Business editor
mbradwell@observer-reporter.com
UNIONTOWN - Fayette and Washington County have teamed up to introduce a state-supported economic development program that links the area's colleges and universities with local start-up businesses to help further some entrepreneurial efforts in key industries here.
The Keystone Innovation Zone program, which is being introduced to the two counties by the Fay-Penn Economic Development Council in Uniontown, is one of 29 in the state.
According to Barry Seneri, Fay-Penn's economic development manager, the local KIZ was authorized in October, and received $225,000 in funding for the first year. Fay-Penn is working with the Redevelopment Authority of Washington County to develop interest in the program here.
Joe Podolinski, who joined the council in February as coordinator for the Fayette/Washington KIZ, said the local zone will focus on three industries - energy, defense and information technology - and three local colleges, Washington & Jefferson, California University of Pennsylvania and Penn State's Fayette Campus.
The goal of the KIZ is to get locally based start-up companies or those that are less than eight years old within the designated industries to use the research capabilities of the local schools to help further a product or service innovation that could eventually create jobs and become a full functioning company.
Both Seneri and Podolinski said bringing the companies and the learning institutions together requires building trust, since the endeavors involve working on confidential information and intellectual property.
"You're trying to assemble industry experts under confidentiality agreements to accelerate the start-up of new companies," Podolinski said, adding that Fay-Penn already is working with one company it hopes to partner with a college for some work, as well as another successful defense-related company that's looking to introduce something of a non-defense nature.
"We're trying to get the students, faculty and business people to come together and spark initiatives from those industry sectors," he said. Seneri said that in the case of the defense industry start-ups, a goal will be to get business owners thinking about how an application they successfully develop for the military might be translated into commercial use once it is released from the military. GPS navigation systems for cars and the radio frequency technology that enables utilities to do remote readings of meters are just a few of the commercial applications that were borne out of military uses.
Colleges that become involved with the KIZ program can apply for additional funding under two different grants - two for $250,000 and another for $750,000 to hire additional faculty or purchase equipment for research related to the companies they work with, Seneri said.
Seneri said that initial reaction to the KIZ concept here has been positive, but Podolinski said he hopes to spread the word further by sponsoring a regional business plan competition with cash prizes aimed at college students in Fayette, Washington, Greene and Westmoreland counties.
"There's the work force issue of being able to find qualified young workers here," Seneri said, adding that one of the long-term goals of the KIZ, in addition to creating jobs, is to help talented young people who graduate from local colleges to find work here instead of leaving the area.
"There are a lot of talented young people here, and we want to present the best opportunities to retain some of that talent here," Podolinski said.
That leads to another incentive for companies that become KIZ partners, said Podolinski, explaining that employers can receive up to $3,000 or 50 percent of an intern's wages for participating in the program.
Seneri said that another goal of the KIZ is to introduce start-up businesses to venture capitalists in the area to help the companies get additional funding and grow further.
According to Podolinski, there are 29 KIZs in Pennsylvania, adding that he spent some time studying some of the successful ones that have been in operation over the past several years. He noted that KIZ have been responsible for more than 70 entrepreneurial start-ups, more than 50 companies that were spun off from existing firms and about 60 spin-offs from participating colleges. One of the most successful is the KIZ that operates in the Oakland section of Pittsburgh with Carnegie Mellon University as the college participant.
He said more than 2,300 jobs have been created across the state and the program has leveraged more than $400 million.
The KIZs were started as part of Gov. Ed Rendell's economic stimulus program for Pennsylvania, which ranks 42nd in employment growth among the 50 states.
Podolinski and Seneri are confident that the KIZ here can produce some winners among start-up companies here, whether they're bred by local business people or spun off from the colleges and universities.
"There's a tremendous amount of resources within the two counties," Podolinski said. "The No. 1 goal of this program is to create jobs in the state of Pennsylvania."
For more information on the Fayette-Washington KIZ, contact Joe Podolinski at 724-437-7913.