Southern Exposure Equals High-Tech Innovation
This in-depth look at 14 southern states shows how technology is sparking new developments in a variety of industries - some traditional, others decidedly 21st century - and how state and local governments are supporting the initiatives.
Mali R. Schantz-Feld (Southern Tech Sites 2009)

On September 22, 2009, a summit took place involving the Alabama Development Office in partnership with the Alabama Department of Economic and Community Development; the Economic Development Partnership of Alabama; and the Alabama Research Alliance to develop the state's first Science and Technology Roadmap to explore research and development potential. Topics for the summit included healthcare, energy, aerospace and defense, modeling and simulation applied to the automobile industry, information technology, and nanotechnology.

Currently, the sectors of aviation/aerospace, biofuels, alternative energy components, and information technology (IT) are the most active in the state. In the 2009 legislative session, Governor Bob Riley introduced and passed legislation to incentivize 21st century jobs that include technology and R&D companies, as well as alternative energy-related projects. 

Development news covers diverse sectors. In the IT category, CGI Group Inc., an IT and business process services provider, plans to create 300 jobs in Troy, with the establishment of its newest U.S. Center of Excellence, a software development and testing facility for commercial and government clients that is scheduled to open in January 2010. In the biosciences, Brookwood Pharmaceuticals, which remains a separate business unit after acquisition by SurModics in 2007, aims to add about 300 jobs in Birmingham over the next three to five years and also add manufacturing of final products to its existing research and development endeavors.

In the clean energy sector, Hybrid Kinetic Motors (HK Motors) is planning a new green-vehicle manufacturing plant in Baldwin County, Alabama. At the press conference announcing the plan, HK Motors Chair Yung (Benjamin) Yeung cited the state's economic strength and its quality work force as the deciding factors for locating its primary manufacturing operations in Alabama. Initial production of all model lines is expected to begin in 2013, with Phase 1 capacity of 300,000 vehicles, and the creation of more than 5,000 direct jobs. The firm's hybrid engine employs compressed natural gas (CNG), electricity, and gasoline, which the firm asserts will offer an efficient and affordable alternative to gasoline.

Among the leading technology industries in the Natural State are power electronics, information technology (IT), and health-related products and services. The IT cluster, concentrated mostly in central and northwestern Arkansas, harbors industry leaders Acxiom, Windstream, and Verizon Wireless. Recently, HP located a customer service and technical support center in Conway that is expected to employ more than 1,200 people.

Arkansas is growing in the "green" technology sector - especially the wind industry. The state's wind generating capacity is advantageous for production, distribution, and maintenance of wind turbine parts and systems. New in this sector includes LM Glasfiber's new wind turbine blade factory that opened in Little Rock in 2008. In 2009, Nordex USA, Inc., a manufacturer of utility-scale wind turbines, broke ground on a $100 million manufacturing facility in Jonesboro, announcing intentions to hire 700 people by 2014.

The Arkansas Research and Technology Park, which currently houses 25 companies in Fayetteville, is experiencing continued growth. In July 2009, the Enterprise Center celebrated its new 65,000-square-foot facility that is slated for completion in 2010. The LEED-certified building will contain wet labs or clean rooms and allow ARTP to serve technology companies at various stages of development.

Mentoring and financial incentives pique the interest of new investors. Innovate Arkansas, a program of the Arkansas Economic Development Commission and non-profit organization Winrock International, helps new technology-based entrepreneurs transform new inventions and high-tech service concepts into viable commercial enterprises. For financial assistance, the Equity Investment Tax Credit Incentive Program is targeted toward new, technology-based businesses that pay wages in excess of the state or county average wage. Once approved, a business can offer an income tax credit to investors purchasing an equity investment in the business. Unused credits may be carried forward for nine years. Another program, the Arkansas Science & Technology Authority's Seed Capital Investment Program (SCIP), supports the initial capitalization or expansion of technology-based companies located in Arkansas with working capital up to $500,000 of the company's total financing needs.

To continue to supply the work force for the growing technology sector, educational institutions such as the University of Arkansas have developed new degree programs in niches including systems engineering and information sciences, biomedical engineering, cell and molecular biology, and molecular biotechnology.

Many of Florida's diverse technology companies are categorized under the information technology (IT) header - more than 24,000 IT companies employ nearly 254,000 people. Simulation and training clusters specialize in fields such as defense, transportation, medical tech, and entertainment. The photonics/optics industry excels in technologies for the military communications. Digital media firms develop interactive video, education tools, video gaming, and other digital media products. The software industry is growing in areas such as gaming, entertainment, law enforcement and defense-homeland security. Florida is big in the small-scale world of MEMS, microprocessors and the manufacture of other precision devices. The state's work force and telecom infrastructure have encouraged developments in wireless technologies and equipment.

Several recent projects focus on clean energy. Buckeye Technologies expects to boost electrical energy generation from renewable biomass and improve air quality by reducing greenhouse gases, sulfur dioxide emissions, and volatile organic compound emissions. The installation of a condensing steam turbine at its cellulose manufacturing plant near Perry is anticipated to temporarily create approximately 148 direct jobs during the installation process, and help retain 555 direct jobs and 1,000 indirect jobs. Also in the clean energy category, InEnTec Chemical LLC selected Clay County, Florida, for its new headquarters, citing the state's strong research universities, sustainability-minded suppliers and utilities, and growing clean technology talent pool as reasons for the location choice.

A 2009 progress report on Florida's Strategic Plan for Economic Development 2007 to 2012 notes that Florida is actively pursuing innovation-driven economic development. To spur venture capital, the state authorized up to $2 billion of state pension funds for investment in high-tech industries and programs to help early-stage companies. Research and development are encouraged by the establishment of new centers of excellence within universities, plus recruitment of institutes such as the Max Planck Institute specializing in bio-imaging and the Charles Stark Draper Laboratory. Incentives such as the Qualified Target Industry Tax Refund (QTI) and the High Impact Performance Incentive Grant (HIPI) encourage high-wage jobs in targeted high-value industries.

Georgia debuted on the list of the 2009 Top 10 Cyberstates by Technology Employment, published by TechAmerica - the industry association formed by the merger of AeA and the Information Technology Association of America - placing fifth in communications services employment, sixth in software publishers employment, and sixth in computer training employment. Software and information technology (IT) services and telecommunications account for about 65 percent of the state's high-tech jobs. Core competencies have been established in health IT, financial technology software, and software development for video games and digital media. "We have a significant presence of companies in both health IT, with McKesson and Eclipsys, and financial technology software, with Fiserv, Lexis-Nexis, and Equifax," says Carol Henderson, director of health sciences and advanced technologies for the Georgia Department of Economic Development.

Alternative energy research is focused around transportation fuels, solar energy, and biomass projects. Georgia Institute of Technology (Georgia Tech) is the home of the Department of Energy's (DOE) University Center of Excellence for Photovoltaics (PV) Research and Education (UCEP), one of two such centers in the United States. UCEP strives to improve the understanding of the science and technology of advanced PV devices, to fabricate record high efficiency solar cells, and to provide guidelines to the industry and DOE for achieving cost-effective and high-efficiency PV devices.

NCR, manufacturer of automated teller machines and retail self-checkouts, and electronic commerce and payment processing firm First Data have recently relocated their corporate headquarters to Georgia. NCR's plans include relocation of 1,250 corporate jobs from Ohio to Duluth in Gwinnett County and an additional ATM advanced manufacturing plant in Columbus that is expected to employ 870 people. First Data anticipates the creation of 1,000 jobs in Atlanta over the next three years. Both companies cited the Peach State's educated work force and work force initiatives, business-friendly environment, and ease of access to key markets as key their decision-making process.

Kentucky's comprehensive plan for energy technology involves the state's natural resources, manufacturing base, and research institutions. The goals include a 20 percent reduction in greenhouse gas emissions from 1990 levels by 2025; greatly expanded research into carbon capture and sequestration; and the development of a large coal-to-liquids industry. The plan's initiatives are estimated to create 30,000 to 40,000 new Kentucky jobs.

In bioscience, Battelle and the Biotechnology Industry Organization (BIO) named Kentucky as one of only six states in the nation with a growth rate in academic bioscience research of more than 50 percent, and one of just eight states with a  greater than 20 percent increase in National Institutes of Health (NIH) funding for overall academic bioscience R&D.

The commonwealth, the University of Kentucky, and the University of Louisville have partnered with Argonne National Laboratory to establish a National Battery Manufacturing Research and Development Center. The advanced battery technologies for vehicles will:

• foster energy independence, reduce greenhouse gas emissions, and boost the economy by making it easier for federal labs, universities, manufacturers, suppliers and end users to collaborate;

• develop advanced manufacturing technology to reduce advanced battery production costs; and

• acceleratie the commercialization of technologies developed at national laboratories and universities.
In June 2009, Northern Kentucky University (NKU) broke ground on a new $55 million Center for

Informatics. Largely funded with state dollars, the center will include NKU's Center for Health Informatics, which will conduct research on effective communication of new healthcare technologies. It will feature a Computer Assisted Virtual Environment (CAVE) for product development research, and a digital auditorium that will be capable of running complex simulations for homeland security, computer security, and financial security applications.

Also in June, Governor Steve Beshear signed House Bill 3, streamlining and modernizing Kentucky's business incentive programs into a single, more flexible tax incentive program. The Kentucky Business Investment (KBI) program provides income tax credits and wage assessments for new and existing agribusinesses, regional and national headquarters, manufacturing companies, and non-retail service and technology related companies that locate or expand operations in Kentucky.

Focusing on digital media, aerospace, and advanced materials, Louisiana now ranks among the 10 fastest-growing states for high-tech employment, according to TechAmerica's 12th annual Cyberstates report. Mark Lewis, president of the Louisiana Technology Council, points out Louisiana's gain of 4,349 high-tech jobs between 2002 and 2007, up 11.3 percent. Most of the growth was in engineering and research and development laboratories. Lewis notes that the statistical gains are particularly optimistic because they occurred "at a time when the country as a whole lost 71,863 high-tech jobs, down 1.2 percent."

Several large prospects became realities this year. 3001 International, Inc., provider of geospatial data production and analysis recently acquired by Northrop Grumman Corporation, is consolidating the current Slidell office and Stennis Space Center in Mississippi into a new 20,000 square-foot facility in Slidell that is expected to bring 85 high-tech jobs, including 50 new positions, to St. Tammany Parish.

Also, in the light of NASA's impending transition from the Space Shuttle to the development of new spacecraft for the Constellation Program, NASA has awarded Jacobs Engineering Group Inc. the manufacturing support and facility operations contract for operational management of its Michoud Assembly Facility, taking over the contract from Lockheed Martin. The company will employ approximately 450 employees.

Several incentives encourage technology investment. The Research and Development Tax Credit provides a tax credit for up to 40 percent for Louisiana businesses that employ more than 50 Louisiana residents and that conduct R&D activities in Louisiana. Another recent incentive is the Digital Interactive Media Tax Credit program that offers a tax credit of 25 percent of qualified production expenditures for state-certified digital interactive productions in Louisiana and an additional 10 percent tax credit for payroll expenditures for Louisiana residents. The Quality Jobs Program provides a cash rebate of 5 to 6 percent of annual gross payroll for up 10 years for qualifying companies in bioscience, manufacturing, IT, environmental technology, food technology, advanced materials, or oil and gas and gas field services. The program also allows for state sales/use tax rebates on buildings, equipment and materials purchased that remain at the plant site.

From plastics to jet engines, Mississippi production of innovative technology is encouraged by a highly-skilled and abundant work force, along with a number of research centers dedicated to such niches as geospatial systems, aerospace and aviation, biotechnology, and polymers.

Aerospace companies are pioneering the latest developments in advanced composites in Mississippi. When GE Aviation announced the location of a jet engine composite component facility in Batesville, the company said it would involve the most sophisticated manufacturing techniques at any of its worldwide facilities. The facility shipped its first products in the spring of 2009. Alliant Techsystems (ATK) recently expanded its Iuka facility to produce composite aircraft structures in addition to the composite launch vehicles previously produced there.

"There is tremendous potential for growth and further innovation in the use of composite materials in aviation and aerospace applications," says Gray Swoope, executive director of the Mississippi Development Authority. "Mississippi is pleased to have industry leaders like GE Aviation and ATK locating and expanding their facilities in our state. These companies have demonstrated their confidence in Mississippi's work force and the state's ability to compete in technology-driven industries."

Geospatial technology is another of Mississippi's fastest growing high-technology sectors, with a variety of industries relying in this sector including the defense/homeland security, engineering, energy and utilities, finance, education, timber and telecommunications sectors, as well as state and local governmental agencies. The Enterprise for Innovative Geospatial Solutions and the Geospatial Council of the Institutions of Higher Learning are among the organizations in the state working to build capacity across this sector. "Mississippi recognizes the value of geospatial technology with applications ranging from water management to global defense," says Swoope. "We are continuing to support the sector by further developing the state's research capabilities and strengthening our already skilled labor force."

In the energy sector, Mississippi Energy and Industrial Construction Consortium reports approximately 50 energy biomass projects in the state. The Mississippi Strategic Biomass Initiative is fostering value-added opportunities for Mississippi farmers related to food crops and animal by-products.

Animal health and plant science are the two most prolific growth areas in Missouri. The Show-Me State is home to the Kansas City Animal Health Corridor which stretches from Columbia, Missouri, to Manhattan, Kansas. Companies in the corridor represent 32 percent of sales in the $19 billion global animal health market, according to Bill Anderson, deputy director of the Missouri Technology Corporation. Plant science, another traditional strength, has been bolstered by facilities such as the world headquarters of Monsanto in St. Louis and institutions such as the Donald Danforth Plant Science Center, Missouri Botanical Gardens, Washington University, and the University of Missouri. Other fast-growing sectors include medical devices, nanotechnology, clinical imaging and medical diagnostics, information technology, advanced power and battery systems, and renewable energy, including algae.

In the very near future, according to Anderson, the Missouri Plant Science Center - a joint venture between the Missouri Technology Corporation, the University of Missouri, and the city of Mexico, Missouri - will break ground in that city. This center for applied research, technology commercialization, and pilot scale production will offer lab and office space, plus a pilot-scale manufacturing facility that will be available on a fee-for-use basis. It is expected to grow into a "hub of innovation and production for functional food, nutraceuticals and other plant sourced products," says Anderson.

Tech businesses in the state rely on incentives such as the Ag-Biotech Recruitment Fund administered by the Missouri Technology Corporation. The fund may be used for low-interest loans, convertible debt, direct equity investments and grants to eligible ag-biotech companies seeking to locate in Missouri. Another key proram is the state's Quality Jobs Program, which tech security firm Global Velocity in Clayton is utilizing for the expansion of a manufacturing facility that anticipates 265 new full-time, year-round jobs at the facility within five years.

Targeted technology industries in Oklahoma include aerospace, renewable energy - specifically wind, solar, and biofuels - bioscience, and advanced manufacturing.

With more than 300 aerospace-related companies in Oklahoma, the state has become a global leader in the maintenance, repair, and overhaul (MRO) niche, a reputation bolstered by activities at the American Airlines Maintenance and Engineering Center in Tulsa and the Oklahoma City Air Logistics Center at Tinker Air Force. In bioscience, research is in progress in plant genomics and transgenics for crop improvements, autoimmune disease and immunology, cardiology and cardiovascular research, infectious disease microbiology, and vision research and ophthalmic neuroscience. R&D facilities include Samuel Roberts Noble Foundation in Ardmore, Presbyterian Health Foundation Research Park in Oklahoma City, and the Oklahoma Technology and Research Park in Stillwater.

Besides aerospace, advanced manufacturing also benefits the energy sector. The emerging wind industry is one of the most active areas of technology-based manufacturing growth. Research by the National Renewable Energy Laboratory has indicated that Oklahoma could potentially generate nearly 10 percent of the nation's wind-generated electricity by 2030. The Oklahoma Department of Commerce estimates that expansion in this sector could result in the creation of 7,000 jobs over the next five years. Last year, wind tower producer DMI announced a project expansion in Tulsa. In solar energy, Belgium-based germanium producer Umicore is building a $51 million, 40,000-square-foot germanium production plant in Quapaw that will produce a component for high-efficiency solar cells used in satellites and other space applications.

To attract technology, the 21st Century Quality Jobs (QJ) and related programs provide incentives by developing clusters around knowledge-based, service industries and incentivizing businesses that have the potential to produce a highly skilled work force.

South Carolina
Advanced materials, aerospace, and energy take the lead South Carolina's technology race. The advanced materials sector serves automakers who are continually seeking to produce lighter, more fuel-efficient vehicles. South Carolina has attracted several giants of the auto industry: BMW's only North American assembly plant, Michelin's North American headquarters and multiple manufacturing facilities, Daimler AG's assembly plant, and American LaFrance's new corporate headquarters and commercial vehicle manufacturing plant, as well as more than 200 suppliers.

The advanced materials sector continues to expand to serve the auto industry and other high-tech applications. Along with an investment in research at Clemson's International Center for Automotive Research (CU-ICAR) in Greenville, American Titanium Works is building a $422 million titanium mini-mill facility in Laurens County that is expected to employ 320 people. DuPont selected its Cooper River plant for a planned $500 million investment to significantly expand production of high-performance Kevlar para-aramid brand fiber for industrial and military uses. The project is expected to require 100 permanent jobs and startup is scheduled for 2010. Manufacturers and processors in the plastics niche include FUJIFILM Manufacturing USA, Inc.; 3M; BP; Cryovac; Eastman Chemical; and Rhodia. 

Aerospace companies throughout the state include Lockheed Martin, General Electric, Honeywell, and 3D Systems. GE Aviation plans to expand its presence in Greenville, with a multimillion-dollar investment and 100 additional jobs by 2013.

In renewable energy, Rollcast Energy Inc. will establish Loblolly Green Power LLC, a new biomass facility in Newberry County that will be the first such facility in South Carolina generating commercially available renewable power. The $170 million investment is expected to generate 27 new permanent jobs and be operational by late 2011. This area of the state offers skilled forestry management, forestry operations and recycling companies that are expected to encourage sustainable growth of these industries.

South Carolina's biotech infrastructure  is comprised of manufacturing, life science R&D, and service companies such as ArborGen, Argolyn Bioscience, and Martek Biosciences. The state's established base of pharmaceutical manufacturers includes Bausch & Lomb, Pfizer's Capsugel, GlaxoSmithKline, Holopack, IRIX Pharmaceuticals, Perrigo, and Roche.

Southern states are creatively blending their traditional resources with new technology to provide for future growth. A new study commissioned by the Memphis Bioworks Foundation cites that a shift to a "bioeconomy" could generate 25,000 jobs in 10 years and $8 billion annually to the mid-South. The study, conducted by Battelle Technology Partnership Practice, covers the region that hugs both banks of the Mississippi River in Tennessee, Arkansas, Mississippi, Missouri, and Kentucky. The area's assets blend 36 million acres of diverse crops - including corn, cotton, rice, and hardwood trees - with the industrial, chemical, and logistics infrastructure necessary for processing and distribution of the resulting products.

Matt Kisber, Tennessee's commissioner of economic and community development, points out that Governor Phil Bredesen's background as a scientist and business executive enables him to view clean energy technology from both an environmental and job creation standpoint. Kisber cites the success of Sharp Solar in Memphis, Shoals Technologies in Gallatin, and SIAG Schaaf Industries in Chattanooga, as indicative of the state's commitment. In August, German-based SIAG Schaaf Industrie Aktiengesellschaft announced the acquisition of Aerisyn, a manufacturer of wind turbine towers in Chattanooga, as well as a plan to invest $3 million and create 120 new jobs.

In the solar sector, polysilicon manufacturers Hemlock Semiconductor and Wacker Chemie both began work on $1 billion facilities last year. Kisber says this heralds the "beginnings of a fully developed clean energy industry, anchored in companies like Hemlock and Wacker, that will span the breadth of clean energy technology - from solar power, to wind, to biofuels and beyond."

Texas touts life sciences, pharmaceutical development, and bio-engineering as strong and growing sectors. A study released in May by the Texas Healthcare and Bioscience Institute (THBI) says that the life sciences industry - composed of four primary niche sectors: agriculture, medical devices, pharmaceuticals, and research and testing - is a powerful economic driver, supporting 236,000 jobs and generating a total annual economic impact of $75 billion. The state currently invests more in basic biomedical research than all but two other states.

The computers and electronics sector was strengthened by Texas Instruments' (TI) new chip production facility in Richardson. TI reports that the fab will be the world's only production facility to use 300-millimeter (12-inch) silicon wafers to manufacture analog chips, which are essential components in virtually all electronics. The company says it expects the project to create 250 engineering, manufacturing, and administrative jobs.

The Emerging Technology Fund (ETF), the Lone Star State's main engine for encouraging the development of new technologies, focuses on fostering innovation, research, and job creation in emerging high-tech industries like semiconductor manufacturing, biotechnology, nanotechnology, environmental sciences, and advanced energy, while allowing university researchers to bring their technologies from the laboratory to the marketplace. The ETF has allocated more than $102 million in funds to 81 early-stage companies and $148 million in grant-matching and research superiority funds to Texas universities.

A $50 million ETF investment was awarded to the National Center for Therapeutics Manufacturing at Texas A&M University, a facility that will offer pharmaceutical companies the flexibility to manufacture clinical grade commercial drugs in Texas. The center will be essential to containing the entire lifecycle for new drugs within the state, therefore retaining investment and jobs.

While Texas has always been identified with traditional energy, diversifying the state's energy portfolio also remains a priority. The governor's office notes that Texas has already installed more wind power than any other state and is also interested in development of next generation nuclear power plants, as well as the addition of new clean coal plants.

Virginia's technology-based economy is focused in three sectors - energy, information technology, and advanced manufacturing, according to Liz Povar, director of business development for the Virginia Economic Development Partnership. New projects related to in the aerospace sector include Rolls Royce's jet engine manufacturing, test and assembly facility in Prince George County that will create 500 new jobs; and a new facility in Martinsville for titanium manufacturer RTI that will employ 150 people. Another aerospace supplier, Alcoa Hownet, is increasing capacity and production of investment castings for industrial gas turbines at its Hampton operations. Orbital Sciences expects to create 125 jobs at its Mid-Atlantic Regional Spaceport for its rocket program.

Incentives are modified and adapted to spur growth. New incentives include a sales-and-use tax exemption for servers locating in major data centers. In addition, the Tobacco Commission Research and Development Grant Program has earmarked $100 million for a competitive research grant program to support research based commercialization of new technologies. The commission funded five Centers of Excellence in the areas of energy, chemicals and materials, information technology, biomedical sciences and healthcare, and transportation logistics in southern and southwestern Virginia.

State incentives play a major role in new business development. "Virginia emphasizes performance-based grants that support research and development," says Povar. For example, the partnership between Rolls Royce and the University of Virginia will result in the Commonwealth Center for Advanced Manufacturing adjacent to the manufacturing facility, as well as research-chaired professorships at participating schools.

Povar also cites the governor's Opportunity Fund and work force training programs. AREVA and Northrop Grumman Shipbuilding are partnering to manufacture equipment and pressure vessels for the nuclear industry and to provide nuclear engineering services. The $363.4 million investment received $3 million from the  Opportunity Fund, a $1.5 million performance-based grant from the Virginia Investment Partnership (VIP) program, training assistance through the Virginia Jobs Investment Program, a Major Business Facilities Job Tax Credit, and road access funding. The project will create 540 new production and engineering jobs.

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