Ann Arbor's high-tech companies get jobs, though corporate headquarters elusive
Ann Arbor’s hottest homegrown startup companies are fast becoming a way for the region to attract major global corporations and other rapidly growing firms to set up shop here.
Several local startups were sold over the last 2 years to corporations based outside of Michigan. But Ann Arbor economic development officials say they are encouraged the newcomers have maintained the local operations of the companies they targeted.
It’s a sign that Ann Arbor’s talent base in sectors such as medical devices and information technology is too valuable for these corporations to simply abandon.
The latest encouraging sign came Aug. 9, when Plano, Texas-based Tektronix Communications, a subsidiary of $12.2 billion Washington, D.C.-based conglomerate Danaher Corp. (NYSE: DHR), said it had reached a deal to buy University of Michigan network security spinoff Arbor Networks.
“These companies come in and acquire our startups - assuming they continue to grow here, which it seems like they are - it’s a really good thing for our region and our state,” said Ken Nisbet, executive director of U-M’s Technology Transfer Office.
Admittedly, the relationship between a community and local companies with corporate headquarters outside of the state can be combustible. (Exhibit A: Pfizer’s 2007 decision to pull out of Ann Arbor.)
But economic development officials say that similar arrangements are largely benefiting Ann Arbor. And they’re not hesitating to encourage companies to locate here, even if the companies’ headquarters are located elsewhere.
The premise? A job is a job, no matter where the corporate headquarters is located.
“Companies go where talent is at, and if we can make the case that you can get the talent you need in this community, then we have the chance of catching the attention of corporate decision makers wherever the company is,” said Michael Finney, CEO of economic development group Ann Arbor SPARK. “We’ve placed a lot of emphasis on that.”
Ryan J. Stanton | AnnArbor.com
SPARK executives Jennifer Owens and Amy Cell recently finished a trip to California, where they sought to strengthen ties with companies that maintain a presence in Ann Arbor, companies that might be interested in establishing an office here and U-M alumni who may want to come back to the state.
“One of the things that we know is necessary is for us to connect with the headquarter operations with companies that have a base here of any type,” Finney said. “That represents a very significant part of the companies that are here. We just view it as a very important piece of growing a community.”
California-based tech companies with Ann Arbor offices include firms like Google, Barracuda Networks, MyBuys, NetEnrich and Systems In Motion. SPARK said last week that a California-based clean tech company is now finalizing plans to locate here, as well, although the name of the company was not revealed.
Then there are four key examples of local startups that continue to grow here despite being recently acquired by major outside corporations:
--Pittsfield Township medical devices startup HandyLab was acquired in late 2009 by New Jersey-based Becton, Dickinson and Co., but the company continues to grow here. So too does Ann Arbor software firm HealthMedia, which was acquired by New Jersey-based Johnson & Johnson in late 2008.
--Arbor Networks, which has operated with its headquarters in Massachusetts and 90 R&D employees in Ann Arbor, has been gradually adding workers to its local operation. Arbor’s new corporate parent, Tektronix, plans to continue adding to its Ann Arbor presence after the acquisition is finalized in September.
"Arbor's going to be coming in as a standalone company," Arbor Networks co-founder Rob Malan said. "Things don't hardly change at all from an Arbor perspective. One of the things they loved about Arbor was the fact that we were such a strong brand and had such a strong customer base with great teams."
Of course, placing our startups into the care of outside corporations makes Ann Arbor more susceptible to losing those companies when times get tough.
Therefore, Finney said, it’s especially important to maintain regular communications with outside companies whose headquarters are located outside of Michigan.
“We continue to sell the value proposition of the community,” he said. “If you do a good job of continuing to sell the community and connecting with the headquarters, when they make a decision as to where to expand or downsize you will be at the top of their mind as a desirable location.”