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Anderson incubator represents 'beginning': Officials hope new center will help revive economy

May 30, 2005

Xtreme Alternative Defense Systems LTD is the type of high-tech company Anderson officials are coveting for their new small-business incubator, the Flagship Enterprise Center.

Founded in 2002 by Pete Bitar, XADS has a contract with the U.S. Marine Corps to develop a long-range, wireless stun gun, known as the StunStrike system.

The patent-pending technology delivers a non-lethal electrical current to disable a human target. The prototypes include a rifle that can fire up to 15 feet and a vehiclemounted unit with a range of 100 feet. The weapon could be used to protect a large building from invasion or to defend U.S. embassies overseas.

The Discovery Channel featured the StunStrike on a May 18 episode of its "Science of Star Wars" program. Pending additional funding, the technology is 12 to 22 months away from hitting the market, Bitar estimated. In the meantime, the entrepreneur will continue researching and developing his product at the incubator near Interstate 69 in Madison County.

"Part of it is the environment of having other entrepreneurs so close by," said Bitar, explaining why he and his four employees moved to the center.

The Flagship Center's opening, in the works since 1998, culminated May 16 with a ceremonial ribbon-cutting. There are 12 companies affiliated with, or located in, the surrounding Flagship Business Park, including about half that have operations in the new incubator. The 40,000-square-foot structure can accommodate between 20 and 25 companies.

City officials hope the startups that locate there will become thriving businesses that outgrow the incubator and seek larger quarters in the Anderson area. The key then would be to establish a technology hub and attract jobs to rebuild a region that once relied on a sturdy manufacturing base to drive its economy.

The factory jobs-27,000 supplied by General Motors Corp.-vanished when the Detroit-based automaker shuttered plants there in the 1980s. $10 billion in annual wages and millions of dollars of yearly tax revenue also were lost.

The city is still struggling to recover. Its unemployment rate for March, the most recent month for which statistics are available, stood at 7 percent, a full percentage point higher than the state's rate. But the center provides hope for community leaders.

"The Flagship Enterprise Center could not come at a more critical time for the state and this region," Lt. Gov. Becky Skillman said. "The government can't create jobs, but it can create a climate for companies to prosper."

The sale of a closed GM plant the corporation donated to the city brought $3 million that officials reinvested in the incubator. Additional funding for the center came from two Certified Technology Park grants totaling $1.8 million from the Indiana Department of Commerce, a $1.6 million grant from the U.S. Department of Commerce, and $450,000 in grants from the U.S. Veterans Administration and the U.S. Department of Housing and Urban Development.

Construction on the $4.5 million structure began in 2003, a few months after the state designated it as Indiana's second Certified Technology Park. The General Assembly established the certification to encourage the development of high-tech companies. One of the conditions of certification is that a park must have the support of a nearby university or research-based institute.

The center is supported by Anderson University. The school will provide access to university researchers and scientists, management consultants and students who can offer research and development support. About 600 students are enrolled in the university's business school.

Further, AU and Purdue University are collaborating on a plan to construct an academic wing at the center for students interested in lending their expertise. AU now provides general-education classes for students enrolled in Purdue's technology program on the Anderson campus.

Private investors would fund the wing built on land south of the incubator that AU controls. The opportunities for students could include internships and part-time jobs, and after graduation, maybe even fulltime employment.

"What is so attractive to us is to give students an opportunity to be in the environment of entrepreneurs and the development of companies," AU President James Edwards said. "This is going to ratchet up our presence out there a lot."

Incubator organizers chose to locate the center in the Flagship Business Park mainly due to its proximity to an interstate. I-69 provides easy access from Indianapolis and Hamilton County, which should make the incubator attractive to entrepreneurs in the metropolitan area, said Chuck Staley, president and CEO of the center.

Clarion Systems Inc. in Indianapolis was one of three companies that won $10,000 each in a business-plan contest sponsored by the center last year. Clarion developed an Internet-based remote-monitoring system to continuously observe municipal water systems and major pipelines for signs of contamination or tampering.

To encourage entrepreneurs to locate within the new incubator, "Incubator Bucks" that could be used to purchase services or toward rent were given to the finalists. But Clarion's sale to New Jersey-based Electronic Control Security Inc. in March has temporarily halted any plans the company might have had to move to Anderson.

ECSI bought Clarion for $1.3 million and expects revenue from the unit to hit $2.25 million next year and $4.5 million by 2008.

"The decision is not mine alone at this point; we have to take into consideration that the corporation now calls the shots," Clarion President Martin Harmless said. "Certainly, we have great respect for the people that have put [the incubator] together."

No matter how long it takes to fill the center, organizers are determined to see the project succeed.

"We had an over-dependence on a singular business," Staley said. "This is not a silver bullet, nor is it a panacea. But the Flagship Business Park is a beginning."
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