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Elm City Tech Babies Boom
Connecticut companies find that staying in front of technological change is more than a full-time job
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Business New Haven
12/11/2000
By: Linda G. Mele
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The new millennium will bring a host of new technologies designed to improve the way businesses and people's private lives will be run and, whether we like it or not, computers and other technologies are here to stay.
Not long ago, fax machines, palm-sized computers and cellular phones were considered oddities - not something most company executives felt they would need in order to conduct their business.
How wrong they were. Try to find a business today that doesn't have a fax machine, or at least access to one. And look at drivers during rush-hour traffic jams and you're likely to see a high percentage with cell phones glued to the sides of their heads.
While some of us may have to be led kicking and screaming into the technology age, others realize - and have realized
for a number of years - that it's the way of the future and learning about it and integrating it into our businesses and lives is vital to our survival.
Biotech firms like New Haven's Gennaissance Pharmaceuticals can trace their very existence to advanced technology and their employees' jobs are made easier because of technology.
In fact, several dozen biotech companies have added at least 1,000 total jobs in the past few years in the region, according to the Greater New Haven Chamber of Commerce.
Along with the advent of biotechnology companies are the thousands of companies and organizations that have sprung up to help businesses manage and control the way technology will be utilized and help them better understand its importance to their industry.
Because every business and every kind of business is different, some entrepreneurial types have developed specialty software, programs, e-businesses and Web sites aimed at specific industries.
Take, for instance, the Branford-based WebCharity, a dot.com company that enables non-profit organizations to hold online auctions or “thrift shop” sales of goods and services and lets companies and individuals auction off or sell goods and services with all of the proceeds going to one or more non-profit organizations of their choice.
The privately owned company was founded in 1998 and today is host to more than 1,000 non-profit organizations in the U.S. and abroad, according to director of operations Linda Forgione.
To date, the recipients of donations include Freedom Farm Animal Sanctuary, American Diabetes Association, Children's Wish Foundation International, African-American Visual Arts Association, Best Buddies Connecticut, Center for Domestic Violence Prevention and Prostate Cancer Research Institute.
“It's a free service to non-profits,” Forgione explains. “Each organization gets its own Web page which can be linked to its own Web site.”
Forgione explains that her company's offerings save administrative costs and eliminates the need to have individual sales or auctions, although the online auction can be coordinated with a live auction if desired.
“Without technology, none of this would be possible,” Forgione says.
Avatech Solutions Inc. of Milford specializes in document management solutions and computer-aided design (CAD) for the manufacturing, architectural and construction industries.
According to account manager Richard Allen, programs designed by Avatech save its clients time and money. “It reduces the administrative burden and gets products to market faster,” he explains.
Avatech has been in business for more than 15 years and, as the company has grown, it has also taken advantage of the appropriate new technologies developed during that time and used it to create even better solutions for its customers.
“I don't ever see us going back to the time where we didn't use computers,” Allen says.
Another example of a specialty technology company is NeuVis Inc. of Shelton.
Launched in 1999, the privately owned company builds e-business services for the financial and health-care industries as well as a few very specialized “new economy” companies through its Internet Rapid Application Development platform (I-RAD). This provides companies with the flexibility to keep pace with market changes, according to public relations manager David Kulick.
“Everything changes so rapidly, and to stay competitive companies must also be able to change as rapidly,” Kulick says. “We use the technology to build systems that can change as quickly as is necessary.
“In this crowded landscape of technology applications, you need to have the technology that saves you from technological obsolescence,” Kulick says.
“And it's not even a question of how it benefits your business,” Kulick adds, “it's a question of staying competitive in the marketplace. If your competitor offers online services, you are going to need to offer them, too, or you will fall behind. Today, if you don't have an online presence and you're a major company, you're way behind the times.”
In addition, B2BPKG, an offshoot of a bricks-and-mortar packaging supply company, is now an application service provider to other packaging businesses.
Spokesman Robert Lerman, says his company “Web-enables” clients' order data through a private network of packaging-related subscribers.
“We run the Internet portal and provide access to it for a fee,” Lerman says.
During the first quarter of 1998, fledgling technology companies received an infusion of $129.6 in capital from 18 different venture capitalists. It was touted as double the amount of the previous year as well as a “new frontier” for venture capitalists.
And, according to Price Waterhousecoopers Technology Group, New England “was the second hottest region in the country, behind California's Silicon Valley” in venture capital funding in 1998.
Needless to say, businesses that promise to help others get funding through venture capitalists rather than by providing the funding themselves have also popped up.
New Haven-based Bluenet Ventures (BNH, November 13) helps companies get funding by introducing them to investors, according to CEO David Meyers.
“We started by focusing on Internet-related companies, and now we also work with wireless service providers,” Meyers says. “Our clients are all technologically oriented.
“A lot of small and mid-sized companies are not using technology to their benefit because they're not sure how to use it,” Meyers says.
Companies are also looking at creative ways to keep current with the fast-paced technology that changes seemingly every day.
Rather than having the need to get specialized personnel to handle it in-house, the Trumbull-based Oxford Health Plans has signed a five-year agreement with Computer Services Corp. to provide information technology outsourcing. As of December 1, 150 Oxford employees became full-time CSC employees.
New Haven's Enterprise Center was made possible because of a partnership between Yale University, New Haven Savings Bank and the United Illuminating Co.
According to CEO Carol Shilling, the center works with high-tech companies, about six to seven start-up and young companies at a time, to “provide strategic planning advice, including a carefully laid-out analysis of where they should be going.
“We help them write a business plan and look for outside funding sources,” Shilling explains.
Started 18 months ago, the center has found in excess of $2 million in funding for its clients, according to Shilling.
The recent election notwithstanding, government also should keep pace, technologically speaking, with the private sector and provide services and programs that will help businesses stay competitive.
To that end, the New Haven Board of Aldermen approved an Empowerment Zone designation that will help Jim Wong and his Synapp, LLC to create a regional Internet data center in the old Starter Corp. building on James Street.
And, in an effort to reach the young people who are the workers of tomorrow, the Connecticut Business & Industry Association (CBIA) released a video in June aimed at middle- and high-school students that deals with information about technology careers that are available in the state.
CBIA vice president for education and training Lauren Weisberg Kaufman says IT “is a field in which we're seeing tremendous growth, so it has become crucial that students be exposed to the job possibilities and the education and skills required.”
CBIA also recently completed a CD-ROM set that's an employer “pocket guide” to school-to-career and revisions to the state Department of Education's industry skill standards.
“We've done a lot of additional work over the past year to build on the strength of the 'Career Exploration Video Series,' which has exposed students all across Connecticut to hundreds of potential careers and the education and skills necessary to obtain them,” Kaufman says.
“With the addition of another video, the CD-ROM, pocket guide and revised skill standards, educators will now have a strong set of tools to use in demonstrating to students how their classwork translates in the real world.”
CBIA currently has about 10,000 member companies statewide.
And, to get companies onto the Internet faster, SNET Internet (part of the SBC Global Network) is now offering high-speed digital subscriber lines (DSL) that provide Internet connections at “speeds up to 100 times faster” than currently available from other providers. Fourteen cities were recently added to the service, bringing the total number of Connecticut communities serviced to 87.
The state's software and information technology “cluster” (SITC) was officially launched by Gov. John G. Rowland last October in Wilton.
Rowland says IT is already the fastest growing sector of the state's economy and the “cluster initiative's collaborative approach will identify what the industry needs to become even more successful.”
According to state figures, the IT industry in Connecticut includes 4,453 businesses and employs almost 72,000 workers. The average salary at IT companies in Connecticut is more than $50,000.
The “Industry Cluster Initiative” focuses on the idea of nurturing the state's key industries to improve the competitiveness of companies within those industries to boost Connecticut's economy.
The SITC is the second cluster to be activated and joins bioscience, which was “launched” in October 1998.
Connecticut Innovations Inc. (CII) is the state's leading investor in high technology and targets seven critical high technology areas in which it invests:
-Advanced marine applications
- Aerospace
-Energy and environmental systems
-Photonics (applied optics)
-Advanced materials
-Bioscience technology
-Information technology
CII began as the Connecticut Product Development Corp. (CPDC) in 1972 and, in 1989, became Connecticut Innovations Inc. It makes risk-capital investments in high-tech companies throughout the state and offers a wide range of support services.
It also offers programs to promote and encourage university/business collaborations through its Yankee Ingenuity Technology Competition.
Connecticut's Advanced Technology Program (ATP) is a unique partnership between the federal government and private industry that provides “grants to accelerate the development of high-risk technologies that promise significant commercial payoffs and widespread benefits for the economy.”
Through the 1950s, much of the state's economy was manufacturing-based and, today, manufacturing still generates about 17 percent of all employment in Connecticut. The base of Connecticut's economy, however, has shifted to industries dealing with health, business and financial services.
In the New Haven area, major employers such as Yale University, SNET, Yale-New Haven Hospital, the Hospital of Saint Raphael, U.S. Surgical, Sargent/ASSA-ABLOY, Bayer Corp., United Illuminating and Southern Connecticut State University contribute to the fast growing biotech and IT industries.
In addition to being a recognized center for legal services, New Haven is also known as the home of IT companies, and it's expected that Amtrak's newly instituted high-speed rail service will enhance the state's industry clusters while expanding the city's large financial service cluster.
Earlier this year, eight information technology companies in Fairfield County received Connecticut Business Training Networks (CBTN) grants to help them “build and sustain a well-trained and motivated workforce.”
The funds will be used to develop a plan “to meet the training and educational needs of their current and future employees” because the IT sector is one of the fastest-growing sectors of the state's economy. But its growth is hampered by a critical shortage of qualified workers.
Says James F. Abromaitis, commissioner of the state's Department of Economic & Community Development (DECD), “Working collaboratively with the financial support of these grants [gives them] a better chance of developing a plan that will meet their training and educational needs. Governor Rowland and industry leaders agree that workforce development planning is absolutely essential in a tight labor market.”
To further encourage hiring and business expansion, the program offers groups of five or more similar businesses with fewer than 500 employees each a chance to apply for four different phases of grants. All program grants must be matched with either cash or “in-kind” contributions.
According to the seventh annual CBIA/Arthur Andersen Survey of Small and Mid-Sized Connecticut Businesses, these businesses are using the Internet to grow in the new “e-conomy.”
CBIA economist Peter Gioia says it's “impressive to see how Connecticut's small and mid-sized businesses are using the Internet to their advantage.”
More than 800 small and midsize business executives responded to the survey, revealing that:
-54 percent of companies currently have a Web site as compared to just 28 percent in 1997.
-15 percent plan to launch a site in the next year, compared to 16 percent in 1997.
- 40 percent say they purchase goods and services over the Internet, compared with only 18 percent three years ago.
-57 percent used the Internet to send and receive business e-mail in 1997; today that's increased to 71 percent.
-About one-third of those polled conducted research on the Internet in 1997. Today that number has climbed to 64 percent.
-Only nine percent used the Internet in 1997 to recruit employees. Now that number has increased to 15 percent.
While all of this sounds promising, companies still face a number of challenges outside the realm of technology.
The CBIA poll also revealed that 22 percent said the shortage of qualified workers was their greatest challenge - and that also means employees with experience in the new technologies - an increase from 11 percent in 1997.
And, 31 percent listed labor costs as their “greatest challenge,” which means that the cost of hiring technology-savvy workers who know their skills are needed will probably cost them more.
Some organizations, such as the National Center for Technology Planning (NCTP), can also be useful to businesses that are still looking for a way to integrate technology or expand their current technology.
The NCTP was founded in 1992 by Larry S. Anderson of Mississippi State University as a way to connect people around the world via the Internet and have them help each other achieve meaningful results in planning for technology advances.
Today, NCTP is “a clearinghouse for the exchange of many types of information related to technology planning.”
This information may be “school technology plans available for downloading via a computer network; technology planning aids such as checklists, brochures, sample planning forms or PR announcement forms; and/or electronic monographs on timely, selected topics.”
In addition to the education arena, NCTP also helps businesses, the military, government entities and public service organizations. As the technologies have progressed, NCTP has provided hyperlinks via its
Web site to further help its clients.
To cut to the chase, Meyers says companies should remember that “technology is our friend” - even though it may not always seem that way.
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