by Adam Davidson

via NPR Planet Money


Every week, Robert Stout of Kings County Jerky slices meat by hand. Photo by Adam Lerner/adamlerner.net

One day Chris Woehrle decided to finally leave his corporate job and pursue his dream: to become an artisanal food craftsman. And so, every day at home, he’d basically pickle stuff.

“I had a refrigerator full of plastic food buckets that were full of pickles and kimchee and sauerkraut and harissa and salsa and ketchup and mustard and, you know, any kind of craft food you could make,” Woehrle says.

Woehrle lives in Brooklyn, where shops are filled with handcrafted, grass-fed, organically raised whatever. Too much of it, in fact. Every time Woehrle had a good idea, he found eight other companies were already making precisely the same kind of mustard or pickled radish.

“You don’t want to play a marketing game where it’s just like, let’s out-market the other pickle people,” Woehrle says.

Eventually, though, he and his partner found a hole in the market: all-natural beef jerky. Kings County Jerky was born. Two guys, a small warehouse in Brooklyn and 25 pounds of beef a day.

The Kings County approach is a model for how manufacturers in many sectors can do better. Ignore low-priced commodity products. Focus instead on customizing high-quality goods for a select audience willing to pay a premium.

It works even on something as simple as a spring.


Photo: Dan Kedmey/NPR Juan Delgado (left) and Steve Kempf of Brooklyn’s Lee Spring company stand with a 50-year-old coiling machine, still in use today.

“Springs are critical to the day-to-day functioning of everybody’s lives,” says Steve Kempf, CEO of Lee Spring in Brooklyn.

My eyeglasses have springs. Our audio recorders have springs. And each of those springs has to solve a slightly different problem.

“You take this wrench here for example,” he said, picking up a wrench from his desk. “It’s got a very unique L-shaped spring design. And so the product designer wants to come up with an elegant design, and he also has a very specific force he wants when you let go of this wrench so that it opens in your hands and feels comfortable.”

Think of this as an artisanal craft wrench. And a craft wrench needs a craft spring. This is good business, by the way. Companies will pay more for a spring that precisely meets their needs than they will for some off-the-rack spring.

The springs at Lee Spring are gorgeous displays of ingenuity and skill. Making them requires knowledge and artistry. It’s a true craft. Craft jobs typically pay more, so the workers at Lee Spring tend to do better than workers who don’t have all those spring skills.

Even big manufacturers — like Toyota, General Electric, Dow Chemical — are focusing more of their business on custom-making products for customers willing to pay more. It’s one of the best alternatives to competing with China and other low-wage countries, which have perfected the commodity business of turning out lots and lots of identical products as cheaply as possible.

Forget that model. In America, we can focus on craft. That’s where the money is, and that’s where the hope lies for American manufacturing.

Manufacturers Look Homeward, Boosting Domestic Production and Spending as Overseas Gains Overseas

By Kate Linebaugh and James R. Hagerty
via The Wall Street Journal

U.S. companies, facing slowing markets and rising costs around the world, are taking a new look at their home market.

With growth slowing in China and a slump gripping much of Europe, companies are adding capacity in the U.S., replacing aging equipment and even moving overseas production back from low-cost labor markets, a sign that corporate America could be poised to take a bigger role in the economic recovery.

The pace of earnings growth at companies slowed in the fourth quarter, and there are signs that profitability is falling. That is prompting companies ranging from beverage maker Coca-Cola Co. to industrial supplier Emerson Electric Co. to disclose cost cuts. But after keeping a tight lid on costs for the past few years, many other companies are expanding capacity to meet rising demand.

United Rentals Inc., the world’s largest equipment rental company, plans to increase its capital spending by about a third, to $1 billion, this year as more construction and industrial companies opt to rent rather than own equipment like elevated forklifts and backhoe loaders. Cummins Inc., which makes engines for trucks and heavy equipment, is boosting its capital spending to more than double the rate of two years ago.

Carlisle Companies, a small conglomerate that makes insulation, tires and restaurant supplies, plans to open two new plants in the U.S. and bring tire production back to the U.S. from China. Union Pacific Co. expects to buy twice as many locomotives this year, spending upward of $400 million. The auto industry is dusting off idled U.S. factories, adding work shifts and expanding production from Chattanooga, Tenn., to Belvidere, Ill., on rebounding car and truck sales. Some auto makers even hope to use the U.S. as a manufacturing base to export autos and auto-parts to Latin America and Asia.

“It is an environment that feels like it is building momentum,” William Plummer, United Rentals’ chief financial officer, said in an interview. “We are coming out of the depths of the recession and are starting to build momentum on the upside.”

U.S. businesses increased their investments in December. According to the Commerce Department, new orders for nondefense capital goods excluding aircraft, a proxy for how much companies spend on equipment, climbed 2.9% from November. That ended two months of declines, suggesting businesses are becoming more confident. Compared with a year earlier, companies shipped 9% more.

“Companies have piled a lot of cash on the balance sheet and delayed a lot of purchases,” said Joseph LaVorna, Deutsche Bank’s chief U.S. economist, who expects capital expenditures, or capex, to grow in excess of 10% this year. “The capex story is very much alive and well, and capex and hiring go hand-in-hand.

There are signs that hiring may be picking up as companies expand facilities. Job growth in January was its highest level since April, with unemployment falling for the fifth consecutive month.

In addition, stubborn construction markets are showing signs of life, and that is helping companies like Caterpillar Inc., according to Andy Kaplowitz, a Barclays Capital analyst. The Peoria, Ill.-based equipment maker notched a 31% increase in its North American construction business, compared with Barclay’s estimate of a 20% gain.

“I’m feeling better about the U.S. economy than I was 12 months ago, for sure,” said Patrick Ward, chief financial officer at Cummins.

Fortune Brands Home & Security Inc., whose products include Master locks and Moen faucets, recently boosted its capital spending plans for 2012 to $80 million, up about 17% from last year, after seeing modest improvement in the U.S. economy, said Chris Klein, CEO of the Deerfield, Ill., company.

“It isn’t off to the races yet,” Mr. Klein said of the economy, “but it is definitely firming up.”

That may not mean major job gains. Most of the capital spending is on equipment that will improve production efficiency. For now, Fortune Brands has plenty of spare capacity and isn’t envisioning new plants. Its 12,000-person U.S. work force probably will expand only slightly this year, with gains mainly in product development and marketing, Mr. Klein said.

On the whole, fourth quarter earnings were weaker than expected amid sluggish growth in Europe and China, and executives voiced caution about 2012. Among the 301 companies in the Standard & Poor’s 500-stock index that have reported their quarterly earnings thus far, 28% missed analyst expectations, a greater proportion than the typical 20%, according to Thomson Reuters.

Companies that are making first-quarter forecasts are striking a mostly downbeat note. Of the 55 that have provided earnings forecasts, 43 said they expect the first quarter to be weaker, according to Thomson Reuters. That is the worst ratio since 2001. Profits for the final quarter of 2011 are up an average of 8.9% from a year earlier, and revenue is up 8.3%.

While the impact of the European slowdown has been muted, analysts have noted how China’s slowdown has eaten into profit. United Technologies Corp. said its Otis Elevator unit sales in China dried up in the fourth quarter compared with swift sales the quarter before. 3M Co. expects below-trend China growth for the first half of this year, after sales slowed markedly at the end of last year.

Despite China’s slump, companies still see opportunities overseas to buoy growth, which means the U.S. won’t grab all of the capital spending. Caterpillar, for instance, said about 60% of the $4 billion it earmarked for this year will be invested in the U.S. largely to expand existing facilities. Auto parts supplier Tenneco Inc. will boost capital spending as much as 15% as it expands business in emerging markets. Charlotte, N.C.-based Carlisle will be expanding a plant in Italy and building a new one in India.

But rising wages overseas, higher transportation costs and the shipping time of goods from China have prompted Carlisle to move tire production to Tennessee from China.

“We find it as cheap to manufacture in the U.S. as China,” Carlisle Chief Executive Dave Roberts wrote in an email. “We will still manufacture in China, but the idea would be to manufacture product for Asia in Asia, for the U.S. in the U.S.”

And strong domestic growth is driving Carlisle to open new factories in Seattle and Kingston, N.Y. “We are starting to see the nonresidential construction market strengthen a bit,” Mr. Roberts said in an interview. “The momentum continues.”

—Bob Tita contributed to this article.

Write to Kate Linebaugh at kate.linebaugh@wsj.com and James R. Hagerty at bob.hagerty@wsj.com

Corrections & Amplifications

Fortune Brands Home & Security has about 12,000 U.S. employees. An earlier version of this article incorrectly said it has a 16,000-person U.S. work force.

Via: TMASC

Opportunity grows in the region

New TMASC report in development

On November 19, 2008, Bexar County Economic Development held its inaugural Texas-Mexico Automotive SuperCluster (TMASC) Conference in San Antonio, Texas. Bexar County created TMASC that year to leverage the changing geography of automotive assembly and automotive markets in North America. TMASC would capitalize on changes in the industrial landscape by building upon the region’s numerous global vehicle and heavy equipment manufacturers, hundreds of Tier 1 original equipment suppliers, and world-class innovative assets. This first look at the region was facilitated by an excellent benchmark study conducted by TIP Strategies, Inc.

Late last year we engaged TIP Strategies to take a look at the region again and create an updated report. The finalization of that report is currently underway. Meanwhile, here’s a snapshot of the TMASC region as we saw it three years ago.

TMASC, circa 2008

Heading into 2009, the TMASC region was home to the final assembly plants of nine global manufacturers. These plants employed more than 18,000 workers and were capable of producing almost 900,000 units per year. The region also had over 200 Tier 1 supplier plants, which employed over 133,000 workers.


TMASC, circa 2011

As of the end of last year, the TMASC Region was home to seven automotive assembly plants and parts plants, employing over 17,000 workers and capable of producing over 800,000 units. The region also contained six commercial and military vehicle manufacturing plants.

Over the last few years, TMASC’s scope has broadened to reflect the region’s additional heavy equipment and commercial vehicle manufacturing activity as well. Heavy equipment manufacturers in the region include Caterpillar, John Deere, and Manitou, which together have seven plants in the region. There are also two specialty vehicle manufacturers: Skyline, which manufactures recreational vehicles, and Frazerbilt, which manufactures emergency response vehicles.


Growth hasn’t come in the form of new plants only. In 2010, Toyota invested $100 million to add a Tacoma production line at its plant in San Antonio. Moreover, yesterday GM announced its continued expansion in the region with a new $200 million metal stamping facility at their plant in Arlington. The new operation will create 180 jobs and save GM an estimated $40 million each year is logistics costs.

Regional roll out coming later this quarter

Once the new TMASC report is finalized, we will be sharing it via the TMASC website, as well as through special presentations to selected TMASC partners throughout the region. We look forward to providing an updated vision of the region to our TMASC communities and stakeholders this quarter, and to exploring new collaborations like we did last week with the Capital Area Economic Development District committee of the Capital Area Council of Governments (CAPCOG). To schedule a presentation, please contact us. We are excited about the many opportunities 2012 will give us to increase advanced manufacturing assets and activities in the region.

By Bryan Walsh
via time.com

The solar panels sparkle on the rooftop of HelioVolt’s 12,000 sq m manufacturing facility. Inside, an elaborate line of printing machines, lasers, chemical baths and ovens — with help from the occasional white-coated human being — transforms a sheet of glass less than a centimeter thick into a solar module in just over two and a half hours. The sheets are a far cry from the thick, polysilicon-based photovoltaic panels that still dominate the solar market. HelioVolt manufactures thin-film solar panels, so called because the modules are made by depositing an ultra-thin — a few micrometers at most — layer of the photovoltaic chemicals copper, indium, gallium and selenide directly onto a glass backing. Compared with conventional modules, the engineering and manufacturing processes are more complex, and thin-film panels are less efficient at converting sunlight to electricity. But their lower cost has many in the solar world — like HelioVolt CEO Jim Flanary — convinced that thin-film panels are the way to go as the industry matures. “If you can do this really cheaply and really quickly, you’ve got a winner,” says Flanary as he leads a walkthrough of HelioVolt’s pilot plant. “We want to scale up as soon as we can.”

It’s not just the how of HelioVolt that makes it unusual in the solar space; it’s also the where. The company isn’t based in southern San Francisco or Boulder, Colo., or the Boston area — the bright green regions that tend to lead the national conversation on clean tech. HelioVolt calls the Texas state capital of Austin home. B.J. Stanbery, the solar veteran who founded HelioVolt in 2001, is a native Texan who got his bachelor’s degree at the University of Texas just down the road from the company’s factory, but he kept his business in Austin for more practical reasons. “The manufacturing skills that workers have here are directly transferable to a thin-film solar company like us,” he says. “And the business culture is attractive here because people are used to taking risks in the energy space.”

Of course, when people think about the energy space in Texas — home to wildcatters and J.R. Ewing of television’s Dallas fame — they probably picture oil rigs and natural gas wells. The current governor of Texas, after all, is the far-right-leaning Rick Perry, who made it known early in his campaign for the Republican presidential nomination that he was a climate-change skeptic. “I do believe that the issue of global warming has been politicized,” Perry told voters in New Hampshire in August. “I think there are a substantial number of scientists who have manipulated data so that they will have dollars rolling into their projects.”

But as politically conservative as Texas tends to be, it’s kept an open mind on renewable energy, which is one reason more wind power has been installed in the state than anywhere else. And within Texas, Austin has always been an outlier: a fairly liberal college town that has managed to marry high tech with hipster culture. Now that’s paying off in the renewable-energy sector, as Austin contends with Silicon Valley as a top clean-tech hub. The city is home to dozens of green start-ups like HelioVolt, many funded by homegrown venture capitalists. Some 15,000 Austin residents are employed in the broader green economy, and the municipal utility, Austin Energy, has pledged to get 35% of its electricity from renewable sources by 2020. Over the past eight years, the number of clean-tech jobs has grown more than twice as fast in the Austin metro area as it has in San Francisco. With its background in information technology, Austin is set to take the lead in one of the most exciting areas in clean tech: the marriage of new energy technology with the Internet. “Austin is already a high-tech city,” says Jose Beceiro, the director of clean energy at the Greater Austin Chamber of Commerce. “Now it’s becoming a clean-tech city.”

Keeping It Weird

For Austin, high tech had to come before clean tech. The city has long been a science-and-technology hub, thanks to the presence of the sprawling main campus of the University of Texas, with a student body of 50,000. In the mid-1980s one of those students was Michael Dell, who founded his eponymous computer company in a University of Texas dorm room before moving Dell to a sprawling campus north of Austin. Around the same time, the federal government and U.S. semi-conductor manufacturers launched a research consortium — based in Austin — called Sematech, pooling public and private investment to compete with Japan, which was threatening to dominate the semiconductor industry.

Sematech and Dell helped create a high-tech boom in Austin through the 1990s, luring tens of thousands of talented engineers who came for the jobs and stayed for the Austin lifestyle — best exemplified by the metastasizing South by Southwest festival, an annual pilgrimage of the hip that brings together music, film and interactive media. “It’s a great place to live, and that matters in this industry,” says Brewster McCracken, the executive director of Pecan Street, a smart-grid research project in Austin.

So as clean tech began to heat up in the early part of the past decade, Austin was a logical place for start-ups and entrepreneurs to set up shop. An experienced technical workforce was already available, ready to shift from manufacturing computer chips to building solar panels. SolarBridge Technologies, which makes microinverters that improve the efficiency of solar modules, spun off from the University of Illinois, but when it came time to scale up, the company picked Austin over other clean-tech hubs like the Bay Area and Boston. “We like the entrepreneurial ecosystem, and there’s just a ton of talent here that you can’t get in Illinois,” says Joe Scarci, SolarBridge’s vice president of marketing. “It’s a great place to recruit.”

This is how industry clusters build: companies come for the employees, and they in turn attract more capital, more workers and more start-ups. That critical mass of innovation is one reason SustainLane Government, a network for green business, has ranked Austin the top city in the U.S. for clean-tech incubation. Austin-based green start-ups can also count on help from the University of Texas and the city government. The Clean Energy Incubator at U.T. supports young green start-ups, providing some initial seed money and holding networking events that can connect entrepreneurs and venture capitalists. The Texas Clean Energy Park — a public-private program in Austin — provides facilities and training for the smallest clean-tech start-ups.

Clean tech, however — much more than information technology — is still dependent on direct government policy, subsidies for renewable power and regulations that mandate energy efficiency and greener buildings. And that’s where Austin’s progressive-leaning politics — Barack Obama received 64% of the vote here in 2008, even as Republican John McCain handily won Texas — pay off. The presence of the university, the slacker subculture of the 1990s and the influential live-music scene has helped make the city, whose unofficial motto is “Keep Austin weird,” far more liberal than most in Texas. Austin has more 100%-green-powered businesses than any other city in the country, and all the municipal government’s electricity comes from renewable sources. Consumers and businesses can receive handsome rebates for installing more energy-efficient appliances and photovoltaic systems — all of which means that clean-tech companies can come to the city knowing there’s a built-in market for their products. “The city here does an excellent job of supporting green tech,” says Bill Sims, CEO of the biofuel company Joule Unlimited, which recently opened a pilot plant in Austin.

But perhaps the single biggest factor behind the greening of Austin is an institution that in most cities stands in the way of clean tech: the utility. Because the city of Austin owns its utility — and because politically progressive Austin residents have shown support for renewable power — Austin Energy has more latitude for experimentation than most of its counterparts around the U.S.

Nowhere is that clearer than in the Pecan Street project, a pioneering smart-grid research and demonstration program based in Austin’s historic Mueller neighborhood. Pecan Street is a collaboration between Austin Energy, the Environmental Defense Fund, the city of Austin and the university, with much of its financing provided by the 2009 federal stimulus bill. The study is detailing energy and water use at the residential level, gathering data that most utilities barely have a handle on. The Pecan Street project, which is also experimenting with residential solar energy and electric vehicles, aims to use that information to create a smarter and more efficient grid, one that is far less wasteful than the rickety power systems throughout the U.S. And it’s something that could have only happened in Texas, where deregulation has forced utilities to compete for profits by investing in technologies that help their customers use less energy. The transition hasn’t been perfect. Some consumers complain about higher costs, and there have been unexpected blackouts. But deregulation does free up utilities to experiment. “Getting this data is the first step to figuring out how to be really efficient,” says Pecan Street’s McCracken. “And Austin is the place where we can get that done.”

With its mix of high tech and clean tech, Austin is well positioned to take advantage of the next major phase in green development: the energy Internet. Ubiquitous digital connection has helped transform the way we communicate and the way we work, but most of us are barely aware of how we use energy. The energy Internet can change that. Green software start-ups like Austin-based Incenergy have developed online energy-management systems that allow building owners to remotely manage smart thermostats, reducing wasted heat and air-conditioning. Companies like Tendril are bringing that capacity to the residential level, creating home energy networks that will enable us to control our energy use as intelligently as we now control our digital video recorders. And the Pecan Street project is the perfect place to test some of these new technologies on a connected and greener-than-average populace. “A lot of my prospective customers are here,” says Jim Balthazar, explaining why he moved his clean-tech start-up Nuventix from Atlanta to Austin. “And he who has the money makes the rules.”

So what could go wrong? Austin faces the same challenges the larger clean-tech sector is confronting: a drying pool of venture capital, the forbidding cost of scaling up and the uncertainties around national climate policy. But the city’s biggest obstacle might be the man who lives in the governor’s mansion in the heart of Austin: Rick Perry. If Perry — or just about any of the other climate-change-doubting Republican candidates on the campaign trail — were to win the White House, it’s hard to see much support for clean tech surviving the budget ax. But even if that happens, Austin may well endure. This is a city that takes pride in going against the grain — and doing things itself. “I’m a native Texan, and I know about the entrepreneurial spirit here,” says HelioVolt’s Stanbery. “People believe that if you want to do well, you need to work hard.” That’s an ethic clean tech will need in the difficult days ahead.

By Adam Davidson
via npr.org

Three months before the Japanese attack on Pearl Harbor, Angus Echols, a member of DuPont’s executive committee, began shaping the chemical giant’s plans for the coming decade. The U.S. would soon be at war, he explained in a series of memos and high-level discussions, and the company needed to aid the effort. But it also needed to think far ahead. When the war ended, Echols argued, women would want to buy cheap stockings. And where was DuPont on this crucial matter?

Echols got his way. While DuPont provided nylon (among other things) to the U.S. military for parachutes and tires, its research department studied how to make stockings on the cheap and did work that eventually led to Orlon and Lycra. And eight days after the Japanese surrender, DuPont announced that it would shift nylon production from war materiel to ladies’ undergarments. Not only did veterans have solid jobs to return to, but the company dominated the burgeoning synthetic fiber and plastics business for decades to come.

The image of thousands of industrial researchers in white lab coats and thick black glasses may seem antiquated, but corporate research and development is more important to our economy now than ever. Whereas a company used to be able to invent some new thing — nylon stockings, say — and spend a decade making money off it, today’s products have much shorter shelf lives. The venerable Western Electric 500 telephone — you know, the boxy one with the slanted face for the dial or, later, touch pad — was developed in 1949 and remained one of the most popular models through the 1980s. Now a phone like the Motorola RAZR or the first-generation iPhone goes from coveted totem to valueless relic (to hipster accessory) in a year or two. I recently visited an Amish buggy auction where salespeople were showing off the awesome features — easy-clean windows, retractable carved wooden cup holders — on the new year’s model. These days, all successful U.S. businesses have become innovation-based companies.

As consumers, we don’t care if our products are invented in the U.S. or in some other country. But as a work force, we should. While much has been written about Chinese factories’ stealing U.S. manufacturing jobs and destroying our businesses, the two countries have reached an uneasy, unspoken economic agreement over the past decade. American firms find they can compete with low-cost manufacturing by constantly developing new products. This has worked out well for U.S. companies — though, notably, not for U.S. manufacturing workers — because there are much fatter margins in owning the intellectual property of a hot new thing than there is in churning out a huge volume of cheap components. And these higher margins manifest themselves in higher salaries for American workers.

Partly as a result, the U.S. still dominates the world of research and development, as it has for more than a century. The country spends nearly double the annual R.-and-D. budgets of Japan and Germany combined. But China’s decadelong rise from a nonplayer in R. and D. to the world’s second-largest spender poses a serious threat. A recent study by the Battelle Memorial Institute, a research firm, predicts that China’s spending will match ours around 2022. In research terms, that is effectively today.

China already has plans to focus on exciting but vague ideas now — like green energy and bio- and nanotechnology — that will most likely become products in the 2020s. And if U.S. government labs, university departments and corporate researchers aren’t already on top of the next generation of breakthroughs, the country will very likely fall behind in 10 or 20 years when those innovations become marketable products. Our global competitiveness is based on being the origin of the newest, best ideas. How will we fare if those ideas originate somewhere else? The answers range from scary to scarier. Imagine a global economy in which the U.S. is playing catch-up with China: while a small class of Americans would surely find a way to profit, most workers would earn far less, and the chasm between classes could be wider than ever.

Unfortunately, there isn’t much to prevent this trend. Overall government research spending (relative to G.D.P.) has been heading down since its peak in the space-race years of the 1960s. And because it’s nearly impossible to imagine Congress significantly increasing research financing, any growth in long-term R. and D. will be, largely, up to the private sector.

And that’s the real problem. From a C.E.O.’s perspective, long-term R. and D. is a lousy investment. The projects cost a lot of money and often fail. And even when they work, some other company can come along and copy all the best ideas free. Charles Holliday Jr., the C.E.O. of DuPont who retired three years ago, told me that it’s tough to get investors to think more than two years ahead — at most. “The stock market pays you for what you can do now,” he said. As a result, DuPont isn’t the only American company changing the way it does R. and D. Corporate research labs at I.B.M., AT&T, Xerox and others have also been slimmed way down or cut altogether.

The government can’t simply pass a law forcing companies to think longer-term, of course. But Congress can do other things, like shift incentives away from rampant short-termism. It could, for example, reduce capital-gains taxes on stocks held for many years. Alternately, companies could create different classes of stock, giving more voting rights to those who hold the stocks longer. Another idea popular among businesspeople: enticing foreign Ph.D. students to develop their new ideas in the U.S.

The question of how U.S. companies will make a buck has probably never been more important. With one war over and another winding down, thousands of young men 25 and under, many without college degrees, will soon enter a work force with no place for them. (Their unemployment rate is nearly double the already miserable national average.) We have no idea how an Iraq war veteran will make a living a decade or two from now. We can only hope there is someone still being paid to figure it out.

By Jim Witkin
via www.nytimes.com


In the world of computers, Silicon Valley is recognized as the spawning ground of technology start-ups. For financial institutions, Lower Manhattan has long been the place to set up shop.

And of course Detroit has historically served as the epicenter of American automaking, evolving in recent times from a manufacturing center to a headquarters city. Still, there is no guaranty that its dominance is permanent.

Among the places vying to become a nexus of automotive development is this college town of 140,000 at the foot of the Rocky Mountains, some 1,300 miles from the Motor City. Already it has earned a reputation as one of the country’s leading engine and transportation research centers, digging into the dirty business of civilizing some of the industry’s biggest and least sophisticated engines.

The Engines and Energy Conversion Laboratory here, part of Colorado State University’s school of mechanical engineering, was founded 20 years ago by Bryan Willson. The results of its work, especially in fuel injection and ignition systems, have been adopted by major industry suppliers like Delphi, Bosch and Eaton, component providers to auto, truck and industrial engine makers.

Work at the laboratory also involves emerging technologies — smart grids, electric vehicle components, alternative fuels and new twists on conventional drivetrains — that will be vital for transportation systems of the future.

Bringing this work to market will require a new approach. “With such a diversity of new technologies, you are starting to see expertise emerge and new businesses form in places like Silicon Valley, Austin and Colorado,” Dr. Willson said. “I expect much of this will not happen in Detroit.”

Many start-ups, hoping to commercialize these new technologies, have already formed or been drawn to the area as a result of programs sponsored by the city of Fort Collins in collaboration with local companies. The goal, according to Josh Birks, the city’s economic adviser, is to build a critical mass of clean tech and transportation-related businesses.

This transformation started with a competition. In 1990, General Motors, with the Energy Department as a co-sponsor, challenged 25 engineering schools around the country in a program that converted GMC 2500 Sierra pickups to run on natural gas. Though the Colorado State University team did not win the competition, placing second, the technology it developed proved useful for a fleet of natural gas hybrid buses operating in Denver.

From that experience, Dr. Willson took away a guiding principle that would inform his future work. “We didn’t want to just conduct experiments or write papers and have them sit on a shelf,” he said. “We wanted to have impact, so what we do here is the messy work to make sure these innovations actually become products.”

The lab’s messy work was evident on a tour through the facility. In one corner sat an enormous 140-liter natural gas-powered engine that once turned a compressor used on natural gas pipelines. Over the years, Dr. Willson and his students have pioneered several improvements to a computer-controlled fuel delivery system that greatly reduces the engine’s nitrogen oxide emissions.

Today the technology can be found on almost every gas pipeline engine in the country, and it has helped establish a national reputation for the laboratory. Enginuity, a start-up working here, commercialized much of this technology and in 2008 was acquired by Dresser-Rand, which supplies equipment to the oil and gas industry.

Nearby, a team of graduate students huddled around a large engine connected to a bank of diagnostic machines by a tangle of wires. A test of a laser ignition system, in which light rather than electric current runs over fiber-optic cables to optical spark plugs, was under way.

“If you look at the future of automotive engines,” Dr. Willson explained, “you are going to see higher levels of exhaust gas recirculation and a much more difficult ignition problem, one that we are looking to lasers to solve.”

Exhaust gas recirculation directs some of the engine’s exhaust back to the cylinders, where it combines with the air-fuel mix to help reduce nitrogen oxide emissions. Many automotive engines depend on this technology to meet emissions standards.

In the building’s basement is a small-scale electricity grid where, among other projects, students study the impact that a growing population of electric vehicles may have on the power distribution network. Behind the building, a company co-founded by Dr. Willson, Solix Biofuels, is developing a low-cost system for producing fuels from algae. Solix intends to license the technology to large energy producers.

In the far corner of the building was a Cummins diesel engine owned by VanDyne SuperTurbo, a spinoff from Woodward Governor, a large Fort Collins-based energy management company. VanDyne pays to use the laboratory’s resources, including several students, to conduct durability and emissions testing on its SuperTurbo technology, a device that adds a two-way mechanical drive to a turbocharger.

In this wrinkle on conventional turbocharger design, the engine can drive the turbo directly, and the turbo can push power back into the engine through a direct mechanical link, a system known as turbocompounding. Testing suggests that the technology could offer fuel efficiency gains and carbon-dioxide-emission reductions of 30 percent, enabling automakers to use smaller engines.

VanDyne is in its second round of venture financing and talking to several truck and auto diesel engine manufacturers, according to its chief executive, Ed VanDyne. It recently signed a deal with the Army, which will test the SuperTurbo on its tanks and heavy vehicles.

For its first three years, VanDyne occupied space at the Rocky Mountain Innosphere in Fort Collins, a nonprofit business incubation program started in 2007 and supported by the university, local businesses and the city. Since then, the program has created 27 companies that now employ 133 high-tech workers, according to Mike Freeman, who serves as chairman of the Innosphere board.

Mr. Birks, the Fort Collins economic adviser, said the Innosphere was emblematic of the city’s commitment to what he called “the front end of business formation.” Through this program, VanDyne received low-cost office space and free access to patent lawyers and accountants, as well as help developing business plans and raising financing.

High-tech businesses in the area can also participate in one of the local innovation clusters where local start-ups and established companies in related industries work together, with help from the university and city on marketing and skill-building. Initiatives typically involve projects in the community that allow member companies to showcase their capabilities.

Once these start-ups can stand on their own through the efforts of Innosphere or one of the cluster programs, most are choosing to stay in the area, Mr. Birks said. “What we are seeing is that corporate headquarters, research and development and the prototyping all stay fairly close to where the company was incubated and founded,” he said.

Other companies are choosing to move to the area. One, Czero, is working with the engines laboratory to develop a hydraulic hybrid kit that recovers energy when a vehicle is braking and is particularly suited for vehicles that make frequent stops.

“We moved our company from Colorado Springs to Fort Collins because the university and the city have created an amazing atmosphere here, very pro- business and pro-innovation,” said Guy Babbit, chief executive of Czero and director of the newly formed Colorado Engine and Transportation Innovation Cluster.

Because demands on the university’s engine research are increasing, it is planning a large addition, expected to begin construction next year. Dr. Willson has been approved by the city’s planning commission to rebuild the original smoke stacks on the historic Art Deco-style building. But he plans to replace them with wind turbines to generate electricity for the laboratory.