Twenty years ago, Hewlett-Packard’s booming Corvallis plant was the biggest driver of the local economy.
After thousands of job cuts, today’s HP is a shadow of its former self, even though it remains one of the largest employers in town.
Enter the “innovation economy,” a form of economic development that relies on multiple homegrown startups rather than a single established enterprise to drive job growth and prosperity.
How that approach works was the topic of Tuesday’s meeting of the City Club of Corvallis, which featured a panel of three speakers on the subject.
Nick Fowler, a veteran entrepreneur who now serves as president of the Oregon Regional Accelerator and Innovation Network, known as Oregon RAIN, noted that companies less than 5 years old with fewer than 10 employees account for a disproportionately large share of new jobs being created.
“It suggests that startups are an engine of economic growth,” he told an audience of about 40 people over lunch at the Boys & Girls Club of Corvallis.
Oregon RAIN aims to harness innovative ideas coming out of Oregon State University and the University of Oregon, with support from the cities of Corvallis and Eugene and the Oregon Regional Solutions program, to help launch and nurture new businesses in Linn, Benton, Lane and Lincoln counties.
Fowler said his organization works to support startups in three ways:
• By providing advice through a network of nearly 300 mentors.
• Operating business accelerators in Corvallis and Eugene.
• Looking for ways to increase access to early-stage capital.
The approach, he believes, is beginning to bear fruit.
“Over the last four or five years,” Fowler said, “I’ve seen a sea change in the environment in the Corvallis area.”
Karl Mundorff is co-director of the OSU Advantage Accelerator in Corvallis, an Oregon RAIN partner that works closely with other organizations in the region, including Business Oregon, the Oregon Nanoscience and Microtechnologies Institute, Oregon Translational Research and Development Institute, Oregon Built Environment & Sustainable Technologies Center, Pacific Northwest National Laboratory and investment groups.
Among the program’s most successful “graduates” are Valliscor, which manufactures a key ingredient in asthma medications, and Inpria, which produces materials for the semiconductor industry — as well as less high-tech ventures such as Benny’s Donuts in Corvallis, the brainchild of Benny Augeri.
“Honestly, we didn’t care if it was doughnuts or not,” Mundorff said. “We really believed in Benny, and we think he’s going to be an entrepreneur in this community for many years to come.”
In the four years since its inception, Mundorff said, the accelerator has helped launch 70 companies that have created 107 jobs, generated $4.6 million in revenues and brought in more than $2.3 million in equity investment, $10 million in grants and $500,000 in loans and other financing.
Patrick O’Connor, a regional economist with the Oregon Employment Department, said that in many ways the local economy is still struggling to recover from HP’s massive downsizing in Corvallis. Since the company’s heyday in 1997, he noted, manufacturing employment in Benton County has plummeted from 9,000 jobs to fewer than 3,000.
“It is going to take an effort of government and an effort of the community to try and help (reverse) this trend,” he said.
Still, O’Connor said, Corvallis has proven to be resilient, helped in large part by the presence of Oregon State University, which has long since supplanted HP as the city’s largest employer and provides a steady stream of talent and ideas for the innovation economy.
That allows the city to pursue a diversified approach to economic development rather than compete with other communities to attract the next big corporate employer.
“We’re big on the local movement,” O’Connor said, “and I think it’s a great thing that we do it that way.”