Accelerating Technology-Based Entrepreneurship

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					Accelerating Technology-Based Entrepreneurship




         Complete report available via the web at:
   www.angeloueconomics.com/clients/orlandoreports.html
Consultant Team: Angelou Economic Advisors   IC2 Institute   M+W Zander
CONTENTS
 CONTENTS                                                                                               2000
                                                                  ACCELERATING TECHNOLOGY-BASED ENTREPRENEURSHIP




        introduction                   1

                       assets for entrepreneurial growth   6

                                               case studies                      18

                                                                    challenges                26

                                                                                      recommendations   32




M   E   T          R       O          O       R      L        A    N    D        O
                                                                                   INTRODUCTION

 Metro Orlando is rich with education and training assets,         Metro Orlando also has considerable challenges to accelerated

 exceptional entrepreneurial support organizations, established    technology-based growth that include:

 technology industries, and examples of successful and globally
 competitive entrepreneurial initiatives. The challenge is to      •   Regional, national, and international perception of the region

 leverage and to augment these critical resources to                   only as an entertainment center and not as an emerging

 successfully exploit existing and new-to-the-world technologies       center for technology-based entrepreneurship

 for the benefit of the region’s small, mid-sized, and large       •   Building the University of Central Florida into a nationally

 companies. How the region organizes to incubate, fund, and            prominent university in areas of science and engineering

 grow technology-intensive companies will, in large part,              critical to the “new economy”

 determine the region’s ability to create high value jobs and      •   Lack of identified venture and angel capital

 sustainable growth.                                               •   Lack of a broad, deep, and knowledgeable workforce for
                                                                       technology venturing

 Metro Orlando’s assets to foster and accelerate technology-       •   Educating the region’s “smart” private and public infrastructure

 based growth include:                                                 (e.g., banking/finance, legal, international and regional and

 •   Knowledgeable champions and mentors                               state government) to the needs of Metro Orlando’s

 •   Experienced and focused entrepreneurial support                   entrepreneurs

     institutions and activities                                   •   Challenges in recruiting, training, and retaining world-class

 •   Globally competitive technology-based industries                  technical talent, senior and mid-level management, and

 •   University and federally funded centers of R&D excellence         entrepreneurs

 •   Technology incubators and a world-class research park         •   Lack of a high tech entrepreneurial community of critical mass

 •   University and college technology education and training          and diversity

     programs focused on critical technologies and technology      •   More effective networking and leveraging of Metro Orlando’s

     venturing/entrepreneurship                                        entrepreneurial academic, business, and government assets

 •   Orlando International Airport                                     toward a focused strategy and vision of accelerated
                                                                       technology-based growth


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                               1
                                                                                            INTRODUCTION
The opportunity is for Metro Orlando to leverage regional assets          development; and alliance building (see Figure Two) — this
of business and academic institutions that generate science and           report focuses on the economic development strategies of new
technology and regionally-based public and private agencies that          firm development and alliance building, and includes
are fostering technology-based entrepreneurship.                          recommendations to:


The vision is for Metro Orlando to transition into a world-class          •    Target fast-growth new economy companies and work to
technology-based, entrepreneurial economy while maintaining its                accelerate their growth
strong tourism industry and to become – within 10 years - one of          •    Foster innovative entrepreneurial and technology
the top five U.S. regions for successful technology                            commercialization strategies
entrepreneurship, Figure One.                                             •    Foster technology spin-outs from academic, business, and
                                                                               government sectors
For Metro Orlando to achieve the stated vision, the region needs
                                                                              Figure One: Path to Becoming a Leader in
to focus on creating a regional business and educational
                                                                                    Technology Entrepreneurship
context that cultivates and accelerates the growth of
home grown technology companies.                                                                                    capital
                                                                                                        talent                 educational
This report emphasizes two key points: (1) Global
                                                                                                                               excellence
competition for the recruitment of technology-based
companies is becoming increasingly fierce among
                                                                                                          Nationally                know-how
communities, nationally and globally, and (2) Regions
                                                            What are the next steps?                 recognized center
that are successful in facilitating the rapid growth of                                                for technology-
home-grown technology firms will experience                               Challenges?
                                                                                                     based wealth and
                                                                                                                                   markets
unparalleled wealth and job creation.                                                                    job creation
                                                             Orlando 2000
While there are four main strategies of technology-based                                                                      technology
regional economic development — company relocation;
                                                                                                        Orlando 2010
company retention and expansion; new firm

                                                            source: IC2 Institute, The University of Texas Austin

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                      2
                                                                                    INTRODUCTION
•   Recruit entrepreneurs and innovative start-ups to Metro           of an infrastructure that links four key factors (1) talent—people,
    Orlando through targeted marketing efforts                        (2) technology—ideas, (3) capital—financial resources and (4)
•   Encourage collaboration on targeted strategies for                know-how—enterprise knowledge for new and rapidly growing
    technology-based growth among key champions in                    firms to be competitive in emerging and new-to-the-world na-
    academic, business, and government sectors                        tional and global markets. Furthermore, the rapid expansion of
•   Develop national and global alliances and partnerships            web and Internet-based economies makes it increasingly impor-
    centered on technology transfer and venturing                     tant to establish business, academic, and regional government
•   Build on experience by creating “learning laboratories”           alliances with national and international partners to facilitate the
    within the community to test new ideas for fostering              national and international access to talent, technology, capital,
    successful technology-based entrepreneurship                      and know-how.


Figure Three on the next page highlights critical components to       Report Overview and Organization
achieving accelerated technology commercialization through
leveraging academic, business, and government resources at            Qualitative and quantitative data and information were collected
the regional level. Central to this process is the establishment      from multiple sources for this report. Interviews and focus
                                                                      groups were conducted with more than 60 industry and aca-
                                                                      demic leaders during on-site visits to Metro Orlando. Throughout
                   Figure Two: Four Strategies for Technology-                    the report, quotes from local entrepreneurs, venture
                          Based Economic Development                              capitalists, and technology executives are included
     Company                       Company                      New Firm          to provide insight into community opinions on
     Relocation                   Retention and                Development        entrepreneurship. In addition, archival data was
                                   Expansion
                                                                                  collected on Metro Orlando and other emerging
                                                                                  and developed technology growth regions in the
                                                                                  U.S. such as Austin, TX; Charleston, SC; San
                           Institutional Alliances
                                                                                  Diego, CA; Raleigh-Durham, NC; and Richmond,
                  for Leveraged Economic Development
                                                                                  VA.
    source: IC2 Institute, The University of Texas Austin

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                3
                                                                                                                  INTRODUCTION

The report begins by providing an overview of key Metro                                           Following the examination of regional assets, the report

Orlando assets for accelerating entrepreneurial growth and                                        presents six entrepreneurial case studies that were selected

achieving status as one of the top five regions in the U.S. for                                   to show the breadth and potential of existing Metro Orlando

technology-based job and wealth creation. These assets                                            entrepreneurial technology-based ventures. Several are

include existing technology expertise, entrepreneurial support                                    targeted as near-term Initial Public Offerings (IPOs) while

structures and activities, existing public/private partnerships for                               others exemplify the range of entrepreneurial activity and

technology promotion, targeted academic programs in the                                           challenges currently existing in Metro Orlando.

region’s university and colleges, the Central Florida Research
Park, and Orlando International Airport.                                                          The report then describes challenges to accelerating
                                                                                                  entrepreneurial growth and achieving world-class status as a
                                                                                                  region creating wealth and jobs though technology-based
                                                                                                            growth. These challenges center on recruiting,
Figure Three: Critical Components for
 Technology-Based Entrepreneurship                                                                          training, and retaining world class talent; the lack of a
                                                                                                            technology-based entrepreneurial tradition in Metro
                                        s m a ll, m id -s iz e d , a nd
                                                                                                            Orlando; leveraging and networking regionally-based
                                           la rg e co m p a n ie s
u n ive rsitie s , c o lle g e s ,                                          s ta te a n d re g io n a l     entrepreneurial training; and the lack of Venture and
      h ig h sc h o o ls                                                         g o v e rn m e n t         Angel Capital.
                                             C o m m u n ity

                ta le n t            te c h n olo g y         c a p ita l        k n o w -h o w             The report concludes with an overview of the
                                                                                                            importance of regional and targeted cooperation
                                         M a rk e t n e ed :
                  e s ta b lis h e d , em e rg in g , a n d n e w to th e w orld                            and networking and presents eight strategies for
                                                                                                            TAKE-OFF – or accelerating the success of
                                                                                                            technology-based entrepreneurship in Metro Orlando.
                                                  F a st-g ro w th                                          These recommendations and strategies are targeted
                                                  te c h n olo g y
                                                  c o m p an ie s
                                                                                                            to:


 source: IC2 Institute, The University of Texas Austin
IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                                           4
                                                                     INTRODUCTION
•   Build and celebrate spectacular entrepreneurial success
•   Strengthen regional collaboration
•   Enhance venture, angel, and other sources of capital
•   Develop and sustain a globally competitive workforce
•   Develop education, training, and research programs
    centered on technology commercialization and
    entrepreneurship; support the University of Central Florida’s
    initiatives to secure legislative funding for staff, buildings
    and equipment to become a major national research
    university
•   Enhance Internet connectivity and bandwidth
•   “Lead the Pack” with innovative entrepreneurial initiatives
•   Economic Development Focused on Technology
    Entrepreneurship


The Appendix provides quantitative and qualitative
benchmark comparisons of Metro Orlando with other
emerging technology regions in the U.S. The objective is to
show how Metro Orlando ranks according to such criteria as
workforce and education, business climate, quality of life,
Internet connectivity, and entrepreneurship.




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.        5
                                                                                                             ASSETS
Assets for Accelerating Entrepreneurial Growth
 Metro Orlando has a lot in common with other U.S. regions         High Tech in Central Florida
 known for fostering and accelerating technology-based                    4,750 Companies (6.8% of all companies)
 entrepreneurship. Many of the support structures found in                69,960 Employees (8.3% of workforce)
 highly successful communities – a major research university              $40,300 Average Salary
 and strong college system, technology business incubators
 and innovation centers, and established technology companies      As of 1999, the average wage for high tech workers in Metro
 – are also present in Metro Orlando. These assets place           Orlando is approximately $40,300, more than $10,000 higher
 Metro Orlando in good position for accelerated entrepreneurial    than the average wage of $27,782. While tourism is a major
 growth. This section provides an overview of select and key       industry in Metro Orlando, on average these jobs pay $18,000
 (not all) assets for accelerating technology-based                per year. Such jobs do not keep the “best and brightest” talent
 entrepreneurial growth for Metro Orlando to achieve the stature   in Metro Orlando.
 of one of the top five U.S. regions for technology-based job
 and wealth creation.                                              Metro Orlando’s technology base includes:


                                                                   High Tech Services - 2,170 companies, 20,670 employees
 The Current State of Metro Orlando’s
                                                                   Telecommunications – 520 companies, 16,480 employees
 Technology Base
                                                                   Software/Multimedia – 1,370 companies, 12,380 employees
                                                                   Computer Equipment - 700 companies, 6,180 employees
 Historically Metro Orlando was built on a strong economic base
                                                                   Defense – 10 companies, 5,170 employees
 of agriculture, tourism, and entertainment. Beginning in the
                                                                   Electronics - 164 companies, 3,880 employees
 early 1990s Metro Orlando began to develop its technology
                                                                   Semiconductor - 18 companies, 2,640 employees
 industry base largely through recruitment of companies and
                                                                   Medical Equipment - 91 companies, 1,920 employees
 talent.
                                                                   Aerospace - 30 companies, 630 employees


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                          6
                                                                                                                ASSETS
  Asset One: A world-class laser and optics industry                 indirect jobs (Report on Florida’s Laser and Optics Cluster,
  (www.floridahightech.com)                                          Florida High Tech Corridor Council, Inc., Spring 1999).


  Metro Orlando is particularly strong in two industries:            Optics and Lasers Research, Education, and Training.
  photonics (lasers/optics) and simulation/training. The region’s    Central Florida is a national leader in optics and laser research.
  strength in these areas is derived from advanced research          Together, the University of Central Florida (UCF) and University
  centers at The University of Central Florida (UCF), The            of South Florida (USF) have 71 optics research faculty that
  University of South Florida (USF), and the presence of major       annually conduct between $12-15 million in sponsored
  Lockheed Martin facilities and talent. Lasers and optics and       research. UCF’s Center for Research and Education in Optics
  associated technologies as applied to telecommunications           and Lasers (CREOL) and School of Optics is the focal point for
  (photonics) are viewed as an especially important industry,        Florida’s optics cluster. 75% of UCF School of Optics Faculty
  research, and education niche for Metro Orlando to achieve         hold the rank of “Fellow” in major national and international
  world-class status. Photonics is predicted to provide the          professional societies.
  technical solutions to expanding bandwidth and the industry is
  expected to grow rapidly in the next decade.                       Historically, many Florida optics companies have spun-out from
                                                                     large optics manufacturers such as Lockheed Martin
  Central Florida is one of four preeminent U.S. clusters in laser   Electronics and Missiles (with 20 surviving spin-outs since 1965
  and optics, with extensive activity in industry, research,         (Schwartz, 1993). Since 1990 16 company spinouts have been
  education and training, and an established workforce. There        started by, or with the assistance of, UCF and USF faculty. This
  are 106 laser and high-tech optics companies and three             number is predicted to increase with the recent launch of UCF’s
  industry organizations in the 13-county Florida High Tech          Industrial Incubator. In addition, Central Florida’s Optics and
  Corridor Region. These companies generate over $2.2 billion        Laser Cluster realizes important synergies with Florida’s
  in annual revenue and represent every segment and product          Biomedical, Microelectronics, and Aerospace Clusters with
  area of the optics industry. They have an annual impact of         such product technologies as surgical, dental, and cosmetic
  over $4 Billion in Florida, supporting over 41,000 direct and      lasers; electronic instrumentation; navigation and
                                                                     communications systems; and laser radar.


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                7
                                                                                                            ASSETS
Asset Two: Central Florida Innovation Corporation                 To attain its mission CFIC carefully selects entrepreneurs and
President, Richard Fox (www.cfic.org)                             technologies, from local industry and universities and from
                                                                  other states (such as Minnesota, California, New Hampshire),
The Central Florida Innovation Corporation (CFIC) was             that have the best potential of fast growth and successful IPOs.
launched in Metro Orlando’s Central Florida Research Park in      CFIC works to shorten the learning curves of these
1995 with funding from both public and private organizations.     entrepreneurs and quickly get them through the start-up phase
Initially CFIC’s annual operating budget of $925,000 was          to successful launch and accelerated growth. This is
provided in about equal thirds by local industry, government,     accomplished through (1) high tech business mentoring, (2)
and academia. As planned, CFIC is no longer receiving             intensive and target training and team building, and (3) regional
government support. CFIC has a staff of 19 with 7 former          and national networking.
executives from high tech companies and 6 MBA students from
UCF. CFIC and its associated companies also rely on a know-       CFIC Support Activities and Outreach Programs:
how network of about 16 volunteer and experienced attorneys,
accountants, bankers, and marketing consultants.                  Angel Network provides funding and introductions to potential
                                                                  client executives, board members, and investors.
CFIC acts as a key catalyst to accelerate the growth of a re-
                                                                  Emerging Business Network (EBN) facilitates networking and
gionally based community of high tech entrepreneurs and start-
                                                                  provides hands-on mentoring and advice through the volunteer
up companies. CFIC locates and targets the most promising
                                                                  support of community business leaders. Outreach programs
technologies and entrepreneurs and works to accelerate firm
                                                                  include a pro bono pool of consultants and professionals,
growth. The objective is to build wealth and high value jobs in
                                                                  business consulting, monthly investor forums, Technology After
Metro Orlando. As stated by CFIC President, Richard Fox,
                                                                  Dark Plant Tours, and a newsletter Innovation Highlights.
“Success for us is to have higher priced and locally registered
cars, not more cars, on the Interstate.”
                                                                  Success Solutions (in cooperation with Valencia Community
                                                                  College). CFIC reviews over 50 entrepreneurial projects/month
CFIC’s goal is to enhance Metro Orlando’s economy by
                                                                  and over 90% of these projects are incomplete or incorrect.
building and strengthening high growth potential
                                                                  Success Solutions, a seven-week sequential course, was
technology-based businesses.

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                         8
                                                                                                             ASSETS
developed to provide beginning entrepreneurs and emerging          In fall of 1997 Triton Network Systems, Inc. (high bandwidth
start-up firms the opportunity and tools to better define and      fixed-wireless radios) received $14.4 million in venture financing
refine their business strategies.                                  with Oak Investment Partners as lead investor. In December
                                                                   1997, MILCOM completed negotiations with Lockheed Martin
Other CFIC networking and information gathering opportunities      and Thermo Coleman Research for the transfer of advanced
include the Venture Forum, Innovation Club, and the MIT Club       video processing technology into Paralogic Holding Company
of Orlando. For example, on October 13, 1999 CFIC and the          that was merged into MILCOM’s second portfolio company,
Florida Venture Forum organized the 4th Annual Innovation          TeraNex, Inc. In the fall of 1998, MILCOM recruited Mike Baron
Showcase & Capital Conference sponsored by law, investment         (formerly an Executive Vice President of Sony Corporation) as
and professional firms, and media sponsors. The forum              TeraNex’s CEO. TeraNex was capitalized by venture capital
featured 16 regionally-based technology and entrepreneurial        outside of Florida because at the time there were no ‘value
presenters.                                                        added’ early stage institutional investors in the state. TeraNex
                                                                   has demonstrated the effectiveness of MILCOM’s business
Asset Three: MILCOM – Military Commercial                          model as compared to many other companies engaged in the
Technologies, Inc.                                                 spinout of defense company divisions and military products.
CEO and Founder, Mike Buffa (www.milcom.net)

                                                                   In June of 1998, MILCOM moved from Tampa to Orlando,
Military Commercial Technologies, Inc. (MILCOM) is a for-profit    Florida and soon after developed a relationship with Theseus
company that focuses on identifying and defining unique de-        Logic, Inc. (semiconductor technology originally developed at
fense products that solve specific commercial problems. The        Honeywell) and launched Centerpoint Broadband Technologies
task of matching a dominant military technology or several         (Lockheed Martin advanced modem technology) in early 1999.
technologies to an appropriate commercial product is a cre-        In December 1999, MILCOM announced the formation of its
ative, iterative process that includes extensive interviews with   fifth start up company, Interpretive Information Systems LLC
industry leaders and potential commercial customers. Since its     (IIS, LLC), as a joint venture with EC-Leasing, a Russian
founding in 1997, MILCOM has developed six companies with          software development and computer leasing company. The
an aggregate value of approximately $1 Billion.                    ISX software product, developed in Russia is based upon
                                                                   customer requirements within Russia. These requirements

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                           9
                                                                                                        ASSETS
                                                              The four organizations comprising the CFTP are all community
 included operating back level IBM Operating Systems on the
                                                              assets in themselves. Two organizations in particular, CFIC and
 latest IBM technology.
                                                              the Florida High Tech Corridor Council, have high tech as their
 Asset Four: Central Florida Technology Partnership           sole mission.
 (CFTP)
 (www.cfic.org/central florida technology.htm)                The Florida High Tech Corridor Council (FHTCC) was formed
                                                              in 1996 as a result of a collaboration between UCF and the
 This partnership was created to better improve regional
                                                              University of South Florida in Tampa. One of the primary goals
 coordination of technology promotion activities. Four
                                                              of the FHTCC is to support high tech development and actively
 organizations comprise CFTP:
                                                              market a geographic region that closely tracks Interstate 4. The
 •   Greater Orlando Regional Chamber of Commerce             Corridor begins in the Tampa Bay area, spans Metro Orlando,
 •   Economic Development Commission (EDC) of Mid Florida     and reaches to Daytona Beach and Florida’s Space Coast.
 •   Florida High Tech Corridor Council, Inc.
 •   Central Florida Innovation Corporation                   The Corridor is unique because it unites high tech companies
                                                              with educational and governmental leaders and economic
                                                              development professionals. Members of the FHTCC share the
 CFTP sponsors six roundtables that focus on the following
                                                              common goals of attraction, retention, expansion, and
 technology sectors:
                                                              promotion of the high tech industry.
 •   Modeling Simulation & Training
 •   Semiconductor Industry
                                                              The FHTCC is one leg of the Technology Partnership. Together
 •   Information Technology
                                                              with the Chamber, the EDC, and CFIC, the FHTCC targets
 •   Lasers and Optics
                                                              technology-based economic development for Central Florida.
 •   Film and Entertainment
 •   Defense and Aerospace
                                                              Asset Five: University and College Resources


                                                              Education and training for the knowledge-based economy and
                                                              world-class research in emerging technology areas are central
                                                              to the growth and sustainability of an area as a high-tech region.
IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                     10
                                                                                                                ASSETS
 While technology-based research in targeted areas of excellence     UCF has built strong partnerships with technology-based
 is key to having assets to build upon, continuing education and     industry in Florida’s High-Technology Corridor – including
 training in a range of technological, business, professional, and   Cirent, Lockheed Martin, Schwartz Electro-Optics, Harris,
 cultural areas is also fundamentally important to a region’s        Oracle, and Honeywell - to help generate the intellectual capital
 technology-based growth. The following discussion centers on        that will fuel the region’s knowledge-based, wealth-producing,
 three important research, education, and training assets of Metro   and job-creating industries.
 Orlando: The University of Central Florida (UCF), Rollins
 College, and Valencia College.                                      While UCF has yet to become a top ranked university in terms
                                                                     of educational and research excellence, there are considerable
 The University of Central Florida (www.ucf.com)                     research and education assets to build on such as Optics and
 The University of Central Florida (UCF) began classes in 1968       Lasers, Simulation, and Materials and in emerging areas of
 with an enrollment of 1,948 students. As of 1999 the total          concentration for the university including Computer Science and
 student population was 31,247 with projections to grow to 45,000    Information Technology, and Biotechnology. Perhaps most
 to 50,000 within 10 years. The university offers degree             importantly, UCF has built considerable education and research
 programs in six colleges: Arts and Sciences, Business               assets by being entrepreneurial and market driven. This can-do
 Administration, Education, Engineering and Computer Science,        spirit has been built out of necessity and over the years UCF
 Health and Public Affairs, and Honors.                              has successfully partnered with business and other regional
                                                                     institutions to build and sustain quality programs and facilities.
 UCF’s Sponsored Research Award Activity totaled $36.6 million       Still, major funding and building challenges exist and must be
 in 1998 and $37.6 million in 1999. The majority of 1999 funding     overcome before UCF completely develops top ranked and
 (43%) came from Federal grants with 22%-35% coming from the         world-renowned education and research programs. Still major
 State of Florida and 35% coming from the private sector and         funding and building challenges exist and must be overcome
 other sources. There were 229 awards totaling $13 million from      before UCF can develop top ranked and world-renowned
 the private sector in 1999. A major goal of UCF is to become a      education and research programs.
 Research I Institution (as judged by the Carnegie Foundation)
 and this is to be achieved by being fully engaged in the
                                                                     “Because of scarce resources from the State, the only way
 economic and social development of the Central Florida Region.

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                             11
                                                                                                                  ASSETS
UCF could grow was to be entrepreneurial, market driven,              of Fellow in major national and international professional asso-
and responsive to industry needs.”                                    ciations.


                                                                      Approximately 100 interdisciplinary graduate students are
UCF’s Center for Research and Education in Lasers and Optics
                                                                      currently earning Master’s and Doctoral Degrees in Optics at
(CREOL) - (www.creol.ucf.edu/index.html)
                                                                      UCF. CREOL benefits from 25 faculty members and 25
                                                                      doctoral-level research scientists, and $35 million in state of the
CREOL is a unique resource offering Orlando an important
                                                                      art equipment. External research recently included $11 million in
advantage in competing with other national and international
                                                                      grants and contracts (and state funds), including more than
technology regions. As one of the top three universities in the
                                                                      $1.6 million from private industry. CREOL’s partnering
country with graduate programs in lasers and optics, and the only
                                                                      activities include:
school of optics in the country, UCF’s CREOL is a world-class
                                                                      •   An industrial affiliates program of approximately 30
leader in both research and education.
                                                                          companies
                                                                      •   Involvement in seven SBIR grants
CREOL is an excellent example of the beneficial outcomes,
                                                                      •   About 300 industrial visitors a year
which can occur from forward-thinking public policies. The State
                                                                      •   Creation of several spin-off companies including BEAM Inc.
of Florida Legislature originally appropriated 16 faculty positions
                                                                          and LaserSight
to UCF explicitly for experts in optics. This decision not only
                                                                      •   Active involvement in the development of Crystal Photonics,
demonstrated the long-term commitment of the state to the
                                                                          Inc. (also a spin-off company), the operation of a new
optics field, but also permitted the center to grow to its current
                                                                          Orlando location for Laser Energetics
size relatively quickly.
                                                                      •   Establishment and financing of start-up company Optical
CREOL is an internationally recognized institution with more than         Diagnostics, Inc.
25 nations represented among students, staff, faculty, and
visiting scholars. CREOL faculty hold a variety of leadership         Institute for Simulation and Training - (www.ist.ucf.edu)
positions in professional societies for optical and laser sciences    UCF’s Institute for Simulation and Training (IST) is the largest
and engineering, and more than half of the faculty hold the rank      concentration of simulation and training expertise in the world.


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                              12
                                                                                                                   ASSETS
Founded in 1982, IST is internationally recognized for quality        specific clients. IST has assisted the Navy in identifying and
research in simulation technology and advancement in training         determining the applicability of commercial PC gaming
systems. The Institute occupies 38,000 square feet of laboratory      technology for pilot warfare skills and tactical thinking. This
and office space in the Central Florida Research Park. Within         evaluation was driven by both cost and effectiveness issues.
walking distance are The Army Simulation, Training and
Instrumentation Command, Naval Air Warfare Center Training            IST possesses a unique combination of expertise in distance
Systems Division, and Air Force Agency for Modeling and               learning, curriculum management, and web-based instruction.
Simulation. Many of the 100+ simulation and training companies        Institute researchers have produced a wide range of advanced
in the Metro Orlando area also are located nearby.                    simulation and training applications with an increasing number
                                                                      oriented to real-time training in a distributed learning
IST research domains focus on Interoperability, Computer              environment. Derivative applications from IST’s military work
Generated Forces, Virtual Environments, Computer Graphics,            also include new training efforts in civilian emergency
Training and Education, New Simulation Environments, Human            management and simulating medical casualties. Another IST
Factors, and Information Technology. Interdisciplinary research       program has served as prototype for teaching endoscopic
staff come from computer science, engineering, psychology,            surgery techniques through virtual reality. IST has entered into a
education and instructional design, and military science.             partnership with two counties to conduct research on a county
Proximity to UCF also provides IST with graduate and                  fire safety program for communities and schools. As part of this
undergraduate students who work on projects while completing          work, IST will model and simulate such catastrophic events as
degree requirements.                                                  tornadoes, hurricanes, and train wrecks to train emergency
                                                                      response professionals for dealing with such crises. With the
IST’s budget in 1998-1999 was approximately $7.5 million —            growing public demand for well-managed crisis teams, IST’s
approximately one-third was provided by the federal                   work could eventually be used in training already underway on
government, one-sixth was derived from contract and grants            crisis management at community colleges.
overhead, and one-fifth was from private industry while the
                                                                      “The simulation industry grew out of military training needs
remainder came from State and local funding sources. Being at
the forefront of military simulation research and applications, the
majority of IST’s work is defense-related and custom-built for

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                 13
                                                                                                              ASSETS
– then everyone focused on simulation because of its                and the SBDC. The Incubator has been approached by
impact on the quality and cost of training. When bandwidth          possible tenant companies from Alabama and is home to one
becomes high enough to support more advanced                        international tenant company – the Scottish Technology and
applications – when we find ourselves hooking our                   Research Center.
surround-sound and video to our loungers - that industry
will be ready for launch.”                                          Rollins College (www.rollins.edu)
                                                                    Rollins College was founded in 1885 as the first college in
                                                                    Florida. U.S. News and World Report (1999) ranks Rollins the
Business and Technology Development Center (BTDC). UCF’s
                                                                    #1 regional university in Florida and the #2 regional university
Business and Technology Development Center (BTDC) has
                                                                    in the South. Rollins has 1,500 students from 40 states and
6,000 sq. ft. or 25 offices for tenant companies. Only in
                                                                    other nations. The Crummer Graduate School of Business,
operation for six months, all but one of the available 24 offices
                                                                    established in 1957, focuses entirely on graduate business
are already reserved. The entire complex of 12,000-sq. ft.
                                                                    education and features national and global business
includes CFIC’s offices and the Small Business Development
                                                                    internships. Rollins’ MBA Program has ranked in the top 25 of
Center (SBDC) which occupies 4,000 sq. ft. Rent is a $1 per
                                                                    all part-time MBA programs in the U.S. Exceptionally qualified
sq. ft. per month on a one-year renewable lease.
                                                                    students participate in internships with Metro Orlando
                                                                    technology companies and entrepreneurial organizations such
BTDC accepts only high tech companies that submit an
                                                                    as MILCOM. The newly dedicated Bush Executive Center
acceptable business plan, have reasonable financial projections,
                                                                    houses executive education classes in Entrepreneur and
and have an exit strategy. Tenant companies can participate in
                                                                    Enterprise Management and the Global Alliance for Business
all the services offered through CFIC such as Success Solutions
                                                                    Education. Its Harward Center for Entrepreneurial Studies
(the seven step entrepreneurial training program), the Emerging
                                                                    works with professionals interested in starting their own
Business Network, Technology After Dark networking activities,
                                                                    business as well as those working entrepreneurially in existing
and Venture Forums. BTDC also has cooperative agreements
                                                                    public and private organizations.
with the Seminole Community College Incubator that accepts
non-technology intensive start-ups.
                                                                    Valencia Community College (http://valenica.cc.us)

BTDC receives most tenant company referrals from CFIC, UCF,
IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                           14
                                                                                                                         ASSETS
 Regional community colleges (Valencia, Seminole, Brevard,                  ♦ Senior management and entrepreneurial team programs
 Lake/Sumpter, Volusia, and Polk) are quite active in training              ♦ Industry development programs
 programs like “school to work” and other grants that involve both          ♦ Career and outplacement programs and Internet based
 teachers and students in K-12 systems. The Tech-4 (Bindell)                   networks
 project is a good example of gathering these entities along with
 The University of Central Florida and the University of South              Valencia’s Technology Innovation Center was organized to
 Florida (USF) into a forum to provide an industry introduction             provide innovative productivity management and career
 and opportunities for teachers and students to have internships            development programs through business linkages and public/
 and for adjuncts to teach specialized topics. Valencia sponsored           private partnerships. Through a network of operating
 Educator Forums talk about education issues and the Industry               companies, consultants, and clients, the Center conducts
 Forums talk about industry issues, such as job/skill levels. The           programs to: (1) build local management and employee
 objective is to bring educators into the industry environment and          competence, and (2) provide training resources with a focus on
 business people into the education environment and to integrate            technology based skills. Industry specific programs that
 both to recognizing each others needs resources, needs, and                respond to the specific needs of companies within industry
 practice.                                                                  groupings are conducted to enhance the visibility of key Central
 ________________________________________________________________________   Florida industry groups and to promote collaboration in joint
 “The HOT economic area is Valencia’s region of Orange and                  ventures in product, marketing, and production programs.
 Osceola Counties and unless we recruit the K-12 students                   Valencia’s Central Florida Free Enterprise Virtual Resource Site
 our output will not supply growing industry needs.”                        [http://choices.valencia.cc.fl.us] is for those starting a business,
                                                                            expanding an existing business, or commercializing an
                                                                            innovation. Success through collaboration is seen by Valencia
 Valencia Community College is the 4 largest of Florida’s community
                                       th
                                                                            Community College as an increasingly important strategy to
 colleges with over 50,000 students enrolled for credit, professional       retain the flexibility and innovation of smaller organizations while
 and adult education, and conferences and seminars.             It is the   capturing the benefits of larger scale operations.
 fastest growing community college in Florida and it enjoys a 95%
 job placement for graduates of “Associate in Science” degree
 programs. Valencia features:

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                      15
 _________________________________________________________________________
                                                                                                                        ASSETS
 “Valenica’s contribution to sustaining Metro Orlando’s                      training centers, technology centers, multi-story office
 technology-based entrepreneurship will continue with our                    complexes, and a Memorial Cancer Institute. The Park is well
 involvement in the Success Solutions Workshops,                             equipped with telecommunications infrastructure with four fiber
 membership on CFIC’s Board of Directors, special                            optic cables in the park including one for the Department of
 entrepreneurial projects, and supplying the “Middle”                        Defense and two for UCF. Complete build-out will occur in 6-8
 workforce to Orlando’s new businesses.”                                     years.
 ________________________________________________________________________
                                                                             Companies may either purchase or lease fully permitted and
 Asset Six: Central Florida Research Park                                    developed sites. Park tenants that own their facilities include:
 (www.orgs.ucf.edu/research/park)
                                                                             ♦   Siemens Westinghouse
 The Central Florida Research Park (CFRP) is one of the 10                   ♦   Invivo Research
 largest in the world as measured by either size (acres) or                  ♦   American Electroplaters and Surface Finishers Society
 employees and is acknowledged as one of the top ten research                ♦   Raytheon
 parks globally (World Trade Magazine). The CFRP has                         ♦   Hayes Research Center
 assimilated the entrepreneurial characteristics of its host                 ♦   Hewitt Associates
 institution, UCF, and has catered to the industry clusters of               ♦   Silicon Graphics
 Central Florida.                                                            ♦   OCWEN Management Center
                                                                             ♦   UCF Institute for Simulation and Training
 The Orange County Research and Development Authority                        ♦   AT&T Wireless
 directs the CFRP as a tax-exempt public land developer that                 ♦   Naval Air Warfare Center/Training Systems Division, Army
 uses revenue bonds to finance its growth. Today, the CFRP is                    STRICOM
 approximately 50% occupied (2.8 million sq. ft vs. an eventual
 build out of approximately 6 million). Within the 1,027-acre                Key selling points for potential clients are: interaction with UCF
 research park, there are 38 buildings, 90 organizations, and 75             in particular the simulation and training cluster, CREOL and the
 companies with industrial and laboratory space, 700 hotel                   optics cluster, and computer science talent. Central Florida’s
 rooms and related commercial activities. CFRP also contains                 weather and lifestyle also help attract companies to the Park.

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                     16
                                                                                                                  ASSETS
 Asset Seven: Orlando International Airport and being                local convention facilities. Furthermore, Metro Orlando
 an International Tourist Attraction                                 convention facilities, hotels, restaurants, and ground
                                                                     transportation facilities built to efficiently accommodate and
 Few regions in the world have an airport facility and daily flow    transport tourists are tremendous assets to facilitate regional
 of national and international visitors equal to Metro Orlando.      technology-based growth.
 This world-class facility also allows for excellent and frequent
 one-stop access to other technology regions in the U.S. and
                                                                     1
                                                                         Some 20,800 Central Texans sell, build, or assemble products for

 abroad. As technology-intensive businesses become linked            Dell – the region’s largest employer. In 1999 Dell added 5,800 to its

 worldwide through the Internet, efficient air travel access is      workforce. To build one Optiplex desktop computer, suppliers ship

 increasingly important to executives and employees. In the          about 80 parts from around the world to Central Texas. Dell has

 rapidly emerging “go-direct” e-commerce, global economy             been the world leader in streamlining and minimizing each step in

 having faster and most economical transportation connections        the build-to-order E-Commerce model, but one factor they can’t

 is a critical asset for transporting products as well as talent.    control is transportation. Since 1997 Dell has reduced time to build a

 The continued growth of Austin-based Dell Computer, for             desktop computer from eight to three hours. Dell has more than

 example, rests on continually enhancing the company’s               1,000 trucks/day coming in and out of Austin rated the most

 innovative just-in-time/go-direct business model. 1 In short,       congested mid-sized city in the U.S. Dell spends more on freight

 globally competitive air and ground transportation is key to the    than manufacturing (Austin American Statesman, 3/17/2000).

 continued success of many 21st century companies and
 emerging Internet-based business models.


 Metro Orlando can build on its international recognition to
 market its strengths as they relate to the lifestyle and business
 needs of technology entrepreneurs. Metro Orlando academic
 and business sectors and local entrepreneurs and start-up
 companies have access to numerous and world-class industry
 conferences and trade shows occurring on a weekly basis in


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                17
                                                                                      CASE STUDIES
 Entrepreneurial Case Studies
Case examples of actual start-up companies can pinpoint            The MILCOM-formed management team came from Northern
strengths and weaknesses of a particular region’s ability to       Telecom, Ericsson, Texas Instruments, and Lucent. MILCOM
foster entrepreneurial and “spectacular successes” serve as        seeded Triton with $1.6 million in 1997 and the start-up currently
valuable role models and magnets for other entrepreneurs.          has two additional MILCOM investors from New York: LS
Principals in six Metro Orlando start-up companies were            Communications and Patricof & Co. Ventures. Subsequent
interviewed to better understand the perceived assets and          venture funding was raised out-of-state, including $14.4 million
challenges to starting and growing a technology-intensive          from Silicon Valley venture capital firms including Oak, Advent,
business in Central Florida.                                       Bessemer, and Stanford University followed by second round
                                                                   funding of $28M and a third round that raised $50M. The
                                                                   company’s last round of financing prior to going public was
Case Study One: Triton Network Systems Inc.                        completed at a $100+ million post-money valuation.
www.triton-network.com
Triton Network System’s - “Fiber Optic Cable in the Sky” –         A recent issue of Red Herring recognized Triton as a top 50
leading-edge technology based on missile radar, was                company and Telecommunications Magazine picked Triton as a
transferred from Lockheed Martin, Missiles & Fire Control by       “1999 Hot Pick to watch.” When Triton went public in July 2000,
MILCOM in 1997. Triton may well be “first to market” with a        the company produced several new millionaires in the Orlando
revolutionary price/performance proposition that is poised to      community. A company goal is to produce $200 million revenue
change the face of metropolitan networks. Invisible FiberTM        and 900 jobs within 5 years.
Internet provides broadband fixed-wireless products in
consecutive point networks with the ability to offer affordable    Lessons Learned
100 Mpbs Internet access to targeted market segments for           Triton Network Systems (and the following case of TeraNex) are
bandwidth intensive applications such as video streaming, large    excellent examples of local entrepreneurial support
file transfers, and real-time interactive collaboration. The       organizations, primarily MILCOM and CFIC, working to launch
technology was initially tested in Disney World and is currently   and grow spectacular start-up success in Metro Orlando. The
being used by Advanced Radio Telecom Corporation (ART) of          level of quality support Triton received may be atypical of what
San Jose, CA.                                                      most entrepreneurs, and would-be entrepreneurs, can expect in
IC Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.
  2
                                                                                                                                 18
                                                                                         CASE STUDIES
the region. Triton is a “spectacular success” which should           configurable to perform a variety of real-time video processing
serve as a role model for local entrepreneurs as well as help        functions, and it supports existing and emerging applications
“put Orlando, Florida on the map” as an emerging player in           without requiring new hardware. Because real-world digital video
technology entrepreneurship.                                         problems can be addressed by software rather than redesigned
                                                                     hardware, the possibility of obsolescence is reduced.
Case Study Two: TeraNex
www.teranex.com                                                      TeraNex’s first family of products, digital TV format converters,
TeraNex provides video and film conversion, compression and          are designed for television broadcast stations, cable operators,
encoding tools for customers in the digital television, broadband,   in-house production facilities and post-production studios. One
Internet, and digital camera markets.                                TeraNex technology enables a particular DTV format to be
                                                                     converted in real time to another DTV format. Another
Business Focus                                                       application provides an efficient method for converting entire
Digital pictures are becoming the preferred and predominant          libraries of entertainment, sports, and other programming to a
data type in the converging Internet, broadband, film, and           DTV format for both U.S. and foreign use. TeraNex
television industries. Manufacturing digital equipment that can      management and investors believe the company’s products are
process video in real-time – forward, backwards, and sideways        the only real-time digital video equipment with sufficient flexibility
– from any HDTV format to any other puts TeraNex technologies        and power to solve current and future digital video computing
in the middle of an important emerging industry cluster.             requirements.


The original military video-processing platform had 4,000            Operations in Metro Orlando
microprocessors on a single PC card and was based on                 MILCOM hired an interim CEO to run the company until Mike
technology originating with Lockheed Martin Missiles and Fire        Baron was recruited from Sony Corporation where he served as
Control. Enhancements to the underlying technology were later        Senior Vice President of the Business Systems group. Other
acquired from Thermo Coleman Research and led to the                 executives were recruited from Lockheed Martin, Digital Video
TeraNex implementation of 150,000 microprocessors in a box           Systems, and Sony. The principal technologist served as Vice
the size of a personal computer. The technology is re-               President of Engineering for Editing Machines and as Vice
                                                                     President of Software at Media Cybernetics. The company uses

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                               19
                                                                                       CASE STUDIES
 a PR/Marketing firm from New York. Most of the technical           talent regionally and nationally. As noted, while this level of
 employees have been hired out of the Orlando defense               quality support is atypical of what most Metro Orlando
 community and the majority of non-technical employees have         entrepreneurs might expect to receive, achieving “spectacular
 been hired from out-of-state due to a lack of local sales,         success” will lead to a “halo effect” for Metro Orlando that will
 marketing, and financial talent. TeraNex currently has             benefit other local entrepreneurs and regional “smart
 approximately 25 employees with an average wage of $75,000.        infrastructure.”
 The company rents a 12,000 square foot facility in Orlando.
                                                                    Case Study Three: Leapfrog Smart Products
 With the support of MILCOM, Teranex raised an initial round of     Leapfrog Smart Products specializes in designing the core
 approximately $9 million from out of state venture capitalists     architecture and software programming of smart cards and
 and Metro Orlando-based angels. The company was                    develops a variety of smart card applications, many of which
 capitalized with venture capital from outside Florida because at   involve biometric identification.
 the time there were no ‘value added’ early stage institutional
 investors in the state. BancBoston Capital has been and            Business Focus
 continues to be an ardent financial supporter of TeraNex and       Founded in 1996 in Ocala, Florida this company has been R&D
 Lockheed Martin’s Orlando facility also became an investor.        driven using talent recruited from Orlando-based Hughes and
 The company’s business plan is based on annual revenues in         Raytheon. The company has concentrated on developing a credit
 excess of $100 million, an employee staffing level of              card with a microprocessor which allows the card to store data
 approximately 500, and an average wage above $40,000.              and, once programmed, to be used in many different applications.
 Market conditions permitting, TeraNex anticipates an IPO in        Smart cards can store one’s medical records, identification
 Fall 2000.                                                         information, security codes, or just about any type of information.
                                                                    A typical credit card holds 100 bits of data while smart cards can
 Lessons Learned                                                    now store upwards of 1 million bits. Smart cards, used extensively
 As an anointed potential “blockbuster” company, TeraNex was        in Europe since the 1970s, provide data portability, security and
 able to secure the best available support services from            convenience.
 MILCOM, CFIC and others in Metro Orlando and to attract top


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                               20
                                                                                         CASE STUDIES
Leapfrog’s first commercial application was aimed at security
                                                                       China. This joint venture agreement, which stipulates that
for RV parks. Subsequently, single applications have been
                                                                       Leapfrog will be the exclusive developer of smart card
developed and sold for timeshares, transportation systems,
                                                                       applications in the venture, is predicted to provide upwards of
membership clubs and businesses, record keeping, facility
                                                                       $200 million in revenues to Leapfrog over a five-year period.
access systems, conventions, and medical records.
                                                                       Having survived on roughly $6 million in private financing from
Increasingly, Leapfrog has designed cards with multiple rather
                                                                       family and friends for the first four years. Leapfrog went public
than single applications. In addition, the company has moved
                                                                       in February 2000 through a reverse acquisition of a public
into variations of smart cards such as “smart patches” which
                                                                       company shell. The company is now publicly traded with the
can be attached to clothing (a child’s backpack, training jackets
                                                                       symbol, FROG.
for battlefield situations) for tracking and access control. Major
applications are developing in Internet security, identification for
                                                                       Lessons Learned
distance learning and testing, and customer transactions.
                                                                       Leapfrog Smart executives consider Metro Orlando an
                                                                       outstanding locale in which to do business. According to
In 1998, Leapfrog was awarded a Phase I SBIR contract with
                                                                       Leapfrog’s chief technology officer, UCF’s engineering school is
the Navy to identify an economical method for identification,
                                                                       in the top ten percent nationally. And the city’s convention and
verification, and certification of individuals in distance learning
                                                                       tourism business has helped Leapfrog establish contacts and
exercises. This project has proven the feasibility of biometrically
                                                                       build important relationships. Several examples were cited in
verified access control that will yield substantial benefits not
                                                                       which Leapfrog personnel attended conventions related to
only in distributed learning but also in other areas requiring
                                                                       current or prospective products, and where important contacts
identity authentication. Leapfrog is now in Phase II of the SBIR
                                                                       and potential clients were able to visit Leapfrog while attending
award. The company has two patents pending.
                                                                       a convention in Orlando.

Leapfrog currently employs 36, but the company expects to hire
additional personnel in the near future. A medical facility is
implementing a major project that will provide medical records
on a smart card for its 13,000 patients and in March, Leapfrog
signed an agreement to provide smart card products and
expertise to a major customer in the People’s Republic of

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                21
                                                                                      CASE STUDIES
Case Study Four: YouKnowBest.com                                   Lessons Learned
www.youknowbest.com                                                For YouKnowBest.com, senior talent has been recruited from
YouKnowBest.com is a consumer product/evaluation/purchase          other technology centers in the U.S. while local talent has come
site that sells reports and custom studies to product              from the defense industry and NASA. As qualified technologists
manufacturers and e-commerce partners. The company makes           and managers are in short supply in all major and emerging
money from commissions on purchases of products made               U.S. high-tech regions, Metro Orlando’s technology start-ups
through the site. The company’s CEO and Chairman came to           have somewhat of a competitive advantage by being “magnets
Orlando to launch his start-up, after serving as a General         for the best and the brightest” employees from the regions more
Manager at Microsoft. The company operates in Celebration,         traditional technology firms.
Florida where the CEO lives with his family. A major reason for
locating in Disney’s planned community of Celebration is that
the office buildings and homes were wired to facilitate fast and   Case Study Five: Distributed Simulation
easy Internet connections.                                         Technology Inc. - www.simulation.com
                                                                   DiSTI is a leading provider of technical training in the field of
YouKnowBest.com was developed through a close working              Distributed Simulation and also provides a range of research,
relationship with CFIC. The firm has hired marketing expertise     consulting, and software development services in the
from a New York-based firm and venture capital from Denver,        development of distributed simulation applications.
Colorado. The company’s CEO is at times frustrated with Metro
Orlando service providers’ lack of knowledge about how to best     Business Focus
support local technology entrepreneurs - that Metro Orlando        Founded in 1994 by three former faculty members of the
service providers are not in tune with the needs of an early-      Institute for Simulation and Training, DiSTI’s first and most
stage, funded technology company. As he stated, “People            successful business ventures have been its’ simulation based
here don’t appreciate the difference between an entrepreneur       training classes for managers and engineers from military
with an idea and one who has received early stage funding.”        organizations and contractors. DiSTI has trained hundreds of
                                                                   engineers, managers, and other technical staff from companies,
                                                                   universities, and government organizations around the world.
                                                                   DiSTI’s premier products are its training classes on the DMSO


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                22
                                                                                      CASE STUDIES
 High Level Architecture (HLA) and Distributed Interactive         Expansion in Metro Orlando
 Simulation (DIS). DiSTI has a new course offering, “Military      Since its founding in 1994, DiSTI has grown from the original
 Simulation, Techniques & Technology”, which is designed to        three partners to a staff of approximately 15. Overall, the firm’s
 bring new technical staff members into the simulation world.      partners agreed that Metro Orlando and especially the UCF
 These classes have become the most widely attended in the         Research Park has been an excellent location for the firm.
 industry. Many are three days in length and priced at $1100-      DiSTI depends on the talent it attracts from UCF’s computer
 $1900. Teaching occurs at the DiSTI site, which consists of a     science and EE departments. The firm is especially pleased
 simulation network comprised of Silicon Graphics and Intel        with the quality of UCF’s students.
 based workstations.
                                                                   While business has been stable, based on a variety of personal
 DiSTI personnel also perform engineering development,             and business considerations, the partners are currently deciding
 requirement analysis, contract labor support, on-site support,    whether to remain essentially the same size or grow the
 and proposal bid services on practically any simulation-related   company appreciably. Company management indicated that
 support need. In 1998, DiSTI was awarded a Phase II SBIR          the Orlando region needs more support mechanisms for small
 contract with the Air Force entitled “Automated Player Control    technology companies, e.g. overall business strategy, how to
 Station.” As a result of this research, DiSTI has created GL      deal with venture capitalists, networking with others, and help
 Studio, the newest and most advanced way to create                with writing business plans. According to the firm’s founder, the
 interactive 3D graphics, instrumentation and innovative user      company falls through the cracks of local support mechanisms.
 interfaces for training, simulation and virtual prototyping. GL
 Studio was released to the commercial market during the first     Lessons Learned
 quarter of 2000.                                                  DiSTI is not likely to be a blockbuster IPO because of its
                                                                   technology and market niche and therefore the firm is not likely
 While DiSTI offers training and other services on several         to be targeted by key local support organizations like MILCOM
 commercial products and to commercial clients, the large          or CFIC. And because of DiSTI’s technology orientation, the
 majority of its work and customers are defense-related.           company does not feel the SBDC staff have much expertise to
 Customers have included Motorola, Hughes Training, Northrop       offer the firm. DiSTI management, however, was not aware of
 Grumman, and Singapore Technologies.                              the full range of support and networking opportunities in the

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.
                                                                                                                                   23
                                                                                       CASE STUDIES
region, such as the “Success Solutions” training offered by          IHatch.com looks for talented, experienced and motivated
CFIC and Valencia Community College. Because there is a gap          entrepreneurial teams of smart people whose companies have
between what business support services (for technology               the potential to become at least $100 million valuation
intensive firms) are perceived to be available and what is           companies within 5 years. The firm provides teams with
actually available, the key lesson from this case is that            assistance in teambuilding and recruiting, operational guidance
additional marketing and informational materials need to be          and support, and brand building and marketing. As an
provided for Metro Orlando firms as they evolve from successful      individual whose businesses were created and operated
start-ups to deciding how to best proceed with accelerated           primarily outside the Orlando region, the firm’s founder has
growth.                                                              established national and international contacts that can be
                                                                     accessed to benefit the companies in which he invests.
Case Study Six: IHatch.com
www.ihatch.com                                                       IHatch.com investments in the Orlando region include:
IHatch.com provides capital and other services for seed stage        ♦ MILCOM—preferred equity investment in January 2000.
and early stage companies in the areas of e-commerce,                ♦ Theseus Logic—preferred equity investment in February
communications, software, information services, and application         2000.
services. As a virtual incubator, IHatch.com’s investments have
been made both within Orlando and outside Florida.                   Investments outside the region include:
                                                                     ♦ Halfbrain.com—specializing in productivity applications on
Business Focus                                                          the web which are part of a new generation of software
IHatch.com was created, and is operated, by an entrepreneur             applications, built on and with web technology
who moved to the Orlando region. Although his background             ♦ Mantra Communications—a Washington, DC-based
was in the restaurant industry, computers and communications            privately held Internet software company building products
have long fascinated the founder. His private investment                to deliver Quality of Service (QoS) for Internet services and
philosophy is to invest from $250,000 to $1 million in seed stage       E-business applications
ventures, $1 million to $3 million in early stage ventures, and as   ♦ StructuredWeb—a provider of free, database driven web
appropriate in later stage and mezzanine rounds.                        site and e-commerce systems for small businesses



IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                             24
                                                                  CASE STUDIES
♦ CoolSavings.com—leading online direct marketing service
   that attracts consumers with the opportunity to save money
   when they shop and enables advertisers to target them
   with personalized offers. CoolSavings was a spring 2000
   IPO led by Hambricht and Quist
♦ Bungo.com—a start-up company focusing on enabling
   individuals and groups to exchange information anytime,
   anywhere in several different applications such as LiveMail,
   file storage, bookmarks and galleries


In addition to providing personal financing, IHatch.com
anticipated raising $20-25 million in the spring of 2000, with
approximately half of that being invested in new early and
seed stage companies. Longer-term, the company intends to
establish a $100 million technology fund.


Lessons Learned
The founder of IHatch.com can live anywhere in the world and
chooses to live in Metro Orlando. He is not a native but
believes Metro Orlando is a “great community” blessed with a
family orientation, an international airport, a very good
university, outstanding international name recognition, and an
excellent convention center.




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.     25
                                                                                            CHALLENGES
Challenges to Entrepreneurial Growth
                                                                     _________________________________________________________________________
Challenge One: Recruiting, Training, and                             As one recent arrival with a “proven track record” stated,
Retaining World-Class Talent                                         “the lack of local talent is no problem, if I need marketing
                                                                     or legal talent I go to New York, Boston, or California to hire
A challenge that is currently faced by all emerging and              it – I secured my own venture capital out of Silicon Valley.”
established high tech regions is being able to attract, train, and   _________________________________________________________________________
retain adequate numbers of technologically-skilled workers.
This includes entry-level workers as well as technologists;          It is planned that the “spectacular venture successes” of a few
production, marketing, and sales professionals; and mid-level        select entrepreneurs will provide crucial role models and a
and senior management. The battle for the most qualified             “magnetic draw” for those that follow. Metro Orlando also
employees and managers is fierce and each community works            benefits from having many technically qualified personnel from
hard to market its unique assets. Additionally, Metro Orlando’s      regionally based defense industry and entry level employees
public and private sectors are working to find better ways to        from Orlando’s entertainment sector. However, according to
train those who live in the region but who currently do not have     several respondents, recruiting high tech labor to Metro Orlando
the needed skills to be hired by technology intensive firms.         is more difficult than one might think. While the entertainment
                                                                     sector brings in thousands of new workers and many highly
Metro Orlando has benefited from the in-migration of a few key       qualified people visit the region with their families, high tech
and exceptional senior level entrepreneurial talent and              workers often desire a different lifestyle and a broader range of
technologists. Many of these “seasoned” entrepreneurs have           cultural offerings than are currently present in Metro Orlando.
gone outside of Metro Orlando to recruit needed talent and to
hire specialized high tech service providers and to obtain           “There is concern about “the next job” in the area if the
venture capital.                                                     position with the recruiting company doesn’t work out and
                                                                     in two career families finding an exciting career
                                                                     opportunity for the spouse.”



IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                  26
                                                                                            CHALLENGES
At least some local entrepreneurial role models mention the lack      “Politicians at the state and local level don’t really
of adequate cultural and entertainment amenities (e.g., non-          understand what we are all about – the public and private
tourist oriented entertainment as well as opera and ballet) to        sectors are all focused on entertainment/Disney as THE
attract and hold “the best and brightest” technologists and           only draw. When they try and recruit venture capital
entrepreneurs from the East and West Coasts and other high            companies they talk entertainment and recreation. VC
tech regions in the U.S. and abroad. Disney entertainment is          people are not concerned with their/your golf game.”
seen to be “manufactured, top down, and corporate” and not            ___________________________________________________________________________
particularly conducive to fostering creativity and innovation and
                                                                      Metro Orlando does have targeted and useful entrepreneurship
the type of energized entrepreneurial environment found in San
                                                                      training programs such as the “Success Solutions” series
Francisco, New York, Boston, and Austin.
                                                                      offered by CFIC in collaboration with Valencia Community
                                                                      College. UCF includes Entrepreneurship as one of five MBA
“What is perceived by national and international tourists as
                                                                      degree specializations, including such classes as
a vast “playground” is in reality a cultural void.”
                                                                      Entrepreneurship, Creative and Innovative Management,
Associated with the challenge of recruiting and retaining talent is   Business Evaluation, and working at the Small Business
the lack of a critical mass of high tech companies to facilitate      Institute. However, UCF’s undergraduate business curriculum
professional security and career development for entrepreneurial      contains only one course on entrepreneurship. Rollins
talent and their spouses. The existing high tech talent in Metro      College’s Crummer Graduate School of Business and its
Orlando is considered to be “all spread out and there is little       Haward Center for Entrepreneurial Studies teach
knowledge of what the “other guy is doing.” Entrepreneurs are         entrepreneurship for the public and private sectors to masters
trying to do things, to get together, but some feel that the public   and executive students. Both UCF and Rollins College provide
sector does not back their efforts. According to one                  student interns for the regions leading “technology incubators” –
entrepreneur, public officials devote more attention to the tourism   MILCOM and CFIC. And Valencia Community College has
industry than high tech.                                              senior management and entrepreneurial team programs,
                                                                      industry development programs, and career and outplacement
                                                                      programs. But more needs to be done and can be done to
                                                                      facilitate the training and re-training of Metro Orlando’s existing


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                    27
                                                                                            CHALLENGES
and yet-to-be-discovered entrepreneurs. Given the extreme              As recently as 1983, Texas was best known globally through
difficulty in recruiting talent from other technology regions in the   movies like Giant, TV shows like Dallas, and the Dallas
U.S., training homegrown talent including managers and                 Cowboys. Certainly few businesspeople or technologists
professional support staff looms as an increasingly important          thought of Austin as successfully recruiting high tech talent from
and continuing challenge.                                              Silicon Valley and Boston. Indeed in the 1950s and 1960s
                                                                       neither Palo Alto/Sunnyvale, CA or Route #128 in Boston, MA

“Here we recruit from Lockheed Martin and they are coming              were recognized as leading centers of wealth and job creation

from a different corporate culture – they ask about our                through technology-based entrepreneurship.

pension programs and don’t understand stock options,
                                                                       “Politicians at the state and local level don’t really
they have “green days” when they expect to get off for
                                                                       understand what we [entrepreneurs] are all about – the
working overtime.”
                                                                       public and private sectors are all focused on entertainment/

“I tell potential employees to forget about whether we have            Disney as the only draw. When they try and recruit VC

a 401k plan because they will become rich if we succeed.”              companies they talk entertainment and recreation.”


                                                                       “The pace of the Internet is so much faster than the pace of
Challenge Two: Re-Branding Metro Orlando                               the community.”
Metro Orlando is best known – nationally and internationally –
as the home of “The Mouse.” Families come from all over the            Another key factor in the re-branding will be the elevation of
world to visit Disney theme parks and related entertainment            science and engineering programs at UCF to levels of national
venues. The world’s leading corporations and professional              prominence. Additional numbers of nationally and internationally
associations regularly hold their annual conventions in Metro          known faculty, outstanding research results at major confer-
Orlando. The region is not known as a center of                        ences, and an increasing number of quality Ph.D. graduates in
entrepreneurial success and for building wealth and jobs               leadership positions in companies will be an important factor in
through technology-based entrepreneurship.                             changing the region’s image.


Re-branding regions is nothing new in the world of high tech.


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                 28
                                                                                            CHALLENGES
Metro Orlando is growing technology-based high paying jobs,          currently go outside of the region — to Silicon Valley, Boston,
but there has been little wealth generation outside of VC funds      New York, and Atlanta — to secure needed VC funding.
raised – the challenge is to have early and spectacular “wins.”      _________________________________________________________________________
As witnessed in the more established high tech communities of        “Money has come from real estate folks and not from
Silicon Valley, Boston, and Austin, the momentum driving             “retired” money – VC money in other states will only look
entrepreneurship increases with every local success. The             outside for Blockbuster Companies – we need something
challenge for Metro Orlando is to harness the excitement             like “Orlando Ventures, Inc.” as an aggregator of funds –
created with its first big successes (or initial public offerings)   but several others have tried this and all have failed.”
and to spread the news regionally, nationally, and globally.         _________________________________________________________________________
Building a “buzz” around the first successful IPOs will catalyze     “There are NO real VCs in Florida” – the money people
the drive in others in Metro Orlando to “get on board” and to        don’t really understand risk and what we are trying to do –
assist and service other local start-up companies and to             where $100 million can be invested despite there being
accelerate their growth. And the region will be increasingly         many failures – but after a few wins others learn and get
known as a nationally and internationally recognized center of       valuable experience.”
technology-based wealth and job creation.
                                                                     Based on a series of interviews with entrepreneurs, angel
Challenge Three:                                                     investors, and venture capitalists along the I-4 corridor and
Venture Capital and Financing                                        including Tampa, the following conclusions are offered:


“Metro Orlando has as many high tech start-ups as Austin,            •   There is a diversity of opinion among venture capitalists
but less venture capital than Wyoming.”                                  regarding investment opportunities in the Metro Orlando
                                                                         region.
Metro Orlando currently lacks identified venture and seed
                                                                     •   The majority contend that Florida and Orlando have great,
capital. Furthermore, regional banks are not educated to the
                                                                         indeed “unbelievable,” deals and excellent valuations. This
general financial and related support needs of technology-
                                                                         is attributed to a long history of defense and NASA funding
intensive start-up companies. Accordingly, most of the
                                                                         and regionally based R&D intensive corporations such as
region’s lead entrepreneurs (the role models for the future)

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                  29
                                                                                          CHALLENGES
    Lockheed Martin and IBM. The result is an agglomeration of         The Orlando area and Florida more generally are viewed
    talent and technology in Metro Orlando, Titusville,                positively in terms of not only available talent and
    Melbourne, and Lake Mary.                                          technology, but also because of the ample retirees from the
                                                                       Midwest and Northeast who live in the area. These retirees
•   There is also a minority view that contends that Orlando
                                                                       serve on company boards and supply needed talent and
    does not present many investment opportunities especially
                                                                       funding.
    when compared to such “comparable” regions as Northern
    Virginia, Dallas, Atlanta, or even South Florida. The main     Numerous retirees in Orlando are accredited investors and
    reason for this observation is that Orlando is still too       have amazing contacts in New York and Silicon Valley.
    dependent on tourism and that many of the locally generated    •   The Florida State Pension Fund allocated funds to the
    technologies do not offer near-term commercialization              Cypress Fund, which was created by Enterprise Florida.
    opportunities because they originate from defense R&D.             The $30+ million fund is administered by New York fund
•   There is a diversity of opinions about valuations. Some            manager Abbott Capital that invests the funds into individual
    believe regional valuations are generally excellent, while         venture funds. The venture capital investment opportunities
    others believe the financiers are being too demanding given        are not restricted to Florida opportunities and are expected
    their control of state funding.                                    to be based on late stage opportunities and not economic
                                                                       development initiatives.
•   Lack of venture capital is not as crucial an issue for Metro
    Orlando companies which are founded by well known              •   State government policy appears to be changing to (1)
    entrepreneurs with established “track records” — the               incentivize venture capital firms to locate within the state; (2)
    designated “blockbusters” — as it is for the less                  place more of an emphasis on venture capital investments
    “spectacular” regionally-based firms.                              in distressed and disadvantaged areas; and (3) emphasize
                                                                       private incubators and private mechanisms for assisting
•   There is confusion and a general lack of information about
                                                                       entrepreneurs, rather than public entities. Accordingly, there
    local sources and availability of venture capital.
                                                                       will be more emphasis on tax credits and other indirect
                                                                       approaches rather than direct intervention mechanisms as
                                                                       in the past.



IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                              30
                                                                                                    CHALLENGES
                                                                            ________________________________________________________________________
•   After many years of working to enlist the state pension fund
                                                                            •   CAPCO funding can be supplemented with other investment
    into venture capital investments, the state retirement system
                                                                                capital as there is no prohibition about co-mingling of CAPCO
    has allocated a portion of funds to alternative investments
                                                                                and non-CAPCO funds. One CAPCO, for instance, has $31
    and has hired several money managers to make these
                                                                                million available from the CAPCO program and another $160
    investments. However, this approach was criticized by
                                                                                million authorized from another fund.
    several individuals because money managers have not
                                                                            •   Venture capitalists believe there is perhaps too much
    previously targeted either Florida- or Metro Orlando-based
                                                                                emphasis on what they can do with the available funding and
    companies.
                                                                                would prefer the CAPCO program be seen as providing only
•   Supply of non-CAPCO (Certified Capitol Companies
                                                                                one part of the solution to funding issues in Metro Orlando.
    Program) funding has improved considerably in recent years
                                                                            •   There is support among the CAPCOs for alleviating the
    but traditional financiers in Florida have not funded
                                                                                manpower bottleneck (both in performing due diligence initially
    technology start-ups, and there still isn’t much funding
                                                                                and in board participation) and also for devising an approach
    available other than through the CAPCO program. Most of
                                                                                that would enable the funding to be used in smaller deals
    the current investors are still traditional risk-averse,
                                                                                identified by other parties within the State of Florida.
    downstream investors. Because of this, angel investors are
    needed fill the gap in financing within the Orlando region.

•   There are considerable differences in views about the
    aggressiveness of the CAPCOs and whether Venture
    capitalists participating in the State of Florida CAPCO
    program will meet the mandated milestones.
_________________________________________________________________________
“CAPCOs tend to sit on the sidelines until an outside VC
does the due diligence, then they show up and want to
invest. They also consist primarily of financial executives
with little operational experience and therefore are not
typically value-added investors.”


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                       31
                          R E C O M M E N D AT I O N S
Recommendations for Take-Off to Occur
                             ________________________________________________________________________
                                                                   “I would encourage EDC and other organizations in town
 The following eight strategies are offered with the belief that
                                                                   to focus on the examples of success and be more active in
 many key business, academic, and policy initiatives as well as
                                                                   the media and around the region and nationally.”
 entrepreneur facilitating organizations and structures, are in
                                                                   ________________________________________________________________________
 place for accelerated technology-based growth - TAKE OFF -
                                                                   “My belief is that most people are not entrepreneurial
 to occur in Metro Orlando. Accordingly, many
                                                                   because they fear the unknown, not because they are not
 recommendations build upon and enhance current regional
                                                                   capable. Examples of success can clear away the cloud of
 activities and initiatives, while others are targeted to Metro
 Orlando’s on-going challenges.                                    unknown.”
                                                                   _________________________________________________________________________
 Strategy One:
 Build and Celebrate Spectacular                                   Strategy Two:
 Entrepreneurial Success                                           Strengthen Regional Collaboration

                                                                   Many scholars, practitioners, and government leaders argue
 This is a strategy that is currently being championed by key
                                                                   that four underlying phenomena are critical and necessary to
 influencers from Metro Orlando’s academic, business, and
                                                                   achieve and sustain technology-based growth in wealth and
 local government sectors. The first section of this report,
                                                                   jobs:
 Assets, emphasizes a range of public and private support
 organizations that are working to launch select regionally-       1. A highly ranked research university with top programs in
 based technology company start-up successes. Several of           emerging technology areas to train the needed talent and to
 these companies are described in the Case Studies portion of      research new and emerging technologies.
 this report. Based on the case studies, challenges are
 revealed that may impede the fostering and accelerating of        2. A “smart infrastructure” or the managerial, entrepreneurial,
 technology-based growth in Metro Orlando. In the following        legal, financial, manufacturing, and sales and distribution talent
 pages we suggest additional near- and longer-term strategies      needed to commercialize emerging technologies and
 for entrepreneurial TAKE-OFF to occur and be sustained.           innovative business ideas.

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                 32
                                                                      R E C O M M E N D AT I O N S
                                                                        firms and headquarters; a greater number of start-up and spin-
3. A high quality of life (including a range of quality educational
                                                                        out companies; and more developed “smart infrastructure” (e.g.,
opportunities and cultural amenities) to attract, retain, and
                                                                        venture capital firms, intellectual property lawyers, senior
stimulate talented and creative people.
                                                                        management talent). However, as has been repeatedly
                                                                        demonstrated in the U.S. and abroad, being highly ranked on a
4. Regional Collaboration across key public and private sectors
                                                                        number of criteria or having world-class Centers of Excellence
                                                                        is not sufficient for accelerated wealth and job creation through
Emerging and established technology regions in the U.S. are             technology-based entrepreneurship.
enhancing their education, smart infrastructure, and quality of life
by collaborating better and smarter than competing regions.             What distinguished Austin then—and what is still considered
Metro Orlando business, academic, and community leaders have            key to the continued success of this technopolis—is exceptional
benefited from visiting many technology growth regions in the           public and private cooperation on targeted opportunities and
U.S. and by applying the lessons learned to Metro Orlando.              challenges for fostering technology-based growth and a
One of the regions visited was Austin, Texas.                           sustainable and affordable quality-of-life. Key in the mid-1980s
                                                                        was the effective networking of first and second level
                                                                        influencers in academia, business, and local and state
The Austin Model                                                        government. The key sectors are as follows: Quality education
In about 10 years Austin has transformed itself from being a
                                                                        with an emphasis on the research university; large companies;
largely state government dominated university town with a
                                                                        start-ups and spin-outs; supportive federal, state, and local
depressed economy to one of the most successful and fastest
                                                                        government; and support groups including smart infrastructure
growing Technopolies in the world.1 In 1985-1989 Austin was in
                                                                        and venture funding. Emphasis is placed on the importance of
a deep recession and “see through buildings” and bankruptcies
                                                                        regional collaboration as well as competition within and across
were the dominant theme. At the time many other regions in the
                                                                        the sectors (see Figure Four).
U.S. could be argued to have universities with considerably more
                                                                         ____________________________________________
                                                                        ____________________________________________
research funding or higher ranked undergraduate and graduate
educational programs; more supportive regional and state
governments; a greater number of large technology-intensive


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                 33
                                                                            R E C O M M E N D AT I O N S
                                                                               __________________________________________
                                                                              __________________________________________
“In Seattle we use to work together – entrepreneurs and                       The Challenge: “As a private business operator, I am not
money people all knew each other at Microsoft – this                          sure I have the bandwidth to work on some of these
fostered an informal network, a sense of community –                          initiatives. It sounds like the plans are good, but I wonder
here [Metro Orlando] there is no major anchor company                         how many of the highly successful entrepreneurs from
that is spinning off entrepreneurs - we are independent                       Austin or the Valley were involved as civic activists prior to
islands running at 1000 miles/hr – I am interested in what                    their first success.”
other technology companies are doing here but we need a
catalyst to spark a sense of community.”

_________________________________________________________________________
“In Orlando, the public sector is overly concerned with
scandal – that public funds will be used to enrich the few,                        Figure Four: The Technopolis Wheel Framework
to make wealthy entrepreneurs, or that funds might be                            Emphasizing The Importance of Regional Collaboration

perceived to be mismanaged.”




                                                                                                                             Com pan ies
                                                                                                                               Lar ge
1
    The roots of technopolis sprang from the humanistic mind of the
                                                                                                 Ed
Renaissance and depicted a utopian, radiant city based on science,                                    uc
                                                                                                           at
technology, and education and where the benefits of innovation are                                              io
                                                                                                                     n                                  t
                                                                                                                                            Em e r g e n s
widely disseminated. The modern “technopolis” – “techno” for
                                                                                                                                            Co m p a n ie
                                                                                                 rt                  Regional &
technology and “polis” for city-state – centers on public/private                         Sup p o s                    Global
                                                                                           Gr o up
collaboration & cooperation to spur the creation of wealth and jobs                                                   Network s G Fe
                                                                                                                                 ov d
through accelerated and globally competitive technology innovation.                                                                er er a
                                                                                                                                     nm l




                                                                                                                 t

                                                                                                                            Go ver nm ent
                                                                                                          en
                                                                                                                                       en




                                                                                                   ve al
                                                                                                     r nm
                                                                                                                                           t



                                                                                                 Go L oc




                                                                                                                                Sta te
So we emphasize the importance of regional networking and
collaboration, sharing information, and partnering to leverage
scarce resources and to achieve targeted near-term goals as
well as to realize longer-term objectives and visions.                                source: IC2 Institute, The University of Texas Austin
IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                                      34
                                                                      R E C O M M E N D AT I O N S
                                                                        _________________________________________________________________________
Strategy Three:                                                         “Banks need to learn - I had a $1 million cashiers check and
Enhance Venture, Angel, and                                             my bank representative just didn’t understand credit and
Other Sources of Capital                                                debit cards, he didn’t have the adequate support services – I
                                                                        took time to educate him and he is educating his bosses –
Increasing the amount of capital available locally will take time.      but I came close to pulling out my funds – I don’t have time
Capital tends to arrive after a region has experienced a string of      to educate everybody”
significant entrepreneurial successes. There are, however,              _________________________________________________________________________
several additional and practical steps that regional champions
can take to increase the likelihood and amount of capital coming        3. Build additional venture capital staff capacity in the
to Metro Orlando.                                                       region through partnerships with such entities as the Kauffman
                                                                        Foundation’s Fellows Program. Provide incentives for attracting a
Recommendations                                                         Kauffman Fellow to the region through resources obtained from
                                                                        public sources or from Tampa-based venture capital firms.
1. Facilitate the welcome of capital to Metro Orlando by
providing free office space and support for temporary visits by         4. Leverage know-how from MILCOM and CFIC to establish
out-of-town venture capitalists and angels, perhaps in UCF’s            a fund for corporate and/or angel investors to invest in local
Research Park or other key locations.                                   technology start-ups for investors who have neither the time
                                                                        nor expertise to perform their own due diligence. The
2. Develop venture capital and business angel intern                    following action items are recommended to accomplish this task:
training programs that send select candidates (from banks,
universities, entrepreneurial companies) to intern training             •   Use professional staff scouting out opportunities.
opportunities in other high tech regions in the U.S. (e.g., Silicon
Valley, Boston, or Austin) and in Florida (e.g., Tampa) and when        •   Finance deals in the range below that funded by venture
possible in Metro Orlando.                                                  capitalists and which any one angel cannot fund. This is
                                                                            targeted for companies that might not be blockbusters, but
                                                                            have a high likelihood of success and importance for the
                                                                            Metro Orlando region.

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                    35
                                                                    R E C O M M E N D AT I O N S
 •   Create a computer-based Business Angel Network and               capitalists and financial firms, and academia for funding projects,
     perhaps link to Austin’s IC2 Institute’s Capital Network and     which will lead to commercialization of products within two-to-
     venture fairs. (www.thecapitalnetwork.com)                       three years. This fund could be modeled off of the current
                                                                      Technology Investment Fund (TIF), with an expanded mandate
 •    Promote angel investing know-how workshops in different         beyond the energy field. As with the existing TIF, the primary
     sectors of Metro Orlando’s wealthy population such as            focus would be on small and mid-sized firms requiring product
     retired, entertainment, corporate, and newly rich.               development funding for projects deemed to have commercial
                                                                      value in exchange for future royalties.
 5. Benchmark Metro Orlando against other technology
 growth areas to determine if additional assistance and support       7. Prepare a briefing packet for consideration by regional
 is required to secure a greater number of Phase I and Phase II       governmental leaders, on municipal retirement systems
 Small Business Innovation Research (SBIR) and Small                  currently allocating small portions of their funds for
 Business Technology Transfer Research (STTR) awards.                 “alternative investments” such as venture capital. Examples
 Because of the defense concentration in Metro Orlando, there         include Nashville’s transit system, state and local retirement
 appears to be a solid pipeline of SBIR awards, and an                systems in Alaska, Ohio, Virginia, and North Carolina, and police
 increasing number of STTR partnerships awards between                and firemen’s systems in states such as Ohio. Data from the
 companies and UCF. The Seminole County Incubator                     latter system shows that .32% of the system funds, or $17 million,
 anticipates providing additional support for SBIR applicants.        have been placed in VC investments. In North Carolina, the local
 Such support activities could be shared with applicants in other     government employees’ retirement system, as of 1997, had
 counties under partnership arrangements.                             approximately $10 million allocated to venture capital.


 6. Work to obtain future state legislative support for
 enhanced appropriations for the CAPCO program,
 especially for an initiative to begin a seed capital
 investment fund to support early stage investments.
 Create a statewide partnership of private industry, venture


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                36
                                                                   R E C O M M E N D AT I O N S
Strategy Four:
Globally Competitive                                                    local and national media. Also encourage academic research
Workforce Development and Sustainability                                and publications on The Metro Orlando Plan.

                                                                        ♦ Promote the region’s entrepreneurial climate, UCF Centers
Workforce availability and development is a central concern for
                                                                        of research, and community college training programs at
all technology growth areas in the U.S. Increased numbers of
                                                                        Orlando International Airport through creative and innovative
computer and technology workers from China, India, Taiwan,
                                                                        displays and events including tourist venues and web page
and other countries are now needed to sustain U.S. technology
                                                                        profiles for local, national, and global audiences.
growth. Companies interviewed in Metro Orlando indicated that
                                                                        ♦ Enhance the presence of Metro Orlando’s
while the training and supply of entry-level workers was
                                                                        entrepreneurship and technology centers of excellence in a
excellent, senior and mid-level managers often needed to be
                                                                        coordinated manner on the web sites of EDC, CFIC,
recruited from other regions in the U.S. The following strategies
                                                                        MILCOM, Chambers of Commerce, and UCF.
center on the recruitment, training, and retention of the “smart
infrastructure” needed to manage and sustain Metro Orlando’s
fast growth technology ventures.                                     2. Use the Internet to link the needs of local academia and
                                                                     industry. The I-4 Corridor web site is a good example of
Recommendations                                                      connecting the community through the web. Its web site contains
                                                                     a messaging system that enables Corridor businesses and
1. Change local, national, and global perceptions of Metro           community colleges to share information such as hiring plans and
Orlando - from home of “the Mouse” to home of “the successful        training needs.
Entrepreneur.” The following action items are recommended for
accomplishing this task:                                             3. Incorporate Metro Orlando’s strong simulation industry
                                                                     into regional training efforts. Encourage simulation companies
   ♦ Spread the news about Metro Orlando successes.                  to work with local community colleges in the development of on-
   Assign responsibility for and set public relations protocol       line workforce development. Model this effort on other state-of-
                                                                                                                      2
   for spreading the news about entrepreneurial successes in         the-art multimedia training programs such as IC Institute’s
                                                                     Entertech (www.entertech.utexas.edu).


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                            37
                                                                            R E C O M M E N D AT I O N S
4. Consider partnering with IC2 Institute, UT-Austin in the                   7. Supplement existing graduate and undergraduate
development of a one-year masters program in Science                          course offerings with non-degree training to better meet the
and Technology Commercialization (www.ic2.org/msdegree).                      critical need for additional management talent for technology
                                                                              start-ups.
5. Create training sessions for Metro Orlando service
providers, UCF staff involved in technology transfer activities,              8. As part of the overall effort to enhance entrepreneurial
and staff involved with student placement in regional start-up                training in the region at all educational levels, afternoon or
companies to educate them on the special needs of                             one-week “summer camps” could be developed to teach
technology entrepreneurs. Sessions could be taught in                         entrepreneurship. Build on summer camp curricula
cooperation with EDC, CFIC, MILCOM, Valencia Community                        developed in other communities as the foundation for Metro
College and others. Include in these sessions a roundtable                    Orlando’s creative and innovative programs.
discussion with entrepreneurs and ask them to share their
experiences.                                                                  9. Organize an annual regional, national, or global Moot
_________________________________________________________________________     Corp Competition for entrepreneurs, possibly link to the
“People (in banks) here don’t understand the difference                       International Moot Corp Competition at the University of Texas
between a funded start up and a person with an idea.”                         at Austin, Graduate School of Business (www.utexas.edu/dept/
_________________________________________________________________________     #business).
“SPEED is important to our survival and growth - we don’t
have time to teach – we need people to run with us – as it                    10. Establish Metro Orlando Industry Councils such as a
is now by the time you throw me the line I’m too far off                      Metro Orlando Photonics Council or a Metro Orlando
shore.”                                                                       Training & Simulation Council, building upon the Orlando-
_____________________________________________
 ____________________________________________                                 based Florida Electro-Optics Industry Association and the
                                                                              National Center for Simulation. These councils could be
6. Enhance the entrepreneurial abilities of technology                        modeled after the successful Austin Software Council
talent employed in defense-supported companies. Make                          (www.austinsoftwarecouncil.org), which promotes: networking
them more aware of career opportunities with Metro Orlando                    events, distinguished speaker series, sister city relations, and
technology based companies                                                    industry specific training programs.

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                     38
                                                                 R E C O M M E N D AT I O N S
Strategy Five:                                                        Minority Entrepreneurship, and Defense Industry
Develop Education, Training, and Research                             Entrepreneurship.
Programs Centered on Technology
Commercialization and Entrepreneurship                                ♦ Educate and nurture industry liaisons in targeted
                                                                      industry clusters.
Among Metro Orlando’s top assets to build upon are its
university and college systems. These entities are key to             ♦ Develop and test leading-edge research, policy, and
overcoming the region’s challenges in workforce training and          action initiatives that foster technology-based growth.
retention as well as new company formation. The following
recommendations center on a targeted set of intiatives for UCF        ♦ Become centrally involved in professional associations
to accelerate high tech entrepreneurship.                             and conferences that center on technology transfer and
                                                                      technology-based economic development.
1. UCF should consider establishing a Center of
Excellence on Technology Transfer, Commercialization,              2. Enhance the Business and Technology Development
and Entrepreneurship that would foster research,                   Center (BTDC) now established in UCF’s Research Park. It
publications, and degree (MA and Ph.D.) granting                   is physically and logically well positioned next to CFIC and the
programs. The following action items will help accomplish this     Small Business Development Center so that entrepreneurs can
task:                                                              be easily directed to the most appropriate support organization.
                                                                   Following is a partial list of recommendations for the BTDC or
   ♦ The Center should organize a Distinguished Visiting
                                                                   what might be re-labeled the Central Florida Technology
   Speaker Series targeted to UCF’s technology strengths but
                                                                   Commercialization Center (CFTC2).
   focusing on technology applications.

                                                                   Create a Board of Advisors from Metro Orlando’s leading
   ♦ Expand the scope and influence of UCF’s Technology
                                                                   technology businesses, community and civic leaders, and areas
   Transfer Office.
                                                                   of UCF technology expertise and the Business School. This
                                                                   helps with “buy in” and the fostering of regional public/private
   ♦ Inaugurate regional entrepreneurial and technology
   transfer awards for such areas as Civic Entrepreneurship,
IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                           39
                                                                    R E C O M M E N D AT I O N S
 cooperation as well as providing useful advice for the                  ♦ In cooperation with CFIC and MILCOM more fully
 Incubator’s management.                                                 develop know-how networks that are composed of business
                                                                         and community leaders with the goals of : (1) providing
 Center BTDC’s activities on areas of the region’s technology            advice and support for resident companies; (2) providing
 strength as well as technical and business areas of critical            advice and support for non-resident companies; (3)
 importance for UCF and Metro Orlando. The following action              educating business and community leaders to BTDC
 items are aimed at helping commercialize university                     activities; and (4) assisting Incubator companies with SBIR
 technologies. These services could be funded by client                  and other funding opportunities.
 organizations.
                                                                      Develop the BTDC as Real-Life Experiential Learning
    ♦ Accelerate the commercialization of existing UCF                Laboratory for UCF students and faculty (as a research and
    research assets in lasers and optics (CREOL), computer            education/training facility) by encouraging faculty and student
    modeling and simulation, and materials testing.                   participation with paid and course credit internships including.
    ♦ Assist the Institute for Simulation and Training in
    developing a business plan that includes the potential of            ♦ Develop an incubator course for graduate and
    the lab for creating an Underwriting Laboratory Certification        undergraduate students based on lessons learned and
    Activity for simulation and training software programs               experiences of on-site companies.
    including ergonomics.                                                ♦ Develop opportunities to work on meaningful projects for
    ♦ Work on a strategy for different industry sectors to               companies residing in the incubator as well as “Virtual
    diversify from Defense Funding. A great deal of the                  Incubator” companies in Metro Orlando and perhaps
    technology being developed and commercialized in Metro               globally. The Scottish Technology and Research Center is a
    Orlando is based on defense funding, such as laser and               good example of using UCF’s Incubator to facilitate global
    photonics companies and the majority of simulation work.             technology networks.
    It is important to build on established R&D capabilities
    while pursuing commercial opportunities to mitigate total
    dependence on federal funding.


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                              40
                                                                        R E C O M M E N D AT I O N S
 3. Consider establishing a Metro Orlando Technology                         “I know when I request a local web site, there are a lot of
 Academy or degree program for high school students.                         “jumps” before the data arrives. I have been told that this
                                                                             is related to lack of network infrastructure – that is how
 4.   Equip Metro Orlando’s non-technology industries with                   many routers does this have to go through before it gets to
 technology applications. Develop a cooperative effort with                  the server down the street. How might better connections
 Valencia and Seminole Community Colleges to assist traditional              help our industry clusters here in Orlando?”
 industries (tourism in particular) with technology training and              _____________________________________________
                                                                             _____________________________________________
 applications.                                                               “A MAIN challenge is lack of “smart buildings” and lack of
                                                                             Internet CONNECTIVITY – Orlando is the least wired city
 Strategy Six: Enhanced Internet Connectivity                                I’ve worked in and I am trying to start a globally
 and Bandwidth                                                               competitive company here.”
                                                                             _________________________________________________________________________
 Enhanced communication infrastructure and Internet access are               “A real advantage of Celebration is “all I had to do was
 seen to be complimentary strategies to build on Metro Orlando’s             throw a switch to be connected”....We need to get
 strengths in optics and lasers, software and information                    Orlando’s existing and future building wired so “you can
 technology, telecom and wireless. Lack of bandwidth is seen “to             walk in and hook up.”
 be holding existing industry hostage” in terms of more fully                _________________________________________________________________________
 developing regional industry clusters like simulation and training.
 The challenge is for Metro Orlando to more effectively use
                                                                             Strategy Seven: Lead the Pack
 defense industry microwave electronics engineers and UCF and
 other centers of research on optics and lasers to focus on
                                                                             Metro Orlando currently has the opportunity to adopt some of
 advanced information technologies.
                                                                             the best entrepreneurship and economic development practices
 _________________________________________________________________________
                                                                             of the nation’s top technology regions. The following
                                                                             recommendations describe several initiatives that may help
                                                                             establish The Metro Orlando Plan and the region as a leading
                                                                             center of technology entrepreneurship.


IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                          41
                                                                    R E C O M M E N D AT I O N S
Recommendations                                                       Metro Orlando to build on.


1. Establish a Social and Civic Entrepreneurship Program              Strategy Eight:
that will grow with the technology community and address              Economic Development Targeted On
issues of “smart growth,” the “digital divide,” school dropouts,      Technology Entrepreneurship
and shared prosperity.    Technology regions are increasingly
concerned with such issues as serious inhibitors to continued         Metro Orlando’s economic development efforts should focus on
regionally based economic development. Indeed such                    entrepreneurship in addition to existing recruitment and retention
initiatives might benefit from the financial support and              activities. As described in the beginning of this report business
commitment from the recipients of the “new wealth” created by         creation is the crucial “third leg” of successful and sustainable
Metro Orlando’s “spectacular successes.”                              regional economic development. Entrepreneurship on the public
                                                                      side needs to focus on activities to create a favorable economic
2. Select and build on the national and international                 climate for wealth generating private entrepreneurship.
appeal of Metro Orlando to create global alliances that
accelerate the region’s technology growth. Share lessons              Recommendations
learned nationally and internationally. For example, IC Institute
                                                           2


has a project to foster Global Networked Entrepreneurship that        1. Metro Orlando should consider the development of a new type
seeks to globally link talent, technology, capital, know-how, and     of public/private organization dedicated to fostering and
markets through the Internet and web. Metro Orlando should            accelerating technology-based growth. Two existing
become involved in such programs, particularly ones focused           organizations should serve as models (1) IC2 Institute, The
on the Caribbean and South America.                                   University of Texas at Austin (www.ic2.org), and (2)
                                                                      CONNECT a University of California, San Diego Program that
3. Work in partnership with the Orlando metro police to               focuses on technology, entrepreneurship and community
create a high tech crime unit focused on high tech thefts             networking.
and a variety of other crimes affecting technology                    ________________________________________________________________________
companies. Irvine, California, for example, established such a
unit approximately four years ago and could be a model for

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                42
                                                                             R E C O M M E N D AT I O N S
 “EDC needs to change its economic development strategy
                                                                                ♦ Compile and release semi-annual figures on the
                                                                                number of new technology companies that are
 – even if it stays in recruitment and retention – it’s not just
                                                                                launched, expand or relocate to the Orlando region.
 low/no taxes and entertainment – it’s technology resources
                                                                                The data could be verified and released publicly to
 at UCF and other educational/research activities, it’s digital
                                                                                interested bodies, including the media. The database
 connectivity, it’s existing entrepreneurial companies and
                                                                                should provide a baseline for measuring performance, and
 infrastructure – economic development is a new ball game
                                                                                the following metrics could be calculated twice a year:
 with .com and the Internet.”
 _________________________________________________________________________      - number of high tech start ups per year
                                                                                - number of new high tech companies in each target
 2. EDC should dedicate a full-time staff person to                               industry
 implement the recommendations of this report, bringing                         - number of high tech start-ups still in business
 together factions within the community that can affect the                     - percentage of high tech starts ups experiencing high
 business climate for entrepreneurship. Focus the EDC’s                           growth rates (>50%)
 business creation arm on coordinating regional technology                      - number and quality of entrepreneurial support
 entrepreneurship training and education, workforce                               services and know how
 development, and deploying a single marketing message                          - number of venture, angel and other financing
 aimed at technology businesses and entrepreneurs. The                            organizations with offices in Metro Orlando
 following action items might be included in the responsibilities               - amount of venture capital funding placed in home
 of the EDC’s Entrepreneurship Director:                                          grown start ups
                                                                                - number of Metro Orlando based high tech start-ups
     ♦ Compile and keep current an Entrepreneur’s Resource                        that go public each year
     Guide (hard copy and web-based) similar to the guide
     published in hard copy by the Entrepreneurship and                         ♦ Publish a monthly calendar of regional training
     Technology Transfer Committee of the Technology Gateway                    opportunities, meetings, events, conferences, and other
     Alliance.                                                                  networking opportunities. The calendar should be
                                                                                produced in both on-line and hard copies.



IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                   43
                                                                  R E C O M M E N D AT I O N S
   ♦ Organize and sponsor events that enhance
   communication among entrepreneurs and support
   services. The goal of these events will be to create a
   greater sense of a technology community and to
   strengthen communication between academic, business,
   and government sectors within Metro Orlando. Financial
   support for the calendar could come from sponsorships by
   local service providers.

   ♦ Champion and coordinate a regional summit of
   technology leaders and public sector officials
   regarding issues critical to the Smart Growth of Metro
   Orlando.

   ♦ Develop a strategic plan for diversification of
   defense-based R&D and industrial development in
   Metro Orlando. With stable or even growing markets,
   companies are unlikely to diversify much until they can sell
   into new local companies to replace their current defense
   clients. EDC, as the recruitment agency, needs to target
   firms that will supplant current supply chains, and provide
   existing smaller companies with new market opportunities.
   For instance, simulation work produced by defense-related
   companies is generally far superior to that currently
   available commercially, which offers an opportunity in
   targeting commercial companies nationally and globally.




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                    44
                                                                                            APPENDIX




                           Compared to the top-flight metro areas nationally, Orlando is not yet a high-ranking area, except
                                on several quality of life indicators. On several business start-up and job growth measures,
                                 Orlando also compares favorably, although those indicators probably are reflecting mostly
                                   service jobs and companies. In terms of intellectual assets (patents, research funding,
                             education measures), which often predict subsequent technology-based economic expansion,
                              Orlando is still not among the higher-ranking metro areas. And certainly on venture capital, it
                                                                                                             ranks very low.


                             What should be remembered, however, is that Orlando has been compared to the technology
                            leaders, rather than to old economy metro areas cities. Further, some of the metro areas in the
                             south and southwest to which Orlando has been compared are larger in size. As least in terms
                             of quantitative comparisons, Orlando is on the verge, but has not quite achieved the stature of
                                                                         the leading technology areas in the United States.

IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                   45
                                                                                                                                                                              APPENDIX
   T a b le O n e :
   W o r k f o r c e C o m p a r is o n s




                                             W O R K F O R C E A N D B U S IN E S S C L IM A T E
                                             U N IV E R S IT IE S


                                                                                                                                                                                               MSA
                                      % o f A d u lts w ith           A s s o c ia te s           1997           1999                       1999                  1999                          # of             4 -y e a r
                                                                        D e g re e
                M e tr o A r e a   D e g r e e s ( '9 0 in c it y )                       P e r C a p it a   W o r k fo r c e                Job           U n e m p lo y m e n t      C o lle g e s /         C o lle g e
                                   B a c h e lo r s o r h ig h e r                             In c o m e       S iz e                     G r o w th             R a te            U n iv e r s itie s   E n r o llm e n t


                    A u s t in                         3 4 .4 %              5 .1 %       $ 2 5 ,4 2 1                     6 3 9 ,9 0 0           5 .0 %                2 .3 %                     6         6 2 ,5 0 0
                   A tla n ta                          2 6 .6 %              4 .0 %       $ 2 8 ,2 5 3                  2 ,1 7 8 , 5 0 0          5 .4 %                2 .9 %                    16         9 5 ,6 0 0
                     B o is e                          2 7 .8 %              7 .8 %       $ 2 4 ,5 6 7                     2 1 0 ,7 0 0           2 .9 %                3 .2 %                     1
                  B o u ld e r                         5 8 .9 %              4 .8 %       $ 3 1 ,3 9 3                     1 6 9 ,5 0 0           2 .3 %                2 .7 %                     2
      C o lu m b u s , O H                             2 4 .6 %              5 .7 %       $ 2 5 ,7 2 8                     8 5 2 ,6 0 0           1 .5 %                2 .5 %                     7         7 4 ,3 0 0
                   D enver                             2 9 .0 %              5 .2 %       $ 3 0 ,7 4 3                  1 ,1 3 7 , 4 0 0          2 .8 %                2 .8 %                     6         4 8 ,4 0 0
                 M a d is o n                          4 2 .0 %              8 .5 %       $ 2 7 ,3 6 1                     2 8 4 ,9 0 0           1 .7 %                1 .4 %                     2
                    M ia m i                           1 2 .8 %              4 .9 %       $ 2 1 ,6 8 8                  1 ,0 0 4 , 6 0 0          2 .1 %                5 .4 %                     7         4 6 ,3 0 0
          M in n e a p o lis                           3 0 .3 %              6 .5 %       $ 3 0 ,1 2 3                  1 ,7 2 2 , 6 0 0          2 .1 %                2 .0 %                     6         8 2 ,3 0 0
               N a s h v ille                          2 3 .6 %              4 .9 %       $ 2 7 ,3 2 4                     6 6 4 ,8 0 0           1 .6 %                2 .8 %                     9         6 2 ,8 0 0
                O rla n d o                            2 2 .6 %              7 .2 %       $ 2 3 ,3 7 4                     8 9 6 ,9 0 0           4 .5 %                2 .8 %                     3         2 5 ,2 0 0
                 P h o e n ix                          1 9 .9 %              7 .3 %       $ 2 4 ,1 3 7                  1 ,5 2 5 , 6 0 0          2 .7 %                3 .0 %                     7         5 2 ,1 0 0
    R a le ig h - D u r h a m                          3 4 .8 %              7 .9 %       $ 2 7 ,7 1 2                     6 7 7 ,7 0 0           1 .0 %                1 .6 %                    10         6 4 ,6 0 0
              R ic h m o n d                           2 4 .2 %              4 .1 %       $ 2 7 ,7 1 7                     5 5 8 ,2 0 0           3 .5 %                2 .3 %                     6         3 0 ,7 0 0
       S a lt L a k e C ity                            3 0 .4 %              6 .4 %       $ 2 2 ,2 6 4                     7 1 1 ,0 0 0           2 .0 %                2 .8 %                     3         2 3 ,8 0 0
             S a n D ie g o                            2 9 .8 %              8 .1 %       $ 2 4 ,9 6 5                  1 ,1 3 2 , 5 0 0          1 .5 %                3 .0 %                    11         5 8 ,5 0 0
                S t. L o u is                          1 5 .3 %              3 .8 %       $ 2 7 ,1 6 8                  1 ,3 2 7 , 9 0 0          1 .1 %                3 .2 %                    12         6 8 ,2 0 0
          T a lla h a s s e e                          4 0 .7 %              7 .4 %       $ 2 2 ,0 3 2                     1 5 9 ,3 0 0           3 .0 %                2 .5 %                     2
                   Tam pa                              1 8 .7 %              6 .3 %       $ 2 4 ,8 7 9                  1 ,2 1 6 , 3 0 0          5 .4 %                2 .8 %                     6         5 5 ,0 0 0




   T a b le O n e s h o w s a v a r ie t y o f e d u c a t io n a n d w o r k fo r c e c o m p a r is o n s .

                O r la n d o r a n k s in th e m id d le in t e r m s o f th e p e r c e n t a g e o f a d u lts w it h f o u r - y e a r c o lle g e
   d e g re e s .
                O r la n d o is a m o n g th e le a d e r s a m o n g m e t r o a r e a s in t e r m s o f th e p e r c e n t a g e o f a d u lts
   w ith a s s o c ia te s ’ d e g r e e s .
                O r la n d o is in t h e m e d iu m - lo w e r g r o u p o n p e r c a p it a in c o m e .
                O r la n d o is a m o n g th e n a t io n a l le a d e r s o n jo b g r o w th a n d in t h e m id d le o n u n e m p lo y m e n t
   fo r th e s e m e tr o a r e a s ,
                             w h ic h a r e a m o n g t h e m o s t t e c h n o lo g ic a lly - a d v a n c e d n a t io n a lly .




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                                                                                                  46
                                                                                                              APPENDIX

  Table Two: General Economic Measures for Four Cities


  CATEGORY                                      National       Austin    Austin    Orlando     Orlando Charleston Charleston San Diego San
                                                Average        Values    Rank      Values       Rank    Values      Rank      Values   Diego
                                                                                                                                       Rank

  ECONOMY
  Cost of living index (Average = 100)            100%           96.5      81        100.5          152    101.8     169       121.9     263
  Recent unemployment rate:                      4.04%          2.20%      26       2.80%           71    3.00%      96       3.00%       96
  Job growth since 1998:                         1.30%          5.46%      227      3.67%           288   4.45%      284      3.43%      281
  Forecast job growth to 2010:                   15.39%        33.19%       3       26.39%          18    21.99%     44       23.05%      34




  Table Two shows a four-city comparison on cost of living, unemployment, recent job growth, and
  forecasted job growth in coming years.

          Orlando does far better than the national average for metro areas on each of the items.
          Compared to Austin, Charleston, and San Diego, it ranks second on three items and third
  on the other.




  Sources:
  American Chamber of Commerce Researchers’ Association; Bureau of the Census, U.S. Department of Commerce; Bureau of Labor Statistics, U.S.
  Department of Labor; Bowker's Library Directory; Standard and Poor’s Expansion Management; Bureau of National Affairs; Runzheimers.




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                    47
                                                                                                                   APPENDIX
       Table Three: Higher Education Statistics for Four Cities

                                                                 Austin            Orlando               Charleston          San Diego

       Area Colleges & Universities
       Colleges with 4 year degrees                                 8                  5                      5                  20
       Enrollment in 4 year colleges                             54,468             25,091                 16,033              96,297

       Schools with 2 year programs                                 1                  1                     1                    3
       Enrollment in 2 year programs                             25,319             22,094                 6,455               39,751

       Major Area Technical University                         Univ. of TX.   Univ. of Central FL.   Univ. of Charleston   Univ. of CA. SD
       Academic Reputation (5 = highest)                           4.1                 2.3                    3.5                3.8

       Undergraduate Students Full-time                          32,474             17,127                 8,232               14,738
       Undergraduate Students Part-time                           4,045             7,230                   644                 INA

       Tuition and Fees ($) In state tuition (Full-time)          3,004              2,200                 3,290               4,031
       Tuition and Fees ($) Out of state tuition (Full-time)      9,394              5,720                 5,580               13,604

       Research Funding At Each Major University ($M)             214.7              27.8                   2.7                311.9




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                      48
                                                                                                                                                           APPENDIX
                                                                                                             A u s tin            O rla n d o              C h a rle s to n   S a n D ie g o

       U n d e rg ra d u a te P ro g r a m s (F u ll/P a rt-T im e S tu d e n ts %
       E n ro lle d )

       B u s in e s s M a n a g e m e n t / A d m in is tra tiv e S e rv ic e s                          4380 / 12%             5600 / 23%             1603 / 18%             1915 / 13%
       E n g in e e rin g / A p p lie d S c ie n c e s                                                   4380 / 12%             2435 / 10%                NPO                 3980 / 27%
       B io lo g ic a l S c ie n c e                                                                      2556 / 7%              1461 / 6%             1335 / 15%             3980 / 27%
       C o m p u te r / In fo rm a tio n S c ie n c e s                                                   2190 / 6%               974 / 4%              267 / 3%               739 / 5%
       P h y s ic a l S c ie n c e                                                                        2190 / 6%               244 / 1%              267 / 3%                 IN A
       O th e r                                                                                          20815 / 57%           13639 / 56%             5432 / 61%             4126 / 28%



       G ra d u a te P ro g r a m s (F u ll-tim e S tu d e n ts a n d % )

       A e ro s p a c e , M e c h a n ic a l, M a te ria ls E n g in e e rin g                            403 / 12%                 NA                        NPO              70 / 8%
       B io m e d ic a l, B io lo g y , M a r in e B io lo g y                                             167 / 5%               35 / 4%                   47 / 75%           65 / 8%
       C h e m ic a l, B io c h e m is try                                                                321 / 10%               15 / 2 %                    NPO             1 7 3 /2 0 %
       C iv il a n d S tru c tu ra l                                                                      368 / 11%                 NA                        NPO              37 / 4%
       C o m p u ta tio n a l & A p p lie d M a th                                                          24 / 1%                 NA                        NPO                 IN A
       E le c tric a l a n d C o m p u te r, O p tic a l                                                  846 / 25%              246 / 28%                    NPO             3 9 5 /4 6 %
       E n e rg y & M in e ra l R e s o u rc e s                                                           114 / 3%                 NA                        NPO                 IN A
       In d u s tria l E n g in e e rin g , M a n u fa c tu rin g M G M T S y s te m s                        IN A               143 / 16%                    NPO                 IN A
       P h y s ic s                                                                                        237 / 7%               29 / 3%                     NPO             119 / 14%
       B u s in e s s                                                                                     798 / 24%              422 / 47%                  16 / 25%              IN A


       T a b le T h re e s h o w s h ig h e r e d u c a tio n d a ta fo r th e fo u r m e tro a re a s .

                   T h e m o s t s trik in g p o in t is th a t A u s tin a n d S a n D ie g o h a v e fa r la rg e r u n iv e rs ity
                   e n ro llm e n ts a n d m u c h
                   la rg e r re s e a rc h o rie n ta tio n s a s m e a s u re d b y g ra n t a n d c o n tra c ts . U C F d o e s a d e q u a te ly
                   in th e
                   d is trib u tio n o f th e ir g r a d u a te b o d y , b u t th e n u m b e r o f g ra d u a te s tu d e n ts is fe w e r th a n th e
                   U n iv e rs ity
                   o f T e x a s a t A u s tin a n d th e U n iv e rs ity o f C a lifo rn ia a t S a n D ie g o .




       S o u rc e s :
       U .S . N e w s & W o rld R e p o rt, B e s t C o lle g e s 1 9 9 9 , J u n e , 1 9 9 9 ; h ttp ://w w w .p e te rs o n s .c o m




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                                                                        49
                                                                                                                                                                            APPENDIX
      T a b le F o u r: Q u a lity o f L ife C o m p a ris o n s
      (M u ltip le M e tro A re a s )


                                                                             Q u a lity o f L ife
                                                          Access

                                                                                                               C la ss A
                                                                                      1 9 9 0 -1 9 9 7         C e n tra l
                                                                                                             B u sin e s s
    2 b r, 9 5 0 sf                P rice o f                   1999                  D o m e stic             D is tric t        Num ber of
         Apt                1 8 0 0 s q ua re fo o t           M e d ia n            R e lo c a tio n s    O ffice S pa c e       M a jo r H u b
    o n th ly R e n t               Hom e                   H o m e P rice            per 1000                 $ /s q . ft.         F lig h ts

                  $879                   $ 1 4 6 ,2 8 9            $ 1 2 9 ,4 0 0                   147             $ 2 4 .3 8                140
                  $699                   $ 1 4 5 ,1 0 3            $ 1 2 6 ,5 0 0                   125             $ 2 2 .9 9                563
                  $677                   $ 1 3 2 ,2 5 4            $ 1 2 6 ,8 0 0                   199                   NA                  NA
                  $912                   $ 2 4 6 ,8 3 3            $ 2 0 0 ,3 0 0                    NA                   NA                  NA
                   NA                              NA              $ 1 2 6 ,8 0 0                    20             $ 2 2 .5 0                200
                  $771                   $ 1 7 9 ,3 7 0            $ 1 7 4 ,7 0 0                    79             $ 2 2 .0 0                377
                  $793                   $ 1 7 7 ,4 7 2            $ 1 3 7 ,5 0 0                    20                   NA                  NA
                   NA                              NA              $ 1 3 5 ,5 0 0                   -1 2            $ 2 7 .2 6                262
                  $728                   $ 1 4 7 ,5 0 0            $ 1 3 9 ,9 0 0                    19             $ 2 5 .5 0                315
                  $624                   $ 1 3 3 ,2 0 0            $ 1 1 5 ,8 0 0                    90             $ 1 8 .5 0                175
                  $659                   $ 1 4 0 ,5 2 6            $ 1 0 5 ,8 0 0                   100             $ 2 1 .5 0                374
                  $665                   $ 1 3 4 ,1 8 6            $ 1 3 0 ,4 0 0                   131             $ 2 3 .4 9                467
                  $755                   $ 1 6 0 ,0 0 9            $ 1 6 3 ,1 0 0                   141             $ 1 7 .7 5                156
                  $762                   $ 1 5 6 ,1 1 8            $ 1 2 9 ,7 0 0                    33             $ 2 0 .5 0                 75
                  $656                   $ 1 6 7 ,4 2 9            $ 1 4 2 ,7 0 0                    32             $ 1 8 .6 1                195
                  $962                   $ 2 4 4 ,8 4 7            $ 2 3 5 ,1 0 0                   -6 3            $ 2 1 .2 0                284
                  $662                   $ 1 3 4 ,2 6 7            $ 1 0 5 ,2 0 0                    NA             $ 1 9 .0 7                414
                  $633                   $ 1 5 9 ,7 8 3            $ 1 2 0 ,2 0 0                    38                   NA                  NA
                   NA                              NA                $ 9 2 ,2 0 0                    56             $ 2 0 .2 5                273




      T a b le F o u r s h o w s se v era l d iscre te in d ica to rs.
                 C o s t o f L iv in g --O rla n d o is a b o u t a t th e n a tio n a l a ve ra g e a n d s lig h tly b e tte r th a n o th e r
      m e tro a re a s.
                 F o r a p a rtm e n ts a n d h o u s in g , O rla n d o is a b o u t m e d iu m , e x ce p t it ran k s ve ry w e ll o n th e
      m e d ia n ho u s in g p rice m e a su re .
                 In te rm s o f re lo ca tio n s in to m e tro a re a , O rla n do is q uite h ig h .
                 O n o ffice sp a c e co s ts , O rla n d o is m e d iu m .
                 O n th e n u m b e r o f flig h ts, O rla n d o is h ig h , th o u g h n o t th e h igh e s t.




      S o u rce s :
      C o s t o f L iv in g Ind e x , A p a rtm e n t a n d H o m e P rice s , a nd M e d ia n H o m e P ric e : N a tio n a l A s so cia tio n o f R e a lto rs ; O ffic e S p a ce : A rth u r A nd e rs e n S u rve y;
      R e lo c a tio n s to C o m m u n ity: A n g e lo u E co n o m ic A d v iso rs; F lig h t In fo rm a tio n : C la rita s




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                                                                                                     50
                                                                                                                                                                                                                      APPENDIX
   T a b le F iv e: Q u ality o f L ife C o m p a riso n s
   (F o u r M e tro A re a s )

   M e tro A re a                                                                                         A u stin                                     O rla n d o                            C h a rle sto n                            S a n D ie go
   P o p u la tio n                                                                                      1 ,0 4 1 ,3 3 0                                1 ,4 1 7 ,2 9 1                          4 9 5 ,1 4 3                              2 ,6 5 5 ,4 6 3



   CATEG O RY                                                        N a tio n a l A v e ra g e   A u stin M e tro V a lu e s      A u stin R a nk   O rla n d o M e tro        O rla n d o    C h a rles to n         C h a rles to n    S a n D ie g o      San
                                                                                                                                                          V a lu e s             R ank        M e tro V a lu es            R ank         M e tro V a lu es   D ie g o
                                                                                                                                                                                                                                                             R ank

   H O U S IN G
   M e d ia n p rice fo r 3 -b e d ro o m h om e :                        $ 1 5 5 ,8 2 9                 $ 1 6 0 ,0 0 0                 198             $ 1 4 9 ,2 4 0             157          $ 1 8 9 ,0 2 0              265            $ 2 4 9 ,8 6 0     288
   C h a n ge in av e ra g e h o m e v alu e                                4 .8 1 %                       9 .7 1 %                      16               3 .8 3 %                 205            0 .6 5 %                  277              1 .3 9 %         269
                            s in c e 1 9 9 8
   U tility c os ts : (A v e ra g e fo r a n 1 ,8 0 0 s q . ft.            $ 1 1 0 .5 9                    $ 8 9 .3 0                    57              $ 1 0 4 .8 0              159           $ 1 1 4 .1 0               204             $ 1 1 5 .0 0      206
                                hom e)


   Q U A L IT Y O F L IF E
   P ro s p o rts in d e x: (1 0 0 is b e st; 0 is w o rst)                  4 7 .3 2                         26                        228                  71                     72               27                     196                 60             87
   A rts & c u lture in d e x : (1 0 0 is b es t; 0 is                       4 6 .1 7                         47                         88                  39                    126               36                     159                 63             53
                               w o rs t)


   C R IM E
   P ro p erty c rim e y e a rly p e r 1 0 0 ,0 0 0                        4 ,6 1 9 .7 3                 5 ,4 1 4 .3 0                  215              6 ,5 9 0 .7 0             274          5 ,8 6 0 .6 0               248            3 ,7 5 0 .8 0       87
                               p e o p le :
   V io le n t c rim e y e a rly p e r 1 0 0 ,0 0 0 p e o p le:             5 5 8 .3 6                     4 9 0 .9                     131              1 ,0 6 7 .3 0             284              940                     272              6 6 6 .4         203



   E N V IR O N M E N T
   E P A w a te rs h e d ra tin g (1 0 0 is b es t; 0 is                     3 1 .7 9                       9 5 .6                       13                 2 4 .8                 147             2 6 .4                   138               2 5 .8          141
                               w o rs t)
   A ir q u a lity ra ting (2 0 0 is b e s t; 0 is w o rs t)                 1 1 8 .9                       140                          73                 175                     8              175                       8                 150             42
   A ve ra g e c o m m u te tim e (m ins ):                                  1 9 .5 1                       2 1 .4                      227                 2 2 .6                 253             2 2 .1                   246                21             214




   W EATHER                                                              N a tio n a l A ve ra g e                      A u stin              O rla n d o                C h a rle sto n                         S a n D ie go
   S u n n y d ays : (d a ys p e r y e a r w ith cle a r/p a rtly                                      2 1 3 .1 4                     231                   242                                     214                           267
                            c le a r w e a th er)
   A v e ra g e J u ly hig h (d e g re es F a h re n h eit):                                             8 6 .7 3                    9 5 .9                   90                                   8 9 .1                       7 7 .3
   A v e ra g e J a n u a ry lo w (d e g re e s F a h ren h e it):                                       2 7 .0 2                    3 9 .3                   50                                   3 7 .3                       4 5 .8




   T a b le F ive sh o w s a n o th e r m o re d e ta iled se rie s o f q u a lity o f life m e a su re s fo r fo u r m e tro a re a s.
   K e y fin d in g s:

                  H o u s in g p rice s — O rla n d o is th e lo w e s t o f th e fo u r.
                  S p o rts — O rla n d o ra te s w e ll in te rm s o f n u m b e r o f te a m s.
                  A rts a n d c u ltu re , O rla n do ra n ks lo w .
                  C rim e — O rla n d o is th e w o rs t o f th e se fo u r c itie s o n b o th m e a su re s .




                                                                                                                                                                                                                                                                        51
IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.
                                                                          APPENDIX
    Table Six: Connectivity


                        Total      Home
          Metro Area    Wired      Wired      Startup       BizGrow
                        Index      Index       Index           Index

               Austin   44.0        10.0          62                61
              Atlanta   30.3         6.4          98                63
           Columbus     23.6        6.2           42                57
              Denver    29.9        7.7           64                64
               Miami    24.5         3.7          77                25
         Minneapolis    30.4         6.5          39                83
            Nashville   27.3        7.7           56                74
             Orlando    22.2        4.5           65                65
             Phoenix    26.7        5.8          100                85
     Raleigh-Durham     26.9        5.4           73                77
           Richmond      n/a        n/a           53                48
       Salt Lake City   25.3        5.6           77               100
           San Diego     n/a        n/a           53                37
            St. Louis   19.6         4.3          48                43
              Tampa     21.3        5.6           52                38


    Sources:
    Total Wired Index and Home Wired Index: Yahoo; Startup Index
    and BizGrow Index: Dun and Bradstreet




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.         52
                                                                                                                                                                                        APPENDIX
  T a b le S e v e n : T e c h n o lo g y D e m o g ra p h ic s

                                                                                  A u s tin    O rla n d o   S a n D ie g o C h a rle s to n     R a le ig h /D u rh a m      R ic h m o n d      A tla n ta    N a s h v ille   P h o e n ix


                                           B u s in e s s S ta rt -U p s
                                                              T o ta l-1 9 9 7    1 2 ,8 9 5    1 2 ,0 7 0     2 3 ,6 3 3          NA                     6 ,0 3 7               5 ,4 1 0         2 0 ,3 9 3        NA            1 4 ,5 5 2

                       P e r C a p ita B u s in e s s S ta rt-U p s                1 .6 5        1 .1 3          0 .9 5            NA                     0 .8 2                  0 .6 2            0 .7 2          NA              0 .6 9
                                          (p e r 1 0 0 in h a b ita n ts ; th e
                          n a tio n a l a v e ra g e p e r 1 0 0 is 0 .6 2 8 )

                                               B u s in e s s G ro w th
      (p e rc e n ta g e c h a n g e in b u s in e s s e s ta b lis h m e n ts
    fro m 1 9 9 0 -1 9 9 6 ; th e n a tio n a l a v e ra g e is 1 1 .8 6 % )
                                                                                  3 4 .9 6        NA             1 .4 9            NA                      NA                      NA              2 2 .1 8       1 8 .0 8         2 0 .6 8

                                                  In c o m e G ro w th
       (a v e ra g e a n n u a l g ro w th ra te o v e r la s t 1 0 y e a rs )      5 .6          4 .3            3 .7             4 .6                    5 .3                    4 .4              4 .8           5 .4             4 .2

                                                F e d e ra l F u n d in g         5 ,1 0 6        NA            6 ,3 2 9           NA                      NA                      NA              4 ,3 8 8       4 ,5 0 6         4 ,1 4 3
             (p e r C a p ita in 1 9 9 7 ; th e n a tio n a l a v e ra g e is
                                                                  $ 5 ,0 1 4 )


                                                                E x p o rts
                     F o re ig n e x p o rts o f g o o d s ($ m ill.) 1 9 9 7     3 ,3 5 5      1 ,7 0 0        7 ,8 1 0         2 ,5 9 0                 2 ,7 2 0               5 ,5 7 0          6 ,6 0 5       1 ,7 6 7        1 1 ,1 0 8

                                           M e d ia n A g e in 1 9 9 5             3 0 .8        3 5 .9          3 2 .2            3 1 .4                 3 0 .3                  3 3 .2            3 2 .8         3 3 .7           3 3 .7
                                               (N a tio n a l a v g .: 3 3 .8 )

                                  W o rk in g A g e P o p u la tio n               6 5 .6         NA             6 2 .5            NA                      NA                      NA               6 6 .2         6 4 .3           6 1 .7
      (% o f M e tro p o p u la tio n b e tw e e n 1 8 -6 4 , in 1 9 9 6 ;
                            th e n a tio n a l a v e ra g e is 6 2 .7 % )



 T a b le S e v e n , d e s p it e t h e m is s in g d a t a , s h o w s s e v e r a l k e y p o in t s .

              B u s in e s s s ta r t - u p s p e r c a p it a , O r la n d o is s e c o n d b e s t, b e h in d A u s tin .
              I n c o m e g r o w t h — O r la n d o is la s t a m o n g th e s e a r e a s , t h o u g h n o t b y to o m u c h .
              E x p o r t s — O r la n d o is la s t . T h is fig u r e , h o w e v e r , is n o t m e a s u r e d p e r c a p it a .
              D e m o g r a p h ic s — O r la n d o is t h e o ld e s t in t e r m s o f m e d ia n a g e , p r o b a b ly b e c a u s e o f t h e
              r e t ir e e p o p u la tio n . D a t a
                             o n ly o n w o r k in g a g e p o p u la tio n , h o w e v e r , w o u ld s h o w a la r g e y o u n g w o r k f o r c e .




 S o u rc e s :
 F e d e r a l R e s e r v e B a n k o f S t . L o u is , 1 9 9 8 ; C o n s o lid a t e d F e d e r a l F u n d s R e p o r t , F is c a l Y e a r 1 9 9 7 ; U . S . B u r e a u o f C e n s u s , O f f ic e o f M a n a g e m e n t a n d
 B u d g e t; C o u n ty a n d C it y E x t r a 1 9 9 9 , A n n u a l M e t r o , C it y a n d C o u n t y D a t a B o o k 1 9 9 9 ; W a s h in g t o n , D . C . ; M e t r o A r e a E x p o r t e r s , 1 9 9 7 E x p o r t V a lu e ; U . S .
 B u r e a u o f C e n s u s , E x p o r t A s s is ta n c e ; S t a t e a n d M e t r o p o lita n A r e a D a t a B o o k : 1 9 9 7 - 1 9 9 8 ; U . S . B u r e a u o f C e n s u s , 1 9 9 8 M S A P r o file ; U . S . B u r e a u o f
 C e n s u s : C o u n ty B u s in e s s P a t t e r n s , 1 9 9 0 a n d 1 9 9 6 ; U . S . D e p a r tm e n t o f C o m m e r c e : R e g io n a l E c o n o m ic I n f o r m a tio n S y s t e m : 1 9 6 9 - 1 9 9 6 , B u r e a u o f
 E c o n o m ic A n a ly s is ; U . S . D e p a r t m e n t o f L a b o r : B u r e a u o f L a b o r S t a t is t ic s ; C u r r e n t P o p u la tio n S u r v e y : 1 9 9 5 M a r c h S u p p le m e n t ; F a c t s A b o u t th e C itie s ,
 1 9 9 6 ; A lla n C a r p e n t e r & C a r l P r o v r s e ;2 n d E d itio n , H . W . W ils o n C o m p a n y , N e w Y o r k , N Y ; L e a d S h e e t , C o u n ty D a t a C o r p o r a t io n .




                                                                                                                                                                                                                                               53
IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.
                                                                                                                                                                                      APPENDIX
   T a b le E ig h t: V e n tu re C a p ita l In v e s tm e n ts
                       V e n tu re C a p ita l
                            In v e s tm e n ts
                              ( m illio n s $ )                                                                                                    R a le ig h -
                                                  O rla n d o       S a n D ie g o       R ic h m o n d        D a lla s         A u s tin         D u rh a m         A tla n ta

                     1999

                       B io te c h n o lo g y                  0            $ 5 1 .9                    0                  0               0             $ 2 6 .2 5          $ 4 .4
                   C o m m u n ic a tio n s             $ 1 3 .8            $ 4 6 .1                    0           $ 5 2 .4        $ 2 2 .0               $ 1 .3 0        $ 7 5 .6
        C o m p u te r s & P e r ip h e ry                     0                   0               $ 1 .0                  0          $ 4 .3               $ 0 .0 0               0
                         E le c tr o n ic s &             $ 1 .6              $ 4 .4               $ 0 .0                  0        $ 4 2 .7               $ 2 .5 0               0
                     In s tru m e n ta tio n
   S e m ic o n d u c to r s /E q u ip m e n t                 0                   0                    0                  0          $ 0 .9               $ 0 .0 0               4
         S o ftw a r e & In fo r m a tio n                $ 2 .9            $ 1 3 .4                    0             3 5 .8        $ 9 8 .6             $ 2 9 .4 7        $ 4 8 .1
                                      O th e r          $ 1 4 .4            $ 7 6 .9               $ 0 .1           $ 6 8 .5        $ 6 4 .2           $ 1 3 4 .0 0        $ 4 5 .9
                          A ll In d u s tr ie s         $ 1 8 .3          $ 1 9 2 .7               $ 1 .1         $ 1 5 6 .7      $ 2 3 2 .6           $ 1 9 3 .5 2      $ 1 7 8 .0


                     1998

                       B io te c h n o lo g y                  0            $ 2 1 .8             $ 1 5 .0                  0               0               1 3 .2 4               0
                   C o m m u n ic a tio n s             $ 2 6 .0            $ 6 9 .1                    0           $ 6 8 .9        $ 3 3 .2                 1 .0 5          $ 1 .3
        C o m p u te r s & P e r ip h e ry                     0              $ 0 .7                    0             $ 3 .0        $ 1 0 .0                      0               0
                         E le c tr o n ic s &                  0            $ 1 3 .0                    0                  0        $ 1 4 .9                      0               0
                     In s tru m e n ta tio n
   S e m ic o n d u c to r s /E q u ip m e n t                 0                   0                    0                  0          $ 3 .3                      0               0
         S o ftw a r e & In fo r m a tio n                     0            $ 5 1 .4                    0           $ 3 7 .7      $ 1 3 4 .6                 7 .8 6          $ 7 .7
                          A ll In d u s tr ie s         $ 2 6 .0          $ 2 8 4 .1             $ 1 5 .9         $ 1 8 3 .8      $ 2 0 6 .9               3 7 .9 2        $ 1 1 .0


   (N o te th a t O rla n d o in c lu d e s W in te r P a rk , L a k e M a ry , a n d M a itla n d . D a lla s in c lu d e s F o rt W o rth , A rlin g to n ,
   R ic h a rd s o n , P la n o ,
   a n d Irv in g .)




   T a b le E ig h t, v e n tu re c a p ita l, s h o w s n o m a jo r s u rp ris e s . O n ly s m a lle r R ic h m o n d
   a ttra c te d a s m a lle r a m o u n t o f v e n tu re c a p ita l in re c e n t y e a rs . T h e O rla n d o m e tro
   a re a is s ig n ific a n tly b e h in d o th e r a re a s , e x c e p t fo r A tla n ta in o n e o f th e tw o
   y e a rs . D a lla s , A u s tin , a n d S a n D ie g o h a v e a p p ro x im a te ly 1 0 tim e s a s m u c h
   v e n tu re c a p ita l a s O rla n d o . A n d o f c o u rs e , e v e n th e s e a re a s d o n o t c o m p a re to
   S a n J o s e o r B o s to n .




   S o u rc e :
   S ilic o n V a lle y .c o m



IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                                                                                                     54
                                                                                     APPENDIX
   Table Nine: Patents


                         1997     1998
       Tampa              286      382
        Austin            888     1440
       Atlanta            744     1034
        Dallas           1147     1471
      Orlando             165      229
     Las Vegas            101      141
   Raleigh-Durham         527      828
      Richmond            152      125
     San Diego           1235     1673
      San Jose           3255     4931
       Boston            2747     3687
      Total US         61,812   80,416



   Table Nine shows roughly the same pattern as with venture capital. Orlando is
   superior only to smaller metro areas, in this case, Las Vegas and Richmond. The
   Orlando metro area also has fewer patents than Tampa. Orlando is far behind
   Austin, San Diego, Dallas, Raleigh, and Atlanta, not to mention the leaders
   nationally (San Jose, Boston). The trend over the past 10 years in the Orlando
   area is actually somewhat down, except for the last year (1998), as is shown in
   Table Ten.




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                    55
                                                                                                  APPENDIX
   Table Ten: Patents in the Metro Orlando Area
   In Recent Years

                         1990      1991       1992      1993        1994     1995     1996     1997     1998

       Lake County         11         12        10        10          13       10       11       14       20
     Orange County         96        105        84        77          84       89       95       94      139
     Osceola County         6          7         6        11          10        6        4        6        7
    Seminole County        83         57        87        69          45       56       59       51       63

      Total Orlando       196        181       187       167         152      161      169      165      229

           Total US    47,497     51,308    52,375    53,341       56,160   55,836   61,200   61,812   80,416




   Source:
   U.S. Patent and Trademark Office, U.S. Department of Commerce




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                         56
                                                                                                           APPENDIX
    IV. Summary of Quantitative Benchmarking
    Compared to the top-flight metro areas nationally, Orlando is not yet a high-ranking area, except
    on several quality of life indicators. On several business start-up and job growth measures,
    Orlando also compares favorably, although those indicators probably are reflecting mostly service
    jobs and companies. In terms of intellectual assets (patents, research funding, education
    measures), which often predict subsequent technology-based economic expansion, Orlando is
    still not among the higher-ranking metro areas. And certainly on venture capital, it ranks very low.

    What should be remembered, however, is that Orlando has been compared to the technology
    leaders, rather than to old economy metro areas cities. Further, some of the metro areas in the
    south and southwest to which Orlando has been compared are larger in size. As least in terms of
    quantitative comparisons, Orlando is on the verge, but has not quite achieved the stature of the
    leading technology areas in the United States.




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                                          57
                                                                                      APPENDIX




                                    Venture Capital (All Industries-1999)

                       $250
                       $200
          (millions)




                       $150
                       $100
                        $50
                         $0
                                          go



                                                      d




                                                                                            a
                                                                                  m
                                                                      tin
                                                               s
                                o




                                                             la




                                                                                          nt
                                                    on
                               nd




                                                                                ha
                                          ie




                                                                    us
                                                           al




                                                                                       tla
                                                   m
                              rla



                                       D




                                                                              ur
                                                          D


                                                                   A




                                                                                      A
                                                 ch




                                                                             D
                          O



                                      n
                                     Sa



                                               Ri




                                                                           h-
                                                                         ig
                                                                       le
                                                                     Ra




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.                         58
                                                                                                         APPENDIX




                                                 Pattern of Changes in Patents
                                   900
                                   800
            US is 1/100 of total




                                   700
                                   600
                                   500                                                                  Total Orlando
                                   400                                                                  Total US
                                   300
                                   200
                                   100
                                     0
                                         1990

                                                1991

                                                       1992

                                                              1993

                                                                     1994

                                                                            1995

                                                                                   1996

                                                                                          1997

                                                                                                 1998


                                                                                                                        59
IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.
                                                                                APPENDIX


                                             Patents in 1998




                               Boston
                              San Jose
                            San Diego
                             Richmond
                        Raleigh-Durham
                            Las Vegas
                              Orlando
                                Dallas
                               Atlanta
                                Austin
                               Tampa

                                         0   1000   2000   3000   4000   5000




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.               60
                                                                          APPENDIX


                                       Business Start-Ups
                                         (Per Capita)



                        Phoenix

                         Atlanta

                      Richmond

                Raleigh/Durham

                      San Diego

                        Orlando

                         Austin

                                   0       0.5         1          1.5      2




IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.         61
                                                                           APPENDIX


                                         Major Airplane Flights

                         St. Louis
                       San Diego
                    Salt Lake City
                        Richmond
                   Raleigh-Durham
                          Phoenix
                         Orlando
                         Nashville
                      Minneapolis
                           Miami
                          Denver
                    Columbus, OH
                          Atlanta
                           Austin

                                     0     100   200   300   400     500   600




                                                                                 62
IC2 Institute, The University of Texas & ANGELOU ECONOMIC ADVISORS INC.

				
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