AKRON, OHIO (Jan. 20, 10 a.m. EST) — Trygve Vigmostad was searching for a U.S. site where his small Norwegian employer, PolyDisplay ASA, could put research offices for its work on a next-generation flexible plastic display.
It's not the kind of project that would get a lot of attention from traditional economic development agencies. After all, PolyDisplay is not building a factory or hiring a lot of people. It may down the road, but for now, it's just a risky new technology company.
Vigmostad wound up choosing Akron for the research offices, in part because he was impressed with a state government program, Ohio Polymer Enterprise Development Inc., designed to help new plastics-oriented firms into full-scale manufacturing.
“OPED was instrumental in our thinking,” he said.
The state launched OPED as a two-year project in October 2001, contributing the lion's share of its $2.2 million budget. OPED helps companies write business plans, link up with venture capitalists and enjoy the benefits of a network of other polymer technology entrepreneurs. Such a concentrated government effort to boost high-technology polymer business development is unusual.
Rather than simply focus on luring another injection molding factory, OPED aims to develop and nurture new materials and applications that can help the U.S. industry, and particularly Ohio firms, be more competitive internationally, said Ron Clark, president and executive director of Akron-based OPED.
“Advanced materials can make something globally competitive immediately,” Clark said.
The program wants to take advantage of Ohio's existing plastics processing base — the nation's second largest, with 2001 shipments of $11.3 billion, according to the Society of the Plastics Industry Inc. in Washington.
That huge pool seems to have stagnated in the past few years, however. Ohio's plastics processing industry grew only 8 percent overall between 1996 and 2001, the slowest of the 12 largest plastics states, according to a Plastics News analysis of SPI's data.
Thus far, OPED has not netted much in the way of tangible economic development gains to turn that around. But Clark said OPED has laid solid groundwork, and he expects the companies OPED is working with to add 2,000 jobs in the state by 2008.
One new company developing a more fire-resistant plastic, American Technical Coatings Inc., uses OPED to get advice on markets and to link up with local governments, said Mike Paparella, an ATC board member.
The material, which has been tested steadily at 2,500° F, can be used in military and jet engines. If it passes performance tests, it will “get plastics deeper into the heart of an aircraft engine because it can withstand the heat of the engine,” Paparella said.
“I think we'll know within the next six months whether or not the material meets performance requirements of the military and defense contractors,” he said. “When that happens, this will take off.”
ATC would need to build a facility to make the material and either would add injection molding to make the parts or outsource the work, he said. While it's not definite ATC would build in Ohio, the state seems to be a frontrunner, said Paparella, an investor in the new Rocky River, Ohio, firm.
“Ultimately, we'd like to be in Ohio,” he said. “I don't think we'd get the kind of attention from another state at this stage of the company's existence.”
The material was developed by Chuck Ingefield, a chemist who is the firm's sole full-time employee, Paparella said. It is made from an inorganic polymer, but ATC declined to offer more details.
“There's market potential and there's industry-changing potential,” he said. “Our product happens to be injection moldable, [so] you can replace machined parts with injection molded parts.”
OPED's uncertain future
OPED got its start because Ohio officials thought their previous effort, Edison Polymer Innovation Corp., was focused too much on basic research and not enough on transforming new discoveries into commercial, job-creating enterprises. Ohio officials pulled much of their funding in 2000 and switched it to OPED. But now, some officials say OPED faces its own uncertain future because state funding runs out at the end of the year.
“It was not anticipated there would be such a tremendous downturn in state revenues,” said Frank Kelley, dean of the University of Akron's College of Polymer Science and Polymer Engineering and a member of OPED's board. “There have been some hard choices made in Columbus.”
Kelley said the plan is to put OPED into a new advanced materials center that several organizations, including the University of Akron, want to build. But there are 13 other Ohio industries vying for money to build the Wright Centers of Innovation, and only enough funding for two or three, he said.
“Many of us board members are trying to figure out, 'What is the plan beyond December?' ” Kelley said. “Many of us think the Wright Center, but there isn't any degree of certainty that will be the answer.”
A state official said OPED probably will stay open, either as part of the proposed Wright Center or linked with another organization. While OPED has worked well, no funding decisions have been made, said Pat Valente, deputy director of the Ohio Department of Development technology division.
“What we ideally would like to see with OPED is that they are an important part of the technology commercialization of the new Akron polymer center,” Valente said. “We fully expect OPED to continue to exist.”
OPED's Clark said he expects the program's efforts to create 2,000 jobs in Ohio within five years, although he acknowledges it hasn't yielded significant jobs in its first year.
“The conservative-side projection on the 60 companies we have dealt with is 2,000 jobs,” he said. “The upside — it could almost be 20,000.”
Valente praised OPED's work, and said one year is too soon to expect it to yield any significant economic development gains.
“Typically, if we are helping smaller companies, the jobs created could be longer-term,” he said.
OPED's support for companies now works out to about $20,000 per firm to hire consultants and do market research. That may not sound like a lot when measured against the hundreds of thousands or millions of dollars a firm can get in tax incentives and low-interest loans for economic development. But a key part of OPED's mission is to link people, a very intangible benefit, Clark said.
“We're a connector — we have venture and private capital seminars at least once a quarter,” Clark said. “We're not here as a free handout. I don't have the money here to let them make a free prototype. I can connect them and help them hire consultants and find people who have money.”
Vigmostad said the connections that a group like OPED provides are crucial when trying to develop or enhance a cluster of technology-oriented companies in a similar industry.
“The key to an industrial cluster in high tech is the people — that is really what Silicon Valley is all about,” said Vigmostad, who is president of PolyDisplay Inc., the Akron-based unit of PolyDisplay ASA of Sandefjord, Norway.
Before entering the private sector, Vigmostad worked for Michigan's Department of Commerce and ran the state's program to boost exports and recruit overseas firms.
“OPED cut half a year off my research,” Vigmostad said. “A couple of months is enormous — if we're six months late, we're not going to get our money and we're going to go into mothballs.”
He praised OPED's small pilot plant for polymerization. He said several other factors also pulled the company to Ohio, including a liquid-crystal program at Kent State University, the University of Akron's polymer program and the fact that their manufacturing partner for glass-based displays, LXD Inc., is in Cleveland.
It's hard to tell if PolyDisplay ultimately will pay off for the state in economic growth.
Like ATC, its technology remains under development, although company officials said plans to marry their liquid-crystal technology to polymers has big markets, including bendable, in-store displays and electronic screens that are visible from many angles and lighting conditions.
If the technology works, Vigmostad said there are advantages to manufacturing in Ohio.
“Our first thought is we would expand our manufacturing right here,” he said. “Display technology has some clusters in California, but for a company trying to work in polymers, we don't think there is anything better in the United States and we don't think we see anything better in the world.”