Home
News
Breaking News
Executive Profile
Technology
South Asian Connection
Health & Medicine
Franchise & Hospitality
Focus: Emerging Markets
Venture Capital Supplement
Guest Columns
Personnel File
Opinion
Editorial
Advanced Search
Archives
Community Calendar
Order REPRINTS
INDIA New England
Media Kit
To Advertise
Become a Partner
Letter to the Editor/Feedback
Submit a Story Idea
Send Press Release
Post Calendar Event
Submit List Entries
Editorial
Subscriptions/ Circulation
Production
Franchise Directory

 
 
Issue Date: December 1, 2008, Posted On: 12/8/2008


Chasing Technology

Columbus, Ohio, tops list of growing tech cities, increases efforts to lure innovative new entrepreneurs, companies


BY CHRIS NELSON

 
 

The evening skyline of Columbus, Ohio, is not as recognizable as some of its famous brethren, but the growing influx of innovative tech companies could change that. Photo courtesy of Columbus Chamber of Commerce

COLUMBUS, Ohio – As a child growing up in the relatively new city of Phoenix in the early to mid-1980s, I would occasionally fantasize about what the great municipalities of the 21st century would look like. I imagined they were very Jetsonian, complete with moving sidewalks that whisked people about, office towers that soared miles into the sky and flying cars. And each city was covered by a vast dome.

Suffice it to say, I am no Edgar Cayce. In the real world, of course, urban areas are comprised of complex layers of development and decay, and so constructing the metropolis of the future is not that simple. What, then, makes a city technologically cutting-edge?

And where will the next “technopolis” – the next Silicon Valley, or Boston – emerge?

While no two municipalities are identical, many of America’s top tech cities and regions – San Jose/Silicon Valley, Seattle, Boston, Raleigh-Durham, N.C., Los Angeles, New York City – share a number common characteristics, such as effective leadership, money, a strong higher-education presence and good planning, to name a few. The answer to the second question is less clear. But Philip Auerswald, a professor of public policy at George Mason University, decided to give it a shot.

He surveyed regional innovation trends across the country and produced an objective report that ranked the top 10 up-and-coming tech cities in the United States. The rankings, which were published in a Forbes magazine article last spring, came as a surprise to many readers. Topping the list is Columbus, Ohio, a city that is perhaps best known as the home of The Ohio State University, and the beloved Ohio State Buckeyes football team. In a list full of surprises, Columbus’ No. 1 ranking was perhaps the biggest. 

The article thrilled community leaders and local and regional business-development officials, but it didn’t tell them anything they didn’t already know. The region is home to several highly regarded research and testing facilities, including the prestigious Battelle Memorial Institute, OSU, the American Chemical Society’s Chemical Abstracts Service, and the Online Computer Library Center Inc., a nonprofit computer-library service and research organization.

Many private IT firms and tech-oriented startups are based in Columbus and the surrounding communities, as are larger companies like Sterling Commerce, a subsidiary of AT&T that provides business process integration and fulfillment services to organizations in various industries. And CompuServe Information Service, an Internet-service provider and the first major commercial online service in the United States, was founded in Columbus and still maintains its headquarters in the city, although it has been owned by New York City-based AOL LLC since 1998.

 The Forbes article confirmed the region’s existing strengths in high-tech economic development, but more importantly, it acknowledged decades of work that Columbus-area residents have put into developing a local technology sector that is now healthy and growing fast. There was just one problem: few people outside of Central Ohio were aware of this. So, the Columbus Chamber of Commerce did what many organizations do when they want to promote their communities: it organized a press junket.

The chamber invited me to participate. Two other journalists joined me on the trip: David Strom, a St. Louis-based freelance journalist and contributing writer to various technology publications, including Baseline, eWeek and InfoWorld; and Eleanor Stables, associate editor at The American, a Washington, D.C.-based publication that is owned by the American Enterprise Institute.

I was intrigued by what I had read in the Forbes article, but I was also skeptical about how robust the city’s tech sector could be, having lived in Boston from 2004 until this past July, and now living Denver, which is another tech hub. I knew little about Columbus, yet I presumed its economy – like the economies of numerous other towns and cities across Ohio – had been hit hard by the loss of manufacturing jobs. I couldn’t have been more incorrect, as I would discover during my visit to the city.

To be fair, my impression of the Columbus area was influenced by news articles about the Ohio economy that I had read in recent months, which carried sobering headlines like “Ohio Town Devastated by Layoffs by DHL,” “ABX Air to Lay Off 283 Workers in Ohio,” and “Whirlpool Corp. to Cut Nearly 1,000 Ohio Jobs.” That last headline greeted me when I arrived in Columbus Nov. 10.

So what made Columbus the high-tech champ on Auerswald’s list? A large increase in the number of patents originating in the city was the main reason. Auerswald developed his list using an intellectual-property-valuation methodology that counted the number of significant patents coming out of a region. He surveyed specific scientific areas that are considered to be today’s most promising frontiers of innovation. These include advanced materials, nanocrystals and quantum dots, polymers and plastics, micro-systems and cell microbiology.

Other inventors when filing their own patents generally reference the most important patents more frequently; lesser patents garner fewer citations. Columbus scored highest in this category due in large part to the number of important patents originating from Battelle, which the article describes as “a force in almost every area of emerging technology, especially life sciences and energy research.” 

The institute was founded in 1929 and named after Ohio industrialist Gordon Battelle, who bequeathed funds in his will that provided for its creation. An impressive but little-known stat about Battelle that mirrors the growth – and lack of awareness -- of Columbus’ tech economy is that in 1997, the institute managed a single lab for the U.S. Department of Energy and had an annual budget of $1 billion, but today it manages seven major laboratories for various federal agencies, with a $4 billion annual budget.

I touched down at Port Columbus International Airport and caught a taxi to my hotel in the city’s downtown area. Most large cities are defined by their skylines, and Columbus’ didn’t disappoint. The downtown area is undergoing a renaissance, with several new condominium towers having opened or taking shape, but the most striking addition to the area is the Arena District, a 75-acre, mixed-use, urban-infill, development that is characterized by its “new urbanism” layout and neo-classical American design. The district took shape in the late 1990s and centers around the eight-year-old Nationwide Arena, which serves as the home of the National Hockey League Columbus Blue Jackets.

The next morning, I met up with Strom, Stables and Katie Webster, an account executive with Development Counselors International, a New York City-based firm hired by the Columbus Chamber of Commerce to market the city and region to journalists. We gathered at the chamber’s headquarters for breakfast before heading off to meet with the staff of TechColumbus, a nonprofit organization based on the OSU campus that works to support the growth of the region’s tech economy. I was excited to learn about TechColumbus’ programs, yet it was the Chamber of Commerce – or rather, the chamber’s offices – that wowed me first.

The organization is headquartered in the Lazarus Building, which years ago was a thriving department store and is now a Columbus landmark. The building has since been completely renovated into class-A "green" office space. One of the truisms about good high-tech design is knowing when low-tech will suffice. This is the case with the Lazarus Building: It features a living rooftop garden that keeps the structure cool year-round. The Lazarus Building is the most significant "green" building in the country and is certified Gold through the Leadership in Energy and Environmental Design Program.

Midwesterners are known for their humility, and this is particularly true with Columbus; the people there were very warm and friendly. It was rather disarming. But it can also prove detrimental to a city that wants to promote itself as an up-and-coming technology hub. Some of the officials that I spoke to at TechColumbus suspect this is the reason why Columbus’ expanding tech sector is such a well-kept secret. As Isaac Asimov once said, “It pays to be obvious, especially if you have a reputation for subtlety.”

Located on the edge of the Ohio State campus and adjacent to Battelle, TechColumbus aims to fuel the growth of Central Ohio’s innovation economy by providing vital resources and assistance to people and enterprises that depend on technology to achieve their business goals. TechColumbus was formed in 2005 through the merger of the Columbus Technology Council, a membership organization for tech-based and tech-enabled businesses in Central Ohio, and the Business Technology Center, a technology-business incubator. Since its founding, TechColumbus has expanded its services to include capital access for startups with TechStart, a $22.5 million program that aims to expand funding to entrepreneurs in the 15 counties that TechColumbus serves. The funding network also includes the Ohio TechAngels, the nation’s third-largest angel-funding group, and various private investors.

The organization’s membership has grown to include nearly 300 businesses, educational and research institutions and government entities, while more than 100,000 technology professionals use TechColumbus’ online and offline programs for educational and networking events annually.

“Our goal is to have 1,000 members by 2010, and that is entirely possible,” Ted Ford, TechColumbus president and chief executive officer,” said. “The Forbes article has really fueled interest in Columbus as a tech city.”

The organization’s flagship program is the TechColumbus Incubator, which promotes economic development in Central Ohio through the creation and incubation of growth-oriented technology businesses that are likely to produce high-value, high-wage jobs.

Located inside the TechColumbus’ headquarters – which is actually a former Simmons mattress factory that shut down decades ago and underwent an extensive renovation – the incubator includes 60,000 square feet of specially designed office, laboratory (wet and dry), conference and research space.

“The incubator has 40-plus expandable offices, each of which have about 600 square feet, a store-front approach and a doorway with a glass wall,” Rick Focht, TechColumbus vice president of incubation services, said. “We provide [startup companies] the physical space and some of the furniture, as well as a telephone and Internet connection. Everything else, they have to buy on their own.

“The companies that we accept into the incubator don't have to worry about signing up or paying for utilities or emptying their trash; we provide those administrative services for one monthly rent,” Focht added. “All they have to worry about is plugging in, and then they’re off and running.”

Since its founding, the TechColumbus Incubator has graduated more than 60 companies and created 293 jobs. In the last five years, incubator tenants have brought in combined revenues in excess of $87 million, raised approximately $53.4 million in capital, and secured $14.73 million in research grants.

Currently, the incubator has 27 clients – six companies operating in advanced materials, eight biosciences firms and 13 IT companies. The list includes Global Seven Inc., a specialty-chemicals manufacturer for the personal-care products industry; Nanomaterial Innovation Ltd., a supplier of raw materials to foam manufacturers; InVasc Therapeutics Inc., a biotech firm that is researching and developing new treatments for hypertension, diabetes and vascular diseases; DIRAmed LLC, which develops painless, noninvasive meters that accurately measure key components in the human body such as glucose, ketones, cholesterol, and therapeutic drugs; 3X Systems Inc., a provider of data-management services and products, including remote-backup, to small- and medium-sized businesses; and Platform Lab, the nation’s only state-funded IT testing and training facility.

According to Focht, TechColumbus receives numerous inquiries every week from entrepreneurs interested in leasing space. “We have pretty strict qualifications for entry into the incubator,” he said. “What we look for in prospective clients is how they will fit this space. We’re not here to provide them with cheap space; we’re here to help them grow so that they can eventually leave the incubator as a successful company.”

The rest of the day included a visit to the Village of New Albany, a small town located just to the northeast of Columbus, where we had lunch with community officials, executives from Nationwide Mutual Insurance Co., which recently opened a sizeable data center there, and Commercial Vehicle Group Inc., which is based in the town. We learned how New Albany has evolved since its founding in 1837 from a small hamlet reliant on agricultural to a small, but extremely well-planned town that is home to a several large companies operating in various industries, including Commercial Vehicle Group Inc., Abercrombie & Fitch Co., Limited Brands Inc. (formerly known as The Limited Inc.) and Tween Brands Inc., which operates Justice, a chain of clothing and apparel stores geared toward young girls that was formerly known as Limited Too.

The next day, we visited Dublin, a fast-growing suburb of Columbus with an approximate population of 35,000 and an incredibly dynamic economy. At an early-morning briefing in a conference room at the newly built Dublin Methodist Hospital, Dublin’s deputy city manager, Dana McDaniel explained to us how the community is trying to attract high-tech firms and grow startups. The approach revolves around a concept known as “the long tail” – the ability of the Internet to support microcosmic segments of life. In this case, the Long Tail is the budding entrepreneur.

“I want the long tail,” McDaniel told us. “I want the two guys in their garage that will eventually expand and become the next big win.” The problem is, companies like this aren’t exactly prolific in number, and once they achieve success, they’re likely to take off for larger, more cosmopolitan cities – particularly those located in the Sun Belt.

But Dublin is a neat city with a cool vibe – its central business district features numerous bars and restaurants – and it is pedestrian friendly. Yes, you really can walk to work from your home. That alone makes Dublin an attractive destination for tech entrepreneurs.

The city also offes a fantastic fiber-optic infrastructure that connects to “bandwidth hotels” and it is putting up its own city-wide WiFi system. Our tour of Dublin concluded with a visit to the headquarters of Sterling Commerce, a subsidiary of AT&T that provides business process integration and fulfillment services to organizations in various industries; Battelle’s sprawling campus, which covers more than 1 million square feet; and Online Computer Library Center’s home office.

I left Columbus with a different impression of the city than before I arrived there. Clearly, it has a very diverse and relatively healthy economy, which is something that many other Ohio cities can’t claim. The regional economy is based on education, insurance, health care, retail and technology. In 2006, Policom Corp., an independent economics-research firm based in Palm Beach, Fla., rated Columbus’ economy the seventh-best in the nation, while Money Magazine ranked Columbus the eighth-best large city in the United States to live. While other cities in Ohio cling to their pasts and slowly decay, Columbus continues to reinvent itself. There’s no reason to be humble about that.

Log In - About Us - Search - Archives

Copyright © 2010 IndUS Business Journal All rights reserved.  | Console Login