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The gospel of e-business Featured

1:01pm EDT July 18, 2002

A small office on Public Square is home to seven people dedicated to the advancement of technology. Together, they make up the operations center of the Northeast Ohio Software Association, a nonprofit trade association founded in 1998 as the brainchild of executive director James Cookinham.

With a board of directors culled from industrial and educational institutions, Cookinham and crew act as catalysts to integrate advancements in software into traditional business applications. Their mission is to grow Northeast Ohio business through the marriage of industry and technology.

Kansas-born Cookinham was raised in Spain and traveled extensively around the world as a nuclear engineer with the Navy. With wild white and silvery hair, it's hard to imagine that he once built nuclear power plants in Europe for Westinghouse. Rather, he looks like he spent the bulk of the '70s and '80s touring with the Grateful Dead.

In 1981, he combined his technical mind, an MBA and a love of software to found International PC Owners, the first publication printed on the IBM personal computer. Since then, it's been his overriding passion.

From Cleveland to Youngstown to Akron, incorporating technology into business is no easy task. SBN Magazine sat down with Cookinham to explore the role NEOSA plays in facilitating the growth of technology in the highly industrialized Northeast Ohio region.

How does this region fit into the national information technology industry?

There are more than 2,000 information technology companies in Northeast Ohio. We have 460 companies that are members of NEOSA.

I saw a study the other day that talked about the salaries of the people working in the IT industry in Ohio, and it's around $8 billion a year. In the eight-county region around Cleveland, there are 75,000 people employed in information technology, of which about two-thirds are in traditional industries. As I talk to people, communicate around the region, most people are surprised.

Nationally, we're not known as an important part of information technology, and I think even amongst ourselves, we're not known for that. We need to train ourselves, to educate ourselves as to how much is going on in Northeast Ohio, then try and get the word out to the rest of the country that there is a lot going on here and there are reasons to move companies here.

That's a challenge for us. My sense is we are at least average; we're not at the bottom of the barrel.

What would be our strongest asset?

The fact that we have the traditional industries here might put us in a stronger position than other regions. The challenge is to take these new technologies and integrate them into our traditional industries.

What can be done to keep the economy strong here while the national economy zigzags up and down?

When you talk about economic growth, there are two models. One is attracting companies and the other is growing our own companies. I would be an advocate of growing our own first, like we're doing.

If we had a solution to having smart IT people ready to go to work, companies would beat our doors down trying to get here. There's a shortage of IT folks throughout the country that includes a shortage of professors. The IT industry is paying a lot of money for these experts, and it's a challenge for the universities to get enough money to pay these people.

Is the latest and greatest technology really coming from educational institutions or is private industry driving innovation?

We recently had a tech transfer conference in order to showcase some of the technologies that exist at NASA, the University of Akron, Kent State University and Case Western Reserve University. We had about 250 people there.

I think the universities feel that more needs to be done on their end to get more funding to do more research. Information technology is the fastest growing sector in our economy. Most of it is not done out of tech transfer, it's done out of private companies with an idea -- entrepreneurs working Saturdays, Sundays and at night.

Do we have an advantage having NASA in our backyard?

Yes. One of the things we addressed at our conference was that issue. When we think of tech transfer out of NASA, we think of Tang or Velcro, but a lot of tech transfer is more one to one -- in other words, getting to know an engineer at NASA, and when you're trying to design a particular thing, you think, "Well if I talk to Dr. such-and-such, he could help me."

One of the things we need to continue to work on is to introduce the engineers, the brilliant people at NASA, to our day-to-day businesses.

How can the business community help?

By helping the educational institutions gear up. We need to reach out to the universities to help them adjust their curriculum, tell them what the industry recommends they do and see that we have education institutions that are providing well-trained people to support their industry.

We have some events with Case Western, John Carroll and Kent State where we introduce the students to the IT companies. We hear about this brain drain, students graduating and leaving the region. In some cases, the students don't know the companies in this region.

What is the brain drain everyone keeps talking about?

There was a study done in the past few months by a group at Case Western. The study found we are losing students to outside the region but we are also attracting students to the region. So if you add them up, it's about neutral.

The study didn't show we had a large brain drain. We are trying to work with the universities to get students to come to our networking events, again to start breaking down these barriers and get more internships started. We need to do some things to make sure the students understand there's stuff going on here.

We're looking at listing colleges on our Web site, so if a company were looking for an intern, information would be available.

What projects are in the works at NEOSA?

We have networking events in which people just get to know people, once a month, the fourth Thursday, at the Great Lakes Brewery. We have similar events in Akron and Lorain, and will be having one in Youngstown.

We also have the NEOSA Angel Network, which is a network of high net worth individuals. We have a system to have business plans come through. We review them and present them in front of individuals to either invest or not.

On the education front, we help companies get to know the schools better and the students to get to know the companies. We have about 110 events scheduled this year, so we have a lot going on.

Explain how the Angel Network functions.

We throw around these terms angel investing and venture capital, and a lot of us don't really understand what it means. Venture capital and angel capital is for a company that's going to have explosive growth.

In other words, you're going to go national. You're going to have $100 million worth of sales and you're going to work Saturdays and Sundays and forget the soccer games. This is an intense kind of business.

About 80 percent of the companies are not going to make it, so investors need to hit some major home runs in the few that do. They've got two employees today and they're going to have 500 employees in three years. If it's not that kind of growth, then you're not really the type of company that would be of interest to a venture capital company or an angel investor.

Is that how Cardinal Commerce got $2 million?

Cardinal did go through the NEOSA Angel Network. It provides security for transactions over the Internet. Is that a big market? Well, it's an enormous market.

There is fraud on the Internet and there is fraud with credit cards, and it has the technology that will address many of those issues. It has a management team of experienced people. That's critical.

And, they've got strong members on their board of directors. So they're a powerful company, one of those that have the potential to be a big national company.

How can NEOSA rally interest when the NASDAQ keeps dropping and dot-coms are falling by the wayside?

I think the economy had a dampening effect on a lot of people. The excitement around start-up companies has clearly lessened. However, I also think the fact is that we didn't have a lot of the dot-coms. The companies we are seeing are really good businesses, companies that are wondering how they will do this on the Internet.

It's made the businesses have to be much more serious; they've got to talk about how are they going to make money. There's still a lot of interest. The Internet is an inflection point in the world, in the way we do things. Figuring out how to adjust to that New World is a place for a lot of opportunity, to make money and get new businesses to do things in new ways.

It's really a unique time in the world. It's not going to go back in the box; the Internet is here to stay.

Is it all about making money, or is there something more?

I think it's more about changing the world. My sense is that a lot of people that love doing this are not so much driven by money as they are excited about what they're doing.

For example, we're going to start broadcasting a NEOSA show over the Internet. We can have our own NEOSA TV show with very little effort. If you think about that, it changes the whole paradigm. For very little money, you can do your own show.

What does that mean to the way we've always done things? Because of this change, there are incredible opportunities to do things in different ways. It's all up to our creativity and imagination to figure out how to use these technologies.

What do you see in the future?

If you think about having computers, if we all had really broad bands, there could be a list of every movie that had ever been done. If you wanted to, you could just go and click on it and watch it. The possibilities are mind-boggling.

Think about the Soviet Union 10 years ago when it was trying to control the press; there's no way it could do that now. What countries used to be has changed; the borders are not that important. I ordered a book from Amazon in the U.K. The shipping price was the same; the delivery was the same; it made no difference if I was buying it from Seattle or London.

The border is not meaningful any more. It's a world economy.

Can we learn from other countries?

Ireland is a great story. Not that many years ago, we thought of Ireland as the bottom of the economic barrel in Europe, really the poorest of the poor. They've taken this IT thing, whether it's Cisco or Microsoft, and put big centers in that country. My understanding is that a lot of Europe is supported out of Ireland.

Take India; it has a great educational system. You'll notice in the paper we're going to India to get high school teachers. This is a knowledge economy. Intellectual capacity is what really counts.

You'd better think about continuously keeping yourself up-to-date for the rest of your life. College is never going to be over because it's changing so fast. That's happening and there's no way to stop it, not that you'd want to.

What is our challenge moving forward?

In this region, the driving economic force is probably the manufacturing industry, the traditional industry. The challenge is to get these new technologies integrated into the traditional industries. If I put on an event, the traditional industries would say, "That's self-serving because your companies are selling those services."

But if they don't adopt some of these technologies, and I'm talking about small manufacturing companies that may supply parts to the auto industry, then they're in peril. We need to get the leaders of the community involved. How to reach: James Cookinham, (216) 592-2257 or James@Cookinham.net

Deborah Garofalo (dgarofalo@sbnnet.com) is associate editor of SBN Magazine.