APPROACH AND METHODOLOGY
Through a unique service model that leverages a wide range of resources in the region from the public, private, and nonprofit sectors, PRISM will provide affordable, customized, and flexible capacity-building services to a portfolio of manufacturing firms. Capacity-building services will include connecting firms to market experts, technical experts, funding sources, analytical capacity, prototyping capacity, management experts, export resources, and sources of capital and talent. The goal of providing these services is to support the firms' innovation activities by helping them with marketing, research and development, human resource development, and operations.
The opportunities and challenges for each firm will be identified through an assessment process developed specifically for PRISM. Organizations and resources in the region will then be matched with the unique objectives of each firm. Firms will pay an up-front annual retainer fee of $15,000-$30,000 to participate, which will give them access to growth coaching, market research, and connecting services, delivered by MAGNET. Other services offered through partner organizations will be made available at discounted rates or on a pro bono basis, commensurate with the typical delivery models utilized by the partner organizations. This flexible capacity will mitigate some risk and allow firms to pursue their growth projects more aggressively than if they were to pursue them with only their own resources. Growth projects pursued by companies will vary by firm but may include new product development, market diversification, export expansion, or the application of new business models.
In supporting these portfolio firms, the PRISM program will also further develop the regional innovation ecosystem to support the broader manufacturing sector through a number of initiatives. For example, through memoranda of understanding with higher education institutions, PRISM will enhance the ability of portfolio firms to utilize university resources, including technology, faculty, labs, and analytical capacity, through the formation of partnerships with the technology transfer offices at the universities. This will position the universities to be more effective at disseminating technology and expertise within the region. Internships will also be used as part of the delivery of services to the portfolio firms, which will help improve the quality of educational programs in manufacturing in the region. This will increase the degree to which public and private funding sources are leveraged, thus improving the accessibility of these funding sources to a broader range of organizations.
PRISM will also support the development of a $4 million 'commercialization fund' that will complement other available local resources, which includes Ohio Third Frontier Funding and funding from other public sources such as Cuyahoga County. The target for capital availability is $200,000 per portfolio firm through grants or low interest loans to support commercialization activities over the two year engagement.
IMPLEMENTATION, TIMELINE, AND DELIVERABLES
Engage at least 15 companies by the end of the calendar year of 2012 that meet the following criteria:
-Have annual growth rates of 10 percent or more over a three to five-year planning horizon that are anticipated to result in jobs and output growth for the region.
-Are pursuing innovation projects: new products/services/business models/processes/markets.
-Support of resources in the region could likely have significant impact on the cost, timing, and/or execution of growth plans.
-Have insufficient resources in place to effectively identify and access those resources.
Engage 15 additional companies, for a total of 30 companies in the portfolio, by the end of the calendar year of 2013.
Engage 20 additional companies, for a total of 50 companies in the portfolio by the end of the calendar year 2014, with the capacity to engage 50 companies on an ongoing basis.
Engagement of the participating companies will entail:
-Delivery of growth coaching, market research, and connecting services to these firms in support of the execution of their growth plan over two years of each engagement.
-Development of business processes to recruit, assess, and engage companies by April 2012, including use of workshops, advertising media (e.g. web, print), word-of-mouth, and channel partners (e.g. other service providers, private equity firms)
-Definition and refinement of working relationships with private sector and university partners that can provide targeted resources and expertise to PRISM participants by December 2012.
-Identification of source(s) of capital and talent for partner firms (ongoing). The target for capital availability is $200,000 per portfolio firm through grants or low interest loans to support commercialization activities over the two year engagement. Sources of capital include local resources, public funding and the commercialization fund.
Ongoing work with universities and community colleges to identify sources of talent to meet the workforce growth needs of portfolio firms.
Ongoing work with universities and community colleges to identify and address skills development needs of portfolio firms.
As extensively documented by the Brookings Institution and others, the metropolitan economies in regions like Northeast Ohio have been seriously damaged by the decline of basic manufacturing over the past several decades. Despite its current standing as the leading manufacturing region in the nation's third leading manufacturing state, Northeast Ohio has been particularly impacted by this decline, both in terms of economic output (40 percent decrease from 1980-2009) and jobs (50 percent decrease from 1980-2009).
Along with technological advances and global competition, the dearth of innovation from the thousands of small to mid-size manufacturers (SMMs) in the region has played a significant role in the decline of the manufacturing sector. Many of these SMMs lack the technical marketing, research and development, and human resource development capacity to effectively pursue innovation projects, particularly given their historic focus on producing parts for other firms on spec in older sectors that have declined. The intent of this commitment is to develop a critical mass of growth projects, some of which will connect old-line manufacturing firms with opportunities in emerging industries and growth clusters such as advanced energy, materials, aerospace, and medical devices.
The partners in Northeast Ohio seek to reenergize the region's manufacturing sector by kick-starting a critical mass of innovative growth strategies among firms to significantly move the needle on the region's economic development. By strategically connecting SMMs with resources from across the region that will address both the individual firm's assets and limitations, PRISM will enable more SMMs to recognize and capitalize on the opportunities in emerging growth clusters and sectors.
Success with implementing the Partnership for Regional Innovation Services to Manufacturers (PRISM) program and mobilizing programmatic resources to support the initiative during PRISM's Build-Out phase is essential to achieving that vision. Financial resources in the form of grants, PRIs or other social impact investing financing vehicles will be instrumental in achieving that success. PRISM is aimed at stimulating significant job growth in the region's manufacturing sector by 2017.
PRISM as a comprehensive, applied approach to manufacturing business growth through innovation is unique to Northeast Ohio. Other organizations try to connect clients to universities, but MAGNET is uniquely positioned as a manufacturing-assistance non-profit with established, working relationships around the region, and the special knowledge of the needs facing SMMs and how to address them. The national Manufacturing Extension Partnership, led by the US Department of Commerce and the National Institute of Standards and Technology (NIST), has indicated its intention to move towards innovation-focused models, and PRISM is one of the first within the national MEP system. To this end, MAGNET continues to share its model with other MEP peer organizations.