JumpStart: IdeaExchange Blog

It’s that time of year, the State of the Union/State time of year. And while I won’t give you a State of JumpStart address here, it’s become obvious to me that:

The State of Cleantech In Northeast Ohio is booming.

The Governor of Ohio, Ted Strickland, visited a JumpStart Ventures portfolio company yesterday, rexorce thermionics (in the process of changing its name to Echogen Power Systems). Aside from the company’s accomplishments including the installation of its commercial pilot for its heat engine and the creation of 20 engineering jobs, the Governor was visiting because it’s the perfect example of the growth of the cleantech sector in Ohio. A few other examples showing this is real growth, not just rhetoric, from The 2009 Venture Capital Report for the Cleveland Plus Region:

• Cleantech companies are the fastest growing segment of companies receiving venture capital or angel investment in the Cleveland Plus region. While they received only 3% of the dollars 5 years ago, they received 20% of the dollars in 2009.
• 33 cleantech companies have received venture or angel investment in the last five years.

One of those companies is VADXX Energy, whose CEO, Jim Garrett, presented its business plan yesterday at JumpStart to the Oberlin Entrepreneurial Scholars. VADXX Energy, which transforms waste plastics (such as the seats of old cars) back into synthetic crude oil, set up its first production facility in Akron recently, and will shortly be starting its first commercial pilot production.

Another of those companies is Phycal, a JumpStart Ventures portfolio company creating algal biofuel. Aside from the algal pool in its Mayfield Heights location, the company is in the process of setting up its first pilot production facility in Hawaii. Phycal was identified as one of BusinessWeek’s 25 Most Intriguing Companies last month.

With the Federal and State initiatives that will ultimately be funding Northeast Ohio cleantech companies in the future, with the new advanced energy incubator in Warren moving forward, and with the continued support of Ohio Third Frontier, there’s no better place to be for a cleantech company.

Cathy Belk is the Chief Marketing Officer of JumpStart. She specializes in branding, marketing communications, and business management. She brings 16+ years of experience in a variety of marketing and business roles, but gets her energy from working daily with entrepreneurs and their growing companies.

If you were a public policy or government official and it was your job to create economic opportunity (jobs) in your community/region/state or country, would you be willing to invest in a “project” that:

• For every $1 the government invested in the new project, the proposed project was required to at least equal the states investment on day one, dollar for dollar
• For every dollar invested in this project, you also knew that not only would you get matching resources on day one but that you could also anticipate that you could get another $12 dollars for every dollar you invested from the private sector in the next five years
• For every $23,000 that you spent one time five years ago, you could create at least one job paying an annual wage of $67,000 – meaning you could recover this investment in new payroll taxes within a 5-7 year time period, conversatively
• For every job you have created today, you have the likelihood – with zero additional investment – to create at least another 20 jobs both direct and indirectly over the next 15 years with this investment?

If this sounds all too good to be true – its not. This is what the commercialization programs of Ohio’s Third Frontier have done since 2002. The leadership in Ohio has understood, for the last seven years, that investments in programs that support the commercialization of technologies in Ohio make sense in the near-term, and make even more sense when looking to future economic growth opportunities five, ten, and 15 years out.

You can find proof of these numbers at www.thirdfrontier.com via metric reports as well as by reviewing the SRI report which is available on this website.

The Third Frontier Program demonstrates how the public sector can lead to create economic growth and jobs — it would be good for Washington to follow Ohio’s playbook.

Ray Leach is CEO of JumpStart and brings his energy and leadership experiences from founding five high growth entrepreneurial and intrapreneurial endeavors in the last 20 years. Ray is a Sloan Fellow and earned an MBA from the MIT Sloan School of Management. He also earned a BA in Finance from the University of Akron.

If you have been reading my blog over the last few months you have read many comments which focus on the intersections between public policy and programs that can make a positive impact to help entrepreneurs be more successful.

Last week, two great pieces of news came out that continue to help connect the dots to smart public policy in the State of Ohio and how government can play a leading role in helping to transform the thinking and acting that states place in our national economy.

First, SRI International published a report that took at look at the economic outcomes that have resulted from the State of Ohio’s technology-based economic development initiatives including Ohio Third Frontier. A press release and a link to the report can be found here. The study found that State expenditures related to Ohio Third Frontier of $681 million generated $6.6 billion of economic activity, 41,300 total jobs, and $2.4 billion in employee wages and benefits. According to the impact study’s figures, Ohio has garnered a nearly $10 return on every dollar of the State’s investment in the period from 2003 – 2008, with the expectation of increased impacts in the years to come.

Just after this report came out from the State, Secretary Gary Locke of the U.S. Commerce Department announced  that the Commerce Department is establishing a new Office for Entrepreneurship and Innovation specifically to help entrepreneurs develop great ideas into workable business plans by giving them training, funding, advisement, access to data, and a big pair of federal-sized scissors for cutting through the red tape of starting a new business. This is an incredible example of public policy makers really getting it.

The SRI report demonstrates and verifies real, significant economic outcomes that are created by smart programs that work in Ohio. The creation of this new office in the Commerce Department shows vision and a commitment for the federal government to hopefully work more closely with the States. Now is the chance to put these two great opportunities together to really help take Ohio and the country to a new level of entrepreneurial sucess and promise.

Ray Leach is CEO of JumpStart and brings his energy and leadership experiences from founding five high growth entrepreneurial and intrapreneurial endeavors in the last 20 years. Ray is a Sloan Fellow and earned an MBA from the MIT Sloan School of Management. He also earned a BA in Finance from the University of Akron.