The Chronicle of Higher Education
Date: December 1, 1995
Section: Business & Philanthropy
Page: A43
Reprinted with permission
Robert M. Hunter:
Montana State U. is "willing and able to provide services that are absolutely integral to our surviving."
(Rob Outlaw photo)
By Goldie Blumenstyk
Bozeman, Montana -- The trick in attracting high-technology companies to this university community is simple, says Dixie F. Swenson, executive director of the Gallatin Development Corporation. When people come to check out the town, she says, "I give them a lot of free time."
Those who take that time soon discover the breathtaking mountain scenery, the pristine spots for hiking, fly fishing, and skiing, and the rustic Main Street of a small downtown where locals smile at strangers and the first parking meter has yet to mar the streetscape.
They also discover Montana State University, an institution of 11,000 students with an enormous interest in putting its resources behind local entrepreneurs and small companies that are oriented toward research and technology.
This mixture of beauty, charm, and scientific competence is proving potent. A decade ago, only about a dozen high- technology companies were in Gallatin County. Today, according to Ms. Swenson's economic-development organization, there are 45, each employing anywhere from two to 250 people. Several of the companies are commercializing ideas developed by the university.
This won't send tremors through the Silicon Valley or the Research Triangle. But in a state with a smaller population than the city of Phoenix, the economic and intellectual impact is appreciable.
Lee Spangler, a Montana State chemist, says the high-tech presence has enlivened scholarship by putting professors in closer touch with those from other disciplines and with corporate scientists who collaborate on industry-related research.
And the jobs the new companies bring have helped to stem a "huge brain drain,"says Robert J. Swenson (no relation to Dixie Swenson), the Montana State vice-president who oversees research. To find work, he says, college graduates have been leaving the state.
Most of the new businesses in Gallatin County have located in or near Bozeman. Some came for the university's special know- how. Bozeman Bio-Tech Inc., for example, is working to commercialize a Montana State idea for using bacteria, rather than chemicals, to protect seeds from fungi-induced rot. The company, founded by Montana State graduates, has sponsored more than $50,000 in related university research in bioscience and agriculture.
Another company, Pharmagenesis Inc. of Palo Alto, Cal., has just established a division called EcoPharm to work with Montana State's renowned plant pathologist, Gary Stroble. With him, EcoPharm's four employees -- all Montana State graduates -- are investigating whether microbes associated with plants can be developed into drugs.
The high-technology boomlet owes a lot to the region's appeal. University leaders, however, say that the institution has attracted companies in its own right. Research areas with the greatest promise include optical technology, biological alternatives to chemical insecticides, and biofilms -- an emerging field focusing on the properties of bacteria that are embedded in surfaces of things like pipelines and medical devices.
Montana State has also been aided by a federal program known as EPSCOR, or the Experimental Program to Stimulate Competitive Research. It helps institutions in states that have not, historically, received a lot of federal grants to compete for them. Since 1979, Montana has received more than $13-million under EPSCOR -- making it one of the program's most successful participants. Most of that went to Montana State.
The university is adopting policies on consulting (and renting out scientific equipment) to encourage companies to collaborate with it while protecting its own interests.
Its efforts so far have earned it the gratitude of company owners and entrepreneurs.
"They have equipment that is not commercially available in Montana," says Robert M. Hunter, co-owner of Yellowstone Environmental Science Inc. "They are willing and able to provide services that are absolutely integral to our surviving."
Yellowstone leases space in a university-affiliated office park next to the campus. It has rented equipment from Montana State and contracted with professors for research.
Mr. Hunter, who is also president of the Gallatin Valley Technology Alliance, a group that supports businesses, says he earned more money as an environmental engineer in Los Angeles and the Bay Area. But he and his wife decided "to get away from the craziness of California in the '70s" for the sake of their young sons. His wife is the company president. They chose Bozeman because it was the closest university town to his in-laws' Idaho cabin, where they too can enjoy the outdoors.
Some company employees came for similar reasons. One is "a fisherman and a hunter who works here when he has time," jokes Mr. Hunter, who himself enjoys hiking, prospecting, and fishing.
Yellowstone develops environmental technologies, including a new technique for extracting gold and silver without using toxins. After 14 years, the company barely breaks even; most of its income comes from grants awarded by various federal agencies under the competitive Small Business Innovation Research program.
Without the university, says Mr. Hunter, his company could not fulfill the program's research requirements. Yellowstone has paid about $20,000 in consulting fees and rent for university equipment, including facilities at the Center for Biofilm Engineering.
Larger companies also rely on Montana State for research. One, ILX Lightwave, operates out of a new, 22,000-square-foot plant where the lunch room offers a view of the nearby Hyalite Peaks. ILX, which employs 46 people, develops and assembles electro-optical measurement instruments used in laboratories.
Founded 10 years ago as a one-man operation, the company initially depended on the university for equipment and for the consulting services of professors and students. Now, it is one of two companies that sponsors a new center at Montana State, known as Optec, that studies light and energy.
As an Optec sponsor, ILX can work closely with university researchers, including Mr. Spangler, the chemistry professor, in chemistry, engineering, and physics. The center's overall annual research support totals $800,000 and involves four professors (soon to be eight) and 35 students. Lawrence A. Johnson, the president of ILX, calls that a good return for his $50,000 sponsorship, even though the company doesn't control the research.
For example, ILX, which wants to develop quieter circuits for its laser-driven instruments, has talked with a Montana State graduate student whose research relates to such circuits.
Mr. Johnson says having a nearby resource for research was an essential element of his early business planning. While still living in Minneapolis, he used family vacations to scout out locales in the West, such as Boise, Colorado Springs, and Missoula, where he could hike, climb, camp, and ski. "We only went to places that had a university."
On a visit here, the Gallatin Development Corporation put him in touch with university officials. Ultimately, he says, he chose Bozeman because of the life style, the presence of other technology companies, its good airline service, and Montana State's strength in physics and engineering. He didn't consider the university a research powerhouse, but he says that didn't matter then, and doesn't now. "If we went to M.I.T. with our $50,000, they would swallow it without a hiccup. Here it creates quite a stir."
Another Optec sponsor, Scientific Materials Corporation, counts on university scientists to help it determine how crystals absorb energy. Its crystals, used in lasers, are sold to research laboratories and universities worldwide. The company has 11 employees; of the nine who are college graduates, seven attended Montana State.
If not for the researchers at Montana State, says Ralph L. Hutchison, the founder and president, "we'd have to have eight to 10 Ph.D.'s on the staff, which would break us instantly. And we'd only use them for 10 per cent of the time."
Despite their reliance on each other, the company presidents and university officials all say they are careful to keep the university from becoming a mere research arm of the companies. Some Optec research is designed "to answer the basic science questions" that affect the development of their products, says Mr. Spangler, the chemistry professor. But the work is also valid university scholarship.
Optec does, at times, perform non-scholarly work for its sponsors, as well as for other companies. A few months ago, Optec professors and students helped Scientific Materials evaluate some new crystals it was growing under a contract for Wright-Patterson Air Force Base. But Mr. Spangler says that he keeps those efforts to a minimum and that students understand that such projects "might help buy some of the equipment they need to do their work."
"It's like being a good neighbor," says Mr. Spangler. Besides, if research sponsors are impressed by Montana State's work, it might lead to more grants for the university, he says. "Everybody wins."
Administrators, too, are eager to attract more research sponsors. The university had $36-million in grants and contracts in 1994-95, mostly from federal sources. It wants to raise that total to $50-million by 1998, with a larger share coming from private sources.
It is even trying to make its next-door office park, the 90- acre Advanced Technology Center, more attractive to companies by offering gym privileges and campus parking to employees who work there.
Montana State got on the university "research park" bandwagon in the 1980s, only to discover, as did many other institutions, that such developments are hardly sure-fire winners. Only a few acres of the office park have been developed, and many of the tenants and property owners have no research orientation and no tie to the university.
The lesson from that, says Roger Flair, the director, is that "people are not going to come to Montana because they know land is available." But he points to two of the park's tenants as examples of a more realistic model.
One is EcoPharm, the pharmaceutical-company division that employs Montana State graduates and is now talking with large drug companies about other collaborations that could eventually lead to additional research-oriented jobs.
The other is BioSurface Technologies, a four-person company that has licensed university inventions conceived at the Center for Biofilms and is now marketing two products based on them.
University officials say they also expect to attract new companies with a planned $10-million expansion of its Plant Growth Center, financed largely with federal money that the university acknowledges is "pork." The center will include a quarantine area -- one of only two in the country -- for weed-killing organisms imported from abroad. The center could prove attractive to agri-businesses that might reproduce and sell the organisms found to be safe.
Attracting companies will remain a goal. But Mr. Spangler has an even more ambitious objective. Mindful that Bozeman lost jobs after some start-up companies were bought out, he envisions the day when companies are so dependent on Montana State expertise that, "even if these companies get purchased, they stay here."
That goal is important to the Bozeman economy, he says. "I think it's an attainable one."