Business Oregon News

August 2011

More Evidence of the Importance of Innovation to Oregon's Economic Success

Technology Transfer from Oregon Research Universities Create Jobs and Profits at Local Firms
The critical connections between Business Oregon and the Oregon Innovation Council (Oregon InC), Oregon's top research universities and the state's private sector have once again been affirmed by the recent decision by Oregon Health & Sciences Universities (OHSU) to double its technology transfer efforts.

Recently, OHSU officials announced plans to add 13 employees to the 14 existing staff members in their technology transfer office. OHSU's confidence and emphasis on the transfer of knowledge and inventions from the university campus to the marketplace is a strong endorsement of Business Oregon's efforts, through Oregon InC, to facilitate this type of economic development.

Oregon has many successful startups backed by our great universities and Oregon InC. Below are just a few examples of these types of success, I believe they aptly illustrate the critical importance of Oregon InC. The 2011 Legislature's decision to allocate $15.4 million in funding for Oregon InC this biennium also reaffirms the importance of the program.

DesignMedix, spun out of Portland State University in 2006, is an Oregon-based biotech company developing new drugs to combat infectious diseases. DesignMedix has designed and synthesized a library of novel drugs to combat several important infectious diseases. The company also has identified new anti-bacterial drug candidates able to kill E. coli bacteria. DesignMedix's experimental drugs are ten-times more effective than most other drugs, lowering costs and overcoming drug resistance. That could be big news in places like Southeast Asia and Africa, where drug-resistant malaria is now commonplace.

Business Oregon provided a grant of $246,000 to DesignMedix through the Oregon Nanoscience and Microtechnologies Institute (ONAMI) to develop nanotech formulations of the company's anti-malarial drugs. DesignMedix has since closed an equity funding round of $1 million and also was awarded a grant of $1.3 million from the National Institute of Allergy and Infectious Disease (NIAID) for research and preclinical studies.

Corvallis-based Trillium FiberFuels has created process technology and equipment to more efficiently convert cellulosic feedstocks into ethanol. In January 2011, Business Oregon awarded Trillium a commercialization grant of approximately $250,000 through the Oregon Built Environment & Sustainable Technologies Center (BEST). Collaborating with Oregon State University researcher Christine Kelly, the company will work to develop a unique enzyme for use in its novel cellulosic ethanol fermentation process.

In November 2008, Business Oregon also provided a grant of $248,000 through ONAMI for the company to develop a process that improves the efficiency of creating fuel grade ethanol from biomass such as straw by up to 40%. The proposed would reduce operational expenses and make the technology competitive. Revenue would come from the installation of equipment and the regular sale of the enzyme product.

Apex Drive Laboratories, Inc., (Apex) is a company that offers patented electric motor and generator technology suitable for transportation and renewable energy applications. The company designs, builds and markets this new generation of motors and generators, along with a proprietary controller, for a complete electric drive system.

Apex Drive Labs, working with Oregon State University, received a $237,600 ONAMI Gap Grant to develop methods of cooling electric motors used for electric vehicles. ONAMI has leveraged more than $90 million from federal and private sources to grow 15 new companies in just two years.

Business Oregon helped Home Dialysis Plus with a $170,000 grant through ONAMI in 2007. The grant helped the company develop a prototype of its home dialysis machine. HD Plus also partnered with Hewlett-Packard Co. to license its inkjet technology that allowed them to mix the salt, electrolyte and water solution used in dialysis. They apply the microfluidic technology HP developed for printers to kidney dialysis. HD Plus also has a licensing agreement with Oregon State University to incorporate technology developed at OSU for blood filtration and water treatment.

HD Plus now employs 36 people, divided between its offices and labs in Portland and Corvallis. The company planned to add at least 14 more employees this year. In 2010, the company received $50 million from Warburg Pincus, a private investment company, to bring its kidney treatment device to market.

Read many more examples of the great work backed by the signature research initiatives of the Oregon Innovation Council.

Oregon Ranks Number One Nationally for Manufacturing Location

State and local economic development groups have several more arrows they can add to their quiver when it comes to touting Oregon's manufacturing economy. Recently, the American Institute for Economic Research has named Oregon as a top spot for manufacturing businesses.

The Massachusetts-based institute released a report concluding that many Western and Northeastern states are preferable for manufacturing, despite their higher wages and the conventional wisdom that Southern and Midwestern states are cheapest. The study concluded that Oregon was tops when measured by production costs per dollar of output rather than just by costs, such as labor, tax and energy expenses.

Using data from 2007, the most recently available for the study's purposes, the institute found that the production cost per dollar of output in Oregon was 70.6 cents, the lowest in the nation. The national average was 83.3 cents. Washington came in at 80.9 cents.

Efficient production, which can be influenced by factors such as access to transportation, can make production costs relatively low even in states that have higher average wages, the institute said in its bulletin summarizing the findings.

The current study is consistent with an earlier study by the institute that measured production cost efficiencies. That study named Oregon, Iowa and Connecticut as the best, calling them 100% efficient and benchmarks for the other states.

In addition, a recent Brookings Institute study found that Oregon has the second-largest share of "clean economy" jobs in the nation. The report also describes the Portland metro area as a "multi-dimensional" clean economy.

The report, Sizing the Clean Economy, was created in partnership with Batelle's Technology Partnership Practice to put some numbers around the "green" or "clean" economy. Read the complete story at Sustainable Business Oregon.

Finally, according to an analysis compiled by the Business Journal's Scott Thomas, manufacturing contributed $38.75 billion to the state's $174.15 billion in 2010 GSP. Manufacturing accounts for 22.3 percent of Oregon's gross state product, ranking it No. 2 nationally. That's just behind Indiana, where manufacturing accounts for 27.2 percent of GSP.

Gross state product is the total output of goods and services within a given state, and the average manufacturing sector contribution nationally is 11.8%.

Business Oregon's Efforts Pay Off for Oregon Firms

Whether it's formal financial assistance or just advising and helping Oregon companies make connections for new sales opportunities, I want to take this opportunity to highlight the efforts of the Business Oregon staff to help add real value to Oregon's economy. Here are just a few projects that staff have worked with and how they've grown recently because of those efforts.

GL Solutions, located in Bend, continues to grow thanks to new contracts from around the nation. The company creates regulatory software and database systems tailored for state licensing and has recently added several state agencies to its client roster. In 2009 when business finance officer Les Livengood and others in the agency first assisted the company through a loan guarantee, GL Solutions had 28 employees, where today they are at about 80.

Pacific Stainless Products, Inc., has added more than 25 jobs in the last several months. The company now employs 150 in St. Helens. Pacific Stainless has seen more contracts due to the additional capacity provided by a recent expansion, which was made possible through the financing assistance of an Industrial Development Bond from Business Oregon.

SAM Medical, located in Wilsonville, continues to grow and has manufactured products in Oregon for more than 25 years. The company has been named by Inc. Magazine in their top 5,000 list of the fastest growing private companies in America. Business development officer Chad Freeman and global trade specialist Tom DiCorcia have assisted SAM, including connecting the company with the Oregon Manufacturing Extension Partnership, utilizing a Business Retention Services grant, and most recently, helping SAM Medical attend two overseas trade shows with Oregon Trade Promotion Program grants. As a result of the export promotion, the company expects to realize $25,000 in additional sales.

When Facebook first came to the state, its employment estimate was 35 people. Since then, the company has grown to 54 employees. Now with the announcement last week that Facebook will construct a second data center building on the site, the company says it will add another 10 permanent workers upon completion. In addition, the 250 construction workers already working at the site daily will now have another year of work. On the recent facility tour conducted for the Oregon Business Development Commission, company representatives cited Business Oregon's industrial site certification as the primary reason they chose to locate in Prineville, and in Oregon.

Global trade specialist Sunun Setboonsarng recently led two clean tech missions for Oregon companies to Bangkok, Thailand and Beijing, China. Three companies went to Bangkok, attending trade shows and company meetings that the global strategies team assisted in setting up. Five companies went to Beijing, to attend a trade show on environmental protection, where Sunun and Business Oregon's Chinese representatives assisted the companies to make sure they had a valuable trip.

Back in Oregon, global trade specialists Alexa Hamilton and Dana Shannon facilitated meetings between the U.S.-Saudi Arabia Business Council and Oregon companies interested in doing business in Saudi Arabia. The group session and one-on-one meetings took place in Eugene, and it appeared many of the companies participating will see export opportunities down the line.

Global trade specialist Tom DiCorcia recruited four Oregon bioscience companies—Microstein, ColumbiaSoft, SAM Medical and 13Therapeutics—to attend the Bio International convention in Washington, DC.

Finally, Scott Nelson and Annette Liebe of the Governor's office recently attended an event at Breedlove Guitars where they met the company's new owners. In 2007 when Business Oregon first assisted Breedlove with an Industrial Development Bond and a forgivable loan from the Governor's Strategic Reserve Fund, Breedlove had 35 employees and the
company now has more than 50.

Business Oregon Conducts Economic Revitalization Workshops in Southern Oregon Communities

Representatives from Business Oregon recently joined officials from the U.S. Environmental Protection Agency (EPA), the Center for Creative Land Recycling, the Oregon Department of Environmental Quality (DEQ) and the U.S. Department of Agriculture to host workshops and one-on-one consultations on how to fund economic development and community revitalization.

Representatives from 54 communities and organizations attended the five sessions held in Klamath Falls, Medford, Gold Beach, North Bend and Florence July 12-14. Industrial lands specialist Michael Williams and Brownfields Program specialist Karen Homolac represented Business Oregon at the sessions.

The workshop was designed for local governments, economic development departments, councils of government, general improvement districts, non-profits, community development corporations, tribes, and other organizations or partnerships interested in sustainable development. Attendees learned how to obtain funding to plan and redevelop your downtown and transform previously used sites, such as Brownfields sites, into main streets, parks, trails and job-creating facilities.

Oregon Business Development Commission to Hold Special Meeting in Portland on August 10

The Oregon Business Development Commission will hold a special meeting on August 10, 2011, from 2 p.m. - 3:00 p.m., in Conference Room PDX1 at Business Oregon's Portland office located at 1 World Trade Center, 121 SW Salmon St., Suite 205. The meeting is being held so the commission can discuss a proposed Strategic Investment Program project in Columbia County.

Upcoming Events

• IFA Board Meeting August 12
• Broadband Advisory Council Meeting August 25

Find a complete listing of events on our Events Calendar