The High-Tech Potential by Amy K Glasmeier

Author:Amy K Glasmeier [Glasmeier, Amy K]
Language: eng
Format: epub
Tags: Public Policy, City Planning & Urban Development, Political Science
ISBN: 9781351481472
Google: 1CoxDwAAQBAJ
Goodreads: 36078376
Publisher: Routledge
Published: 2017-07-05T00:00:00+00:00

State of the Art, Inc.—A Case Study

State College, Pennsylvania, home of the Nittany Lions and Pennsylvania State University (PSU), is the economic focal point of rural Centre County. Although the county experienced rapid growth between 1970 and 1980, it is still quite rural. Nevertheless, because State College is a university town, there are a number of qualities that make the community particularly appropriate for high-tech development. The level of social and cultural amenities is high, the population is well-educated, and the university has a number of programs that lend themselves to discovering technologies that are adaptable to commercial use. PSU has also helped create the context for new firm creation, and, with limited results, a few high-tech firms have developed. Completely separate from the university’s influence is one firm that is by any measure an unqualified high-tech success story. The following discussion briefly recounts the history of State of the Art, Inc., a small high-tech company that produces capacitors for the electronics and satellite industries.

State of the Art, Inc. (SAI) was established by Don Hamer, a former employee of Erie-Murata, a large capacitor producer in Erie, Pennsylvania. In 1980, Hamer left the company and moved to State College, where he work for five years as a salesman and technical consultant to Murata customers. By then, he had identified a market niche (variable-size batch production capacitors) unfilled by the big capacitor producers, so he set up production in State College. SAI started out quite modestly, with fewer than twenty employees. Hamer understood the market for capacitors and chose to compete in both the commodity end and the higher-value-added end of military products. Within four years, the flourishing company had become the nation’s second largest capacitor producer (on a volume basis). When interviewed in 1986, SAI had one hundred employees (largely local high school graduates and individuals with less than a full four-year college degree) and utilized sophisticated production equipment. The growth of SAI has been steady and solid. Even during a period of industry downturn, the company avoided layoffs. Production was built up carefully—as the firm grew, it wisely invested in new technology—and throughout company development, decisions were made to automate and upgrade workers’ skills rather than maintain a labor-intensive production posture, the least costly direction in the short run.

To the extent that geography matters, SAI’s success can be partly attributed to locating in a community in which education is highly valued. Local elementary and high schools provide a solid education. Thus, even noncollege-bound students are prepared for success in industry.

Locational isolation is not a problem for SAI because the capacitor product has both national and international markets. Individual units are small and lightweight, easily shipped to customers by overnight delivery. Customer satisfaction and competitive edge revolve around providing quantities ranging from 100 to 100,000. Therefore, the company’s success rests not with an extraordinarily technological product per se (though the product is highly sophisticated and meets stringent and exacting DOD standards) but on its ability to supply a wide variety of customer demands that large firms have overlooked.

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