Adaptive Cluster Proposal City Lab Fall 11 FINAL

8/3/2019 Adaptive Cluster Proposal City Lab Fall 11 FINAL

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Georgetown University School of Continuing Studies

SPIRE Institute

December 2011

Proposal for the

Creation of a New Economic Clusterin Northeast Ohio:

Adaptive Community


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EXECUTIVE SUMMARY 3

I. INTRODUCTION 5

GEORGETOWN-SPIREPARTNERSHIP 5CITY LAB COURSE 5

II. CONCEPT 9

MISSION 9ADAPTIVE COMMUNITY 9

THE IDEABEHIND AN ECONOMIC CLUSTER 10RATIONALE FOR NORTHEAST OHIO 12

III. BUSINESS MODEL 16

PRODUCTS 18CONTRIBUTORS 27

IV. BENEFIT AND RISK ASSESSMENT 35

CONTRIBUTORS 35POLITICAL 41

V. COMMUNICATIONS PLAN 43KEY PUBLICS 43BRAND POSITIONING 46MESSAGING 47STRATEGIES AND TACTICS 50

REFERENCES 59


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Executive Summary

This document presents a proposal for the creation of a new economic cluster

for the Northeast Ohio region that will be centered on the adaptive community.This new economic cluster will create new jobs, industries, technologies, andhuman capital for the benefit of the region and its people.

This proposal is the result of student and faculty research and work for thecourse City Lab, which was offered in the fall 2011 academic semester througha joint partnership between Georgetown Universitys School of ContinuingStudies and the SPIRE Institute.

This proposal presents the following: an overview of City Lab, a history ofeconomic clusters, rationale for the creation of a new Adaptive Cluster, abusiness plan, a benefit and risk assessment, and a communications plan.

Mission

The mission of City Lab is to pioneer the development of a sustainableNortheast Ohio economic cluster that attracts, connects, and creates entitiesthat generate the research, products, and opportunities to serve thestakeholders of the adaptive community.

The creation of this new Adaptive Cluster will:

Promote Economic Sustainability Develop Human Capital Foster Entrepreneurship Ignite Community Connection

Adaptive Cluster

The proposed economic cluster will harness the existing strengths and entitiesof the Northeast Ohio region and create a set of new products and services.

Through the interactions of seven (7) key contributors, four (4) new products andservices will be created.

The following products will result from the new Adaptive Cluster:

Medical Devices


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Human Motion and Control Adaptive Sports Equipment Clothing

The expertise and resources from the following contributors will be essential for

the creation and success of the new Adaptive Cluster:

SPIRE Institute Georgetown University Government Non-Profits Medical Institutions Academic Institutions For-Profit Companies and Manufacturers

Next Steps

Following the presentation of this proposal to key stakeholders, there are twonecessary steps that should happen in order for the Adaptive Cluster to becreated.

The first is to convene requisite capital and financial backing from interestedparties. A financial model or schema should be created to illustrate and

communicate how funding will be used.

The second is to create a timeline for the implementation of the Adaptive Clusterthat includes the interactions of the products and contributors, communicatingthe integration of products and services with stakeholders.


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I. Introduction

Georgetown-SPIRE Partnership

The Georgetown University School of Continuing Studies (SCS) has partneredwith the SPIRE Institute, located in Geneva, Ohio, to provide custom educationalprogramming that answers todays most pressing challenges. In partnershipwith SPIRE, Georgetown will provide expert resources, faculty and curriculumwhile SPIRE will provide classroom and training space at its new state-of-the-artfacilities. Together, the two institutions will work to advance the shared purposeof unlocking human potential and impacting communities.

Georgetowns School of Continuing Studies was originally created in 1956 to

develop new academic programming for the adult, non-traditional, and localmarkets in the Washington, D.C. metropolitan area, extending the capacity ofGeorgetowns mission of educational outreach and inclusivity. The School has arecord of creating applied academic programs that uphold the standard ofexcellence that has existed at Georgetown for more than 200 years. The Schoolprovides adults and professionals with opportunities to advance both personallyand professionally, and fulfills Georgetowns mission of creating women andmen in the service of others.

The SPIRE Institute is a non-profit organization whose mission is to unlock the

full potential of the human spirit via athletics, academics, and service at itsstate-of-the-art facilities in Geneva, Ohio. SPIRE was founded to be anaccessible living-learning laboratory, and is within driving distance of two-thirds of the U.S. population. It serves U.S. and International participantsincluding high school, collegiate, and professional athletes; clubs, camps, andteams of various levels; Olympians, Paralympians, Special Olympians, andWounded Warriors, among others.Its ultimate vision is to lead as a one-of-a-kind non-profit in order to cultivate character and produce good citizens whoknow how to cooperate, compete, and lead.

City Lab Course

City Lab is a new multidisciplinary course offered through a partnership betweenGeorgetown and SPIRE that brings theory to practice with an educationalexperience that takes students from the classroom in Washington, D.C. to theSPIRE facilities in Geneva, Ohio, a living learning laboratory. The course offersan opportunity for students to work collaboratively on solving multiple urban


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challenges facing Northeast Ohio, bringing together the skills and talent fromvarious disciplines and fields, with the ultimate goal of creating a new economiccluster that will impact the region.

The inaugural fall 2011 course roster has brought together students and facultyfrom many SCS programs, including the masters programs in sports industrymanagement, human resources management, public relations & corporatecommunications, real estate, and technology management, as well as thebachelors and masters programs in liberal studies. The rigorous,multidisciplinary curriculum is pushing the boundaries of applied highereducation by creating an entirely new way of coalescing institutions andcommunities around solving some of the worlds most pressing challenges.

Through City Lab students have studied reports on the Northeast Ohio region,read texts on economic clusters and social capital, heard lectures from expertfaculty members, and met with community leaders and townspeople fromGeneva. Through classroom and field collaboration, as well as market research,the fall 2011 class targeted the adaptive community as a possible segment forcreating an engine of economic growth in the Northeast Ohio region. Thisproposal for the creation of an Adaptive Clustera new economic cluster thatwill connect existing area industries, coalesce leaders and politicians, andcreate jobsis the culminating project of the City Lab course and was producedby Georgetown students under the guidance of faculty.

Students

Students in the fall 2011 City Lab course come from six Georgetown mastersprograms and one Georgetown undergraduate program, bringing together thetalent and skills from across industries and disciplines. Such an academicallyand professionally diverse roster ensured that the course, as well as thisproposal, is inimitable in todays higher education landscapetruly puttingtheory into practice in an impactful way. The students, under faculty guidance,were the sole creators of this document.

The students and their respective academic programs are as follows:

Tyrishma A. Allen, Masters in Real Estate Eugenie W. Bostrom, Bachelors in Liberal Studies Chris Carrington, Bachelors in Liberal Studies Carlos P. Casseus, Masters in Technology Management Clarence R. Daniels, Bachelors in Liberal Studies


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Mary C. Dixon, Masters in Liberal Studies Tamara Filipovic, Masters in Human Resources Management Emmanuel Isaac Flatto, Bachelors in Liberal Studies

Joseph S. Friend, Masters in Real Estate Kelly Holdcraft, Masters in Public Relations & Corporate Comm. Ireene C. Leoncio, Masters in Public Relations & Corporate Comm. Simon A. Manka, Masters in Real Estate Lizette L. Salvador, Masters in Human Resources Management Matthew Scheel, Masters in Real Estate Itiah S. Thomas, Masters in Real Estate Marshall Williams, Masters in Technology Management

Faculty

Faculty co-teaching the fall 2011 City Lab course represent myriad industriesand academic disciplines, bringing together experts with decades of combinedprofessional and teaching experience. Their expertise and guidance served inthe creation of this document.

The faculty and their respective credentials are as follow:

Albert CalogeroSupervising Media Editor/Producer, WUSA-TV, Washington, D.C.;

Adjunct Professor, Journalism, University of Maryland Kesha Christoph

Special Projects Manager, SPIRE Institute

Marty ConwayPrincipal, Way Forward Associates LLC; faculty member, Sports

Industry Management masters program, Georgetown University;

former business development executive at AOL; former VP marketing

for the Texas Rangers and Baltimore Orioles

Stuart CordellAttorney, Warren and Young PLL, Ashtabula, Ohio

Bobby GoldwaterPresident, The Goldwater Group; faculty member, Sports Industry

Management master's program, Georgetown University


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The Hon. William Bill Hudnut, IIIPrincipal, Bill Hudnut Consultants, LLC; Senior Fellow Emeritus,

Urban Land Institute, Washington, D.C.; former mayor of Chevy

Chase, Maryland, 2004-2006; former mayor of Indianapolis, Indiana,1976-1992; former member of U.S. House of Representatives,

Indianas 11th district, 1973-1975

Robert L. Manuel, Ph.D.Associate Provost and Dean, School of Continuing Studies,

Georgetown University

Christina RobertsChief of Staff, School of Continuing Studies, Georgetown University


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II. Concept

Mission

The mission of City Lab is to pioneer the development of a sustainableNortheast Ohio economic cluster that attracts, connects, and creates entitiesthat generate the research, products, and opportunities to serve thestakeholders of the adaptive community.

The creation of this new Adaptive Cluster will:

Promote Economic Sustainability Foster synergies with existing andpotential entities to create a diverse and robust economic cluster through

continuous research, innovation, and development.

Develop Human Capital Identify the workforce skills needed to supportand serve the economic cluster and facilitate the knowledge and training

required through partnerships with businesses, institutions of education,

and government.

Foster Entrepreneurship Nurture a culture that supportsentrepreneurship and innovation by providing education, business

relationships, and funding targeted at the needs of the economic cluster.

Ignite Community Connection Seek the involvement and provide aplatform for communication for all Adaptive Cluster stakeholders (i.e.

residents, local business owners, and lawmakers) through grassroots

marketing campaigns, social networking, and community gatherings.

Adaptive Community

To adapt is to make something suitable for a new use or purpose throughmodification, adjustment, and/or alteration. The term adaptive community,though, is hard to trace as it is a relatively new term. The word adaptive isused as an adjective to modify the word community in an effort to describepersons who display some physical limitation either from birth or as a result ofdisease, incident, or another cause. Members of the adaptive community come


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from all walks of life: children, war veterans, disabled, wheelchair-boundpersons, Paraolympians, the elderly, and other persons from nearly everycategory imaginable. What all members of the adaptive community share incommon is the desire to live life fully, without limitations.

The Idea Behind an Economic Cluster

What is cluster-based planning for economic development? Michael E. Porter,one of the worlds most influential thinkers on strategy and competitiveness, aswell as the development practitioner largely credited with popularizing the theoryof economic cluster strategy, defines clusters as geographic concentrations ofinterconnected companies, specialized suppliers, service providers, andassociated institutions in a particular field that are present in a nation or region(Porter, 2011). Other leading economic theorists and development practitioners

define clusters more simply as a spatial and sectoral concentration of firms(Bresnahan, Gambardella & Saxenian, 2001), or more explicitly asconcentrations of businesses that collocate because of trading (buyer-supplier)relationships and/or to share common factor markets (including infrastructure,knowledge resources and labor) and/or common goods markets (Luger, 2005).

Since the 19th century, economic clusters have existed in various placesthroughout the U.S. to promote prosperity and economic development inspecific market segments. The genesis of these clusters varies, with somesprouting up organically while others were strategically planned and

implemented. The ultimate success of economic clusters can largely beattributed to the amount of financial capital invested through the use of variousfunding sources, including government grants, venture capital firms, and privateentities.

The three most famous examples of U.S. clusters are Californias Silicon Valley,Bostons Route 128 Corridor, and North Carolinas Research Triangle Park(RTP). Both Silicon Valley and Route 128 clusters started in the 1960s, whileRTP dates back to the late 1950s (Saxenian, 1996). The first two focus on thehigh-tech industry with various specializations, including software and medicaldevices (Harvard Business School). The latter focuses on the life sciences

sector, while specializing in a range of industries like pharmaceuticals andbiotechnology (Harvard Business School).

These three clusters also represent the complexity of the overall economiccluster strategy, in that this approach is not one size fits all and it does notbegin in the same way everywhere. In fact, clusters can begin organically or


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intentionally. The origins of the Silicon Valley and Route 128 clusters are oftendescribed as indigenous and spontaneous. This distinction is in reference tothe fact that both Silicon Valley and Route 128 depended on the growth ofexisting firms and the start up of new ones by entrepreneurs with roots in the

state (Schalin, 2010 & 2011). RTP, on the other hand, began intentionally or in aplanned fashion. It was conceived of before it existed and it relied on outsidefirms relocating to the area (Research Triangle Foundation, 2011). As such, theRTP cluster depended on formally organized efforts, officially referred to ascluster initiatives, to promote cluster growth and competitiveness (Mills,Reynolds, & Reamer, 2008).

At the same time, all three clusters have two key characteristics in common.The first is that they each exist in specific geographical regions and the secondis that they are high-tech. That they form a geographic cluster indicates theirability to better leverage the necessary economic inputs and key players due totheir proximity and agglomeration in one place, region, or area. That they are allhigh-tech indicates their ability to take advantage of renowned universities andresearch centers in a way that fosters high-tech research, development,manufacturing, and markets for the benefit of regional economies.

Ultimately, the presence and strength of these three clusters positively impactedtheir regions economic performance in the following ways:

Higher gross domestic product per capita (Ketels, 2008) Higher housing prices (EDA) Higher regional and traded sector wages (Porter, 2003; Delgado, 2011;

Gibbs, 1997; Wheaton, 2002)

Higher number of New Business Formations and patentsa measure ofinnovation (Delgado, 2011)

Higher number of successful transitions from unemployment orunderemployment to high-skill jobs (EDA)

Such impact indicates that the performance of regional economies is stronglyinfluenced by the strength of local clusters (Porter, 2003). What determines thestrength of most clusters is the extent to which their collaborative process

involves government at multiple levels, companies, teaching and researchinstitutions, and centers for collaboration, in order to research and develop,produce, and market for emerging industries. This strategic and dynamicinterconnectedness allowed all three aforementioned clusters to create resilient,robust, innovative, sustainable, and competitive regional economiesand it issomething City Lab intends to create for Northeast Ohio.


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However, with respect to cluster-based development in other regions, acommon critique of economic cluster strategy is that you cant copy and pastea Silicon Valley cluster model anywhere youd like to spur economic growth

and recovery (Wadhwa, 2010; Saxenian, 1996). While the above noted examplesare relevant to the cluster model we propose in this document for NortheastOhio, they are not used in a copy and paste fashion. The noted characteristicsof these clusters help to clarify the unique strengths of the Northeast Ohioregions existing networks and assets that in turn help identify the economiccluster strategy as the best suited economic development approach for thisregion. It is from this perspective and foundation in the economic clusterstrategy where the germination of an Adaptive Cluster to reinvigorate NortheastOhio was born.

Rationale for Northeast Ohio

Northeast Ohio [is] home to both innovation and manufacturing assets

that could be at the forefront of a resurgent national economy.

Regional Business Plan, April 2011

Even before it formally joined the Union in 1803, the state of Ohio was exaltedas a land of promise and a realm of varied resources (Havighurst, 1976). Suchpraise can even be found in George Washingtons journals, dating back to 1770,when he first explored the Ohio River valley and wrote that, The great

valleywould soon attract a great population; it would be settled and civilizedmore rapidly than any similar domain in history (Havighurst, 22). The firstPresident was not wrong in his prediction, for it didnt take long before Ohio wasat the forefront of an emerging U.S. industrial economy that started at the end ofthe 19th century.

From that time until the 1960s, the U.S. economic development model reliedheavily on government-driven policy decisions and incentives that built world-leading industries, which provided well-paying jobs and economic prosperityacross the nation. During this time, Northeast Ohio was one of the countryspremier assembly and parts-manufacturing centers, home to auto plants, steel

mills, tool and die manufacturing, and a range of related industries thatproduced diesel engines, construction and industrial vehicles, aircraft parts, andmore. Above all, this industrial heritage depended on the regions ability to pulltogether its inherent assets (i.e. natural resources, skilled human capital, andmanufacturing and transportation infrastructure) for the production of industrialcomponents that generated huge reserves of wealth for the region.


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However, beginning in the 1960s, Northeast Ohio started to experience losses inthe production of rubber tires, steel products, and in its auto industry as awhole, along with contraction in its manufacturing employment base (Fund for

Our Economic Future & Advance Northeast Ohio, 2011). On a broader scale, theU.S. began losing its dominance across myriad industries and businessfunctions, including market share and jobs. With the arrival of globalcompetition these old economy industrial models with their hierarchical andcentralized structures, wherein inputs and supply-chains operated in silos, couldnot continue to compete and survive in the post-industrial economy thatdemanded more horizontal, decentralized, and diverse operating systems. Itwas during this time when it became clear that a new economic developmentmodel was needed.

Clustersare a fundamental fact of national economies, and a critical

enhancer of regional economic performance.

Brookings Institution, 2010

In 2008, the Brookings Metropolitan Policy Program called on a new federalapproach to economic development. The federal government should move topromote cluster development and growth nationwidethe federal governmentshould boost the nations competitiveness by catalyzing increased clusteractivity in U.S regions, Brookings stated (Mills, Reynolds, Reamer).

In 2009, the U.S. government heeded the call for this new economic

development approach when its Economic Development Administration (EDA)partnered with Michael E. Porter to lead the creation of the ObamaAdministrations cluster mapping project. More recently, in his Federal Budgetfor 2012, President Obama appropriated $325 million to EDA to support regionaleconomic competitiveness initiatives, including a proposal for a competition toidentify 20 potential clusters that would receive a share of $2.5 billion in funds(Leonard, 2011).

It can be said that the federal governments embrace of the economic clusterstrategy is long overdue, considering the fact that since the 19th century someform of an economic cluster has existed in the U.S. to promote prosperity and

economic development, including Northeast Ohios Plastic Parts Cluster thatstarted in 1935 (Harvard Business School).

What is more, Northeast Ohio already recognizes this particular strategy as aplanning mechanism for economic growth and recovery. In their April 2011Regional Business Plan, the Fund for Our Economic Future and Advance


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Northeast Ohio identified six high-potential, emerging industry clusters that theregion should focus on. These six industry clusters include: biosciences/healthcare, advanced manufacturing, cleantech/advanced energy, electronics,advanced materials, and information and communication technologies.

According to the report, these six areas leverage both the Northeast Ohiosresearch strengths based on its nationally recognized institutions and itstraditional manufacturing strengths. It is clear that the regions leadersunderstand that the economic cluster strategy is an apposite approach wherebythe regions existing strengths can be used to generate research, products, andopportunities in ways that are innovative, sustainable, and relevant for the neweconomy of the 21st century.

Transitioning to a more innovation-driven economy requires leveraging

the regions existing strengths and building clusters in emerging

industries.

Regional Business Plan, April 2011

As the above quote indicates, the Northeast Ohio region already has thecompanies, specialized suppliers, service providers, and associated institutionsin particular fields ready to compete in a geographic and advanced-tech clusterthat serves an emerging industry. These strengths include: large concentrationof medical institutions; nationally recognized academic institutions; growth ofnon-profits; increasing public-private partnerships; diversification and transitionof the regions manufacturing sector; and an innovative private sector. Thus,what Northeast Ohio needs is to intentionally develop a cluster that would

influence the necessary linkages and spillovers across firms and associatedinstitutions, which already generate the aforementioned strengths (Porter, 2003).That being said, the question remains: Which emerging industry would thiscluster best serve?

By accelerating and nurturing the interaction of the regions existing resourcesand competencies to serve the healthcare industry through the medical devices,human motion and control, adaptive sports equipment, and clothing markets,Northeast Ohio has the opportunity to pioneer the development of asustainable NE Ohio economic cluster that attracts, connects and createsentities which generate the research, products and opportunities to serve the

stakeholders of the adaptive community. We are calling it an Adaptive Cluster,an economic cluster that targets segments within the adaptive community.

This economic approach is powerful for the following three reasons. First, thisAdaptive Cluster would be a sub-section of one of the largest industry sectors innortheast Ohio. The Center for Economic Development within the Maxine


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Goodman Levin College of Urban Affairs at Cleveland State University describesthe healthcare industry in Northeast Ohio in the following way:

From 1978 to 2003, the national population grew by 31 percent, while

the national healthcare industrys employment increased 116 percent(1.63 ratio). In Cleveland, the population has remained almostunchanged (3%), while the healthcare industry grew 80 percent (1.86

ratio). Therefore, during the long-term period, Clevelands healthcarecluster grew faster than the national rate when controlling for thechange of population.

Second, the Adaptive Cluster does not exist anywhere else in the world. Andthird, there is no unified economic cluster in existence today that serves theworldwide adaptive community. For these reasons alone, the development ofthis economic cluster offers Northeast Ohio a decisive sustainable competitiveadvantage over other places in the nation and the world. Overall, this regionalcluster has the potential to achieve the following four goals: ignite communityconnection, promote economic sustainability, develop human capital, and fosterentrepreneurship.

The potential for this new Adaptive Cluster is based in an economicdevelopment strategy that builds upon the mindset that already exists inNortheast Ohio about thinking, planning, and acting like a region in accordancewith its inherent place-based advantages. The economic cluster proposed inthis document is in line with two of the six areas that were identified for cluster

development in the aforementioned Regional Business Plan (2011, April), whichare (1) biosciences/healthcare and (2) advanced manufacturing.

Finally, this Adaptive Cluster would also help achieve a number of goals that theAshtabula County Port Authority Economic Steering Committee identified intheir August 2010 Strategic Plan (28-31). These include the following: definewhat economic regionalism can mean in development; create synergy amongbusinesses and organizations to promote economic growth; identify relevantpartnerships and encourage participation; establish an advanced materialstechnology center and business incubator; coordinate with SPIRE to capitalizeon future potential; expand growth partnership role in all types of business

expansion; encourage local entrepreneurship; and active engagement in existingregional collaborative. City Lab is prepared to make the economic possibilities inthe region a reality through the creation of an Adaptive Cluster.


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III. Business Model

With the mission of City Lab as the foundation, the goal of the new economiccluster is to nurture the environment for the creation, incubation, expansion,transformation, funding, and attraction of people and entities that research,design, develop, manufacture, maintain, provide education and training,regulate, and promote the use of (1) medical devices, (2) human motion andcontrol, (3) adaptive sports equipment, and (4) clothing, to form a new AdaptiveCluster for the Northeast Ohio region. The Northeast Ohio region consists of 16counties with a population of 4.1 million people. The regions $170 billion annualeconomy places it in the top 25 nationally and at number 42 globally.

We have identified these four emerging market segments that exhibitopportunities to create products and services that will harness Northeast Ohiosstrengths. These strengths are characterized by the regions existing institutions,companies, non-profits, and public and private partnerships (these entities aredetailed in depth in the section: Contributors [p. 26]). These contributors willwork in tandem to attract human capital to the region and to further economicgoals by way of the bioscience, healthcare, and advanced manufacturingindustries. Contributing partners will be crucial to the success of the new

Adaptive Cluster and will be essential in reaching the ultimate goal of benefittingthe global adaptive community.

The proposed business model is based on the interactions between two groupsof entities: products and contributors. Through interaction, connection, andengagement, a new regional exercise based in the intellectual and practicalpursuits of people will create a new economic cluster, the Adaptive Cluster. Thisnew economic cluster will become greater than the sum of its parts, for nosingle product or contributor can advance or succeed without the mutualinteractions and support from other entities.

Whats clear in the research on economic clusters, as well as Northeast Ohiosexisting industries and functions, is that there is a unique opportunity that existsduring this moment in time to formally validate an Adaptive Cluster that will

become an economic hub for the region, the country, and the world.

Moreover, this new economic cluster will be immensely impactful on humanlives. Members of the adaptive community, ranging from children to Paralympicathletes to war veterans, demonstrate a hunger for and need for the creation ofindustries around adaptive technologies. Through the creation of the Adaptive


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Cluster, members of the adaptive community will be living examples of how asmall idea can grow into a life-changing product through the coordination ofindustries. Most importantly, members of the adaptive community will come tothe region to engage with the products and the contributors of the adaptive

cluster, affecting meaningful and impactful change on a large scale.

The model below illustrates the interactions between the four (4) products(creations) and the seven (7) key partners (contributors), forming the genesisof the new Adaptive Cluster. These entities have mutually exclusive relationshipsand, together, will form the new Adaptive Cluster.


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Products

There will be four (4) market segments that the new Adaptive Cluster will createproducts or services for. The sections below describe each product segment

and articulate the respective opportunities of the markets.

1. Medical Devices

The Northeast Ohio region is poised to become the next destination for asustained medical device research, manufacturing, and practice as part of theproposed Adaptive Cluster. The thrust in the medical technology sector hasincrementally increased over the last three or four years and this momentum isexpected to continue as more companies are established, become profitable,and expand in the region (Magaw, 2011). The long-term goal is to have

Northeast Ohio become synonymous with the medical device industry, muchlike it once was with the automotive, steel, and rubber industries. In a January2011 article in Crains Cleveland Business, BioEnterprise Corp.s President,Baiju Shah, said to expect the region to be largely defined by health caretechnology within the next 10 or 20 years as Northeast Ohio will have beenthrough several entrepreneurial generations (Magaw).

The medical device market comprises all instruments, apparatuses, implements,appliances, implants, machines, in vitro reagents, and software that are used toprevent, diagnose, monitor, mitigate, treat, or cure medical conditions(Wipperfurth, 2010). Examples include products such as surgical appliances and

supplies, electro-medical equipment such as imaging and patient-monitoringsystems, and in-vitro diagnostic substances.

The assistive technologies (AT) market is a subset of the medical devicesindustry, and is a segment targeted for the Adaptive Cluster. These productsinclude clinical and at-home rehabilitative equipment, mobility aids such aswheelchairs, motorized scooters and canes, and aids of daily living such asrespiratory care, speech and communication aids, and grip assists. While thepreference is for producing medical devices that serve the adaptive community,the intent for this market segment is not limited to this audience.

The medical devices segment (also referred to as the MedTech market) of thehealthcare industry is greatly driven by innovation, which generates highdemand for the latest and best equipment. In 2000 the medical devices marketwas sized at approximately $145 billion globally (World Health Organization,Geneva, 2003). The industry more than doubled its projected sales in excess of$300 billion in 2011 (Zacks Equity Research, 2011). The U.S. represents the


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greatest share of the market in terms of consumption and production, withestimated sales of $95 billion in 2010 (Zacks Equity Research) and $108 billionin 2011 (IBISWorld). Japan is the second-largest medical devices market afterthe United States, of which U.S. firms account for roughly 60% of all medical

devices imported to Japan (Zacks Equity Research).

Medical device companies tend to be concentrated in regions characterized byadvanced technology, particularly in the industries of microelectronics,telecommunications, instrumentation, biotechnology, and software development(International Trade Administration, 2010). There were roughly 5,300 medicaldevice companies in the U.S. in 2007, mostly small and medium-sizedbusinessesabout 73 percent of which had fewer than 20 employees(International Trade Administration). With the help of an increase from anaverage of $30 million a year of venture capital investments from 1996 through2001 to $150 million a year since 2005 (Davidson, 2011), 625 FDA-registeredmedical device and component makers cropped up in Ohio in 2008 alone. Thisput Ohio ahead of Minnesota, Michigan, and Indiana in terms of the number ofFDA-registered medical device and component makers, and second only toIllinois among Midwestern states (Michaels, 2011).

Nationally, the medical device industry employed more than 365,000 people,earning an average annual wage of approximately $60,000 in 2007 (InternationalTrade Administration). In Ohio, medical device-related employment is growingstatewide, as reflected in an almost 20 percent growth in bioscience jobs from2000 to 2009 (Michaels). The sector employed 55,465 people in 1,253

bioscience-related firms (Stackhouse, 2010). Moreover, 34 percent of the statesMedTech jobs are concentrated in and around Cleveland, located in NortheaastOhio (Michaels). This represents a big shift from a region whose employmentwas previously dominated by the automobile and manufacturing sectors.

Faced with decades of industrial decline, manufacturing companies in NortheastOhio have invested in new ways to grow and sustain their operations by turningto advanced manufacturing. Equipped with the regions skilled and eagerindustrial workforce, companies have successfully transitioned from traditionalto advanced manufacturing in segments such as specialty chemicals andfabricated metals. Year-over-year, manufacturing employments gained 8,000

jobs, growing by 3.7 percent to now account for 13 percent of all jobs in theregion (McFee, 2011). Northeast Ohios manufacturing sector is reportedlygrowing faster than any other sector in the region and is outpacing sectorgrowth on a national level by nearly 10 percent (Smith, 2011). This trend ofdiversification in the Northeast Ohio regions manufacturing sector has alsohelped to fuel its gradual recovery from the 2007 recession, as the benefits have


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had a multiplier effect in the realms of sales increases, market share growth,company expansion, employment boosts and continued new-productdevelopment (The Plus, 2011).

Many small manufacturing companies have already shifted their focus to includethe production of medical devices and their inputs. Companies such as AstroManufacturing & Design, Superior Products, and Prince & Izant Co. are excellentexamples. Astro, which primarily produced auto and aerospace components, isnow also producing medical devices and meeting regularly with physicians atthe Cleveland Clinic to work on new products. Sales for Superior Products grew80 percent in four years, in part by expanding their offerings from valves andfittings for industrial compressed gas systems to also include products formedical oxygen systems. Sales for Prince & Izant grew 300 percent in one year,a precious metals company that now also makes platinum electrodes forimplantable medical devices (Cleveland.com, 2008).

Northeast Ohio is also home to well-established companies that solelymanufacture medical devices. U.S.Endoscopy designs and supplies nichediagnostic, therapeutic, and supports accessories used in the GI endoscopyand urology markets. Founded in 1991, U.S. Endoscopy is a major contributorto Northeast Ohio regions medical device sector, employing 362 people,maintaining distributor partnerships in over 50 countries, and serving almost5,000 customers worldwide (The Plus, 2011, April). AxioMed is developing aproduct line to help restore spinal function to patients with degenerative spinediseases. The companys first product, the Freedom Lumbar Disc, is in clinical

trials while their latest device, an artificial cervical spine disc, recently received a$500,000 state loan. Since being formed in 2001, AxioMed has secured over$34 million in private equity financing (The Plus, 2011, April).

Not only are there a number of medical device companies that have originatedin Northeast Ohio, but ten of the countrysand arguably worldstop eighteenmedical device manufacturers have recognized the importance of havingfacilities in the Cleveland area. These companies include Johnson & Johnson,GE Healthcare, Philips Medical Systems, and Steris.

Northeast Ohio can further anchor itself in the medical devices sector by

harnessing the $465 million Cleveland Medical Mart & Convention Center inorder to gain global recognition and boost revenues. This showroom andconference facility is slated to open in fall 2013 and it is the worlds first marketfacility designed specifically for the healthcare industry, enabling medical devicecompanies to exhibit their products and services (BioEnterprise, 2011).


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2. Human Motion & Control

Human motion and control often falls within the orthopedic prosthetics market.The market includes a range of products and therapies to treat a variety of

conditions that primarily concern the spine, such as herniated discs, spinaldeformity, and fracture of the spine. Examples of products include items suchas ankle, wrist and back braces and supports, hip, knee and spinal implants,and upper and lower extremity prosthetic devices. These specialized devicesthat directly impact mobility will be a life-transforming element as part of theproposed Adaptive Cluster.

The development of advanced prosthetic implants involving better fixation,cementless design, and wear-resistant material is enhancing growth prospectsin the industry (Magaw). Trends in growth can also be attributed to demographicand social aspects, including an aging global population, rising incidence ofdegenerative joint diseases, increase in the rates of road traffic accidents, andthe desire to maintain active lifestyles that increases the demand for lessinvasive and bone preserving technologies. Research into the normal biology ofmusculoskeletal tissues, the diseases and injuries associated with these tissues,and the underlying mechanisms of musculoskeletal tissue regeneration continueto gain importance as part of the human motion and control devices market.

In 2005 the U.S. market for prosthetics, orthotics, and cosmetic enhancementproducts was valued at $6.8 billion and was expected to increase to $10.8billion in 2010 at an average annual growth rate of 9.9 percent (BCC, Inc.). The

global orthopedic prosthetics market is projected to reach $19.4 billion by theyear 2015 (Global Industry Analysts, Inc., (GIA), 2011). The U.S. and Europecollectively account for a major share of the global market. Developing nationssuch as India, China, Russia, South Africa, and Brazil offer extreme growthpotential for orthopedic companies due to their steady economic growth and thepresence of large elderly populations.

Warsaw, Indiana is described as one of the most robust and concentratedmedical equipment development sectors in the world (Stackhouse). Thiscommunity holds more than half of the U.S. market share and supplies two-thirds of the worlds demand for orthopedic devices (BioCrossroads - BC

Initiative, Inc./CICP Foundation, 2009). It is home to key industry players suchas Biomet, Zimmer Holdings, and DePuy Orthopedics. Hanger OrthopedicGroup, Inc accounts for 27 percent of the orthopedic prosthetics patient caremarket in the U.S. alone. Hangar Prosthetics and Orthotics also has apartnership with the Wounded Warriors Project to provide veterans who havelost multiple limbs with secondary rehabilitation for prosthetic care to maximize


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mobility and help regain independence (SPIRE is partner of the WoundedWarriors Project). Other well-recognized companies include DJO Incorporated,Ossur hf., Bauerfeind AG, DeRoyal Industries, Otto Bock, Smith & Nephew,TRS, Wright Medical, Stryker Corp, Medtronic, and Opto Circuits.

Northeast Ohio has various companies committed to furthering adaptivetechnology and exo-skeletal research in the human motion and control market.Such companies include Prosthetics Design Inc, Acor, Inc, AcuTemp, AMTSystems Engineering, Inc., AxioMed Spine Corporation, and Ace Prosthetics.WillowWood, located in Mt. Sterling, Ohio, is an industry leader in the design,manufacturing, and distribution of prosthetic products. In addition, located justeast in Elyria, Ohio, is Invacare, a major manufacturer of homecare products thatkeep consumers active in their own homes and communities (INVACARE).

Ashtabula County may be considered the epicenter of the reinforced fiberglasscomposite industry in the U.S. as companies within it produce more polymersand plastics per capita than anywhere else in the country (Getchey, 2010).Reinforced fiberglass composite materials could play a major role in adaptiveequipment production and exo-skeletal research and development, positivelyimpacting the lives of members of the adaptive community.

Ashtabula County is also home to the SPIRE Institute, one of the largest indoor,multi-sport, training and competition complexes in the world. SPIRE hasfostered an alliance with Parker Hannifin, a Fortune 500 company headquarteredin Cleveland, to study human motion control technologies. Parker Hannifin isknown for its engineering of motion and control technology for machines, but its

interest in exploring human motion control makes SPIRE an ideal partner as theinstitute offers a venue where both able-bodied and para-athletes will betraining, rehabilitating, and learning. Parker Hannifin can observe these athletesand create products from their studies for SPIRE and global athletes to use, aspart of the Adaptive Cluster. SPIRE also has a plan to create a comprehensiverehabilitation center, which will incorporate the latest technology in prostheticsand robotics research. It is a possibility that Parker Hannifin will establish theirhuman motion and control R&D center within SPIRE to take advantage of theopportunities to study and test how to apply their technology to humans.

The public sector has also helped to promote research and development that

has resulted in new technology, benefitting members of the adaptivecommunity. The most recent example is the National Science Foundation, who

just finished building the worlds fastest two-legged robot (National ScienceFoundation, 2011). This breakthrough will help to bring exo-skeletal technologyone-step closer to reality for many people who are in the adaptive community.


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Because technology innovation is at the forefront, the human motion and controlmarket tends to favor large, established companies with ample money to spendon R&D, production, FDA approval, commercialization, and the legal protectionof products once developed. Historically, stringent U.S. Food and Drug

Administration regulations make for an approval process that can take years tocomplete, which could delay production and expansion. Manufacturing musttake place rapidly as this market has extremely short lead times, which can beas short as 60-90 days. Due to these unique circumstances, the orthopedicsand prosthetics industry rarely sees newcomers enter the market. When thosenewcomers do enter the market, they are often not start-ups but companies thatare well established in another market segment, like Parker Hannifin. With theplan for an Adaptive Cluster, existing players in the market may gain greateragency to expand their operations.

The success of the human motion and control market as part of the AdaptiveCluster would most likely depend on its ability to attract existing companiesmore so than focusing on incubating start-ups. The economic cluster will needto create advantages for companies, such as helping to mitigate costs orsupplying needed resources. The cost of doing business in Northeast Ohio isalready lower than most major urban areas, mainly attributed to cheaper realestate, lower cost of living, and central proximity to North American markets,which reduces shipping time and rates. The regions ports, railroad, airport, andhighway transportation systems offer a robust logistics infrastructure, whilecontinuing state tax advantages and government incentives for specific localeswill offer incentives for productivity.

3. Adaptive Sports Equipment

The adaptive sports equipment market includes products such as a golf clubsmade shorter for a person in a wheelchair, wheelchairs enhanced for racing, or asled modified for ice hockey players. The goal of the industry, and thus for theproposed Adaptive Cluster, is to adapt existing sports equipment for use bymembers of the adaptive community.

It is presumed that the biggest driver for the sale of adaptive sports equipmentis that the adaptive community seeks to join or reengage in a physically active

and fit lifestyle. Participating in sports is a great way to enjoy socializing withfriends, teammates, and competitors while also building physical strength,resilience, and self-confidence. The majority of adaptive sports products andtechnologies are currently being used by a variety of people with backgrounds,ranging from the novice athlete to gold medal-winning Paralympians.Interestingly, the Internet has also aided in the adoption of adaptive sports


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equipment by adaptive demographics, such as children, wounded veterans, andpara-athletes, by making information available on various equipmentmanufacturers and sporting facilities that make participation.

Today, the rate of veterans with similar injuries has increased due to recentwars. And their eagerness to return home to an active lifestyle has led to anincreased demand in grants, donations, athletic training, and publicationsregarding the adaptive community and has augmented the demand for adaptivesports equipment. The Wounded Warriors Project is probably the mostrecognizable entity that provides goods and services to disabled veterans tohelp them move beyond rehabilitation and toward a full and productive life. Indoing so, the organization provides programs focused on physical health andwellness. It has strong partnerships with high quality, specialized disabledsports providers, making year-round sports and fitness programs available insnowboarding, skiing, bicycling, golf, fly-fishing, rafting, camping, and the like(Wounded Warrior Project, Inc.).

Athletes with disabilities have experienced great inclusion within the Olympicarena as well. The origin of the Paralympic games has its roots as a sportscompetition involving World War II veterans with spinal cord injuries, which washosted in Stoke Mandeville, England in 1948 (Paralympic Games). The numberof athletes participating in the Summer Paralympic Games has increased from400 athletes from 23 countries in Rome in 1960 to 3,951 athletes from 146countries in Beijing in 2008 (Paralympic Games). The USOC and Team USAathletic organizations have formed partnerships with companies that produce

adaptive sports equipment to create endowments for the advancement ofAmerican Paralympic athletes. This partnership allows athletes to receive thetraining and equipment that they need to compete at a reduced cost or for free.In return companies get exposure by marketing globally via the Olympics.

The adaptive sports industry is unique to North America, with mostmanufacturers of this technology based in either the U.S. or Canada. Corporateinnovation has provided many opportunities in the fields of engineering andsports science. Many well-established companies are already committed toproviding the next wave of technology for the adaptive community. Some of themajor players are Invacare, TRS, Spokes NMotion, and Enabling Technologies.

TRS has a Sports and Recreation division that unveiled products designed toduplicate the flexion and extension characteristics of the hand and wrist with ascoop shaped palm surface to enhance bi-lateral ball handling, which isexcellent for contact sports (TRS, Inc., 2011). Spokes NMotion is a specialist inthe production of sleds for adaptive cycling, sailing, and team sports like hockey


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and rugby, in addition to numerous other all-terrain applications. The companyis also one of the top producers of sports-specific devices for adaptive skiing(i.e. monoskis, bi-skis, dualski, superlite outriggers) and accessories, in additionto a full range of equipment for use by stand-up and sits down skiers (Spokes 'n

Motion). Enabling Technologies, located in Denver, Colorado, is a premieredesign and manufacturing company of adaptive recreational equipment for thephysically challenged. Their skis, outriggers, and crutches are sold throughoutthe world and are recognized for their durability, versatility, and superiorworkmanship (Enabling Technologies, LLC, 2011).

Invacare, located in Elyria, Ohio, is one of the biggest manufacturers of adaptivesports devices, generating $1.8 billion dollars in revenue in 2010. InvacaresSports and Recreation Rehab Division, known as Top End, has been makingsports and recreation products since 1986, first specializing in racing chairs thenin sport-specific chairs designed for basketball, quad rugby, and tennis (TopEnd).

Advances in adaptive equipment technology have greatly enhanced theperformances of athletes with disabilities off the field, too. Cycling research hasbeen applied to wheelchairs and as a result wheelchairs are lighter and aremuch easier to transport. Changes in wheelchair design have also beenimpacted, with innovations in wheel sizes and hand rims so that individuals canbe more comfortable in everyday activities.

Just as with the human motion and control market, the majority of adaptive

sports device manufacturers are not located in Northeast Ohio, so there is workto be done to attract these companies to the region. Unlike the human motionand control market, the barriers to entry are much lower for new companieslooking to either make products or provide adaptive sporting venues. NortheastOhios geographic landscape is also an opportunity to become a destination formembers of the adaptive community to take part in outdoor sporting activitiesliving the adaptive innovation born in the region.

4. Clothing

The goal of the adaptive clothing market is to engage entities in the research,

education, innovation, design, development, and manufacturing of adaptiveclothing for individuals who live without the use of an extremity, a prostheticdevice, or a device to aid in mobility. This may include clothing for sports,recreation, performance, fashion, and work.


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Adaptive clothing is defined as clothing specially designed for people withphysical disabilities, the elderly, and the infirm who may have difficulty dressingthemselves due to an inability to manipulate closures, such as buttons andzippers, or due to a lack of a full range of motion required for self-dressing.

Adaptive clothing can also be specially designed and made to suit seniors,handicapped, hospital patients pre- and post-surgery, rehabilitation, or patientswith temporary or permanent disabilities (Disabled World).

There are several reputable companies that make adaptive clothing for childrenand persons with special needs using the following adaptations: flat seams toreduce friction, discrete adaptations to make the clothing look as normal aspossible, easy access with snaps, the use of Velcro and stretchy fabric, roomybottoms to accommodate diapers for all ages, longer rise in the back toaccommodate sitting in wheelchairs, elastic waist for increased comfort andease in dressing, and meeting safety through flammability standards. Inaddition, the same companies can also make custom clothing tailored forspecific needs of individuals.

Companies are beginning to realize that creating clothing for the adaptivecommunity is profitable and worthwhile. Quick Change Clothing is an innovatorof design and manufacturing of adaptive clothing. Other examples of companiesthat make clothing for children with special needs include: Mini MiraclesChildren's Clothing, Adaptations by Adrian, Talon Clothing, The Callhans, andSilverts.

The global apparel industrys total revenue in 2006 was $ 1,252.8 billion andwas predicted to reach a value of $1,781.7 billion by the end of 2010(Fashionproducts). The Asian Pacific region constitutes the largest amount ofproduction and trade in the apparel industry worldwide (35.4%), followed byEurope (29.4%) and then America (22.3%) (Fashionproducts). Its clear thatadaptive clothing can easily fit into the industrys massive scale of productofferings.

There are two existing models for product delivery in the clothing market: thebuyer-driven and the producer-driven. Firms that fit the buyer-driven model,including retailers like Wal-Mart, Sears and JC Penney, athletic footwear

companies like Nike and Reebok, and fashion-oriented apparel companies likeLiz Claiborne, Gap and The Limited Inc., generally design and marketbut donot manufacturetheir products. They are manufacturers without factories,with the physical production of goods separated from the design and marketing.Unlike producer-driven chains, where profits come from scale, volume andtechnological advances, buyer-driven chains profit from combinations of high-


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value research, design, sales, marketing, and financial services that allow theretailers, designers, and marketers to act as strategic brokers in linking overseasfactories and traders with niche products in targeted markets. Clothing designand manufacturing in the Adaptive Cluster would most likely follow this buyer-

driven model, vertically integrating all steps to deliver products to the adaptivecommunity.

Clothing is arguably the one product of the Adaptive Cluster that will require thegreatest number of resources to make a reality. According to the Career Guideto Industries 2010-11 Edition report for the State of Ohio, there are currentlyseven clothing manufacturers and 332 textiles companiesbut few adaptiveclothing companies. Given the propensity for clothing to be produced in the

Asian Pacific region, even if the manufacturing itself does not occur in NortheastOhio initially, there is opportunity to influence the buyer-driven model of productdelivery where the focus is on high-value research, designing, marketing, andmanufacturing. The economic cluster can try to produce a new brand of clothingline for the adaptive community or could create one within an establishedcompanys brand. Either way, clothing could be tested and developed based onresearch that could be gathered from interacting with participants at SPIREInstitutes comprehensive rehabilitation center.

Contributors

In order for the proposed Adaptive Cluster to be successful it must identify and

bring together potential participants and other stakeholders. The business,philanthropic, government, academic, sports, and medical entities below are inthe position to collectively lead the development of the vision, strategies, andtactics to create an Adaptive Cluster. When this community is convened it willalso lay the groundwork for two important tenets of the economic cluster:collective knowledge and regional proximity. In the same way, pooling thecollective knowledge and bringing all the stakeholders together benefitseveryone involved, including the companies and people in the Northeast Ohioregion.

1. SPIRE Institute

SPIRE Institute is one of the largest indoor, multi-sport, training and competitioncomplexes in the world. With more than 750,000 sq. ft. indoors and acres ofoutdoor facilities, it has the unique capability to simultaneously host clubs,leagues, tournaments, and championship events no matter the season. Everyconsideration has been taken to create an unparalleled experience for the


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athlete, coach and the spectator. Moreover, SPIRE exists to unlock the fullpotential of the human spirit[it] is for high achieving athletes training to reachtheir peak, but it is just as tailored to high school students and active seniors,Paralympians and Special Olympians, Wounded Warriors and weekend

warriors.

But SPIRE is more than a facility; because of the relationships that it has alreadyfostered within and outside of the region, it has the potential to be the homebase for the incubation of the proposed Adaptive Cluster.

The economic cluster can use SPIREs momentum of mission, programming,innovation, publicity, multiple partnerships (i.e. philanthropists, educationalinstitutes, students, sports associations, professional athletes, veterans, localgovernment, Georgetown University, Parker Hannifin, and other localcompanies), and facilities for convening users and suppliers of medical devices,clothing, adaptive sports equipment and human motion and control devices. Inthis sense, the Institute becomes a true living learning laboratory, where ideasarent just produced but lived.

SPIRE could play host local medical exhibits, conferences, trade shows, andseminars relevant to the adaptive community. Adaptive sports equipment andother adaptive devices could be tested and further developed based onresearch that could be taken from observing naturally able-bodied athletes atthe Institutes facilities. SPIRE also has a plan for a comprehensive rehabilitationcenter, which will incorporate the latest technology in prosthetics and robotics

research. Moreover, SPIRE will assist the women and men in uniform that returnhome wounded by offering rehabilitation and therapeutic services andeducational programming on site.

2. Georgetown University

Georgetown University is one of the worlds leading academic and researchinstitutions, offering a unique educational experience that prepares the nextgeneration of global citizens to lead and make a difference in the world. TheUniversity is a vibrant community of exceptional students, faculty, alumni, andprofessionals dedicated to real-world applications of our research, scholarship,

faith and service. Established in 1789, Georgetown is the nations oldestCatholic and Jesuit university. Drawing upon this legacy, the University focuseson educating the whole person through exposure to different faiths, cultures,and beliefs. Moreover, its programming aims to fulfill the Universitys mission ofcreating women and men in the service of others, with a focus on social

justice and intercultural understanding that impacts the world.


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In early 2011, Georgetown Universitys School of Continuing Studies enteredinto a relationship with SPIRE Institute as the official educational partner toprovide resources, faculty, and curriculum for new multidisciplinaryprogramming. The relationship demonstrates the joint commitment to creating

innovative programming that helps students of all ages maximize their potentialfor future achievement. This partnership is designed to connect the educationalexpertise of Georgetown SCS with the state-of-the-art capabilities of SPIRE, tocreate a living learning laboratory for high school summer curriculum, prepyear, post-secondary and non-degree programs. The goal is to help studentsapply theory to practice, resulting in the development of essential skill sets likeleadership and creativity.

3. Government

The federal government is using economic cluster theory as a framework for jobgrowth to help get the economy back on track. President Obama's 2012 budgetproposes a competition to identify 20 potential clusters that would then receivea share of $2.5 billion in funds (Leonard, 2011).

Northeast Ohios government has also recognized the regions opportunity andstepped into its role as a catalyst of economic activity by providing financingand encouraging high levels of synergy amongst the public, private, and non-profit sectors. A recent example is the Ohio Third Frontier, a $2.3 billion public-private partnership aimed at stimulating the economy through investment in newtech-based industries. The initiative has contributed $235 million into biomedical

research and start-ups in Northeast Ohio since 2002 (Davidson, 2011).

The Innovation Ohio Loan Fund, administered through the Ohio Third Frontier,was created to assist existing Ohio technology companies to develop andcommercialize next generation products and services by financing theacquisition, construction, and related costs of technology, facilities, andequipment. The Fund attempts to combat companies difficulty with securingfinancing from conventional sources due to technical and commercial riskfactors associated with the development of a new product or service(Youngstown/Warren Regional Chamber).

The JobsOhio Network is referred to as the Kasich Administration's private-sector response to the state's economic challenges. It is a web of regionaleconomic development groups supporting a statewide jobs agency with thegoal of crafting regional economic strategies and ink deals with companiesarriving, expanding and staying put in the state (McFee, 2011). The OhioDepartment of Development looks to local partners like Team NEO (one of the


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states six JobsOhio Network regional partners) via JobsOhio to increase Ohio'sability to keep companies there and help them grow, something the Departmentacknowledges that it has never been able to do effectively on its own (McFee,2011).

In 2011 the Ohio Third Frontier also provided a one-year, $4.1 million grant toTeam NEO to operate a regional JobsOhio office in Northeast Ohio and fundproposals from groups in the region for initiatives that would create more jobs,increase capital investment, and boost some of the regions competitivestrengths (Baker, 2011). The Adaptive Cluster will look to local, state, andfederal incentives to help put the plan in action.

4. Non-Profits

Northeast Ohio has the benefit of having a business ecosystem that includesnon-profits as major contributors to supporting business incubation andworkforce and entrepreneurial training that advances economic development.

The Fund for Our Economic Future is a collaboration of philanthropicorganizations and individuals that have united to strengthen the economiccompetitiveness of Northeast Ohio through research, civic engagement, andgrants. Its main goal is long-term economic revitalization that strengthens theregions core cities, encourages inclusion, and enhances the regions quality oflife (The Fund for Our Economic Future, 2011).

Launched in 2007 by the Fund for Our Economic Future, Advance NortheastOhio creates the region's economic competitiveness agenda. It articulates avision for the region by establishing a set of values and beliefs that guide howthe region will act and specifying strategic priorities and goals to make theregion more competitive in the global economy. Partners in Advance NortheastOhio are from all sectors of the region and use the agenda to shape the regionalcollaborations that promote more business growth, strengthen talentdevelopment, encourage inclusion, and promote more efficient, effectivegovernment.

Team NEO advances Northeast Ohios economy by serving as the 18-county

regions private-sector economic development hub. It builds collaborationamong the regions economic development organizations, attracts newbusinesses from around the world, and connects the region to the statesJobsOhio program. Since 2007, the organization has attracted new companyoperations, 4,800 new jobs, and almost $173 million in annual payroll to


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Northeast Ohio, leading to a total annual regional payroll benefit of $281 million(TeamNEO, 2011).

Jumpstart is a non-profit venture capital organization that directly invests in and

assists entrepreneurs leading high growth companies in Greater Cleveland. Italso exists to grow and strengthen the regions entrepreneurial ecosystem byraising funds for other organizations and by managing a network of 20incubators, accelerators, and investors (JumpStart, Inc., 2011).

BioEnterprise Corp is described as Northeast Ohios medical device industrysnerve center. It is a non-profit that fosters the creation and growth ofhealthcare and bioscience companies in the region by recruiting medical firms tothe region, helping start-ups obtain venture capital and state money, andmatching manufacturers with suppliers (Davidson). The founders and partnersare the Cleveland Clinic, University Hospitals, Case Western Reserve University,Summa Health System, and BioInnovation Institute in Akron. Additionaltechnology partners include the NASA Glenn Research Center, Cleveland StateUniversity, NorTech, and BioOhio.

BioOhio is a non-profit organization designed to build and accelerate a globallycompetitive bioscience industry, involving innovation, research, and education inorder to drive economic growth and improve quality of life in Ohio. BioOhio haspartnered with top pediatrics, cardiology, and teaching hospitals, is the largestglobal contract research organization, is a member of Fortune 35 companies,and is a nationally ranked institution (BioOhio, 2006-2011).

The Austen BioInnovation Institute in Akron, Ohio has a Medical DeviceDevelopment Center, which is a collaboration of Akron Childrens Hospital,

Akron General Health System, Northeast Ohio Medical University (NEOMED),Summa Health System, and The University of Akron. This strategic alignment ofinstitutional, state, federal, and philanthropic support, accompanied with

Akrons rich legacy in industrial and materials science, is working to pioneer thenext generation of life-enhancing and life-saving innovations that will transform

Akron and the surrounding region into a model for biomedical discovery andenterprise (ABIA).

An organization that helps to plan the Adaptive Cluster could also be its own501 (c) 3non-profit. For example, at Research Triangle (RTP) in North Carolina,the actual park was originally developed as a private, profit-seeking entity, whilethe Research Triangle Council was a non-stock, non-profit entity (Schalin,2011). Although the origins were modest, the RTP organization spun off various


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entities over time to effectively manage new ventures, making thatbiopharmaceutical cluster the success it is today.

5. Medical Institutions

Northeast Ohio boasts a large concentration of hospitals, including UniversityHospitals, MetroHealth Medical Center, Summa Health Systems, the VeteransHospital, Genevas local hospital, and the renowned Cleveland Clinic.

Medical institutions role in the Adaptive Cluster can be categorized as providingmedical services, conducting independent and joint ventured research for theadvancement of medical science, and purchasing disposable and durablemedical equipment. For example, to expand on their role as a major medicalequipment purchaser, in 2005 the national health expenditure for durablemedical equipment and non-durable medical products was $67.6 billion andreached $78.1 billion in 2009 (Centers for Medicare & Medicaid Services, 2011).In 2009, the national health expenditures for these same categories wereprojected to be $83 billion in 2011 and reach $127.4 billion by 2020 (Centers forMedicare & Medicaid Services). The annual spending for fixed and movableequipment was $12.4 billion in 2001 and increased to $15.9 billion in 2007(Schuhmann, 2009). Such large-scale spending is due largely to needing toreplace dated equipment caused by rapid advancements in scientific andmedical research.

The Cleveland Clinic is ranked as the number one cardiology and heart surgery

hospital in the world (U.S. News & World Report). It is number two on the list ofthe top 100 grossing hospitals in America as of August 29, 2011, reporting $9.14billion is gross revenue (Oh, 2011). In 2010 roughly $275 million of ClevelandClinics revenue was generated from grant, contract, and federal researchinvestment in the Clinic (The Cleveland Clinic, 2010). Cleveland ClinicInnovations, the Clinics technology commercialization arm, maintains the GlobalCardiovascular Innovation Center, which incubates startups focused on thediagnosis and treatment of cardiovascular disease. The Cleveland Clinicsconcentration on treating heart disease was instrumental in spurring 16cardiovascular companies to move to the region since 2008. Furthermore, theCleveland Clinic has just launched an Aquatic Therapy Program that is focused

on aiding rehabilitation for the adaptive community.

6. Academic Institutions

Higher education and access to world-class universities play a big part in thesustainability of any economic cluster, and will play an important role in the


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Adaptive Cluster. Academic institutions really have an opportunity to spur thedevelopment of the Adaptive Cluster by providing R&D and innovation,encouraging human capital development via curriculum, and attractingknowledgeable workers who want to extend their study. There is a large

concentration of academic institutions in Northeast Ohio: 14 public universities,24 branch campuses, 23 community colleges, and more than 120 adultworkforce education centers and training programs, many of which are knownfor their achievements in scientific research, innovation, and application.

Universities are often responsible for the research and development of newtechnologies that directly impact industries. Moreover, there is demonstratedgrowth in the demand for educated and certified individuals in the healthcarefield as it requires the attraction and retention of talented individuals to filltechnical roles. For instance, the physical therapist industry in the US isexpected to grow to $26.9 billion of revenue in 2011 (IBISWorld.com).

Many universities in the Northeast Ohio region also have robust engineeringprograms with a focus on new technologies, helping to train the next wave ofinnovators. Cleveland State University, home to the Fenn College ofEngineering, offers a specialization in Applied Biomedical Engineering inconjunction with the world-renowned Cleveland Clinic Foundation. The OhioState University has the top ranked engineering program in Ohio, which is alsoamong the top 20 public engineering programs in the U.S. Other localuniversities like Youngstown State University are investing in interdisciplinaryscience programs. Youngstown State University (YSU) is the first university in

Ohio to create a College of STEM science, technology, engineering, andmathematics.

Case Western Reserve University ranks 12th among private institutions and 24thoverall in federal expenditures for science and engineering researchdevelopment. Moreover, the Case Western Reserve University School ofEngineering ranks among the nation's top 50 graduate engineering programs byU.S. News & World Report, and top 10 in biomedical engineering (Case WesternReserve University, 2011). Case Western Reserve University and the Wallace H.Coulter Foundation have created a $20 million endowment that is aimed attranslating biomedical research into commercial products and clinical practices.

Cuyahoga Community College began offering a course to supply area firms withmore skilled workers by educating out of work line manufacturing workers whoaspire to learn computer-controlled milling for medical device production(Davidson, 2011). The Department of Labor provided a grant that afforded freeclasses for people who wanted to attend.


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7. For-Profit Companies and Manufacturers

In order to innovate in the growing field of adaptive equipment, for-profitcompanies and manufacturers need talented people. The 2010 Fund for OurEconomic Future Dashboard of Economic Indicators stated, For companies,human capital is likely the hardest factor to move and to find. The quality of theworkforce, as well as quality of capital (such as sites, buildings and access totechnology), all lead to a companys ability to produce, compete and survive. Inboth earnings and unemployment, education and training matter. NortheastOhio offers a solid, available workforce with experience that is relevant to thetask of creating the Adaptive Clusterthe challenge is to get the regionscompanies and manufacturers on board by supporting the local workforce andbuilding inroad with partner organizations.

Capital is mobilecompanies will invest where they can get the most return.Commodity products that use low-skilled labor cannot be produced as cheaplyin Northeast Ohio or the U.S. as they can be produced in China and throughoutthe Asian Pacific region. To paraphrase a former chief economist for a majorautomaker regarding global competition: People all over the world want towork, and can be trained to do the work we need. When competing in a globaleconomy, Northeast Ohio workers need to create products that aredifferentiated with a greater return or higher value added. The Adaptive Cluster

is an opportunity for the region to compete in a global market by forgingpartnerships with area companies who already have deep ties on a global level,and to reinvigorate and evolve existing manufacturers into makers of newtechnologies.


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IV. Benefit and Risk Assessment

Part of developing a strategy that will ensure the long-term growth and successof the Adaptive Cluster is to focus on opportunities that will minimize risk andmaximize benefits. City Lab had created the following principles to ensure thesuccess of the new economic cluster:

Focusing on targeted markets through aggressive marketing Differentiating the products through exclusiveness and brand awareness Developing strategic partnerships with both industry leaders and

competitors

Building a relationship-oriented business that fosters long-term seller-customer relationships, not just "single-transaction" deals

Fostering social responsibility through a commitment to programs thattransform lives (i.e. SPIRE donates 5% of all proceeds towards "Feed the

Children" and other charities)

With the implementation of any new business plan comes inherent risk; but it isthe potential benefits that outweigh perceived threats. We have identified twocategories or entitiescontributors and governmentthat will be essential forthe creation and success of the Adaptive Cluster. The following sectionsarticulate identifiable risks while also anticipating impactful benefits and, in

certain cases, the control and mitigation that will be used to negotiate aconstructive and productive balance between the two. These are strategicpoints of importance that will be used to convene these entities and beginconversations about how they can constructively contribute to the creation ofthe Adaptive Cluster and maintain involvement over time.

Contributors

1. Local Public Sector: Geneva, Ashtabula, and the Greater NE Ohio Region andIts Politicians

Risks Public investments of local/state/federal dollars do not produce

anticipated returnsthe money is considered lost or wasted.

Elected officials are attacked for supporting the Adaptive Cluster, eitherbased on financial considerations or quality of life issues such as


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increased congestion/infrastructure needs, higher land and real estate

prices/taxes, and how cluster development affects local quality of life.

Benefits Economy of local area flourishes as new local businesses are created. Tax revenues increase allowing for better public schools, infrastructure,

parks, etc.

New jobs created for those currently unemployed or underemployed withthe promise of job growth.

Businesses from elsewhere establish relationships with the AdaptiveCluster that will further create jobs in the local area.

New training programs in academic institutions that raise the skills andeducational achievement of local people so that they are more

employable for the 21st century economy. Northeast Ohio becomes home to a thriving economic cluster (i.e.

Research Triangle in North Carolina).

Private investment from SPIRE shares funding burdenControl/Mitigation

Manage expectations from the beginning. The project should not beoversold to begin with anticipated results should be discussed in

advance of decisions to finance.

The Adaptive Cluster should be presented as a reasonable investment,given what is known and can be inferred.

Facts in the form of regular progress reports that can support positionstaken with regard to use of public monies should be part of an ongoing

communications program.

Less favorable facts must be communicated in the appropriate contextbefore they are characterized by others to the detriment of the cluster.

While public investments may exceed anticipated results, it is wise torestate that this is a long-term investment. The comparable cluster

Research Triangle, which was only one of the three best known clusters

to have been created rather than grow organically, is thriving today

but it was a very modest effort 50 years ago that grew steadily rather than

exponentially.


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2. Parker Hannifin, Invacare, and Other Corporate Partners

Risks Investments do not pay off in corporate strategic planning time frame. Stock prices negatively affected where publicly traded companies are

involved.

Research done at SPIRE does not lead to innovative strategies to meetmarket needs.

Work force needed for onsite tasks associated with research at SPIRE isnot available or properly trained.

Benefits SPIRE facility means lower upfront costs for corporate research.

The Geneva/Ashtabula County area offers significant cost benefits interms of location over Colorado and Georgia, home to Olympic training

facilities, and over Massachusetts and California, home to Route 128 and

Silicon Valley. Geneva/Ashtabula County has lower cost of living,

affordable real estate, less congestion, and is located within two hours of

major transportation hubs Cleveland and Pittsburgh and within five to

eight hours of the entire eastern seaboard.

Ashtabula County is the cradle of the reinforced (composite) industry inthe U.S. and produces more polymers and plastics per capita than

anywhere in the country.

The adaptive sports industry is unique to North America, with mostmanufacturers of this technology based in either the U.S. or Canada. The

Geneva/Ashtabula County location of SPIRE provides prime access to

both able and disabled athletes for research and development of new

products/technologies/protocols for the adaptive community.

Adaptive Cluster provides for cross-fertilization among companies whichstimulates more creative output and faster development of new products

and services.

Control/Mitigation Marketing to present the myriad assets currently associated with

partnerships in the Adaptive Cluster should be ongoing and should

include events that allow company representatives to interact with local

officials and business owners.


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Targeted and free media outreach to create buzz so that the clusterestablishes a leading presence in the adaptive arena and becomes the de

facto geographic location for all things adaptive.

Convene conferences/meetings at SPIRE to address issues associatedwith adaptive community in order to capture the knowledge and create

repositories of expertise.

Work with firms to understand and meet their needs.3. USOC, Veterans Administration, Department of Defense, and Other MedicalPartners

Risks Tax dollars and private contributions could be invested in projects that do

not work out (i.e. Solyndra). Funds appropriated are subject to congressional action and may not be

reliable or sustainable.

Funds from the USOC are subject to their fund raising process and alsomay not be reliable or sustainable.

Contracting process for federal dollars is long and arduous, furtherimperiling time lines and stability.

Criticism of public investments and of agency management of thecontracting and oversight process.

Possible need for bricks and mortar federal facilities at SPIRE raisescosts to unsupportable levels.

Public requirements for transparency, accountability, and publicparticipation may clash with private corporate proprietary information

preferences and intellectual property protection.

Benefits For relatively small investments the Department of Defense, the VA, the

USOC,and medical partners obtain access to first-rate facilities at SPIRE

that can provide them with valuable applied research opportunities.

Partner organizations can test and prototype rehabilitation strategies atSPIRE, gaining valuable data for better design of future products, and can

work collaboratively as part of the Adaptive Cluster.

This public investment pays off much better than anticipated in terms ofknowledge gained and advances for the adaptive community.


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Other federal agencies might want to become associated with SPIRE onbehalf of other target populations (i.e. Heath and Human Services,

MediCarre, etc.)

Can complement efforts at SPIRE by increasing demographic spreadcovered by observation/recording of performance data from partner

organizations.

Control/Mitigation Federal requirements for public participation, transparency, and

accountability for public involvement and funding can help to mitigate any

criticisms.

Detailed record keeping of monies, jobs, program management, andpublic outreach in a timely fashion and on a regular reporting basis can

address criticisms effectively.

4. Georgetown University, Case Western Reserve University, Kent StateUniversity, and Other Academic Partners

Risks University reputations and prestige at risk in any new venture Criticism about academic relevance of involvement in the cluster Use of scarce university resources for project No student or alumni interest/support for outreach programs

Benefits Cluster success adds to reputations of participating universities and

schools.

Cluster demonstrates value of university outreach programs in terms ofknowledge gained and management of resources.

Knowledge gained about sociology, economics, and businessmanagement of formation and operation of public-private endeavors to

solve real world problems.

Academic disciplines related to bio-mechanical engineering and design,robotics, electronics, healthcare, physical rehabilitation, and

art/aesthetics/fashion gain experience and expertise in real world

applications of knowledge and knowledge development.


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University students get opportunities to work on cutting edge scienceand technology with companies leading change in the adaptive world,

perhaps leading to jobs after graduation.

5. SPIRE Institute

Risks SPIRE becomes overcommitted too soon, losing focus, and is not able to

maintain the intensity needed over time to make the Adaptive Cluster a

success.

Unable to secure adequate funding in a timely fashion and/or on a long-term basis.

Unable to attract students, workers, experts to its facilities.Benefits

From the SPIRE Mission statement: SPIRE Institute exists to unlock thefull potential of the human spiritSPIRE is for high achieving athletes

training to reach their peak, but it is just as tailored to high school

students and active seniors, Paralympians and Special Olympians,

Wounded Warriors and weekend warriors. Our only criteria for

acceptance are a love of sports and a desire to strengthen your mind,

body and character.

SPIREs

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Adaptive Cluster Proposal City Lab Fall 11 FINAL

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