Buying in Bulk: Electrifying Fleets Across the Country

The Electrification Coalition (EC) is a nonpartisan, nonprofit organization that develops and implements a broad set of strategies to facilitate the widespread adoption of electric vehicles (EVs) to overcome the economic, public health, and national security challenges that stem from America’s dependence on oil. They provided technical support to the Climate Mayors initiative to help cities, counties, school districts, and other public entities leverage their collective buying power and accelerate the conversion of public fleets to EVs. 

Sarah Reed is the EC’s Director of Programs, managing EV innovation projects including the Climate Mayors Electric Vehicle Purchasing Collaborative program. Matthew Stephens-Rich is the Director of Technical Services for the EC’s programs.

This interview is part of an FAS series on innovative procurement.

Ryan Buscaglia: Could you give a broad overview of what the Climate Mayor’s EV purchasing collaborative was and what the role of the electrification coalition was within that?

Sarah: This project, the climate mayor’s purchasing collaborative, was launched in 2018 by then Mayor Eric Garcetti of Los Angeles and a couple of other partners. It was an unprecedented effort to create a one stop shop for local governments and schools and universities to reduce some of those upfront challenges that exist with fleet electrification. This project is really focused on providing technical assistance to all of these types of nonprofit local government/public entities, as they look to purchase EVs. 

We ask, ‘how can we make sure that every vehicle that’s being bought within the next year is electric? How can we provide that support, knowledge, and information on the fleetside to make that shift?’ So we pair that information and guidance from the electrification coalition with an easy option to buy this equipment.

You can buy all types of vehicles including school buses, garbage trucks, street sweepers, EV charging stations, and the EVs that we all pretty much know at this point (Chevy Bolt, the Nissan LEAF, etc.) through Sourcewell, which is a purchasing platform that sells all kinds of things. 

Many local governments are familiar with Sourcewell from buying equipment for playgrounds, pens, chairs or anything that schools and local governments purchase. This initiative brought together us, that purchasing mechanism, and the climate mayors who were saying ‘we need to transition our fleet’. That’s how we looked at that approach, especially in 2018, when there weren’t quite as many EVs out there. Our role is the overall organization as well as that technical support.

Why are public fleets an important leverage point in advancing electrification?

Sarah: The EC’s mission is focused on improving economic and national security challenges and reducing dependence on oil. We have this history of working with communities and cities on EV adoption and knew that fleets were a sweet spot for several reasons. Fleets have predictable routes. So in general, most fleet vehicles drive within the city or they drive to and from different facilities. They have higher mileage than a vehicle you or I might drive, which increases the cost savings of an electric vehicle. And they also usually go home to one spot at night where they can charge. So they’re really good candidates to make electric. And we can help show some of the cost savings and the total cost of ownership. Matt can share more about that part.

Matt: 2018 doesn’t sound like that long ago, but where we were in the market at that point there were barriers that needed better solutions. First and foremost was market growth. Consumer adoption was going on in 2018, but definitely not at the clip it is right now.

We saw an immediate opportunity to bring public fleets as a leader in proving EVs and where they can be a best fit in fleet deployment. When you think about a fleet—average people don’t think about fleets often—you’re thinking about dump trucks, step vans, Amazon delivery, that type of thing. But it turns out public fleets have a significantly large light duty deployment: sedans, pickup trucks, etc. It’s everything from a parking enforcement vehicle, to courier vehicles, a whole slew of things that are running around town. 

This made them a really good fit for electrification. It’s also a great way for cities to communicate their sustainability priorities and demonstrate what EVs look like in the wild. To this day we have a number of partners that signed on to the initial commitments with climate mayors that still send us back pictures. It just gives that demonstration of what EVs do look like in the wild. So that it’s not just a hypothetical, but something that’s real right in front of you. 

While we had a lot of initial municipalities that were excited to go electric, they didn’t have reliable access. Typically you have to go through usual procurement—you have to go through a publicly bid RFP process, you have to get three vendors responding back, and go through a whole criteria set. It takes time, effort, and energy. The biggest critics of RFPs will be quick to point out you often end up with an inferior product to what you originally were hoping for.

Working with Sourcewell and our procurement partners we were able to use pre-bid contracts to eliminate the need for that and instantly go and purchase those vehicles that you wanted. We heard and still l hear stories of somebody saying “I’m looking for a Chevy Bolt or a Kia Niro or something like that and my local dealer didn’t respond to my RFP, so I can’t buy the vehicle I’m looking for. What do I do?” So that was a specific opportunity.

But as fleet options have grown between electric school buses, electric street sweepers, charging infrastructure, transit buses—we’ve continued to grow the offering in the EV purchasing collaborative. For instance, with the F150 Lightning and the E-Transit, the Ford options, those are amazing utility applications, big top requests right now for a lot of folks, which has been a really helpful key asset to that. 

As Sarah also mentioned, in terms of the technical support we’re here to help usher folks through that procurement process. Pre IRA [Inflation Reduction Act] and Bipartisan Infrastructure Law [BIL] there was an opportunity to use the earlier EV tax credits through leasing. And then by leasing the vehicle from a leasing company or maybe a dealer or your procurement partner, you’re able to claim a pass through portion of the tax credit. A lot of municipalities never lease so this was the first time they were ever leasing a product. Often you just buy it outright using bonded money or something to that effect. So there was a lot of technical support in terms of procurement. 

We also provide fleet analysis support through our free to use Drive tool—Dashboard for Rapid Vehicle Electrification (DRVE)—which you can download from our website. Anyone can use it. It’s designed to provide a quick analysis. A lot of fleet managers are bought into electrification, they don’t need the whole proofing of “what is an EV? where do I charge it?” They have a lot of that figured out. It’s really just the question of “okay, what is the exact model that I should be thinking about? Or what would a Total Cost of Ownership (TCO) look like?” They’re pretty bought in but just need some of those final touches to gut check it.

That brings up so many follow up questions from me, the first is why do electric street sweepers have such high demand?

Matt: Street sweepers were really popular in part because what’s one thing that every city has? It is a street sweeper or a refuse truck. At that moment, it was kind of a cool thing we had an electric street sweeper and said let’s do an informational webinar and get the word out on it. That was the most attended webinar we had hosted to date. And it was because there were a lot of good use applications and a lot of city fleet vendors were really excited to hear about that. Definitely a great example of finding vehicle options ripe for electrification.

We’ve grown like Sarah mentioned with nonprofits and we have done a lot of work with universities. State fleets as well. While city fleets are a great place to start, we work with all public entities big and small. We’ve had the chance to work with and help them through the process, especially again to the market growth. One thing we really emphasize is you are not expected to use our procurement partner, it’s just one of many options. So above all else, we’re here to help you find the most cost effective, most time efficient way to get your vehicles deployed. In those moments, we’re really just really on hand to help out folks through any specific part of the process. 

How did the Climate Mayors’ collaborative that you all are a part of come together? And what were some of the challenges of putting together such an aggregated purchasing vehicle rather than working with people in a one-off fashion?

Sarah: Mayor Garcetti had a really strong sustainability platform and he did a ton of really exciting things in the city of Los Angeles. One of those things was around electric vehicles at the community / fleet level across the city and he was a cofounder of the climate mayor’s organization. 

There are a group of cities that put together a request for information out to automakers to say, “We’re a couple of really large cities (Seattle, LA, etc.) and we want to buy this many fleet vehicles, we want to electrify them, and you need to make vehicles for us to buy.” This was a market indicator from all these large cities that the demand is there. The EC had a history with Sourcewell and built up some of those other relationships to turn that initial action into a project that could provide the support [for cities].

To make sure I’m understanding it right—there were three main entities involved here. You have the Climate Mayors that came together issuing a call and committing to purchasing a certain number of electric vehicles that they thought would meet their goals as cities and locales. You have the Electrification Coalition functioning as an overarching organization and technical support provider, working through details and analysis. And then you have Sourcewell, who’s the actual vehicle point provider who they can go to as an “easy button”. Once cities determine something meets their needs they can procure it quickly from them. Is that right?

Sarah: Yes, perfect! And you did ask about initial commitments. So there was that RFI, and then when we launched this program, there were about 20 cities and counties committing to a couple hundred EVs. This project has been focused on immediate action. So we didn’t care about saying, “Oh, by 2030 we’re gonna electrify our whole fleet.” That wasn’t what this was about. This was about next year—what vehicles are already turning over and how we can make them electric?

The peak of commitments was over 6,000 vehicles that fleets were looking at purchasing. Several thousand were purchased. And so that initial commitment grew from 20 or so folks, when we launched this program in 2018, to several hundred local governments that are a part of this effort.

Besides the thousands of vehicles, are there any other impact or success measures that you have from this specific program that you’d like to talk about?

Sarah: So it’s about 450 cities and counties and the actual commitments to purchasing vehicles has the potential to reduce over 2 million annual gasoline gallons, as well as 46 million annual tons of CO2 emissions. We’ve also written some case studies and provided other reports and resources.

Matt: A big key to success too, especially in those early days, we focused on investing into the relationships we were building with cities. The biggest thing about procurement is it’s always happening. So you’re always planning for that next one, two, or three rounds, forecasting procurement planning across a number of years. So we focused on those initial quick hits, and then focused on how we can grow those purchase orders over time with partners. Having all the analysis set really helped. We also did a lot of work with cities on setting up what we call “EV first” procurement policies. So essentially taking the city’s own internal procurement policy and kind of flipping it on its head. 

Traditionally, the assumption is you’re going to buy a gasoline or diesel vehicle, not anything that you have to defend. We flip it and say EV is actually the assumed norm and if it’s not going to be that they have to work down to the decision tree to get to buying a regular gasoline or diesel vehicle. Now, we are still working with a lot of those original cities. Many of them are staying on target for broader 2030 goals, like Sarah mentioned, but even then, there’s all types of barriers that can crop up along the way. 

Do you do any work around planning for the end of life asset problem with localities so those vehicles are gonna break down, they’re gonna need to replace those on a timeline eventually. How do you manage that transition and handle scrapping or selling to a secondary market?

Matt: To be honest, it doesn’t just start with EVs. Very few fleets can just outright scrap and replace vehicles. Often you have something in a primary use and then you’re putting it into a secondary use. It’s quite literally in the back, we’re going to use it on an as needed basis. Indeed, should a vehicle have to go in the shop, we have the backup that can come into deployment. So we actually started into that with those first EV purchases. Often those gasoline vehicles were not being immediately retired or sold off or sent to a scrapyard, but put in a secondary use on hand as needed. Very rarely driven, to be honest, but just still there. 

That asset management is a critical piece to it. Going back to the leasing structure—that creates a whole new world for secondary life and addressing how do you deal with the end of life for that vehicle? Those public fleets that were going down the leasing route, often that was in a closed ended lease or with an option to buy it out at a later date. 

So that was a way to hedge a bet because electric vehicles in general really are taking a shape and arc of evolution more similar to your smartphone than a traditional vehicle. The range only gets better, charging speeds get better. So that was one way folks were a little more comfortable with committing to procuring. With a closed ended lease, they knew they were giving it back to the dealer and not just going to have the vehicle on their hands and working out what do we do with it?

In sending to scrapyards, it’s interesting because there is actually a lot of asset value. There are so many rare and critical minerals in the vehicles and battery packs. It’s a growing industry—Redwood Materials is a growing recycler who I heard speak once. They put it saliently describing how all the material of a battery is there from day one to the last day. There are a lot of amazing efforts on materials reclamation. We actually have a Critical Minerals Center that is a sister program and effort that goes upstream and thinks about how to bring mineral security onshore. That’s all to say that public fleets will be a part of that flow. Fleets are a really good test case because fleet managers take their jobs very seriously when retiring an asset, whether that’s selling, recycling, or taking it to auction.

Are there any other ways to de-risk the end of life problems for public procurement?

Matt: Another example is EV transit buses. There are a number of transit bus companies with great EV options, and clever leasing options to lease the bus and the battery as separate assets. It addresses the questions about how battery life will fare. That’s been an option too, decoupling the battery from the vehicle and thinking about them as two separate assets that work together. It creates fascinating procurement options. There were terms, for instance, where you lease a bus for a ten year period but you have a five year term on the battery and you get a fresh battery at the five year mark. Assuming you’re keeping up with other things—suspensions, tires, etc.—that just need inspection and upkeep you can keep it on the road for a while.

Sarah: I’ll clarify that while we do work on transit buses and have helped many cities with them, they are not a part of this program because there are very strict FTA rules about how you can sell them.

Could you talk more about the DRVE tool and how important that information is when it comes to helping cities with their planning?

Matt: Call it right place right time. As we were launching the EV purchasing collaborative we were talking with friends at Atlas Public Policy who do a lot of market research and tool creation. We were grabbing a drink at a conference talking about how all of the total cost of ownership calculators out there are clunky and hard to use. From that, the DRVE tool was born.

We wanted to focus on what’s the tool for the masses, not the folks that can dedicate a lot of resources and time. We want people to be in and out in an hour and have a good assessment of where EVs could be a good fit. We wanted it to be open-source and free to use, something that anybody could download and run with—it’s Excel based. We designed it so that it talks to a variety of federal source databases like, the Alternative Fuel Data Center, etc. The vehicles in it update automatically. If you run it in a couple months you’ll start to see 2024 model year vehicles start to populate it.

It was something we needed for our own practice, but realized it was effective and that we could release it publicly. You can upload any fleet data tracking that you use— we’ve worked with folks who have had to fax us their data sets. We saw a need to work with a wide variety of file formats.

How has the IRA affected what you’re trying to do with the electrification coalition and what is your vision for the next couple years that you’re excited to work on?

Matt: Our vision is we’re not going to sleep!

We have continually added to the DRIVE tool adding new features. We added more forward, navigating EV incentives and charging procurement incentives too. Between the BIL and IRA there are a lot of new provisions. Specific to the IRA, the commercial clean vehicle tax credit is going to be most relevant for public fleets. We’re reloading the site daily now on what was formerly called “direct pay” now called “elective pay”. Everything we described to you about pass-through working with dealers, leasing has changed now because public fleets can file for these tax credits directly and claim the entire benefit. Now the challenge is on us to make sure we’re digesting that information and getting out to the masses and being sure folks are understanding of the steps it will take to get this set up. Another implication of this new funding is the focus on charging infrastructure. The charging and fueling infrastructure round that just became available as part of the $7.5 billion provided by BIL—we supported 50 applications to that, did countless webinars and phone calls.

Any last thoughts from you, Sarah?

Sarah: This program has helped a lot of folks get ready to take advantage of these incentives and become more familiar with electric vehicles. We’re focused on helping cities of all sizes (not just the usual suspects). We helped 50 cities and many of those were very small, or rural, or didn’t have a fleet sustainability person. We’re trying to expand who has access to these vehicles on the city side of things. Also creating wholesale tools—while our individual support is great there’s only a few of us. 

This is the way the market is going. I don’t know if you could say that five years ago you could have had everybody saying that, but I doubt there are that many folks out there in cities unsure that this is what the future is going to look like. Taking advantage now while there are incentives, tax credits, and state programs that provide incentives for this transformation is critical. If you don’t act now you’ll be behind, there will be less resources out there. Now is the time to act and have more buy in. 

The Future of Mobility in Michigan

The Detroit Regional Partnership (DRP) will use $52 million from the EDA to transition legacy automotive industry into a globally competitive advanced mobility cluster. The Global Epicenter of Mobility (GEM) coalition will do this through a new Supply Chain Transformation Center and Mobility Accelerator Innovation Network that will bolster existing pillars of support in their ecosystem.

Maureen Krauss is the President and Chief Executive Officer of the Detroit Regional Partnership. In December, 2022 Maureen testified at a House Science, Space, and Technology subcommittee hearing on Building Regional Innovation Economies. You can find her testimony here. Christine Roeder is the Executive Vice President of the GEM coalition and has over 20 years of experience with economic development and the automotive industry across Michigan. She previously held various senior leadership roles at the Michigan Economic Development Corporation (MEDC).

This interview is part of an FAS series on Unleashing Regional Innovation where we talk to leaders building the next wave of innovative clusters and ecosystems in communities across the United States. We aim to spotlight their work and help other communities learn by example. Our first round of interviews are with finalists of the Build Back Better Regional Challenge run by the Economic Development Administration as part of the American Rescue Plan.

Ryan Buscaglia: Could you tell me a little bit about the history of your coalition and how it came together in Detroit?

Maureen Krauss:  We represent a region of five and a half million people. That is not a federal formula region or state formula region. It is a self chosen region where people/communities have decided they want to work together. So that always makes things a little easier. We’ve been doing this for a long time in economic development. And when you look at our seven clusters that we focus on, the mobility cluster—advanced mobility—right now is responsible for about 70% of our workload. So it’s one that we’re immersed in. Everyone knows Detroit as the auto town, the auto region. Michigan—the auto state. We have been seeing this transformation everyday from ICE to EV (internal combustion engine to electric vehicle) but it’s really more than auto right? It has to do with aerospace and defense and a lot of other industries that are here on how the mobility industry is changing.

So it was interesting when we first convened regional partners who work in this space. We actually didn’t pick mobility. We said: ‘What should it be? What topics should it be?’ And we were really pleased when people got back to us on that: 19 out of 20 said mobility. So that was a clear sign that this was a space we needed to really focus on. 

The one other thing I will say, Christine and I worked together back in 2009 and 2010 when our auto economy imploded, and we learned a lot from that. We did not want that to happen again. Our global epicenter of mobility approach is to proactively embrace this change and ensure that our talent and our small and medium sized companies and our entrepreneurs can keep pace with the global shift, with the big original equipment manufacturers (OEMs), with the huge tier-one suppliers, and make sure they have access to the resources and the research that they need to make the transition. At one point I said to the EDA: we don’t want to ever come back to the federal government for a bailout. We want to show that we’re proactively recognizing this change and doing something about it. Christine, I don’t know if you want to share any other insight around that on how people got involved in it [the coalition].

Christine Roeder: My prior work for 20 plus years was with the state level economic development group doing business development. And so a lot of my time—if not 90 plus percent of my time over that couple of decades—was spent on automotive projects in Southeast Michigan.

Knowing this ecosystem of players of workforce development and entrepreneurs and the different incubators we have, the work we have with these research institutions like University of Michigan and Wayne State— we’re really fortunate in this region. To the DRPS credit, when they were pulling this application together. It was not a situation of “well this is the group we have and this is how we’re moving forward.” It was “how can we make the table bigger?” I’ve heard Maureen say that a number of times, how can we make the table bigger? And who else is missing and how can we bring them to the table? 

Old image of Dodge automobile factory, circa 1916. Workers are finishing chassis.
Dodge Factory, 1916

Everyone knows Detroit as the auto town, the auto region – but it’s really much more than auto.

So I’m really thrilled about the work we’re doing within these different pillars of projects for the EDA, because they have brought together groups that never have even worked together their whole time doing workforce development or economic development in the Detroit metro region. We’re building trust across different organizations and educating these organizations about what the capabilities they each have.

You mentioned the historic roots of this coalition coming out of the incredibly tough period of 2009 and 2010. Could you talk about the lessons from that period and how that informed the projects and coalition that you’re working on today?

Maureen: There were some really significant programs that came out of that period of time. Some did not work out. They didn’t pan out, they weren’t needed. But we had to really take a look and say— okay, we’re very grateful for this auto industry here, what would we be without it? It provides great jobs, great quality of life, and jobs across the spectrum from manufacturing to technical research and development. We have these assets, what else can we do with them? 

So what happened as this coalition was building: we saw the different components be created to address very specific needs, and our approach on this EDA grant was we don’t want to invent something new. It was funny how the EDA asked us in all the meetings, well, is there a construction project? Or are we building a new thing? No, we have some existing pillars that are quite strong! We want the funds to accelerate their work, and make sure that historically excluded communities (HECs) will be able to have access. 

We looked at a very broad definition of HECs not just from a racial lens, but for instance, our region is very urban and suburban and rural. So how do we ensure that a successful program in Ann Arbor or Detroit can reach companies and people in the rural areas of our region too? So it was really, as Christine said, expanding that table and not creating yet another program.

And then we looked at what are shared components that we can all benefit from. That’s the strength of one of our components called GEM-Central and the whole research piece. Entrepreneurs, small-medium sized companies—they can’t hire high end McKinsey or Boston Consulting Group firms to do their research, but there’s a lot of shared information there. So we wanted to strengthen that and have that available to all. 

And then very importantly in the DEI space, we’re a very diverse region, and it’s very authentic here. But we want to ensure that our small and medium sized companies also understand how to be more diverse, how to really embrace all of the cultures that are here in the Detroit area. You know, a lot of these smaller firms barely have an HR person, let alone a DEI officer. So that’s one of our activities. We want to make sure that small and medium sized companies understand how to incorporate DEI into their companies to provide greater opportunities for all because we do believe that we have a great talent pool here. Sometimes you just have to look in different places than the traditional sources. And that really encompasses a lot of our DEI work and allowing access to those findings and those paths for companies that might just have a part time HR person doing payroll.

How are you bringing people to the table trying to be inclusive in the process of developing this future oriented cluster? Did it look like weekly meetings or did it look like town halls? Did you go to people in the community?

Maureen: Our diversity here is very authentic. So it’s not like we had to one day say, who can we call that represents black entrepreneurs or whatever. We work with these people every day. It was really as Christine said. We met every week for I don’t know how many weeks we typically had about 80 people on each call. We never met in person, either. Remember, this all started during COVID. We never met in person. But we had these meetings and we invited a big group of everyone we knew. Who was who was the black business Chamber of Commerce here? Get them in. Detroit Future City? Get them in. Our rural areas’ economic development partners and others? Get them in. It never seemed that it was forced, but it was just making sure they were in the conversations and there was that representation. It was the weekly mantra—who’s not here? Tell your friend, tell us who we can include on an invite. 

We have the second largest Arab population outside the Middle East in the Detroit area. There’s a very strong Hispanic Chamber of Commerce here. So Ernst and Young (EY) helped us bring all those people together and have those conversations. We did two sessions with them to really listen to what their thoughts and ideas and approaches would be to make sure that we were inclusive. I don’t think any of us feel comfortable that we’ve solved this issue. Right? But we’re gonna work super hard to be better and more inclusive in everything we do. And then Christine, if you want to talk about the global initiative as well and how they were engaged?

Christine: As this project came together we split it up into different pillars of activities. The talent pillar includes Global Detroit, which is an organization that works day in and day out bringing immigrants and the world community to Michigan, and specifically Southeast Michigan for job opportunities, entrepreneurship opportunities, and to become part of our ecosystem. As well as standing up for those groups that are already here in Detroit. As Maureen mentioned, we have a very strong Arab American presence here. We have a growing Bangladeshi population in Hamtramck. It’s wonderful to see and the integration of that into our community is really important, especially with the need to help them to build businesses and hire people.

The entrepreneurship program at Global Detroit is one of the funded partners of the EDA under our umbrella of GEM. Whether it’s with that group or, for example, yesterday and the day before here in downtown Detroit at our large convention center the Michigan Minority Business Development Council had their annual minority procurement conference. So they had hundreds of companies and hundreds of exhibits on the floor and we had two of our partners that had exhibited there. One of them being the group that’s reaching out to the legacy companies, the ICE companies that Maureen mentioned, as well as our talent and workforce pillar. So we had two of our pillars represented there, reaching out into the minority business community and talking about GEM. We’re looking to do things differently and dig way deeper into these historically excluded communities to make sure that they’re part of the solution.

I know that a conversation people are having is around the struggle of trying to link up a series of small and mid sized manufacturers who may or may not be able to plug into different OEM supply chains at different places. So hearing that you’ve connected that with the talent piece is wonderful, hopefully creating a value chain that is inclusive, and meets all the needs of a globally competitive market at the end of the day. Is that initiative connected with the new supply chain transformation center that is a critical part of your project?

Christine: The Supply Chain Transformation Center is the legacy company component, and they were there yesterday. So yes, it’s tied into that and working with those companies, particularly new companies that they’ve never worked with before in more rural areas and/or minority owned. All of those companies have components and products that are at risk of being extinct in the next 20 years. One of the lessons that Maureen and I learned back in 2008 and 2009 was that when companies that only made one part for one or two customers, when those customers filed bankruptcy, they suddenly had no idea what they were going to do.

Diversifying those companies into other products is what the supply chain transformation pillar is really doing. It is identifying those companies working with them on what is the product, where else could it be applied? What’s your machinery like? What else could it make? What’s your talent like? What can we upskill them into doing? And then how do we make sure that company continues to be a company as the product line that they’re currently making is shrunk into a handful of suppliers that will continue to build those or produce those parts. ICE is not going away, it’s going to take decades for those all to come off the roads, right? But we’re not going to have as many of them, there’s not going to be as many produced at the large scale. So how do we help those companies to find other customers to build their parts?

Maureen: We’re trying to create a path for the customer journey, and connect all the different components of GEM to ensure that all of these really strong pillars that we have—we do hate to call them pillars, but ‘co-recipient’ sounds very government-like, so we haven’t found the perfect phrase—but you know, we have six of them. How do we make sure that they are aligned? So it’s almost like a handoff. So your company’s going to make a new part at your legacy company and you’re going to transition but then we have to talk about the talent and what do we do with your existing talent so they don’t just get left behind, but that they have the skills to make that. We really are trying to be thoughtful about making sure these programs are also connected, talking to one another and sharing this customer journey. And in the end our customer is our people, right? Whether they represent individual talent or small or medium sized companies. We just need to ensure that all the pieces flow together nicely.

Mural reading
“Nothing stops Detroit”

How have you been navigating this transition from people thinking of Detroit as the auto town, and Michigan the auto state, and moving from that vision to the next 10-20 years as people make this transition from ICE to EV? I’m wondering how you tell the story of that transition to people and if you ever get pushback from people who might want to double down on the historic focus on ICE automobiles. 

Maureen: You’re always going to have naysayers. I never got my late parents to use a cellphone properly, and that was frustrating. Bless them, but it just didn’t work. I do think our people are very resilient. We’ve learned about change before and we learned what happens when you don’t embrace that change in the right way. There’s still going to be the naysayers “oh we will never have enough charging stations, oh who is going to supply all the hydrogen?” Those things are going to be a part of the conversation.

That’s why our research component is so important so we have the right data to show it’s not either or. There’s not going to be one date in the future where we switch from ICE to EV. We have to transition. It’s happening very quickly. We just had a big announcement in DC this week with Secretary Raimondo about a project that’s coming to Michigan with 600 jobs in the hydrogen electrolyzer space, they’re called NEL. So this is happening in a big way, but we want to be sensitive to the fact that change is hard.

Christine: I would just add that what’s going on with the government, federal regulations coming down that the companies need to meet in a short amount of time doesn’t leave any chance that this transition is happening. We are going to do what we can to save as many jobs and save as many companies as we can. And continue to attract companies in this new supply chain as maureen just mentioned this week’s announcement in the hydrogen space. It’s not just electric vehicles that run on batteries, it is hydrogen too. There are many other ways that our mobility companies are going to wean us from fossil fuels and move us towards more renewable choices. There’s going to be naysayers but we need to follow where the puck is going, not just follow the puck. 

Maureen, you testified to the House Science, Space, and Technology Committee Research and Technology Subcommittee last December. How did it feel to stand up on such a stage and speak up for your region like that?

Maureen: I’m extraordinarily proud. I grew up here, it’s my home. Five years ago they wouldn’t have asked Detroit to testify for this. It meant so much that they were asking us. I had Congress people from around the country asking me “how did you do this?  How did you work together and avoid somebody going rogue?” I’m proud our region realized the strength of working together. Five years ago we would have had five different applications from this region and none of them would have been strong enough to be successful. It was interesting when you saw who called us initially to tell us DRP needed to lead this. It was our council of governments, SEMCOG, somebody from Ann Arbor, from Automation Alley, these were all mature organizations who recognized: “why would we apply individually? Let’s do this together.” 

Those of us who are here know the great innovation that happens here. We tour the facilities and it’s a marvel. For a long time our story got overshadowed by other issues: bankruptcy or crime or vacant buildings. Now to be recognized as an example of innovation is, not to be sappy, but it made me very proud to tell that story on a national scale.

If you’re successful in doing what you proposed, what’s your hopeful vision for what Detroit will look like in 10-15 years?

Maureen: You’ve probably seen a shirt somewhere that says ‘Detroit vs Everybody’. It was done a few years ago when the city got beat up quite a bit. Really where we’re at today is so different, it’s such a different place. But it takes a while for a community to go down. Takes a while for it to get back. When I tell my future grandchildren what grandma did I want to show them the amazing people and companies that chose to come here because they saw it as an opportunity to be innovative and to be their best selves and be successful. People from all over the country and the world.

Christine: Ten years from now the seeds we are planting will grow into a recognized entrepreneurial ecosystem. That’s an area where Southeast Michigan—because of the jobs available in the auto industry—has not been an area nurturing entrepreneurship and bringing new ideas to market. Ten years from now I hope we’re seeing headlines of incubators bustling and companies that we put into the funnel as an idea raising their series A in venture capital to grow jobs and keep them in Michigan. Use our talent that will be training through GEM. Working with universities to make sure commercialization is happening here and we are able to grow. Again these new business owners. We adore and support our automakers and all the supply chains through it. For my daughters who are teenagers right now I would love for my children to be able to have that choice of coming out of school, and if they have an idea for something they want to create they can do it here in Detroit, they don’t have to go to a coast to do it. The GEM coalition, the entrepreneurship startup piece especially, I would like to see the work we’re doing in that area have a real impact.

One Ocean, One Blue Economy with Maritime Blue Coalition

Washington Maritime Blue aims to scale its blue economy innovation cluster in the Pacific Northwest Region. The coalition is supporting an invigorated and resilient regional blue economy by connecting clean energy production and storage technologies to maritime and ocean economies. They are working across the innovation spectrum, incubating early-stage ventures and advancing large-scale technologies being deployed in the region. Including projects related to hydrogen production and storage.

Joshua Berger is the President/CEO of Washington Maritime Blue, an organization committed to the development of maritime business, technology, and practices that promote a sustainable future contributing to economic growth, ecological health, and thriving communities.

This interview is part of an FAS series on Unleashing Regional Innovation where we talk to leaders building the next wave of innovative clusters and ecosystems in communities across the United States. We aim to spotlight their work and help other communities learn by example. Our first round of interviews are with finalists of the Build Back Better Regional Challenge run by the Economic Development Administration as part of the American Rescue Plan.

Ryan: Could you tell us a little bit about how your build back blue coalition started, and the history of your organization as an overview?

Joshua: Our origin story is not wholly unique, but certainly pretty specific to the success of growing out an innovation cluster organization and the breadth of the relationships and concentric circles that build out from that. In my former role I was working for our Governor Jay Inslee. I was both policy and economic development lead on all things related to our Maritime and Ocean industries. We recognized that we had a $40 billion maritime industry here. That’s been a legacy sector here in the state but closely nestled—literally and figuratively—with a booming and growing tech sector, certainly one of the most advanced and comprehensive manufacturing sectors that’s tied to Boeing and aerospace more broadly, and a significant amount of capital and a growing startup ecosystem in this region.

And all that was growing and being recognized alongside a major transition happening in maritime, oceans and fisheries and the growth of this term: the ‘blue economy.’ And so the governor put together a high level advisory committee and asked for us to create a stakeholder driven statewide strategy for the blue economy. How could Washington State Lead nationally, if not globally on the growth of the blue economy? This was about eight years ago now at this point.

So we spent 18 months gathering up hundreds of stakeholders in formal and informal facilitated discussions and meetings. And as we were doing that, recognizing where all our all our assets were and where we had some real significant opportunity to compete and grow.

We went around the globe to places like Norway and Portugal and Hamburg and Singapore, and asked, ‘Okay, how are you leading in this innovation economy? How are you driving capital? How are you helping corporates work with research facilities, institutions, community partners, and public partners’? They all had these things called ‘Innovation Cluster’ organizations—formally organized clusters, but in a way where you very deliberately tied your industry partners with research institutions, university, public agencies (everything from federal state agencies, ports, municipalities, transit authorities), with other NGOs and community based organizations.

Add that together very intentionally and we could drive forward and lead in the blue economy. So we raised our hand and said ‘yes, we would like one of those.’ And we formed it and spun it out of our state Department of Commerce. And so that organization has been running Washington Maritime Blue for five years now. We have multiple program areas, have grown to 130 plus members, with 12 full time staff, supporting demonstration projects, supporting the entrepreneurial and startup ecosystem, working on career pipeline, workforce development efforts, as well as being a conduit for delegations and knowledge sharing and business development opportunities all broadly focused on the blue economy. It’s really about profitability, sustainability, and equity as the core focus areas of maritime and oceans.

That’s a great overview, thank you. So you had a coalition forming for several years before the EDA came out with their Build Back Better Regional Challenge award? How did you approach that given that you already had a partnership and had an innovation cluster that was in development?

Well, we’ve already been running on our second round of EDA support as well as state support, local ports and municipalities. It was an EDA regional innovation strategy grant that supported the state, the development of the strategy and the formation of the cluster organization. We were then awarded an EDA build to scale award which we’re still engaged in. It helps us operationalize and take the cluster organization and its goal is to the next level. And when the build back better process came along, we sort of said okay, how do we shape what’s now already a rich and effective cluster—which is itself a coalition of partners focused on innovation—and broaden that out, so that we are very intentionally helping build and focused on the intersection of the blue economy and the green economy on the energy transition side of the house. Our organization will work on everything from kelp, to digital drayage truck solutions to the future of fuels. And this was a real attempt to support the innovation happening in those multiple sectors in concentric circles around the blue economy.

How did you decide to focus on the intersection of energy projects, specifically clean and green energy, with the blue economy? And when you were making that decision, who was at the table/ who informed that choice?

We have close partners around these multiple spaces. If we just look at maritime decarbonization, which has been a heavy focus for us, we continue to recognize one of the more challenging aspects is to actually make that transition across maritime (for example ferry electrification and future fuels). I mean ships, drayage trucks, port operations. It’s one thing to have the technology on board vessels so that a vessel could run low to zero emissions. It’s another thing to have the infrastructure across the community that supports an entire system of those vessels.

We have hundreds of different types of vessels, thousands of different vessels that are part of the maritime economy that works here. What we recognized quickly was utilities have a strong role to play. Certainly the future of fuel has a role to play. At the same time, we’re seeing that transition in the EV and transportation markets, we’re seeing that transition happening in the aerospace markets with sustainable aerospace fuel and the like. A lot of this infrastructure is shared. So if we’re going to truly be able to make this transition and move beyond demonstration projects we need a larger ecosystem and infrastructure to support it.

And so, we’ve worked closely with other organizations like the Clean Tech Alliance, the newly forming CHARGE consortium which is focused on electrically generated e-fuels, and the aerospace industry and others. So we recognize if we can form this larger coalition focused on the clean energy transition, and we take it through a blue economy lens, we can support an ecosystem that supports all of this. Whether it’s the actual fuel production and infrastructure to get it to a working waterfront, as well as the startup ecosystem and workforce ecosystems that ultimately help that help that continue to grow.

So this was this stuff we were already working on with partners and as the opportunity came along we as an organization have the operational infrastructure in place, coordination infrastructure in place, already have all the industry and research partners at the table. And if we can bring in our partners in those adjacent sectors, then we felt we had a strong coalition to build.

What are a few of the main projects that you proposed to work on and are you still working on them, even though you didn’t wind up winning the full phase two award?

The projects are all still ongoing. Some we have a lead on some others have leads on. The actual infrastructure capital projects that are moved forward are fuel production, a tribal facility on the border of Washington and Oregon, another is a transition from the final coal plant in Washington State on the fuel production side. On the demonstration side is a demonstration of being able to utilize formic acid as a liquid hydrogen carrier that supports port and terminal operations. And another is building out the infrastructure to support a connected maritime and manufacturing area of our state. So the Tacoma tide flats— the Port of Tacoma and many other manufacturing facilities including a fuel production site is there. What we are proposing and are continuing to build is a 5G and edge-enabled area that could support the efficient flow of fuel, chips, manufacturing, and the like.

And then another innovation center on the east side of our state, which is more of a hub around where fuel production is happening: electrically generated hydrogen for the most part. So we’re building out the hydrogen infrastructure and demonstrations of where that would be able to be used. We also had programmatic projects which continue to enable our organizations to work together to have a pipeline of new projects into that ecosystem. How do we support them and build out new demonstration projects, the startup ecosystem, and then the workforce development to support it. So there were capital and programmatic projects as well.

You’ve talked a little bit about entrepreneurs, you mentioned how you have startups in house. And you’ve talked about how you work with more established players like utilities. You started out of a state level commerce program. That’s several of the stakeholders that are important in an innovation ecosystem, but two that I haven’t heard as much about that I would love to know how you interact with are research institutions and sources of risk capital.

They are all part of the quintuple helix of how we do innovation for sure. We have close working relationships with multiple different research institutions that are actually members of our organization. So our membership is made up of that quintuple helix as well.

The research institutions we engage are our national lab here, the Pacific Northwest National Lab (PNNL), multiple centers at the University of Washington include the Applied Physics Lab, Pacific Marine Energy Center, Washington State University’s CHARGE Consortium and JC Dream Consortium, which are really focused on new fuels. Then other research institutions outside of our area, including the Middlebury Institute for the blue economy. And then, actually through the pandemic, we did a lot of work with the Institute of Health Metrics and Evaluation at the University of Washington as we were helping our maritime and fishing industry work through the pandemic. So they are a core part of this.

One example which is a capital project that was proposed in our build back better application and is continuing on with various funding was the ability to capture carbon to store high density hydrogen in a safe, transportable manner and the ability to extract that hydrogen out of it and utilize it for multiple different purposes. For us, a maritime use case is to be able to run and support basically a one megawatt generator, zero energy generator. And so a startup that’s part of our ecosystem figured out the way to essentially have a single carbon capture moment. Capture some carbon, shoot it full of electricity and create formic acid with high density hydrogen inside of it. The Pacific Northwest National Lab had the reformer on the other side to then pull the hydrogen out of the formic acid and utilize it in multiple different ways. So this was a partnership between the startup, the national lab, the utility who’s going to own and operate it, and two different maritime operators in the port that we’re going to actually utilize the energy. And then a global engineering firm to do some wraparound support services.

That’s a quintessential joint innovation project where our role is to help layer public private capital, bring the value chain of partners, we have the relationship with the terminal operators and the truck drivers, the labs, the startups, the utilities, etc. So that’s a critical way in which one example of how the national labs and research institutions broadly play a part. We do a lot of work to bring those research institutions together. We’re working now to essentially create a charter between the research institutions involved in our organization, and how they’re gonna work together to focus on ocean based climate solutions: Oregon State University, University of Alaska-Fairbanks, University of Washington, WSU, and others to have some formality across some of that too. The research institutions, like the rest of that quintuple helix, are critical.

On the capital side, it’s all about getting capital to get this stuff moving. We believe that there’s an important role for layering public and private capital. On the private side we have growing relationships with all the different flavors of capital, whether it’s debt equity, risk, others. And they’re mostly relationships who are interested in the projects and looking at different ways to finance them. That started with a capital landscape study—we were looking across our region and across the country asking who’s funding things in the blue economy and at what stages and what levels and what mechanisms. Certainly we have a pipeline of venture risk capital interested in the startups that come through our programs. So we’ve done a lot of work to energize that pipeline, as well as educate that pipeline on the opportunities in the blue economy and oceans. And we’re now forming our own early stage investment fund. So we’ve now partnered with a longtime impact venture capital managing partner and collectively created a new fund that will invest directly into our marquee accelerator program, which are all venture scale companies.

You mentioned that you did a roadshow across the globe at the start—Norway and other port facilities across Europe. What are those relationships like today and do you still keep in touch? Whether that’s with colleagues in the US, like the Port of LA, or the Pacific, or globally?

This is critical. There is one ocean and so therefore there is one blue economy, right? We’re intricately tied. Norway in particular, primarily because of the leadership they have in maritime electrification and offshore wind development. As we were developing this work and in my former role I helped negotiate an MOU (Memorandum of Understanding) between Norway and the state of Washington, which we continue to build off of and update. We also have one with Finland, Singapore and Korea and a number of others that we’re engaged with- France, Portugal. We look at opportunities, through the clusters and then into their state run economic development and innovation agencies. My friend from Norway is here this week. I’ll be in Iceland next week. Through the startup community we run a program called the One Ocean accelerator, which is specifically designed for international startups who are a little further along and looking for a soft entry landing point into the US market. So we run a 12-week program dedicated to international startups. We’ve had them from Korea and Finland and Norway and Portugal. And then we’ll be expanding this year as well. We have international delegations that come and go through this region and that we also bring across the globe. So those relationships are integral, absolutely.

If you’re successful with the projects that you’re working on, what is your end vision for what Washington state looks like in 10-15 years? How would you like to see it look different because of your impact?

Washington State has probably the most aggressive climate goals in the country, and have made some significant strides to set up the incentives and infrastructure and investments to be able to do that here. One of those things is we have the cleanest and cheapest electrons in the country. And so if you’re going to make a business model work for this clean energy transition, whether it’s fuel production or operations or use, you can make it work here first. And so if we are able to effectively couple our climate incentives, the capital landscape that’s here, and the infrastructure to support this work we’re going to see significant innovation coming to this region. Whether it’s to support it or build it from the inside up. We see it as being an aggressively welcoming home for innovation across the clean energy transition, which is going to allow us to meet our climate goals here by 2025 – 2030 and beyond. Active growing legacy sectors that are doing it in new, clean, equitable and sustainable fashions and continued growth across this region. That’s certainly our goal.

Smart Manufacturing Taking Flight in Wichita

The South Kansas Coalition, led by Wichita State University (WSU), will receive $51 million to strengthen U.S. aerospace production. Their award will help stand up a Hub for Advanced Manufacturing and Research to support the adoption of new production methods by small- and mid-sized manufacturers, as well as supporting the buildout of a workforce training facility and a complementary Smart Manufacturing Adoption Program.

Debra Franklin is the Associate Vice President for Strategic Initiatives at Wichita State University.

This interview is part of an FAS series on Unleashing Regional Innovation where we talk to leaders building the next wave of innovative clusters and ecosystems in communities across the United States. We aim to spotlight their work and help other communities learn by example. Our first round of interviews are with finalists of the Build Back Better Regional Challenge run by the Economic Development Administration as part of the American Rescue Plan.

Ryan: Hi, Debra. Could you tell us a little bit about how this coalition came together and the history of your partnership in Wichita?

Debra Franklin: For more than a decade, the South Kansas Coalition has been working together on various projects. The Wichita region leverages a strategic plan titled the Regional Growth Plan that is regularly updated, and advanced manufacturing is a targeted industry sector. The coalition has identified regionally important priorities, and we look for funding opportunities that help to support or enhance the targeted industry sectors. Coalition stakeholders have previously worked together on several different projects with a variety of federal and state agencies.

So, you were planning these projects and had the strategic plan going well before the EDA announced their challenge, is that correct?

Yes, that is correct. One of the ways that we approach industry-driven initiatives in our area is to ask industry what kind of public sector investments would be helpful for private sector profitability and competitiveness in global markets. There are clearly some investments, workforce, technology and innovation elements that need to be kept within their firm for competitive reasons. But there are things that the public sector can do to advance innovation, expand workforce skills, and increase private sector productivity, profitability, and sustainability. And those are the activities and investments that the coalition prioritizes. These industry-driven strategies and tactics are included in the regional strategic plan. When competitive funding opportunities are published, such as the EDA Build Back Better opportunity, we can look at the strategic focus area and the priority activities that best fit a particular funding mechanism.

In both the strategic plan and your build back better narrative that you submitted, why did you decide to focus on an aerospace cluster, and how did you make that decision?

When we wrote the application, we initially wrote it focused on advanced manufacturing anchored in aerospace. Because the aerospace industry is so large – concentrated in Wichita – the proposal ended up getting dubbed as an aerospace project. So, if you go back and look at the Phase One winners and the sector icons that EDA used at that particular point in time, you will notice that the Wichita proposal was categorized as an advanced manufacturing project. As we moved into the Phase Two challenge, the EDA chose the aerospace icon for our award and classified the South Kansas/Wichita proposal as an aerospace project.

Wichita is known as the air capital of the world because of the concentration of aerospace manufacturers in the region. But we also know that aerospace is very cyclical, and we have other industrial concentrations or regional specializations in other manufacturing industries. Wichita has advanced manufacturing with high precision, low volume, highly regulated types of production. The South Kansas region has an overall manufacturing location quotient that is twice the national average, one of the highest manufacturing concentrations of the largest United States metropolitan areas.

Additionally, global economic and geopolitical trends in the aerospace market are of strategic national importance. So, when we were asked, ‘what is your north star? What is the imperative for the United States to fund the South Kansas proposal?’, we leaned into what is going on in global markets – and the future growth of aerospace.

One of the things I would love to follow up on is the role of small and mid-sized manufacturers (SMMs). I saw a number thrown out that there are 450 plus different independent manufacturers in the area. Could you talk more about Wichita’s manufacturing landscape in general and how you heard from those communities?

We have a strong regional manufacturers association that is convened by the chamber of commerce. That is one of the primary places where our SMMs lean in and work together on coordinating collaborative efforts. They have an executive board of 20+ leaders and have more than 200 members from various manufacturing and manufacturing-related companies throughout the area. When the coalition is looking for a sounding board and a manufacturing group to help prioritize these public sector investments, the Wichita Manufactures Association provides an essential market perspective. It is also vital to highlight labor because it is especially important to understand the tolerance for innovation adoption and the enthusiasm of workers for new production processes that are commercialized through these investments.

Several years ago, we were working on a project for autonomous vehicles. Many people find autonomous technologies interesting, but some workers are concerned about these innovative technologies disrupting their careers and do not enthusiastically support them. When looking at how to prioritize federal investments into a regional economy, you need to look at all groups and how the innovative technologies are perceived. As a region aspires to implement automation or manufacturing elements for commercial adoption, if manufacturers want workers training, or if leaders aspire to help companies go from design to manufacturing in increasingly compressed development cycles with ecologically and economically sustainable technologies, it is essential to know how these activities are going to be received not only by the leadership and the ownership of these particular firms, large, medium or small, but the technicians and frontline workers who are manufacturing the products or delivering the services.

The coalition worked with Deloitte on a future of work study. One of the subgroups engaged was frontline workers. The study did not identify the participants as unionized or not unionized. Frontline workers were asked about their willingness to accommodate, tolerate, or enthusiastically support adopting these newer technologies. And the numbers were approaching 70% who were affirmative in wanting to move forward. Regional frontline workers supported the idea of assistive technologies in manufacturing; they understand that labor shortages are a global economic challenge. We believe workforce shortages were pivotal in evolving the worker’s perspective on technology adoption. Kansas has savvy people who know global markets well – in our agricultural markets as well as in our manufacturing markets.

When you talk about assisted manufacturing, what are some of the actual technologies or things that you think people are particularly excited to get moving?

The coalition focused on two technologies in the Build Back Better proposal: additive manufacturing and high-velocity subtractive manufacturing. These technologies impact the entire life cycle of a product: design, production, sustainment, and recycling. These two technologies impact the speed to market, production productivity, mass customization, and sustainability elements.

The coalition approaches economic development by prioritizing investments that help manufacturers compete in global markets. What public sector investments are required to compete in global markets? What do manufacturers need from the public sector? What do manufacturers require for their next-generation factory? Or what is necessary to fit the existing manufacturing assets, and how will companies integrate key technologies to modernize? Robotics and automation are a big part of the conversation. Workers, leadership, and owners are predominantly driven by safety and environmental concerns, and access to talent.

I think that a really critical and important part that you mentioned was not responding to a single public opportunity but looking at how to become globally competitive from the get-go. And then you could not rely on a single federal opportunity, but if one happened to come along, you wanted to put your best foot forward. Following up on that, what does your engagement with industry look like? Had you not won this award, would you still have moved forward with many of the plans?

Even in this situation, the coalition always makes decisions based on limited resources. You have a lengthy list of prioritized activities and investments. We move them forward as strategically as possible; what needs to be done first and second? Who else can pick up an activity or training and move it forward? Are long-term sustainability elements always a part of what we are doing? Yes. Could we be where we are today without this award? Absolutely not. 

The Build Back Better award has given us an opportunity to add to our public sector capital stack as well as a new Hub for Advanced Manufacturing and Research. With this expanded capacity, the region can now develop and deliver curricula and provide an industrial common. This would not have happened without this award. And being that we are in a heavily concentrated manufacturing sector and have multiple manufacturing firms, the multiplier effect on this investment is powerful.

Thinking through some of the different stakeholders who are either a part of this coalition formally or informally: how are research institutions part of this coalition in Wichita?

Remember that this proposal operates within a larger ecosystem; we have multiple programs where we collaborate on deliverables that are of strategic national importance. Howard University is a new collaborative research institution we are working with in this initiative. Howard just received the recent UARC award from the Air Force. We collaborated with Howard because a Deloitte consultant from The Smart Factory @ Wichita introduced Wichita State to the leaders of Howard’s Center for Excellence in Supply Chain Management. They are also working on supply chain efficiencies and smart technologies for manufacturing.

In the early 2000s, as advanced composite adoption was accelerating in multiple industries, we found it important for policymakers and economic development experts who collaborate with policymakers to more fully understand composites and what challenges the adoption of these new materials involves. Howard has become especially important because they are focused on supply chain synergies and are in the District of Columbia. They work in proximity to policymakers, and we work with manufacturers, materials experts, and other kinds of engineering and production processes. By working together, the coalition will be better able to maximize this award. Collaborating and learning from our colleagues at Howard has been a privilege. Again, this is an ecosystem program. We are very honored to accelerate activities important to the regional strategic plan and the United States. The updated national strategy for advanced manufacturing is one resource that sits on my desk all the time

And what about workforce development?

We must train existing workers with a deep knowledge of the legacy and current manufacturing best practices. We cannot snap our fingers and create multi-billion-dollar factories that replace aging ones. We work into, leverage, and build on capabilities and capacities that the U.S. manufacturing is so very proud of and successful in operating, making them more successful and more productive. Higher throughput, higher quality, and mass customization are the elements that help to make the U.S. more competitive in global markets. Recently we were at the future ready center with leaders from across the state that included different stakeholders: pipeline technologies, K-12, the Workforce Board, the largest school district in the state, etc. Clearly, we are concerned about our next generation of manufacturers, but we also have mid-career workers with this legacy knowledge that need to add to their capabilities, capacity, and knowledge of next-generation technologies; they will be the first adopters.

One of the things you spoke about in your application was focusing on recruiting diverse talent. Could you speak to what exactly you plan to do when it comes to recruiting and retaining diverse talent?

Wichita is in the Midwest, and recruiting diverse talent looks a little different in the Midwest. We recruit nationally to our region and intentionally and explicitly support and recruit all people in our area. The fastest-growing population demographic group in our region is the Hispanic population. Wichita State University is the most diverse public higher education institution in Kansas, and we are an emerging Hispanic-Serving Institution. In addition to a growing Hispanic population, the region has a very vibrant and growing Vietnamese population. We add language adaptations for workers and families to support these populations and others. We reach out to all communities and work with the schools and minority chambers of commerce.

Think ten years in the future, how will Wichita look different if you are successful in what you proposed to do?

That is the best question; that is why we write these applications and prioritize investments and why disparate people who might not benefit directly come together and support these programs and projects – because of the long-run vision. The knowledge that our regional manufacturing environment is a unique national asset that produces essential economic value and national security outcomes. We operate in a high-precision, highly regulated unique environment; there is a respect for excellence and pride in the manufacturing culture. How does Wichita look in ten years? We are more precise, more effective, more efficient, and we are going to be able to operate in global economies meaningfully across the country.

A Generational Model for Inclusive Clusters in St. Louis’ Tech Triangle

The St. Louis Tech Triangle coalition will receive approximately $25 million to support the region’s advanced manufacturing cluster – which will support and grow the existing biosciences and geospatial clusters. One of their primary projects is the Advanced Manufacturing Innovation Center (AMIC), which will be the hub of an inclusive ecosystem and bring investment to a historically excluded area of STL.

Tracy Henke is the Chief Policy Officer/President of ChamberSTL with Greater St. Louis Inc., lead of the region’s Build Back Better Coalition. GSL was founded on January 1, 2021 as a result of combining the strengths of five legacy civic organizations into one with a unified focus around a common vision and strategy for fostering inclusive economic growth. Ben Johnson is Senior Vice President, Programs at BioSTL. Since 2001, BioSTL has laid the foundation for St. Louis’ biosciences innovation economy with a comprehensive set of transformational programs leveraging the region’s medical and plant science strengths. 

This interview is part of an FAS series on Unleashing Regional Innovation where we talk to leaders building the next wave of innovative clusters and ecosystems in communities across the United States. We aim to spotlight their work and help other communities learn by example. Our first round of interviews are with finalists of the Build Back Better Regional Challenge run by the Economic Development Administration as part of the American Rescue Plan.

Ryan Buscaglia: Could you tell us how your coalition came together and the history of your partnership between organizations? Were you working on elements of this project before the EDA even announced their process?

Tracy Henke: The whole concept for the hub of our proposal originated back in 2015. Some workforce training and items related to innovation and entrepreneurship were already going on. But they were going on separately. The St. Louis Tech Triangle and the partners came together through identifying synergies that existed that could be built upon and leveraged. This [Build Back Better Regional Challenge] was an opportunity to identify those synergies and bring them together more cohesively with the support of federal funding to accelerate that work to make certain that we could move together instead of in isolation.

So, Ben, on the Bio side that you work on, had you been working on individual projects related to advancing the bioeconomy in St. Louis, which maybe hadn’t had as much connection to the other two legs of the triangle before this partnership came up? 

Ben Johnson: I would echo Tracy in that this was an opportunity to grow existing, and find new, synergies across the industry cluster. For the biosciences, over 20 years in St. Louis, we’ve been working as a coalition of academic institutions, corporate partners, entrepreneurs, support organizations, philanthropy and civic organizations, to build our bioscience economy. With the success of that collaboration in building innovation infrastructure, we now feel like we’re just at the starting line of realizing the economic potential in some respects. These were existing partnerships and projects and collaborations that were in the works. In some ways, Tracy and her organization gave us a bit of a framework to knit that together with other emerging clusters in a way that some of the other clusters hadn’t really been positioned to organize in the past. I think a critical piece there is that we didn’t come together exclusively for the purposes of ‘here’s Build Back Better, let’s react to it.’ We had a foundation, we had coalition partnerships. We were able to come together around an organized thesis that really drives inclusive growth for the region. From there, projects knit together well. It wasn’t like, ‘Okay, here’s the NOFO. Let’s figure out what exists in the world.’ There was an existing framework for that discussion, including the STL 2030 Jobs Plan, stewarded through Tracy and Greater St. Louis Inc. 

Could you talk about why you decided to focus on three distinct fields (advanced manufacturing, geospatial, and biosciences) in your project?

Tracy: Understand that while it is the St. Louis Tech Triangle, the driver of our submission is advanced manufacturing. Advanced manufacturing supports biosciences, it supports geospatial and it leverages the history and existing strength of our region. Metro St. Louis has always been a leader in manufacturing and so that question, ‘why focus on all three?’ It’s a focus on advanced manufacturing that supports our biosciences, energy and our geospatial, and more. Also, we call it the tech triangle because when you look at an overview map of the region, you can literally create a triangle that links the placemaking hubs of the three clusters. 

Growing the advanced manufacturing cluster supports our existing bioscience and geospatial activities, but also helps grow and further grow, for instance, our aerospace and other opportunities that might exist, and that’s leveraging our past and present history in the region.

With all of these different projects ongoing, which coalition actually took the lead on writing and submitting the application?

Tracy: Greater St. Louis, Inc. did. Why was it Greater St. Louis? Partially because we’re not an implementer of any of these programs in particular. We are a convener, we are an entity that works with all of them. Hopefully they all see GSL as a partner in this effort. And because you can’t have 20 writers, it doesn’t work well. If you have 20 people doing these interviews and you try to put it together in one cohesive document, you have 20 different voices. And so for the overarching narrative it needs to be in one voice to make sense for those reviewing.  We shared it, and we ensured that partners offered feedback. We incorporated as able, but of course, had the limitations put on us by EDA on page numbers, numerous requirements, etc. Individual partners wrote their individual submissions; it doesn’t mean partners didn’t provide edits and guidance, and I did as well to ensure linkage with the overarching narrative, but they all wrote their own. We met on a regular basis, but there always has to be one person with the pen.

I’m glad you took the pen for St. Louis! Could you talk a bit about the Advanced Manufacturing Innovation Center (AMIC-STL) and why that is the hub of this proposal?

Tracy: The Advanced Manufacturing Innovation Center, which is referred to as AMIC-STL, was identified in 2015. The St. Louis Economic Development Partnership is a partner in our specific submission, not just the overarching narrative, but our specific submission on cluster growth. They received a grant back in 2014, I believe, when it looked like there was going to be significant downsizing in the aerospace industry here in the St. Louis metro, specifically Boeing. And so that’s when a defense readjustment grant was provided to help the region think about what does this region need to do, how do all those people get trained for other employment, and they looked at once again, this region’s strength in manufacturing.

AMICSTL is modeled off of the AMRC in Sheffield, England. The Advanced Manufacturing Research Center in Sheffield, England, was initially a Boeing funded entity. There are other manufacturing centers in Europe, I believe there’s also one in Japan now, they’re all a little different. But in our opinion, and what we have studied here within the United States, there isn’t anything like we’re talking about here in the United States. The Advanced Manufacturing Innovation Center will be an opportunity to do the research and development. It will be an opportunity to do prototyping and small batch manufacturing, but also an opportunity to create what we call verticals in different spaces. So an aerospace vertical, a bioscience vertical, an energy storage vertical. Something that brings not just a prime entity like hypothetically, aerospace and Boeing, but then all their other suppliers, all the entities that feed into Boeing and what Boeing does and the research that goes along with it. By co-locating, it allows cross pollination of ideas and also cross pollination of how to use things in other ways.

The Advanced Manufacturing Research Center in Sheffield, England, was initially a Boeing funded entity.

So something that might be used as relates to technology on a drone to look under the canopy of trees might have some technology applicable to the healthcare space. Or researchers might be able to take something that they learned from the development of a specific technology and apply it in a completely different field. Having these researchers and developers and the ability to prototype etc, allows for cross pollination of ideas and that growth, which then spurs additional development and additional growth. 

If you look at what happened in AMRC and Sheffield, they started with a handful of R&D individuals, they now have over 500. And they now have over 400 units of housing built. They started with one building, they now have multiple buildings.

Ben: Another point I think that was critical, particularly for our regional strategy and commitments but also for Build Back Better and EDA is the physical geographic location in a significantly disinvested historically excluded community. It really gives an opportunity to bring some of this new manufacturing innovation, bridging the biosciences and geospatial, as sort of a beachhead into a neighborhood and community where that type of investment has not occurred in a significant amount of years.

Tracy: When you look at the history of St. Louis, and you look at how communities were built up, a lot of them were built up within the urban core around manufacturing. Unfortunately, we lost a lot of that and then saw out-flight. Even early in 2015-2016 with the conversation about the establishment of this Advanced Manufacturing Innovation Center, they talked then about how its location should be in a historically disinvested community. And so this is a strategic location in the heart of the city where the land currently exists, right next to a technical school and in close location to multiple education institutions as well that can help on the workforce side, strategically located near NGA West, near our cortex and biosciences partners, as well as surrounded by other workforce partners.

Recognizing that this is a tough challenge, how are you making sure that AMIC-STL has a constructive and growth minded and equitable result for the community rather than continuing a trend of either pushing people out of homes / businesses or making it difficult for existing residents and existing community members to stay there?

Tracy: Almost every week GSL brings our AMIC-STL partner and our city partners and our neighborhood partners where AMIC-STL will be located to the table. 

Once again, this is purposeful on its location. There is nothing currently on the site. Most of the surrounding community, quite honestly, has suffered from disinvestment. There are vacant homes and boarded up buildings because of the outflight and more. And so we are working to ensure AMICSTL, being that centerpiece, sort of like AMRC and Sheffield, will create this domino effect. But to do that, we also have to make sure that partners are at the table. In addition we must have community engagement and will use BBBRC funding to help with this. We’re also drafting an RFP on establishing the baseline of metrics as it relates to the manufacturing ecosystem in the region, as well as the spokes of that and how far they reach. 

We’re looking at this holistically. We’re not just looking at building a building.

Also, our workforce partners are looking at what gaps exist in workforce training, and not creating new workforce programs necessarily, but how do our existing workforce entities fill those gaps. We’re looking at this holistically. We’re not just looking at building a building. I think that’s the important thing.

How will St. Louis look different in ten years if you’re successful in doing what you proposed?

Tracy: In ten years: AMIC is built and the dominoes have started resulting in growth. Our workforce training, our innovation entrepreneurship, our community engagement, our cluster growth is working. Can I say this is going to be overnight? No, I cannot. Is this going to be easy? No, it is not. In ten years is it our hope that we’ve seen progress? Yes. Can we say that it is our hope to continue seeing AMIC growing with verticals with benefits to different areas and lines? Yes. We are doing this deliberately and with intention to ensure a higher probability of success.

Ben: Ten years from now, I believe through Build Back Better and the collaboration to form it—with AMIC as its embodiment—will be a longitudinal and generational model, even if it is a model still in progress. It will be a model for how we do intentional, inclusive economic growth with increased permeability between innovation districts and underserved neighborhoods. A new model for STL and beyond for lessons learned and successes. Ten years, we will still be getting better and continuously improving in that work, but AMIC will be a significant mile post in that journey of St. Louis doing things differently.

Packaging Semiconductors at the Doorstep to Disney

This interview is part of an FAS series on Unleashing Regional Innovation where we talk to leaders building the next wave of innovative clusters and ecosystems in communities across the United States. We aim to spotlight their work and help other communities learn by example. Our first round of interviews are with finalists of the Build Back Better Regional Challenge run by the Economic Development Administration as part of the American Rescue Plan.

BRIDG is not-for-profit public-private partnership located in Osceola County, Florida providing semiconductor R&D and production capabilities to industry and government, enabled by a versatile 200mm microelectronics fabrication facility (or ‘fab’). As the anchor tenant of an emerging 500-acre technology district known as NeoCity, BRIDG operates the fab with a focus on heterogeneous integration and advanced packaging process technologies, and the development of a secure manufacturing methodology leveraging digital twins and other Industry 4.0 concepts. 

Supported by Osceola County, Florida High Tech Corridor Council, imec, SkyWater Technology (Center for Neovation operator) and others, BRIDG connects challenges and opportunities with solutions. They are “Bridging the Innovation Development Gap” (BRIDG) making commercialization possible. Their coalition, led by Osceola County Board of Commissioners, won $50.8 million in September, 2022 as part of the challenge. 

Jim Vandevere is the President of BRIDG. His career spans over 30 years of C-level experience with telecom companies, medical devices, and startups in photonics and electronics.

Ryan Buscaglia: I would love to start out and ask if you could tell us about how your coalition came together and a little bit of the history of NeoCity?

Jim Vandevere: Historically, Osceola County has been a region known for its strength in the services and agriculture industry. You either work in theme parks, restaurants, or farming— such as on a cattle ranch or something like that. During 2008, and more recently during COVID, there was a down-tick in the market where things changed, and people didn’t travel much. Osceola County specifically ranked about second in the country in unemployment. They recognized the importance of having a diversified portfolio for people to work in and wanted to add a third leg to the revenue stool, which is basically a technology component that survives downturns in markets.

Osceola County looked at what innovative technologies were being conducted within Florida’s universities (University of Central Florida, University of Florida, University of South Florida) that can be leveraged, and along with leadership from the Florida High Tech Corridor Council and Orlando Economic Partnership, felt that the semiconductor industry was an area where Florida, and particularly Osceola County in Central Florida, can truly make an impact on a national scale. After a few years, SkyWater Technologies also became involved in the regional efforts. So, for nearly the past decade, the group has been working closely together and eventually formed a coalition to grow an ecosystem on a 540-acre plot of land owned by Osceola County called NeoCity. Since the start of the economic diversification initiative, the county has invested approximately $270 million dollars to build a 200mm microelectronics fabrication facility (or ‘fab’), built a STEM-based high school, and added a Class A office complex onsite. With local and state funding, along with collaborations from industry partners such as TEL and SUSS Microtec, BRIDG was able to add tools to operate the fab as you see it today. Our cluster has been meeting twice a week since before the Build Back Better Regional Challenge was even a thing. We’ve been interacting for a long time. 

There’s a real sense of community here. Not just within Osceola County, but along the entire Florida high tech corridor from the Space Coast to Tampa—everybody’s interested and invested (whether directly or indirectly) in the success of this environment and the NeoCity campus.

How did Osceola County make the decision to pursue semiconductors as a cluster instead of another industry, and who was making that decision? Was the county leading on that, or were there other people at the table?

The idea for NeoCity started in 2012 after a “best practice” regional leadership mission to Texas and discussions around the importance of the semiconductor industry. There were other people at the table. Everybody had an opinion. The difficult question was, “How do you fit $278 million into your budget to make this program work in Central Florida?” Osceola County’s response was, “We can make this happen. We’re the fastest growing county in the state of Florida.” They decided to take a big leap of faith with some sound financial planning, knowing that it could deliver huge dividends and a huge tax base with employees. Most semiconductor fabs average between 300 and 1000 people or 5000 people depending on size. And these people—ranging from PhDs to high school graduates—make a whole different level of income. In fact, the high school graduates are making significantly more than the average salary of someone working in agriculture or hospitality.

From a high school graduation point of view and continuing education into college or higher ed, Osceola County had ranked 61st out of 67 school districts in the state of Florida. Many students weren’t moving on to college. So, the county implemented a program two years ago to fund high school seniors from Osceola County to attend Valencia College. They paid for school—strategic workforce development stuff—and now they’ve moved up to 17th in a short window of time. That’s a huge jump!

Could you talk a little bit more about how Osceola came to focus on education and workforce as a key component? How did the high school associated with NeoCity come to be?

As soon as we made the decision to move toward semiconductors, we understood that it takes a different level of student. It takes a STEM student, somebody who’s interested in science, technology, engineering, and math. At the time, the county didn’t have that niche focus within their existing high school system. So, they proactively built a STEM-focused, project-based high school next door to the office complex at NeoCity (NeoCity Academy). That STEM high school started four years ago and graduated its first class last year in May. Nearly 100% of the students in that graduating class went on to colleges all over the country. It’s a serious testament to the academic excellence they achieved. 

Osceola County had the planning and the foresight to ask, “How do we get our students more involved from the beginning?” This went all the way down to science fairs in middle schools and even science awareness outreach in elementary schools. We actively engage and support science fairs in Osceola County that target these students to get kids and parents to understand the technology that we’re developing. SkyWater, BRIDG, NeoCity Academy, Osceola County, the Florida High Tech Corridor, and imec are all actively involved in support of education in this community.

So, we’ve talked about a couple of different groups involved. We’ve talked about education. We’ve talked about the role of the county. But how does the coalition approach working with other stakeholders?

As a not-for-profit organization, BRIDG interfaces with a lot of universities. Mostly universities in Florida. However, we work with universities across the United States like UC Davis, Stanford, MIT, Georgia Tech, ASU, and Ohio State. I will tell you that one of the biggest accomplishments from an outside point of view is that imec, a Belgian company, chose Florida to open their U.S. headquarters. They basically solidified the vision of the county because they are a very advanced engineering company based out of Leuven where they have a 300mm fab and a lot of capabilities in design. They work with Fortune 500 companies all over the world. And their U.S. headquarters is right here at NeoCity in Osceola County. That interface and that linkage validates what Osceola County wanted to do and continues to do every day. 

From an industry partnership standpoint, we have two equipment suppliers that are ranked in the top five equipment suppliers of all semiconductor fabs—big multi-billion-dollar companies—that use our site as a demo center for their U.S. capabilities.

Locally, we work with regional industry associations such as the Manufacturing Association for Central Florida, FloridaMakes, and the Florida Photonics Cluster. We have a good relationship with Valencia College, and then we have our partner school, the Institute for Simulation and Training at UCF, which is globally renowned for their modeling, simulation, and training program. Then, we also have ongoing project collaborations with the University of Florida, as well. So, we have a really solid record pulling in local as well as international friendlies into the site to make it successful.

Students entering NeoCity Academy, located within the NeoCity Community campus.
NeoCity Academy

Between Kissimmee and St. Cloud, NeoCity Academy is one of community’s current tenants. Students engage in inquiry-driven, project-based learning, aiming to enter the workforce with enhanced technical skills.

Of the research institutions you mentioned: I know one of the key projects in your Build Back Better proposal is working with UCF on creating digital twins of the facility. Could you talk about what motivated that and why you thought that that was an important project?

It’s definitely an important project. The Air Force funded secure digital twins for DoD applications to virtually show the pipeline of activities from design all the way through to where the product winds up—showing sourcing components to fab processing, all the fab machines and everything like that and all the decision points. It’s basically taking snapshots to understand design attributes, metrology testing, inspections, etc. all the way into final test assembly and then out to the end use product. 

Now how is UCF involved? They are modeling and simulating how components go through the process. So, as you go through each tool and it performs its function, they’re pulling data from that performance to understand the process. In the end, we will understand the entire flow. Once you understand that flow, you will then know what the variables are. Doing a simulation of ‘what if’ scenarios can help industry understand costs and what kind of tool sets you need to do certain things. Then, you can do a predictive plan model saying ‘hey, it’s going to cost you this much money. You’re going to need this many people, and this is what you need.’ It’s already being done for most industries, for example the automotive industry, but this is the first semiconductor play.

Taking a step back from the projects that you’re working on and going back to how you originally came up with the plan for the Build Back Better grant, I would love to know who actually did the work to write this Build Back Better Regional Challenge application. Who took the lead and how did you decide that they would take the lead? Was it natural or did it come about from a consensus process?

It came about from a consensus process. The detailed technical information came mostly from BRIDG and the overarching documentation came from a grant writing group and Osceola County staff. This direction and the knowledge of how to submit this grant was very important. 

The overall vision of how we present ourselves came from our normal meetings with the county manager, the team, and me. The creation of the grant was a complete team effort. Honest, straightforward questions, challenges, and feedback came up amongst the coalition group while we developed this. We learned a lot more about each other and how every individual group does business. We went through six months of hard grinding to get that grant to be representative of the coalition.

It sounds like the recipe called for not only deep technical expertise, but also an open and collaborative group working on it. And then a clear vision that tied all of the disparate parts together. Are those the main ingredients?

Yes, and I would add understanding and knowledge of grant writing and what the reviewers are looking for.

Even the best teams have disagreements sometimes. Are there any moments where your coalition had different ideas about what the vision for the future was? And how did you reconcile those situations?

As a kid, my father told me there’s no ‘I’ in team. We win together, we lose together. But there are always ‘me’ people in a group. Getting those dynamics out of the way when you first start is important. The best part about our group is that we have a common vision of making NeoCity work. That was the underlying tone. Their ideas were maybe not like yours or anybody else’s, but everybody’s heart was in the right place. The challenge was how you communicate to get everybody to understand your idea. That is why our coalition is successful. We’re not afraid to have honest conversations and disagreements, but we work through it.

How will Osceola County look different in 10 years if you’re successful and doing what you all proposed? What does it look like for the class of 2033 coming out of NeoCity Academy or for the families who can rely on working in the fab or someplace adjacent?

In 10 years…I think the opportunity for NeoCity is like in many places across the United States. Today is when you’re going to see the most funding ever. You’re not going to see this again, probably, for another decade. However, I would say that there is nothing stopping the growth of NeoCity as long as we execute the way we’ve been executing and hold true to our vision. I will say 10 years from now, we will have successfully created the Design Center of Excellence to attract more companies, in addition to the ones you see here today. You will probably see seven or eight more companies in a group that support leapfrog advanced studies and work on that as a collaborative effort. 

Additionally, we’ve put significant funds toward workforce development including our local community college system. Our goal is to increase STEM capabilities and provide equipment, information, and better tools to support Osceola County. We want to continue the support of the Osceola County gift that has provided a Valencia College education for every high school senior that graduated in the Osceola County system over the last two years. We can supplement that and create a more robust avenue that connects students not only to the existing Valencia College environment, but also to all universities throughout the state of Florida. The goal is to elevate the entire state. Staffing in the semiconductor industry right now is tough— everybody’s complaining about it across the country. They can’t get the workforce. In Florida, we control our own destiny. That’s what I hope to see in 10 years.