Gemstones might be the last thing you would expect to draw a firm to southeast Michigan. But that is what David Hunt, CEO of Landon IP, uses to explain his company’s choice to locate its newest offices in Southfield.
"A guy travels around the entire world looking for a diamond," he says, summarizing an anecdote he picked up at a Houston firm. "He never finds one, but when he gets back home he stumbles on a diamond in his backyard. I think southeastern Michigan is a diamond."
Hunt says the glut of available talent in Michigan spurred Landon IP, which deals mostly with patent information, to their decision. He refers specifically to the pool of engineers, which he credits to the state’s numerous engineering programs, as well as layoffs in the automotive industry.
So what types of companies can flourish in this setting? "Name it," Hunt says. "Anything related to mechanical, chemical, or electrical fields. All technology falls into one of those three fields, and you guys have all of it." He listed semiconductor, wireless communication, consumer electronics, biotech, and chemical firms among others.
Landon IP's pick was notable in that Southfield beat out a pack of competition that included Baltimore, Palo Alto, and Bangalore, India. The choice goes against recent trends in offshoring information work, which Princeton economist Alan S. Blinder recently listed as among the most vulnerable industries to be offshored.
"I get a queasy feeling when I see other companies talking about one place like India and not talking about the wonderful benefits we have here in the U.S.," Hunt says.
Hunt, whose humor can be self-deprecating — "I don’t have an original thought in my head" — counts Harvard economist Michael Porter among his chief influences, emphasizing the "five forces" model which Porter devised in 1979.
The five forces theory, which has become a staple of managers and business professors, instructs companies to seek environments where competitive rivalry is low. To this end, Hunt says, he chose Michigan over India.
"The law of supply and demand will tell you that, eventually, you’re going to get priced out of that (off-shore) area," he says. "I like to find opportunities where nobody else is, or very few people are going, but where there’s really good qualified people."
This is why, Hunt says, the Southfield office will likely swell to employ nearly 300 biochemists, and mechanical, electrical, and chemical engineers within six years. "When you have such a highly skilled workforce that is hungry for stable, well-paying jobs, it should catch the attention of every business in the United States," he says.
Landon IP has already grown tremendously since Hunt took over in 1998. The company had eight employees then; it now employs over 120.
Founded as Landon & Stark in 1949, the company focused its business on typesetting patent information in a process known as "patent stenography." When Xerox machines made this practice obsolete, they were forced to adapt and began assembling and correctly formatting copies — still a thorny and time-consuming task.
Due to the complexity of patent law, Hunt found he could expand services easily. Soon, Landon IP was performing patent searches, competitor intelligence, and legal consulting. The growth was natural, Hunt says. "It’s almost like, if someone sells you a toothbrush, you need toothpaste as well."
After receiving an MBA from the College of William & Mary in ’93, Hunt worked a variety of jobs before purchasing Landon IP. But entrepreneurship is in his blood, he says. Growing up on welfare, he would often peddle Fuller brushes door-to-door with his mother.
"Even though we were very poor, she taught us the value of working hard and working smart. It was natural for me to want to work for myself," he says. Years later, he still brings this spirit to his work at Landon IP.
"We like to see ourselves as visionaries," he says. "The economics of Michigan are ideal; it’s ripe for tremendous growth. There’s no question in my mind that it’s America’s best-kept secret."
Richard Kurtz, president and CEO of Advanced Photonix, shares Hunt’s enthusiasm. Recently, the high-tech firm relocated its head offices from California to Ann Arbor.
After purchasing a new manufacturing subsidiary, Picometrix, the company began searching for a new location. This inspired discussions with the Michigan Economic Development Council. The council, Kurtz says, ensured that the economic incentives were right for his company — who also considered California and Wisconsin — to choose Michigan.
When asked to explain what his company does, Kurtz laughed. "It’s going to get long," he said.
"(We’re) what’s referred to as an ‘optoelectronic semiconductor component and subsystem manufacturer.’" What this essentially means, Kurtz explains, is that they make photosensitive semiconductors — that is, those that convert photons to electrons.
The company designs and manufactures products in three platforms: high-speed optic receivers, optoelectronic solutions, and terahertz systems.
The use for these parts encompasses the telecommunications, military, medical, and diagnostic fields. Advanced Photonix counts Raytheon, Boeing, Cisco, Siemens, NASA, and many major Universities among its clients.
This means they need engineers. And Kurtz, a Michigan State graduate and thirty-year veteran of the tech industry, is sure he can find them here. Michigan colleges graduate a deluge of engineers, which Kurtz believes he can channel.
"I don’t think a lot of Michigan people leave because of the weather," he says. "Everybody in the last ten years has known the direction of automotive, and no one wanted to become an automotive engineer. Where’s the alternative?"
Kurtz says Advanced Photonix offers such an alternative. The company employs about 160 — though they do not give site-specific numbers — and expects to expand. They have grown between 15 to 25 percent annually since Kurtz took the reins in 2002. Now, with a booming telecommunications segment and their terahertz platform still a "very unexplored" capacity, Kurtz expects that number to rise.
Kurtz was also drawn to Michigan by the "common-sense oriented" labor relations climate, compared with that of California, whose government has struggled to detangle runaway employer cost issues — worker’s compensation, for instance — over the past few years.
Less tangibly, Kurtz was attracted by what he described as the "Midwestern work ethic." This is particularly important, he says, because Advanced Photonix performs a great deal of microscopic assembly work.
"When you first go out to California, it’s kind of strange because everyone just loves the weather," Kurtz says. "In the Midwest, we really focus on the job and getting the job done; the weather is secondary for us. We play on the weekends. The expression I like to use is, ‘we work hard and we play hard in the Midwest.’" Still, some employees do come from outside Michigan, Kurtz says, due to the dearth of semiconductor manufacturers in the state.
What the fall of the auto industry has taught us, he says, is that high-tech "moderate employment" businesses — like Landon IP and Advanced Photonix — will be the key to Michigan's future growth.
"I think it does a disservice for us to have one company that has 10,000 jobs in it, that if it pulls out, we lose 10,000 jobs. We need maybe 50 companies with 200 jobs."
Alex Dziadosz is a freelance writer living in Ann Arbor.
Photos:David Hunt of Landon IP
Landon IP's offices in Alexandria, VA
Richard Kurtz of Advanced Photonix
Advanced Photonix has high tech military contracts
Advanced Photonix creates high speed products for the telecommunications industryPhotographs courtesy of Landon IP and Advanced Photonix