By C. GRANT JACKSON
USC president Andrew Sorensen’s sleep is the sleep of
the faithful, of a true-believer in South Carolina’s
future.
In Innovista, USC’s new research campus, Sorensen is
convinced the school has a plan to help take the state
not just into the 21st century but the 22nd.
South Carolina is counting on Sorensen, and his
counterparts at MUSC and Clemson, to be right.
The
state has lost manufacturing jobs steadily over the past
decade. To compete in the global economy, South Carolina
has shifted from an almost complete reliance on pursuing
smokestack industries. Instead, the state is investing
millions in its research universities — to attract top
professors and knowledge-based companies, with hopes
they’ll spin off even more companies.
It’s a jobs strategy S.C. leaders have been slow to
pursue while other states have been speeding along. What
gives South Carolina the chance to catch up is that USC,
Clemson and the Medical University of South Carolina
long ago turned their attention to leading-edge science.
USC is especially strong in the area of hydrogen and
hydrogen fuel cell research. If the university can
sustain its edge and momentum, experts say, the
promising “alternative fuels” technology could add
thousands of high-paying jobs and transform South
Carolina’s economy.
Trying to guess which research field, such as
hydrogen research, will be “hot” is a leap of faith.
Everyone knows it.
But it’s a calculated leap, South Carolina’s leaders
say, one the state can’t put off, and one that would
benefit the entire state.
“The state will have three really strong economic
development and research engines geographically located
throughout the state,” said Rick Kelly, USC’s vice
president for finance, who is shepherding Innovista’s
construction. “We will broaden the economic base of this
state.”
STEPPING OUT
Of the three research universities, perhaps making
the greatest gambit is USC, which has plans that could
eventually double the size of its campus.
And hydrogen research is what is putting the school
on the national research map.
USC is focusing on four research areas: alternative
energies, nanotechnology and the biomedical and
environmental sciences.
But it is the school’s work with the new energy
sources of hydrogen and fuel cells that has captured the
public’s imagination.
The highly competitive field is also where USC and
the state arguably have gained the most momentum. One
Connecticut official recently described South Carolina
to The New York Times as the most competitive of the two
dozen or so hydrogen-focused states.
If true, it’s no small feat.
Hydrogen, and hydrogen-based fuel cells, could
transform the economy the way the Internet did, experts
say.
Fuel cells, battery-like devices that create energy
by mixing hydrogen and oxygen, might one day power
everything from laptops to cars, trucks, houses and
businesses. And they could obviously lessen the
country’s vulnerability to the geopolitics of oil.
Larry Wilson, a member of the USC Research Campus
Foundation Board, believes South Carolina can be to
hydrogen what Texas was to petroleum, that Columbia
could be the new Houston.
But the first companies USC will attract won’t be
fuel cell companies. Too few exist.
Many of the first companies are likely to be
information technology or computer companies.
In fact, the first company USC has attracted is Duck
Creek Technologies, a research-oriented insurance
industry software company that Wilson is chairman of.
Duck Creek expects to have about 200 employees with
an average salary of $83,000 working on campus. It will
be located in the first “private partner” building at
Innovista, a sort of vertical research park.
Wilson’s connection — and the fact that the company
is a software developer instead of a fuel cell company —
might have some people wondering.
But others say it’s a natural progression toward
attracting more advanced fuel cell- and
hydrogen-oriented companies.
And already on campus are a dozen industry partners
working with USC researchers in the National Science
Foundation Industry/University Cooperative Research
Center for Fuel Cells.
Those companies — such has Boeing, John Deere, BASF
and General Motors — can take discoveries gained through
the center and turn them into products or services. The
partners work in groups on projects and have access to
patents developed.
BENDING EARS TO GET WHAT THEY NEED
For state leaders, including Sorensen, selling USC
and South Carolina is an exercise in peddling the
future.
It means proselytizing about future jobs, yet-to-be
created companies and research that might exist only in
lab notes.
That puts Sorensen and his vice president for
research, Harris Pastides, in the pulpit.
It’s a new role for university leaders, who over the
years mostly watched while the state’s politicians and
business leaders worked to create jobs.
Pastides thinks it’s a natural fit.
“Flagship research is not about the Ivory Tower. It’s
about Main Street,” Pastides likes to say.
The country’s use of technology is increasing, he
said. But “that doesn’t mean every research park in the
country is going to make it. All you do is put a sign up
and hope you can fill it.”
But Pastides believes Columbia will make it and
Innovista will make it. He and Sorensen tell that to
every researcher and industry head they get on the
university’s plane to recruit, every congressman who
will listen and every Rotary Club that will have them.
USC’s previous work will go a long way toward
long-term success, Pastides said.
Top USC scientists have been working for years on
fuel cells and related issues such as hydrogen
production and storage.
When the NSF four years ago created the country’s
only industry-university center for fuel cell research
at USC, the university’s “mission picked up momentum
like a snowball rolling downhill,” said professor John
Van Zee.
“When Dr. Sorensen arrived, he saw the potential, and
the snowball got bigger,” said Van Zee, who first
proposed the NSF center.
The school also now can hire researchers who are
stars in their fields, thanks to $30 million set aside
by state lawmakers each year since 2003. The money pays
for endowed chairs, which includes higher salaries for
professors, the salaries of the professor’s research
teams, expensive equipment and new labs.
State money, too — $70 million in bonds so far — is
going toward USC’s buildings. Richland County and the
city of Columbia are paying more than $30 million for
two parking garages.
Going up at the corner of Blossom and Assembly
streets, in the Horizon Center complex, are two of the
five buildings planned so far for Innovista.
The 125,000-square-foot academic building will house
USC researchers in alternative fuels as well as in
chemistry, engineering and nanotechnology. It will be
home to NSF’s fuel cell center.
The other building is for USC’s industry partners.
It’s being built with private money by Craig Davis, who
developed N.C. State University’s Centennial Campus in
Raleigh.
The academic building also will house an incubator
for start-up companies. EngenuitySC, a nonprofit
dedicated to spurring a knowledge-based economy in the
Midlands, is using a $1 million federal grant to create
the incubator, complete with lab space.
Pastides appreciates the help.
It’s mission-critical, he said — that kind of lab
space simply isn’t available elsewhere at USC.
BUMP IN THE ROAD
Some folks are anxious that things aren’t going
faster for USC.
People in Columbia are impatient, said Davis, the
N.C. developer, “but everybody has just got to calm
down. It will all happen. It is just taking a little bit
of time.”
There was a bump in the road late last year, though.
A big bump.
USC thought it had a home run in Project Genesis.
Officials say they were well on their way to landing an
unnamed Fortune 100 information technology company when
the company backed out.
Business conditions were forcing the business to lay
off thousands nationwide, Sorensen said. A company
officer told Sorensen that company leaders couldn’t
announce layoffs on Monday, then turn around Tuesday and
say they were investing millions in a Columbia facility.
The deal was incredibly close to happening, said John
Lumpkin, a Columbia real estate consultant who was
interim director of Innovista at the time. “The
transaction was done, a lease was negotiated.” The deal
was headed to the company’s board for “the final Good
Housekeeping seal.”
Genesis was to occupy nearly all of Davis’ building,
which was being designed specifically for the company.
The enormity of the deal might have led USC to put
too much emphasis on the project.
“Our regular Tuesday morning Innovista meetings
became 90 percent about Genesis,” Pastides said.
He said he worried then about neglecting other
prospects.
“But there was just no time — this was so big.
Basically, the prevailing attitude was, get this one,
get the big kahuna, and others are gonna drop,” Pastides
said.
Genesis became a lesson learned.
“The thing that I learned from that is that we don’t
go fishing with one pole,” Sorensen said.
They had worked on Genesis for more than a year.
One of the biggest lessons has been the need to
manage expectations. “We had a team meeting, and we
recognized that we let Genesis get too far out ahead of
us, and expectations got too high,” said USC’s financial
officer, Kelly. “When that failed, it crushed (us).”
Since Genesis, John Parks, with the University of
Kentucky since 2004, joined USC as executive director
for Innovista and associate vice president for economic
development.
Pre-Parks, the recruitment of possible Innovista
tenants was coordinated by Lumpkin and split largely
between Lumpkin, Davis, Sorensen, Kelly and Pastides.
Lumpkin gets credit for steering the team through a
learning curve. “There wasn’t a recipe,” he said. “We
didn’t open up a cookbook, and say, ‘OK, recipe No. 4,
let’s go cook up a research knowledge economy.’”
Part of why USC went out and got Parks, Pastides
said, was to become more focused on corporate recruiting
and to learn from someone who has been doing it.
“Nobody in the country has a book on how to do that,”
Pastides said.
Sorensen, as he has been, will continue to be
involved personally in much of the recruiting.
PROSPECTS
Word about Innovista is spreading, and Sorensen talks
to prospects that are fuel cell-related and those that
are not.
And not all the prospects want to lease space from
Davis.
“I had a CEO and a vice president for financial
affairs of a company that wants to build a
110,000-square-foot building in Innovista,” Sorensen
said.
Recently, he met with a fuel cell manufacturer. “I’m
talking to people all the time,” he said.
Davis has an office and a team of four in Columbia,
plus a project manager who comes in regularly from
Raleigh. Davis said he spends two to three days a week
on Innovista, mostly on recruiting.
“There are over 20 prospects that I call real
prospects, not suspects, that we are working closely
with,” Davis said.
Pastides and Parks both talk about the need to follow
up with prospects every day. Success doesn’t come
overnight, they say.
“I think you are always thrilled to hit a home run,”
Parks said. But “sometimes it can take two to three
years to get from the initiation of a project to getting
a presence.”
The hydrogen and fuel cell piece of Innovista,
especially, is a long-range proposition.
The S.C. Hydrogen and Fuel Cell Economy Strategy,
crafted in 2005 by scientists and state business,
university and community leaders, lays out a 20-year
plan.
It calls for landing the first hydrogen and fuel cell
companies between now and 2010. Growth would accelerate
from 2011 to 2015, bringing 2,000 to 3,000 new jobs and
40 to 50 new companies.
Between 2016 and 2025, the state should have a mature
industry, with 8,000 to 12,000 jobs and an equal number
of supply-chain and secondary service jobs.
Those connected with Innovista frequently cite
Harvard professor Michael Porter’s comment about
reinventing South Carolina’s economy: “This is a
marathon, not a sprint.”
But things are going well, USC officials say. There
are a lot of prospects, Parks said.
“When I got to Kentucky, I hit the ground standing,”
he said. There was no activity. Only inertia. He had to
get things going.
“Here, I liken it a little more to hopping on a
galloping horse,” Parks said.