Creating the Oregon Display System Industry Consortium: Building an Industry Cluster

With so many display-related companies located in the Portland metropolitan area alone, it was clear there was an opportunity to build an industry cluster.

by Amy Keiter

REALLY GOOD BEER locally produced in small-quantity microbrews – that's what Portland, Oregon, U.S.A., is known for to much of the beer-drinking world.

As a Business Development Officer for the State of Oregon's Economy Development Agency, I knew that Portland should also be known for its display industry.

With more than 20 display-related companies in the Portland metropolitan area alone, including InFocus Corp., Clarity Visual Systems, Hewlett-Packard, Intel Capital, Epson, 3M, Sharp, Planar Systems, and Barco, to name just a few, it was clear there was an opportunity to build an industry cluster.

What is an industry cluster? Economists define an industry cluster as a geographically bounded group of similar or related firms – connected by common markets, technologies, or knowledge – their suppliers, skilled workers, and supporting institutions.

To thrive, clusters need four components: suppliers (the equipment makers, the widget producers), customers (savvy cutting-edge technology firms hungry for new advances in displays), rivalry (competition that spurs innovation), and inputs (the raw materials such as optical engineers and strong universities).

"We did a back-of-the-napkin cut at the size of the industry, and we realized that display com-panies employ more than 1500 workers locally and contribute $1.5 billion in annual revenue," explained Paul Gulick, former CEO of Clarity Visual Systems and newly appointed Vice President and Chief Technology Officer at Planar Systems (Planar acquired Clarity in September 2006). Gulick was one of the primary private-sector champions of the cluster concept. "By working in 'co-opetition,' we could have a real impact on the Oregon economy."

The first meeting of what was to become the Oregon Display System Industry Consortium (ODSIC) was held in April, 2004 in the plush, technology-rich boardroom of Planar Systems. Top-level executives from two-dozen display-related companies spent almost 4 hours identifying common needs, obstacles, and opportunities to grow their industry.

Amy Keiter is Business Development Officer at the State of Oregon Economic and Community Development Department, 775 Summer St. NE, Suite 200, Salem OR 97301-1280; telephone 503/229-5113, e-mail: amy.keiter@state.or.us.

"Many of us knew each other, but we had never thought to lift our heads up and look beyond the immediate needs of each of our companies to see what we could do co-operatively to grow our business," remembered Chris King, former CTO of Planar Systems.

I became the scribe at the meeting and "cluster coordinator" for ODSIC. The State of Oregon has a clear interest in developing strong industry clusters as key economic-growth enablers. The companies in this cluster provide high-wage "knowledge worker" jobs and attract intellectual capital. I needed to understand what the state could do to help this cluster grow and thrive in Oregon. The meeting ended with a clear mission and a number of key initiatives.

"We knew that we needed to position Portland as a Display Technology Center of Excellence – the initiatives were derived from that goal," Gulick recalled as he ticked the initiatives off on his fingers. "We needed to influence the local universities to provide curricula to help us train the engineers our companies require. We needed to attract display-oriented synergistic businesses. And we needed to facilitate access to capital for business expansion."

Thom Holder of Intel Capital concurred on the need for investment dollars. "The display industry here has a proven track record of success in everything from components to projection systems," Holder said. "This is creating fertile ground for new technologies and companies to develop and is serving as a catalyst for further investment."

Since that time, ODSIC has grown in membership and is slowly achieving its goals. There are now 31 firms (including a few across the Columbia River in Washington state) actively participating in the cluster, including law firms and public-relations agencies, plus the local universities. The cluster has been represented at SID's annual International Symposium, Seminar, and Exhibition for the past 3 years, thanks to the financial support of the state and local economic-development agencies.

"The display cluster is a huge success story in Portland," proclaimed Rashid Ahmed of the Portland Development Commission. "We are very happy to support this group because they have really come together in a spirit of competitive collaboration. We have created a true public–private partnership, in which they have identified some creative and meaningful ways for the public sector to assist the industry as a whole, rather than one company at a time."

The display consortium booth at the SID International Symposium, Seminar, and Exhibition has been staffed by OSDIC members. "I admit, I was not looking forward to staffing the booth," said Paul Patterson, General Manager of Emerging Technologies for Epson. "But when I got there, I realized how many people I knew at the show, and it became a real opportunity to promote Oregon and our display consortium."

A significant benefit of ODSIC's presence at the trade show was SID's selection of Portland to host its second annual ADEAC (Americas Display Engineering and Applications Conference) in Portland in October 2005. Phil Heyman, SID's Convention Chair, attended a meeting of ODSIC in Portland for the pitch. "I'd never seen anything like it," Heyman recalled. "Here were all these companies, sitting in a room together, agreeing that they would help support our conference financially and would send delegates to attend."

The three-day symposium brought approximately 500 attendees from across the country, and a few from overseas. One highlight of the event was "Student Day," a brainstorm of the ODSIC organizing committee.

"We kept coming back to our goal of 'growing our own engineers,' " explained Candace Petersen, Vice President of Corporate Strategy at InFocus. "We thought that the exhibit floor at ADEAC would provide an opportunity to expose technology-savvy high-school and college kids to the latest innovations in display technology."

ODSIC partnered with the Business Education Compact (BEC), a local non-profit organization that creates internships for students with local businesses. BEC developed an application process and rounded up almost 50 students to attend "Student Day" at ADEAC '05.

"We immediately saw Student Day as an opportunity to give students hands-on exposure to the latest technologies and meet the engineers behind them," said enthused Mary Beth Horton of BEC.

Pat Green, Technology Group Director at Planar, was one of the ODSIC volunteers who briefed the students with a crash course in "Displays 101" and then took them in small groups to each of the booths in the exhibit area.

"The kids were totally engrossed," he remembered. "They asked terrific questions, and clearly saw extended applications for the technologies."

In the year since ADEAC '05, the display cluster has continued to advance its mission. Most recently, a sub-committee led by Oregon State University Computer Science Professor Mike Bailey has submitted a proposal to the state for a display-oriented collaborative research and education institute. He says the proposal comes from both a technology-push and a technology-pull point of view, creating both the supply and demand for advanced display technologies.

"In order to significantly impact the Oregon economy, we will also reach out to other disciplines that require the latest display technology to create markets for our inventions," Bailey said. "These would include fields such as chemistry, biology, and engineering."

The outcome of the four-year $10 million proposal remains undecided, but Bailey believes the concept will be critical to the commercialization of new technologies and will put Oregon in a leadership position in next-generation products and projects in advanced display systems.

In addition, a donation of image and video testing and measurement equipment from Tektronix has enabled Portland State University to create the beginnings of a display test lab. Under the direction of Dr. Fu Li of the Department of Electrical and Computer Engineering, the lab is designed for graduate research projects. It will also serve the technical testing needs of numerous companies in the area working on image processing and video communications.

There is still a great deal of additional work ahead for the Oregon Display System IndustryConsortium. The education sub-committee will continue to work to drive display-related cur-ricula into the state's system of higher education.

Also missing in Oregon has been a strong program to promote business entrepreneurship, so that employees with an innovative idea can start a new business.

"We are on the cusp of rolling over some new programs to address this gap," asserted Erik Stenehjem, the science and technology advisor to Oregon Governor Ted Kulongoski. "We're investigating the idea of a 'royalty loan fund,' in which an entrepreneurial start-up could get an upfront loan, which would be paid back with a percentage of net profit, at such time as they have profit."

A glass manufacturer is high on the list of companies the cluster would like to see come to Oregon to fill in the supply chain. Should such a company express interest in relocating or expanding into Oregon, the state would look for ways to assist with finding an appropriate site and ensuring a skilled workforce is available. Mike Salsgiver, Deputy Director of the state's Economic Development Agency, said a cluster-based approach to economic development makes sense.

"We're listening to what our industries are telling us they need," Salsgiver added. "We're aligning our community colleges and universities to meet their workforce demands, and we're streamlining our processes to speed the integration of new businesses paying family wages into the Oregon economy."

To date, the cluster has not succeeded in recruiting new out-of-state or international companies into the Portland metro area. But as Gulick, whose company was recently purchased by Planar, knows such decisions have long sales cycles.

"Oregon is a key player in the global display industry," Gulick said. "When companies recognize the unique partnership we have among the state government, the universities, and the private sector, they'll come to Oregon to innovate."

A cluster cannot be invented: a number of related companies need to exist with some degree of proximity for a cluster to develop. But fertile ground for clusters can be provided by improving access to research facilities (the best-known example is Research Triangle Park in North Carolina) and by providing the appropriate training and educational opportunities in your community. Clusters grow organically, but they can be helped along with organization and commitment. Every member of the display cluster has a "real" job upon which their company's success depends.

As cluster coordinator, I have come to appreciate that one needs successful local companies to have a thriving cluster. I can also attest that the microbrew cluster has relevance to the display cluster in Oregon, judging from the line of thirsty display engineers enjoying free local microbrews at ADEAC, courtesy of the Oregon Brewer's Guild.

For more information on the ODSIC, visit its Web site at www.econ.state.or.us/display. htm. •