AeA's Longanecker tech Rookie of the Year

November 7, 2005

BY MICHAEL KRAUSS

Ed Longanecker gets my vote for Chicago tech rookie of the year. Longanecker finished his first year as executive director of the American Electronics Association's Midwest Council. He's breathing new life into the organization, and pointing AeA forward.

AeA is the nation's largest high-tech trade group, representing more than 2,500 companies. In 2001, AeA pulled up stakes and left Illinois.

Last November, Longanecker arrived to re-energize AeA. He quickly recruited PCTEL CEO Marty Singer to chair the Midwest AeA. Today, membership stands at 125 companies, including Motorola, Andrew Corp., Zebra Technologies, Littlefuse, Richardson Electronics, Cabot Microelectronics and SPSS.

Longanecker and Singer emphasize the Midwest's local tech company financial performance and an improved job picture. They're immersed in a host of policy issues affecting tech companies, including Sarbanes-Oxley relief, health care reform, H1B visa improvements, stock option treatment and education opportunities for foreign students.

Longanecker called last week to say five AeA companies reported record revenues. Elk Grove-based ISCO International's top line tripled in the first nine months from the same period a year earlier. Oakbrook Terrace's VASCO Data Security's third-quarter revenues grew 79 percent. Chicago-based PCTEL's third-quarter revenues surged 102 percent. Romeoville-based Nanophase Technologies posted record third-quarter revenues up 22 percent. Motorola's third-quarter sales increased 26 percent to a record $9.4 billion.

Then Longanecker called back to say SPSS logged record third-quarter revenues, and Click Commerce reported record revenues and profits. "The success of these companies is an example of the resilience of the tech industry," Longanecker says.

Now, Longanecker's not taking credit. He's simply saying something positive is happening. He knows we're still recovering in terms of tech jobs, but he expects positive tech job growth in Illinois in the next 12 to 18 months.

Singer says the expansion of wireless broadband and tech security are fueling growth. "We're positioned better to rebound than California," Singer says.

Singer has concerns. Sarbanes-Oxley compliance costs hit mid-size tech companies hard. The cost of expensing stock options makes emerging tech companies less appealing to investors.

Longanecker and Singer are concerned the government is misguided in limiting H1B visas. The visas allow educated foreign-born professionals to work in the U.S. "The H1B annual cap for 2006 was reached on the first day -- Oct. 1," Singer says. "It's an unmitigated disaster."

Singer worries American schools are losing tuition revenues because the government is preventing foreign-student entry. The long-term impact is less innovation here as those students go elsewhere to learn, work and invent.

Microsoft provides $2.7 million

Microsoft Midwest General Manager Michael Gorriaran is busy this week providing $2.7 million in cash and software grants to three Chicago non-profits.

On Tuesday, Vincent Allocco, executive director of El Valor, the Pilsen community development center, accepts a $660,000 grant in cash and software to increase the number of women and minorities preparing for technology careers.

On Wednesday, Field Museum President John McCarter receives a grant of software worth $1.4 million to update tech infrastructure.

Thursday, Erie Neighborhood House Executive Director Ricardo Estrada receives a grant of $667,000 in cash and software to support adult education efforts.

Bits & Bytes

Should we invest in new tech startups or recruit global corporate behemoths to relocate to Chicago? A paper by the Hudson Institute Center for Employment Policy says job growth depends on new business births and existing firm expansions -- not on capturing the next Boeing. E-mail Xiuyue@hudson.org for copies.

Sandee Kastrul, president of i. c. stars, holds her TechBash Thursday at YBAR on West Ontario. Kastrul's group provides tech training support to inner-city youth. Her TechBash aims to "defragment our community and put an end to the tireless Silicon Valley comparisons."

Stephen Gately, president of Palatine-based RND Pharmaceuticals is smiling. His company just received a $25,000 investment from the Illinois Technology Enterprise Center at Northwestern University.

Chicago-based SSA Global won Software Business magazine's Best Product Strategy award.

Michael Krauss is a Chicago area tech writer and consultant.

 

 

 ©2005 Marion Consulting Partners