Is this the symbol of your economic future?

BYLINE: C. Grant Jackson, The State, Columbia, S.C.

Mar. 25--USC president Andrew Sorensen's sleep is the sleep of the faithful, of a true-believer in South Carolina's future.

In Innovista, USC's new research campus, Sorensen is convinced the school has a plan to help take the state not just into the 21st century but the 22nd.

South Carolina is counting on Sorensen, and his counterparts at MUSC and Clemson, to be right.

The state has lost manufacturing jobs steadily over the past decade. To compete in the global economy, South Carolina has shifted from an almost complete reliance on pursuing smokestack industries. Instead, the state is investing millions in its research universities -- to attract top professors and knowledge-based companies, with hopes they'll spin off even more companies.

It's a jobs strategy S.C. leaders have been slow to pursue while other states have been speeding along. What gives South Carolina the chance to catch up is that USC, Clemson and the Medical University of South Carolina long ago turned their attention to leading-edge science.

USC is especially strong in the area of hydrogen and hydrogen fuel cell research. If the university can sustain its edge and momentum, experts say, the promising "alternative fuels" technology could add thousands of high-paying jobs and transform South Carolina's economy.

Trying to guess which research field, such as hydrogen research, will be "hot" is a leap of faith. Everyone knows it.

But it's a calculated leap, South Carolina's leaders say, one the state can't put off, and one that would benefit the entire state.

"The state will have three really strong economic development and research engines geographically located throughout the state," said Rick Kelly, USC's vice president for finance, who is shepherding Innovista's construction. "We will broaden the economic base of this state."

Stepping out of the three research universities, perhaps making the greatest gambit is USC, which has plans that could eventually double the size of its campus.

And hydrogen research is what is putting the school on the national research map.

USC is focusing on four research areas: alternative energies, nanotechnology and the biomedical and environmental sciences.

But it is the school's work with the new energy sources of hydrogen and fuel cells that has captured the public's imagination.

The highly competitive field is also where USC and the state arguably have gained the most momentum. One Connecticut official recently described South Carolina to The New York Times as the most competitive of the two dozen or so hydrogen-focused states.

If true, it's no small feat.

Hydrogen, and hydrogen-based fuel cells, could transform the economy the way the Internet did, experts say.

Fuel cells, battery-like devices that create energy by mixing hydrogen and oxygen, might one day power everything from laptops to cars, trucks, houses and businesses. And they could obviously lessen the country's vulnerability to the geopolitics of oil.

Larry Wilson, a member of the USC Research Campus Foundation Board, believes South Carolina can be to hydrogen what Texas was to petroleum, that Columbia could be the new Houston.

But the first companies USC will attract won't be fuel cell companies. Too few exist.

Many of the first companies are likely to be information technology or computer companies.

In fact, the first company USC has attracted is Duck Creek Technologies, a research-oriented insurance industry software company that Wilson is chairman of.

Duck Creek expects to have about 200 employees with an average salary of $83,000 working on campus. It will be located in the first "private partner" building at Innovista, a sort of vertical research park.

Wilson's connection -- and the fact that the company is a software developer instead of a fuel cell company -- might have some people wondering.

But others say it's a natural progression toward attracting more advanced fuel cell- and hydrogen-oriented companies.

And already on campus are a dozen industry partners working with USC researchers in the National Science Foundation Industry/University Cooperative Research Center for Fuel Cells.

Those companies -- such has Boeing, John Deere, BASF and General Motors -- can take discoveries gained through the center and turn them into products or services. The partners work in groups on projects and have access to patents developed.

For state leaders, including Sorensen, selling USC and South Carolina is an exercise in peddling the future.

It means proselytizing about future jobs, yet-to-be created companies and research that might exist only in lab notes.

That puts Sorensen and his vice president for research, Harris Pastides, in the pulpit.

It's a new role for university leaders, who over the years mostly watched while the state's politicians and business leaders worked to create jobs.

Pastides thinks it's a natural fit.

"Flagship research is not about the Ivory Tower. It's about Main Street," Pastides likes to say.

The country's use of technology is increasing, he said. But "that doesn't mean every research park in the country is going to make it. All you do is put a sign up and hope you can fill it."

But Pastides believes Columbia will make it and Innovista will make it. He and Sorensen tell that to every researcher and industry head they get on the university's plane to recruit, every congressman who will listen and every Rotary Club that will have them.

USC's previous work will go a long way toward long-term success, Pastides said.

Top USC scientists have been working for years on fuel cells and related issues such as hydrogen production and storage.

When the NSF four years ago created the country's only industry-university center for fuel cell research at USC, the university's "mission picked up momentum like a snowball rolling downhill," said professor John Van Zee.

"When Dr. Sorensen arrived, he saw the potential, and the snowball got bigger," said Van Zee, who first proposed the NSF center.

The school also now can hire researchers who are stars in their fields, thanks to $30 million set aside by state lawmakers each year since 2003. The money pays for endowed chairs, which includes higher salaries for professors, the salaries of the professor's research teams, expensive equipment and new labs.

State money, too -- $70 million in bonds so far -- is going toward USC's buildings. Richland County and the city of Columbia are paying more than $30 million for two parking garages.

Going up at the corner of Blossom and Assembly streets, in the Horizon Center complex, are two of the five buildings planned so far for Innovista.

The 125,000-square-foot academic building will house USC researchers in alternative fuels as well as in chemistry, engineering and nanotechnology. It will be home to NSF's fuel cell center.

The other building is for USC's industry partners. It's being built with private money by Craig Davis, who developed N.C. State University's Centennial Campus in Raleigh.

The academic building also will house an incubator for start-up companies. EngenuitySC, a nonprofit dedicated to spurring a knowledge-based economy in the Midlands, is using a $1 million federal grant to create the incubator, complete with lab space.

Pastides appreciates the help.

It's mission-critical, he said -- that kind of lab space simply isn't available elsewhere at USC.

Some folks are anxious that things aren't going faster for USC.

People in Columbia are impatient, said Davis, the N.C. developer, "but everybody has just got to calm down. It will all happen. It is just taking a little bit of time."

There was a bump in the road late last year, though. A big bump.

USC thought it had a home run in Project Genesis. Officials say they were well on their way to landing an unnamed Fortune 100 information technology company when the company backed out.

Business conditions were forcing the business to lay off thousands nationwide, Sorensen said. A company officer told Sorensen that company leaders couldn't announce layoffs on Monday, then turn around Tuesday and say they were investing millions in a Columbia facility.

The deal was incredibly close to happening, said John Lumpkin, a Columbia real estate consultant who was interim director of Innovista at the time. "The transaction was done, a lease was negotiated." The deal was headed to the company's board for "the final Good Housekeeping seal."

Genesis was to occupy nearly all of Davis' building, which was being designed specifically for the company.

The enormity of the deal might have led USC to put too much emphasis on the project.

"Our regular Tuesday morning Innovista meetings became 90 percent about Genesis," Pastides said.

He said he worried then about neglecting other prospects.

"But there was just no time -- this was so big. Basically, the prevailing attitude was, get this one, get the big kahuna, and others are gonna drop," Pastides said.

Genesis became a lesson learned.

"The thing that I learned from that is that we don't go fishing with one pole," Sorensen said.

They had worked on Genesis for more than a year.

One of the biggest lessons has been the need to manage expectations. "We had a team meeting, and we recognized that we let Genesis get too far out ahead of us, and expectations got too high," said USC's financial officer, Kelly. "When that failed, it crushed (us)."

Since Genesis, John Parks, with the University of Kentucky since 2004, joined USC as executive director for Innovista and associate vice president for economic development.

Pre-Parks, the recruitment of possible Innovista tenants was coordinated by Lumpkin and split largely between Lumpkin, Davis, Sorensen, Kelly and Pastides.

Lumpkin gets credit for steering the team through a learning curve. "There wasn't a recipe," he said. "We didn't open up a cookbook, and say, 'OK, recipe No. 4, let's go cook up a research knowledge economy.'" Part of why USC went out and got Parks, Pastides said, was to become more focused on corporate recruiting and to learn from someone who has been doing it.

"Nobody in the country has a book on how to do that," Pastides said.

Sorensen, as he has been, will continue to be involved personally in much of the recruiting.

Word about Innovista is spreading, and Sorensen talks to prospects that are fuel cell-related and those that are not.

And not all the prospects want to lease space from Davis.

"I had a CEO and a vice president for financial affairs of a company that wants to build a 110,000-square-foot building in Innovista," Sorensen said.

Recently, he met with a fuel cell manufacturer. "I'm talking to people all the time," he said.

Davis has an office and a team of four in Columbia, plus a project manager who comes in regularly from Raleigh. Davis said he spends two to three days a week on Innovista, mostly on recruiting.

"There are over 20 prospects that I call real prospects, not suspects, that we are working closely with," Davis said.

Pastides and Parks both talk about the need to follow up with prospects every day. Success doesn't come overnight, they say.

"I think you are always thrilled to hit a home run," Parks said. But "sometimes it can take two to three years to get from the initiation of a project to getting a presence."

The hydrogen and fuel cell piece of Innovista, especially, is a long-range proposition.

The S.C. Hydrogen and Fuel Cell Economy Strategy, crafted in 2005 by scientists and state business, university and community leaders, lays out a 20-year plan.

It calls for landing the first hydrogen and fuel cell companies between now and 2010. Growth would accelerate from 2011 to 2015, bringing 2,000 to 3,000 new jobs and 40 to 50 new companies.

Between 2016 and 2025, the state should have a mature industry, with 8,000 to 12,000 jobs and an equal number of supply-chain and secondary service jobs.

Those connected with Innovista frequently cite Harvard professor Michael Porter's comment about reinventing South Carolina's economy: "This is a marathon, not a sprint."

But things are going well, USC officials say. There are a lot of prospects, Parks said.

"When I got to Kentucky, I hit the ground standing," he said. There was no activity. Only inertia. He had to get things going.

"Here, I liken it a little more to hopping on a galloping horse," Parks said.

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