corridor runs along 7th Street and Georgia Avenue from New York Ave. downtown to Kansas Ave. in Petworth and includes tech companies such as Living Social, Optoro, Blackboard and Social Tables.
“The corridor provides access to affordable office space, a variety transportation options and high-skilled talent and other tech companies,” said Tiffany Thacker, Director, Business Attraction & Marketing for the WDCEP.
This year, Digital DC launched the Digital DC Tech Fund (DDCTF), a $1 million venture fund making grants ranging from $25,000 to $200,000 to companies that locate in the tech corridor. Funding for the program is made possible through the DC Great Streets Program, a commercial revitalization initiative focused on improving major corridors. The first round of pilot grants will be announced later this month.
“The new tech fund is a pilot program initially centered on the corridor, but if successful the city hopes to expand the available funds and geography,” said Thacker.
WeWork is one of the newest tech companies to locate in the tech corridor. In early 2014, WeWork opened two co-working locations in Chinatown and in the repurposed Wonder Bread factory located in the trendy Shaw-Howard University neighborhood.
WeWork, which is known for finding warehouse-type buildings in emerging development areas and converting them to modern, techie spaces, already has set up spaces in New York, San Francisco and L.A. with new spots launching in Seattle, Chicago and Boston.
The Chinatown location has the capacity to hold 400+ and the Wonder Bread location 700+ making it some of the largest co-working and event spaces dedicated to entrepreneurs in the DC area.
Companies like Social Driver, a full service digital agency startup in DC, and iStrategy Labs, a leading DC tech startup, are housed in the ultra-sleek co-working space. iStrategy, which creates everything from apps, to animations, to massive festivals and social strategies to transform organizations, was started just six years ago and has grown to 50 employees.
“One of the main selling points for DC is our attractive workforce,” said Thacker. “Many go to school here and stay, attracted to the hip and walkable lifestyle—and overall vibrancy of the market, not to mention there is a large potential customer base and talent at the city and regional universities.”
Thacker also serves as director of AccelerateDC Venture Mentoring Service, a WDCEP initiative that offers free and confidential mentoring for technology-based businesses in the area.
“DC has a lot of experienced entrepreneurs in the area, but not many programs to connect startups with them,” said Thacker. “When a company is accepted into Accelerate DC they are introduced into a network of mentors so they have access to help through issues, whether funding, human resources or product development issues.”
AccelerateDC started accepting applications in January and has grown to 30 companies with a mentor base of about 80 across the DC area.
KENTUCKY RACES AHEAD IN R&D
Long known for developing the world’s best race horses, bourbon and basketball players, Lexington is now gaining global recognition as a growth engine for the high-tech and advanced manufacturing sectors. Named America’s 17th leading high-tech hotspot by The Atlantic CityLab, the Lexington region boasts nearly 200 R&D intensive high-tech facilities employing 27,500 employees with core competencies in automotive technology, plant and genetic engineering, medical device manufacturing, renewable energy and software development.
In January 2014, Funai Technology Corp., a subsidiary of a multi-billion dollar global electronics company headquartered in Japan, announced it will open a Lexington subsidiary employing as many as 50 people with an average wage of $100,000 a year.
Funai Lexington Technology Corp. will support R&D in inkjet and microfluidic technologies, which is the use of engineering, science and technology to design systems in which small volumes of fluids will be handled. The corporation, which will be on the Lexmark International campus in Lexington, represents a $4.2 million investment in the Commonwealth.
The Kentucky Economic Development Finance Authority preliminarily approved the company for tax incentives of as much as $1.2 million through the Kentucky Business Investment program. The incentive allows a company to keep a portion of its investment over the term of the agreement through corporate income tax credits and wage assessments by meeting job and investment targets.
“Funai’s decision to open a research facility in Lexington is one more example of the attraction of high-tech companies to our quality of life and their recognition of local talent,” said Lexington Mayor Jim Gray in a press release.
Lexington’s thriving ICT sector is supported by a robust network of industry giants such as Hewlett Packard, IBM, Lexmark and Xerox, as well as a diverse mix of small and medium sized businesses including newcomers TeleHealth Holdings, developer of MedSignals, a cellular-embedded medication reminder, monitor and hub for vital sign monitoring, and Transposagen Biopharmaceuticals, a provider of unique animal models of human diseases for drug discovery and development.
“In addition to creating high-paying jobs, these high-tech companies are contributing to Lexington’s reputation as a magnet for high technology growth,” said Bob Quick, President & CEO for Commerce Lexington Inc.
Lexington also is becoming a hotbed of entrepreneurial activity. Between 2007 and 2012, high-tech employment in Lexington increased by more than 14 percent, resulting in post-recession metro growth that exceeded that of every other metro in America, according to Lane.
Among the many locally grown companies is the standout, Big Ass Solutions. Home to Big Ass Fans and Big Ass Light, the company’s annual revenue increased from $34 million to $122 million between 2009 and 2013, tripling its workforce to nearly 500 with an average annual wage exceeding the national average by almost 30 percent. The company recently joined several of the world’s top technology companies in founding the Thread Group, which will focus on developing new wireless-networking protocol for smart homes.
“Lexington’s highly educated workforce, central location, excellent transportation system, low cost of doing business and affordable cost of living have all been major factors in the development of the community’s high-tech and advanced manufacturing sectors,” said Quick. “However, teamwork is the driving factor; strong leadership and collaboration between the city, universities, businesses and regional partners all help make Lexington a hub of talent and innovation.” For example, the Bluegrass Business Development Partnership (BBDP), a collaboration among the city, Commerce Lexington Inc. and the University of Kentucky (UK), work together to attract and grow jobs through a combination of incentives. In 2013, the BBDP assisted nine companies in relocating to Lexington, adding 190 jobs and investing $7.5 million in the local economy.
The nine companies moving to Kentucky from nine different states, include Bauer Labs, Directed Energy Inc., Hitron Technologies, Inc., Mercury Data Systems, New Global Systems for Intelligent Transportation Management, Nicolalde R&D, NOHMs Technologies, Inc., Science Tomorrow and Twin Star TDS, LLC. The companies are focused on software and IT, renewable energies, communications, life science solutions and advanced manufacturing.
“The companies were specifically drawn to Lexington, in part, because of the BBDP Rent Subsidy Program, a local fund established by the city to provide a rent subsidy of up to $10,000 to SBIR-STTR grant recipients,” said Quick.
Housing many of the region’s high-tech companies is Kentucky’s only R&D business park—the University of Kentucky’s Coldstream Research Campus. Coldstream, a 735-acre office park, was specifically designed for recruiting high-tech and biotech companies, as well as university centers and startups.
Coldstream offers intellectual capital and resources from UK, as well as infrastructure for existing and new companies. Corporate headquarters at the Coldstream Research Campus include Tempur-Sealy International, Inc., the world’s largest bedding provider, HP Exstream, a developer of customer communications management software, Coldstream Laboratories, a developer and manufacturer of parenteral pharmaceutical products, A&W Restaurants and Bingham McCutchen LLP’s Global Services Center.
Lexington also recently launched a $1 million Jobs Fund, an incentive program that provides gap financing targeted at advanced manufacturing, high-technology, healthcare and company headquarters, and a plan to make Lexington a “Gigabit City” with dramatically improved Internet speeds based on fiber-optic technology for businesses and residents.
“Lexington must join the ranks of Chattanooga, Kansas City and Austin to ensure that our people and businesses have access to fast Internet connections—the vital infrastructure of the 21st Century,” said Mayor Jim Gray. “Lexington is well positioned to take advantage of this bandwidth because it is a University City, with extraordinarily high levels of educated talent and entrepreneurship.”
VENTURE CAPITAL BETS ON AUSTIN
Greater Austin is a city with deep roots in innovation, serving as home to some of the world’s top entrepreneurs, founders and 21st century trail blazers. Austin is one of the leading areas for venture capital investment in the country, garnering $407 million in VC funding in 2013, according to the latest MoneyTree Report.
Austin is home to the world’s leading tech players such as Samsung Advanced Micro Devices (AMD), Apple, Inc., Applied Materials, Cisco Systems, Dell, Inc., Freescale Semiconductor, IBM, Intel, Microsoft Corp. and 3M, plus numerous startup companies such as WhaleShark Media Inc. and Bazaarvoice Inc.
The region’s startup ecosystem includes several venture capital firms, the Central Texas Angel Network, one of the most active angel networks in the country, groups that foster and encourage entrepreneurship and several well-known incubators. There’s plenty of talent in the area, both recent graduates from the University of Texas and from Austin’s large tech companies.
With a 2.6 percent population growth rate (estimated annual) for 2013—the highest of all large metros—and an economy that expanded 5.88 percent last year, Austin took the top spot on Forbes’ annual list of America’s Fastest-Growing Cities for the 4th year in a row. With over 100,000 people working in high-technology industries, Austin has become the new destination for high-tech relocations and expansions.
In February, Roku, a maker of streaming media players, announced plans for a new development center in Austin, where the Silicon Valley-based company expects to hire up to 50 software and hardware engineers.
“It’s certainly a lot easier to relocate people to Austin than the Bay Area because of the cost of living and the fact that it’s such a great technology hub,” said Scott de Haas, VP of Hardware Engineering, Roku in a Feb. 6 Austin American Statesman article.
Also in February, Dropbox announced plans to expand its office by 170 employees adding to its existing workforce of 30. The company’s Austin location is its second office outside of California. More than 200 million people and 4 million businesses including BCBG, Kayak, National Geographic and Rockstar Energy use Dropbox (1 billion files are uploaded to Dropbox every 24 hours).
Austin’s central location, vibrant tech community and culture drew Dropbox to expand here, said Sujay Jaswa, vice president of business at Dropbox.
“The city has been a welcoming home for us, with a great bunch of Austinites joining the Dropbox team,” Jaswa said. “We’re excited to expand our presence in the area as we continue to bring exceptional products and user experience to our customers.”
Websense, a computer security software company based out of San Diego, California, also announced in February it will completely relocate its headquarters to Austin creating 470 jobs with an average salary of $82,000.
“Establishing Austin as our headquarters will heighten our security industry leadership position and enable us to better serve our growing global customer base,” said John McCormack, CEO, Websense in a news release. “The city is quickly becoming a technology hub with an invigorating quality of life and multi-tiered workforce that fits well into our future plans.”
South by Southwest (SXSW) has certainly played a role in highlighting Austin’s emergence as a high-tech hub. In March, SXSW Interactive held its 22nd festival in Austin, which featured five days of presentations from the brightest minds in emerging technology, scores of networking events, and programs showcasing the best new apps, hardware, video games and startup ideas the community has to offer.
In May, the Greater Austin Chamber of Commerce’s Innovate Austin initiative and SXSW Interactive announced the companies named to the 2014 Spring Austin A-List: 12 of the most promising Austin-area startups, who were chosen from over 250 nominations.
Top honorees were named in three investment stage categories: emerging, growth and scale, and represent key sectors of innovation including enterprise big data, social, health, entertainment and consumer product goods. Recognition as an A-List Company is intended to increase the visibility of Austin’s most fundable, scalable and innovative regional startups, and drive increased venture capital funding to Central Texas. To date, there has been a combined $465 million in investment for all A-List honorees since 2011.
“The spirit of entrepreneurship continues to thrive in Austin,” said Hugh Forrest, Director, South by Southwest Interactive. “As evident through the high funding, growth and successful exits of Austin A-List alumni, this city has emerged as one of the world’s top ecosystems for innovative founders and their startups. These startups achieve success via a nurturing support system from the community and Austin offers this opportunity to flourish.”
Some of the A-List companies included Datical, whose flagship product, Datical DB, automates the deployment of database schema updates for organizations that struggle with the constant state of application change across complex environments and TeVidoBioDevices, a life sciences/biotech company using 3D bio-printing of live cells to build natural grafts for breast cancer reconstruction.
Signaling just how far Austin has come as a leader in innovation, Google recently named Austin as one of the newest locations for one of its tech hubs. In May, Google announced that Capital Factory, an Austin-based incubator and co-working space for startups, is joining its Google for Entrepreneurs Tech Hub Network.
“The city’s thriving startup community and deep bench of engineering talent, combined with its natural creativity and eclecticism, make it the perfect place to expand,” John Lyman, Head of Partnerships, Google for Entrepreneurs, said in a blog post.
In the past six months, 71 percent of startups involved with the program say it’s having a “significant impact on their growth,” while participating companies have raised more than $50 million and created 1,200 jobs since becoming members.
Capital Factory, a seed stage mentoring program for startups, is the eighth space to join the Network, a group of partner organizations across the U.S. that does everything from hosting accelerator programs for talented developers to providing desks for entrepreneurs. Google for Entrepreneurs provides funding to all the hubs and gives them access to mentorship opportunities and Google products.
SOCAL GETS A $1.3B TURBOCHARGE
Southern California’s aerospace and advanced manufacturing industry has been gaining momentum over the past few years. And now, thanks to a new federal program, the region has preferential access to $1.3 billion in funding which is helping its local aerospace and advanced manufacturing industries further pick up speed.
In May, the Obama Administration named the SoCal region, which includes Los Angeles, Orange, San Diego and Ventura Counties, one of 12 regions eligible for special attention under the Investing in Manufacturing Communities Partnership (IMCP) program which is designed to boost manufacturing and create new jobs.
A joint effort between the city of Los Angeles, regional partners in Orange, San Diego, Ventura counties and USC successfully secured the SoCal region’s federal designation as a “Manufacturing Community” under the program. The effort to win the designation was done through a partnership called the Advanced Manufacturing Partnership for Southern California (AMP SoCal).
AMP SoCal unites a broad-based consortium of 86 dedicated organizations that have come together to transform the Aerospace and Defense (“A&D”) industry with a focus on advanced manufacturing technologies from additive manufacturing to model-based engineering and design. Home to companies like SpaceX, General Atomics, AeroVironment and Sapphire Energy, the federal designation will help the SoCal region to attract manufacturing investment and jobs.
Bruce Stenslie, President/CEO of the Economic Development Collaborative of Ventura County, said the designation will help the region continue to its steady evolution toward greater efficiency and productivity.
The federal designation builds on the state’s ongoing efforts to strengthen the manufacturing sector. Last year, Gov. Jerry Brown signed legislation to enact the Governor’s Economic Development Initiative, which includes a sales and use tax exemption for the purchase of manufacturing, biotech and R&D equipment.
Gov. Brown also established the California Competes tax credit which will provide $151.1 million in incentives during fiscal year 2014-2015 to companies that want to expand or relocate to California.
Currently, there are over 814,000 manufacturing jobs in the SoCal region, with more than 365,000 in Los Angeles County, the highest in the nation.
In May, Boeing announced that they are transferring 1,000 engineering jobs to the region to take advantage of the large talent pool. SoCal also has the largest concentration of military personnel and more than 80 percent of the state’s aerospace workers. According to a San Diego Military Advisory Council Report, in San Diego alone, the defense industry had a $38.7 billion impact on the region in 2013.
In July, the City of San Diego announced a deal to provide medical device company Illumina Inc. with a tax rebate in exchange for expanding and keeping 300 jobs in the city. Illumina has been dubbed the “World’s Smartest Company” by the MIT Technology Review, ahead of Tesla Motors, Google and Samsung, and is at the forefront of sequencing the human genome.
“This is a perfect example of how San Diego can support middle class jobs while also encouraging economic growth,” said San Diego Mayor Kevin Faulconer. “This agreement keeps hundreds of high wage jobs in San Diego, ensures city residents benefit from over a million dollars in annual sales tax revenue and strengthens our region’s leadership in biotechnology.”
Illumina has over 1,500 employees within San Diego and is the city’s most highly valued biotechnology company. As Illumina was considering a variety of options to expand its manufacturing operations, including locations outside the city and state, Mayor Faulconer personally visited its headquarters and began a dialogue to ensure the company chose San Diego.
HOTBED OF HIGH-TECH IN NEWARK
While Newark, NJ’s tech scene might still be under the radar, it’s got its finger on the pulse and is quickly becoming a hot bed of high-tech activity.
From big companies like Panasonic and Audible.com to smaller startups, high-tech companies are being drawn to Newark due to its access to New York City, a major technology center, fiber-optic infrastructure and resources like the New Jersey Institute of Technology (NJIT) and the Rutgers Business School.
Two companies that saw Newark’s potential as a tech hub early in the 2000s were IDT and Audible. IDT started as an Internet-based international telephone calling service. Today, it is a Fortune 1000 multinational telecommunications holding company. Audible, an Internet provider of audiobooks, was purchased by Amazon for $300 million in 2008. The firm is located in a state-of-the-art facility in downtown Newark and is the city’s fastest growing private employer with 600 employees.
Verizon, whose state headquarters has been in Newark since 1929, employs hundreds of people in its downtown facilities and continues to invest in the city’s future. The company is deploying an all-fiber network across the city’s neighborhoods, bringing the benefits of fiber technology to consumers and businesses, and making Newark a 100-percent fiber town.
In September 2014, the Berger Organization’s office tower at 60 Park Place became the first large commercial building in the city’s downtown core to have access to the fiber network. The building was built in the early 19th century but now tenants have access to 21st century technology.
As Newark continues to emerge as a high-tech hub, fast and reliable Internet services become a vital tool to attract businesses to the city’s downtown core. When Verizon completes its fiber-optic build later this year, residents and businesses will have access to the company’s revolutionary FiOS services.
“We are investing in the city’s future by building our state-of-the art, fiber-optic network to every neighborhood in Newark,” said Sam Delgado, vice president of external affairs for Verizon NJ.
The newest addition to the city’s high tech growth is Panasonic Corporation of North America’s headquarters, a 340,000-square-foot, glass-clad building at Two Riverfront Plaza, which opened in 2013. It is solar-powered and its Innovation Center showcases the company’s latest developments.
The first of its kind outside of Japan, the Innovation Center brings all of Panasonic’s diverse technologies and capabilities in North America together in one location to improve accessibility for business customers.
After considering New York and Boston, Biotrial S.A., a French contract research corporation, decided to build its North American headquarters in Newark’s burgeoning Science Park district, an emerging mixed-use technology park in Newark adjacent to the University of Medicine and Dentistry of New Jersey, NJIT and Rutgers-Newark.
Biotrial S.A. purchased a 1.2 acre parcel of land in the science park, where more than 90 incubator companies are located within the 351,000 square feet of office and research space that has already been developed. The company broke ground in 2013 and moved into the space earlier this year.
Biotrial’s North American headquarters continues the trend of biotech and pharma companies migrating to Newark as a place that is bridging the gap between medical research and treatment. Fifteen of the world’s 25 largest pharmaceutical companies have facilities in New Jersey.
Former Newark Mayor Cory Booker actively promoted the Science Park development as a hot spot for biotech and science research companies since 1996. The new Biotrial offices will add 100 permanent jobs to the area and provide 150-200 construction jobs.
NJIT’s New Jersey Innovation Institute (NJII), launched earlier this year, is helping spur innovation and economic growth throughout the state. The non-profit institute houses two major health IT initiatives that NJIT launched five years ago: NJ-HITEC, which has helped 8,000 New Jersey physicians adopt electronic medical records, and the Highlander Health Data Network, whose six member hospitals in northern New Jersey share medical data to improve the coordination of care to patients.
The institute was designed to match academic researchers with local companies that want to contract out their research to university labs. The idea is to make it easier for large and small first to turn to campus professors and researchers for low-cost help while creating a new source of income for the public university. Five local companies—Panasonic, AECOM, Berger Group Holdings, Cisco and Torcon—have signed on as partners of the institute.
NJIT, which has about 10,000 students, spends more than $100 million on research each year. NJIT hosts a technology business incubator, the Enterprise Development Center (EDC), which helps more than 90 tech and life science startups. By locating at the EDC companies are able to tap into the institutions human and financial resources, allowing it to keep costs at a minimum.
Companies in the incubator include iSpeech text-to-speech (TTS), a speech recognition (ASR) software company that has been featured in Mashable, TechCrunch and Bloomberg Business Week; Phone.com, which just made Inc. magazine’s annual list of the 500/5,000 fastest-growing companies in the U.S. for a third year in a row; and Endomedix, which is developing a spray gel used to control bleeding during surgery. In June, Endomedix received a $1.4 million federal grant to support its research on the gel, technically classified as a medical device.
Brick City Development Corporation (BCDC) recently launched Converge, a new pop-up co-working space for new or existing tech startups, this summer. Other tech meet-ups convening to bring together and support entrepreneurs include Lean Startup Machine, which works to move beyond the idea formation stage, and Code for Newark and Brick City Tech, two meet-up groups which teach business new technology including learning how to code, and =SPACE (Equal Space), a shared space for entrepreneurs based in Newark.