Tech growing presence as Centre County industry

crosenbl@centredaily.comFebruary 9, 2013 

Lin Wang’s company will help doctors detect HIV and leukemia sooner.

Wang and her husband, Tony Huang, a Penn State associate professor, own Ascent Bio-Nano Technologies, a fledgling business. Thanks to a chip they’ve developed that produces three-dimensional imaging of a stream of cells, inexpensive portable devices will be able to screen cells for serious diseases.

“We want it to be something that benefits society greatly,” Wang said.

Wang, the CEO and president, and Huang, the chief technology officer, represent the vanguard of industry in Centre County.

Manufacturing still accounts for one of the county’s top industries, according to Pennsylvania’s Center for Workforce Information and Analysis, but the past decade has seen a shift from large companies to smaller scientific or technology-oriented ventures.

Ascent Bio-Nano Technologies is in the Ben Franklin TechCelerator@State College, an incubator at Innovation Park formed from a partnership among several of the area’s economic development providers.

Entrepeneurs such as Wang and Huang receive training, support and mentoring services, office space and access to loan and investment programs. Four-week and eight-week boot camps give researchers the tools to become flourishing independent business owners — with the goal of helping them grow into established tech firms such as local success stories Restek, NanoHorizons, QBC Diagnostics and Sound Technology.

“How do we make this market produce the next-generation companies at a better rate?” said Stephen Brawley, CEO and president of the Ben Franklin Technology Partners’ regional headquarters and one of the TechCelerator’s leaders.

New faces in manufacturing continue the county’s industrial evolution, as a thriving university and changing demographics fuel economic growth.

Changing times, changing industries

Fifty years ago, Centre County’s economy revolved around Penn State, agriculture, limestone quarrying and large plants such as the Titan Metal Co. factory, once the county’s biggest employer.

Brickyards were largely gone but coal mining still maintained a presence, though its heyday was long past. Mills had gone the way of the old Match Factory, which closed in 1947.

By 1998, the economic landscape had become more diverse.

Penn State and education in general remained large employers, as did manufacturing. But construction, retail trade, accommodation and food services, health care and social assistance, and finance and insurance all occupied large sectors of the local economy, according to 1998 U.S. census data.

Twelve years later, according to census data, most of those industries had grown in terms of paid employees, reflecting the county’s steadily increasing population. The notable exception was manufacturing.

Marketplace changes and economic downturns caused companies — including Corning Asahi, Murata, Jostens and Cerro Metal Products Co., formerly Titan — to close local plants. From 1998 to 2010, the number of paid manufacturing employees locally shrank from 8,711 to 3,778.

“I think some of that has been just part of the evolution of manufacturing industries in the U.S.,” said Tom Kearney, an area manager with West Penn Power and the board chairman of the Centre County Industrial Development Corp. “It’s very difficult to find in a store today something that wasn’t made in another country.”

During the same period, the number of retail establishments dropped by 112, but the number of employees increased slightly, due in part to an influx of big box chain stores, mostly along the bustling North Atherton Street and Benner Pike corridors.

In 2009, the latest data year compiled by the Center for Workforce Information and Analysis, the county’s top five industry sectors, in descending order of employee totals, were: retail trade; health care and social assistance; accommodation and food services; manufacturing; and professional, scientific and technical services.

A telling snapshot of one trend in the local economy occurred Jan. 20.

On that day, Penn State had the most online job openings with 290. In second place, with 37, was Mount Nittany Health System, followed by Geisinger Health System and HealthSouth Corp., according to the Center for Workforce Information and Analysis.

What the doctor ordered

These days in the county, health care is one healthy industry.

Mount Nittany Medical Center completed expansions last year, adding a cancer center and renovating its emergency department. Geisinger’s Gray’s Woods multispecialty clinic, which opened five years ago in Patton Township, is expanding. The area also claims The Meadows Psychiatric Clinic, HealthSouth Nittany Valley Rehabilitation Hospital and several retirement communities.

Among the county’s top employers last year, Mount Nittany was second, The Meadows was ninth, and Geisinger was 13th.

Aging baby boomers are largely behind the local health care growth, Kearney said. Newly retired people are settling in the area, drawn despite winters to its quality of life, natural beauty and amenities such as the university and its sports and cultural offerings. That, in turn, has spurred the growth of medical and care facilities.

“Now we have the services that retirees and other people need,” Kearney said.

Mount Nittany CEO and President Steve Brown agrees that the demographic spike has prompted the hospital to add programs and services — such as electrophysiology for the treatment of heart disease — to address chronic conditions related to aging.

“We need to be prepared to deal with those kinds of things,” Brown said, noting most of the new programs have stemmed from ties to Penn State Hershey, a teaching hospital.

“That relationship is getting stronger as the years go by here, and we’re working closely with them.”

One day, he hopes, the connection will help establish a family medicine residency program at Mount Nittany, leading to residents practicing locally and eventually the hospital becoming a full-service academic teaching hospital in partnership with Penn State’s College of Medicine.

“I see this growth continuing for a while,” Brown said.

‘Ideal characteristics’

Ted McDowell also is optimistic about the future.

McDowell, an AmeriServ Bank regional president, envisions the Centre Region staying a financial hub. In recent years, banks increasingly have popped up in and around State College — to the point that the two ZIP codes encompassing State College Borough and most of the immediate surrounding area boasted 43 branches in 2009, more than all but a few dozen of the nation’s 21,000 ZIP codes.

That year, the finance and insurance sector ranked eighth locally in size. Federal Deposit Insurance Corp. records show 70 bank branches in Centre County with, collectively, about $2.5 billion in deposits.

“One of the drivers, I think, has to do with the strong demographics that occur in this region that don’t occur in any other areas of central Pennsylvania,” said McDowell, also the board chairman of the Chamber of Business and Industry of Centre County.

McDowell said the community presents “ideal characteristics” that attract financial institutions.

Among them, he said, are low unemployment, a relatively high disposable income base and robust housing prices, which provide “great sources” for home equity loans, mortgages and consumer lending.

“The banks want to be here,” Kearney said.

In addition, the area’s retirees and businesses supply ample opportunities for financial institutions to deliver trust, wealth management and employee benefit services, McDowell said.

Many businesses that delayed expansions or slowed hiring while the nation’s economy foundered are more “cautiously optimistic” than they were two or three years ago, he said. That’s a good omen for local bankers.

“I think if you see the business sector getting healthier, the banking industry grows,” McDowell said.

Heads in beds

Banks aren’t the only new commercial structures appearing in the region.

Hotels and restaurants have increased, continuing the growth of the local lodging and food services industry sector in recent years and the flow of tourism dollars to the county.

Visitors spent about $650 million in 2011, a 9 percent jump from the previous year, according to “The Economic Impact of Travel and Tourism in Pennsylvania” report. The figure has climbed annually after a dip in 2009, part of an overall rise in tourism sales statewide.

Tourism in 2011 supported about 4,800 local jobs, according to the report.

Central Pennsylvania Convention and Visitors Bureau “conversion studies” — a method of evaluating tourism advertising programs — indicate that while Penn State’s sports and cultural events are a huge draw, scenery is the top reason people come to the county, said Betsey Howell, bureau executive director.

“That says we’re getting people who are coming in that have no ties to the university,” she said.

Better indoor athletic facilities would bring more youth and scholastic tournaments to the area, Howell said. But if the economy keeps improving, she expects local tourism will continue its upward trend.

An emerging landscape

The future is a little cloudier for construction companies, traditionally among the largest local employers.

After stagnating in recent years, housing construction has picked up, with two large student apartment complexes now under way.

But state cutbacks in transportation funds have hampered companies such as Glenn O. Hawbaker Inc., which derives a “significant portion of our business” from road and bridge construction, said Charlie Campbell, director of special projects for the firm.

He said his company hopes for more funds from state legislators and Gov. Tom Corbett in the coming fiscal year. Resolving federal questions such as the looming debt ceiling battle also might help if, as a result, local business leaders feel more secure about going forward with construction projects, he said.

In the meantime, the Marcellus Shale natural gas industry has filled in some of the gaps. Campbell said his company carried 250 jobs statewide in 2012 because of the gas industry.

“It’s not just royalties that are being paid to land- owners that benefit Pennsylvanians, it’s all the jobs that are being created, and our industry is just one of them that’s benefiting,” Campbell said.

As a fuel source, Marcellus Shale gas could be a boost for local manufacturing, said Sue Hannegan, assistant director of the county’s Office of Planning and Community Development. Gas could make some previously outsourced production economical again, she said.

“We could see some of those jobs come back,” she said.

But the real manufacturing growth, she said, will come from small, emerging companies — some specializing in support products for the gas industry, some in other high-tech fields.

Kearney sees the county producing more successful ventures like Sound Technology, which makes transducer and probe products for the medical ultrasound industry. Founded in 1987, it needed more space and moved last year into the Ferguson Township building where Jostens made yearbooks.

So far, the TechCelerator program and Penn State’s support for innovation are making a difference, Kearney said.

“The university is doing phenomenal work in releasing technologies and intellectual property to the professors and folks like that,” he said. “They’re truly leading the pack.”

With major highways, a strong utilities and communication infrastructure, and good schools, the county stands poised to attract companies as well as develop them, Kearney said.

“We’re a kind of diamond in the rough,” he said.

“We’ve got a lot to offer to businesses, and we’re going to see a lot of success in the coming years.”

Chris Rosenblum can be reached at 231-4620. Follow him on Twitter @CRosenblumNews.

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