Arizona Technology Report - January 2011

Arizona Technology Report Arizona Technology Council: The Voice of the Technology Industry

In This Issue Another Door Opens ... Page 2 Winning Ways ... Page 5 Change Agents ... Page 6

Who We Are The Arizona Technology Council is a private, not-for-profit trade association with a mission to CONNECT, REPRESENT, and SUPPORT the state’s expanding technology industry.

Phoenix Office One Renaissance Square 2 N. Central Ave., Suite 750 Phoenix, Arizona 85004 Phone: 602-343-8324 Fax: 602-343-8330 info@aztechcouncil.org

Tucson Office The University of Arizona Science and Technology Park 9040 S. Rita Road, Suite 1150 (near I-10 and Rita Road) Tucson, Arizona 85747 Phone: 520-829-3440 Fax: 520-829-3441 tucson@aztechcouncil.org

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Jan. – Apr. 2O11 aztechcouncil.org

President’s Message Partners. Who can say they can go through life never needing a partner – in life, in love, in business? At the Arizona Technology Council, we consider ourselves partners with our member companies to ensure their success, because we know in today’s climate especially it can be tough to go it alone.

For our nearly 600 member companies the Council works hard to make sure we can offer the programs that help organizations grow and prosper. That’s important to 43 percent of our member companies, because they have no more than three FTEs. With our assistance, they have a shot at grabbing that brass ring.

And while they may be small in size, most are doing big things—from aerospace and defense to renewable energy, from research and development to support services. Many are shaping our history in science and technology.

On the pages that follow this message we offer a glimpse of the programs that we have for professionals. Some exist for personal development, some offer ways to stretch a dollar, all fulfill a need.

Steven G. Zylstra, These programs and others like them President and CEO, would be impossible to host without Arizona Technology Council teams of people working behind the scenes to make them happen. With the help of our staff, “ambassadors” and other volunteers, we start the business day with a breakfast seminar series called Council Connect and end the day with networking opportunities at our After 5 events. Often we collaborate with other organizations like the Phoenix Chamber to bring you events, such as the Legislative Kickoff and Business Expo. We even take time to mark successes in Arizona’s technology community with our annual Governor’s Celebration of Innovation. (This year’s winners also are named here.)

Our impact and reach continue to grow. I recently returned from heading a group to China to begin building the bridges that we expect to lead to new markets for our members and the rest of Arizona’s technology industry. The Council is not just statewide; it’s now global. Also, on these pages we share observations from the road written in a blog by a member of our group.

I invite you to learn more about the Council and what we’re doing. We’re proud of what we offer our members as well as what they accomplish every day. After all, that’s what partners are for.

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Another Door Opens

Council group travels to seek new opportunities in China developers in five countries, including the United States. To customers from all over the globe, Beyond Soft provides services such as software and website development, application testing and localizing software for the Chinese market.

Xi’an The Council's Merry Merrell, director, marketing and communication (second from left), and Steven G. Zylstra, president and CEO (second from right)

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s the world continues to recover from the recession, one lesson learned is businesses no longer can count on customers coming to them. To stay competitive, companies need to reach out, even if that means going to the other side of the globe.

With this in mind the Arizona Technology Council recently led a trade mission to China to introduce members of the delegation to business opportunities through meetings with government officials, industrial park leaders, peer companies, and consumers. The trip was organized in conjunction with the Arizona Department of Commerce and the Arizona U.S. Export Assistance Center.

Observations of cities visited in the 10-day trip that began Oct. 27 were chronicled in a blog by Karen Dickinson, an attorney with Quarles & Brady in Phoenix. The cities and highlights included:

Beijing The group visited Zpark software park with over 200 software and IT companies employing 20,000 people. While companies such as Oracle, IBM and Thompson Reuters are located in this software park, amazingly 95 percent of the companies in the park are Chinese. One of those companies is Beyond Soft, which won Best Employer in China in 2010. Beyond Soft is part of the burgeoning software outsourcing industry in China. It employs 4,000

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We were hosted by the Xi’an Hi-Tech Industries Development Zone, which was founded in 1991 as one of earliest high-tech parks in China. It now houses more than 14,000 companies employing 250,000 people. And there are 55 other high tech parks in China just like this one. The park’s focus is on four areas: electronic information such as IT, software and telecom; biomedical; advanced manufacturing research and development for industries such as semiconductors and optics; and services such as law offices and design. Fifty new IP applications are filed by the companies in the park per day. While there are multinational companies with offices in the park—such as Applied Materials, NEC, Fujitsu, Intel, Micron, Oracle, Sybase, SAP and IBM—most of the companies are Chinese. The software park alone has 80,000 employees working for 900 companies. Special incentives are offered for U.S.-based software companies to locate in Xi’an software park.

Zhangjiagang The port city has an entrepreneurial government that has been one of the first to embrace each of the many changes since China opened to the West in 1979. Not surprisingly, Zhangjiagang has a burgeoning solar industry as well as major manufacturing. We were hosted by high-level government officials from the Zhangjiagang Economic Development Zone as well as the Investment Promotion Bureau. This is a “model” city, one that other city governments visit as an example of how to create a livable, economically successful city. In fact, the average annual income

in this small city is one of the highest in China: $15,000. The Zhangjiagang government has created parkland and lakes, and has strict rules in the city regarding cleanliness and maintenance.

Because of the city government’s intense focus on sustainability and environmental regulation, it is known as one of the most livable cities in China, and it certainly lived up to its reputation. This city really is the new China.

Suzhou Known as the “Venice of China,” we visited the brand spankin’ New Town. In that town is the Suzhou Industrial Park, a cooperative project between the Chinese and Singaporan governments. Once again, the scale of this industrial park, the sophistication of the technology and the beauty of the living areas are indescribable.

Hangzhou Eighty of the top 500 Chinese private companies are headquartered here.

We visited the Hangzhou North Software Park Service Center, which provides one-stop free services to companies in the park. The companies include the creative industries—multimedia, Internet, advertising and entertainment— along with IT and software. We had a quick visit with a Chinese website development company, Panshi, with 1,600 employees helping companies in the Zhejiang province in which Hangzhou is located.

Shanghai A highly educated city, with 65 colleges and universities, 51 graduate schools, and half a million students. This large talent base, the lifestyle, and special incentives have drawn many companies to locate in the Zhangjiang Science Park, growing quickly after 2002 due to special preferential policies such as a 14 percent rebate on the usual 17 percent value added tax for software companies located in the park. Many large private and publicly traded Chinese companies—such as ZTE, Lenovo, Apexone and Shanda—join multinationals, such as Infosys, Capgemini, Dupont and Honeywell, in the park and our own ON Semiconductor and Freescale. In fact, Park is home to more than 5,000 companies with 150,000 hi-tech employees. That’s more than all the hi-tech employees in all of Arizona! And the companies at the park are provided support services such as human resources talent searching, a shared data center, even a patent processing center for free.

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Why is this important to the economy and Arizona businesses?

Because exports mean jobs. And lots of help is available for Arizona companies that want to export. A National Export Initiative (NEI) is now in effect focusing on five areas: access to credit, especially for small and mid size firms; more trade advocacy and export promotion efforts; removing barriers to the sale of U.S. goods and services abroad; enforcement of trade rules; and pursuing policies that will increase global economic growth so that there’s a strong worldwide market for U.S. goods and services.

Some first steps have been taken as part of the NEI that could be important to your business. For example, until now a U.S. exporter of encryption-based products, such as a cell phone or a network storage system, was required to request a technical review from the federal government prior to export, a process that takes between 30 and 60 days. A proposed new rule could eliminate up to 85 percent of all the technical reviews of these products, helping U.S. companies access the global market more quickly.

In addition, Congress recently passed the U.S. Manufacturing Enhancement Act, which suspends duties on a number of imported goods that are of special interest to U.S. manufacturers. The bill provides relief to manufacturers from duties they had to pay for imported inputs, such as chemicals and specialty parts. This is expected to reduce the cost to U.S. manufacturers, making products competitive in the global market. And, the Small Business Administration has recently made changes making it easier for small and medium sized businesses to get export financing. More changes are planned as part of the NEI, so stay tuned.

—Karen Dickinson

Arizona Technology Council's delegation to China

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Connect with the Arizona Technology Council

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he Arizona Technology Council is a private, not-for-profit trade association with a mission to connect, represent and support the state’s expanding technology industry. With nearly 600 member companies throughout the state, the Council is dedicated to helpings its members succeed.

Roy Vallee, chairman and CEO of Avnet, was featured in this year's Keynote Speaker series.

It uses a three-pronged approach to serving members’ needs:

Connect: Bringing Innovators Together With more than 130 events each year, the Council offers abundant opportunities to get involved. Members can find like-minded peers on committees, showcase their companies at Lunch and Learn events, or come armed with business cards to the monthly After5 networking series. Members get the chance to display their companies’ capabilities to prospective partners and customers at the Partnering Conference, an annual one-day matchmaking event.

Represent: Providing a Voice for the Technology Industry The Council’s public policy advocacy efforts have resulted in Arizona having one of the friendliest environments in the country for research and development. Each election year the Council publishes its Vote TechSmart guide to highlight state legislators who support a technology agenda as well as those who don’t.

In 2010 the Council was instrumental in the expansion of R&D tax credits to be refundable as a source of capital for smaller innovation-based companies and an incentive for R&D investment.

Participants at this year's Partnering Conference

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Additionally, the Council publishes TechConnect, Arizona’s technology magazine, which chronicles innovation throughout the state.

Support: A Variety of Programs Member companies have access to free job postings on the Career Center powered by Jobing.com, as well as reduced prices on insurance, computer products, and more with the affinity and member-to-member discount programs. These services can cut company expenditures and increase profits.

Additionally, the Council has resources for business leaders and entrepreneurs, such as the CEO network, the mentoring program and the newly launched Consultants on Demand service, which provides a comprehensive listing of temporary contract opportunities for businesses seeking help and professionals seeking work.

Winning Ways

Governor’s Celebration of Innovation honors the best of the best in the tech community Members of the state’s technology community gathered to honor their own at the annual Governor’s Celebration of Innovation held recently at the Phoenix Convention Center.

The event is presented by the Arizona Technology Council and the Arizona Commerce Authority. This year’s theme of Arizona in Motion was appropriate as companies continue to move forward in the light of the economic news.

The winners and the reasons for their recognition are: D O neNeck IT Services People’s Choice Lifetime Achievement Award Steve Sanghi, president and CEO of Microchip Technology in Chandler. He is credited with leading the evolution of the company into one of the most successful microcontroller companies in the world as well as being a champion of science, math and engineering education in schools.

D C hairman’s Award - Sandra Watson, chief operating officer of the Arizona Commerce Authority.

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d Denison Business Leader of the Year - Robert Breault, president and founder of Breault Research in Tucson D W illiam F. McWhortor Community Service Leader of the Year - Dr. Jack Johnson, president of SciEnTeK-12 Foundation in Tucson.

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ioneering Award - GlobalMedia Group in Scottsdale. CapSure/CONi system that includes images in electronic medical records.

D G reen Innovator of the Year - Global Water Resources in Maricopa. FATHOM platform to help save water.

D G lobal Competitiveness Leadership Michael Manson, co-founder and CEO

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• Scott Olson, Highland High School in Gilbert, Project: “A Novel Fiber Optic Backlight System Utilizing Controlled Light Attenuation” • Stan Palasek, Sonoran Science Academy in Tucson, Project: “Heat Stress Reveals Hexose Transport Rates in Saccharomyces cerevisiae” • Varun Ramesch, Hamilton High School in Chandler, Project: “A Parallel Algorithm for Real-Time Hand Gesture Recognition”

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egislators of the Year - Sen. Barbara Leff, R-Paradise Valley, and Rep. David Stevens, R-Sierra Vista.

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he Tech Ten legislators honored for their support of technology were Sens. Manuel Alvarez, D-Elfrida; Frank Antenori, R-Vail; Rebecca Rios, D-Apache Junction; and Reps. Chad Campbell, D-Phoenix; Bill Konopnicki, R-Safford; Lucy Mason, R-Prescott; John McComish, R- Ahwatukee; Michele Reagan, R-Scottsdale; Kyrsten Sinema, D-Phoenix; and Andy Tobin, R-Dewey.

New service for employment seekers and employers

Want to find the most comprehensive listing of employment opportunities throughout Arizona?

Thanks to a partnership between the Arizona Technology Council and Jobing.com, you can.

It’s a win-win for users of the Council’s Career Center powered by Jobing.com.

Job seekers get the chance to post their

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of Motor Excellence in Flagstaff, which makes electric motors for vehicles ranging from bikes to cars.

D Innovator of the Year/Start-Up

Company - WebPT in Phoenix. Webbased system for physical therapists to keep records and schedules.

D Innovator of the Year/Small Company Breault Research in Tucson. APEX, an optical engineering application.

D Innovator of the Year/Large Company

- IBM Corp. in Tucson. System Storage Easy Tier application that uses solid state discs to speed access time to data on computers.

D Innovator of the Year/Academia Arizona State University’s School of Life Sciences in Tempe. Deep-brain stimulation technique to help various neurological and psychiatric conditions.

D Teacher of the Year - Robert Hobbins from Sonoran Science Academy in Tucson.

D Students named Future Innovators of

the Year and their projects are: • Kurt Andres, Pusch Ridge Christian Academy in Tucson, Project: “Augmenting Energy Efficiency by Ameliorating Mass Imbalance in Wind Turbines”

resumes to apply for open positions and allow employers to find the resumes in the Jobing. com database. In turn, employers get their positions in front of industry professionals who come to the Council for support.

It gets even better for employers. Positions can also be posted for a fee in more than 100

Career Centers in the community. Through Jan. 31, Council members get a 50 percent discount off the regular rate of $349. Nonmembers can also post for only $389.

For more information, visit the Council Web site at www.aztechcouncil.org.

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Change Agents

Get the chance to innovate and create We are facing changes that cannot be addressed with traditional methods, because change itself has changed. We no longer face incremental, predictable changes, but massive unprecedented shifts.

Many solutions that worked in the past now simply cause more problems. A whole new perspective is needed to successfully approach this new era.

Your managers and other employees can tap into their own creative and innovative competencies to help them develop winning approaches to change, thanks to the Arizona Innovation Institute.

The Arizona Innovation Institute develops creative thinking skills and decision-making methodologies through classroom offerings and on-site sessions for specific client needs. With either approach, the Institute can provide tools and methodologies for creative thinking and decision-making to drive innovation.

Dr. George Land and FarSight Group, Inc., an Arizona firm with decades of experience helping organizations innovate, will bring together a unique combination of innovative methodologies and collaborative decision-making technologies. More than 100 organizations have successfully used this proprietary, systematic approach to new product, service and front/back-end processes. In turn, you’ll identify new ways to discover important and emerging customer needs, processes for creating business strategy, and methods for creating breakthrough innovative solutions to existing business problems.

The business applications for the techniques you’ll learn include: D N ew market identification D M anufacturing D N ew product development D P

roduct delivery D C

ustomer service D O rganizational design D S

ales and marketing” D I T and process alignment D R

isk management Who should attend the Arizona Innovation Institute programs? Any

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employee who can contribute to innovation, including executive leaders, business unit and product line leaders, workers with profit and loss responsibility, and research and development team members.

A full calendar of sessions is set for 2011 starting Jan. 26, with registration

Dr. George Land

available at www.azinnovate.org. For more information, contact Kim Kressaty at kkressaty@aztechcouncil.org or 480-654-4669.

Permanent Solutions Temp experts offer boost to small businesses

There seems to be no shortage of temporary workers when it comes to getting business done. If only there were “temporary experts” to assist small businesses.

Now there are.

The Arizona Technology Council has partnered with Go1099, an Arizonabased career consulting company, to help small businesses manage costs and organizational structure by providing experts for contract services. All Council members now can access Go1099.com’s consultant and professional contract services as well as post projects and special assignment needs without charge.

“This free exchange marketplace of talent and jobs is a tremendous resource to our members and one that they can trust,” said Steven G. Zylstra, president and CEO of the Arizona Technology Council. “This Council is completely aligned with Go1099’s vision of boosting Arizona job creation and business performance.”

This convenient online resource provides businesses with the flexibility to access high-caliber talent and expertise without the expense and commitment of long-term payroll employees, equity dilution of partnership, or shared ownership.

By providing the ability to scale capacity and production up or down rapidly and efficiently, Go1099 offers freedom and flexibility to its clients.

“Our goal is to accelerate local business growth and build a community that is based on trust and relationships,” said Dick Stover, CEO of Go1099. “We are pleased that the Arizona Technology Council shares this community vision and is taking the important step of offering its members this value-added service. Everyone in the Greater Phoenix area wins.”

For more information, go to http://aztechcouncil.go1099.com or visit the Council’s home page www.aztechcouncil.org and click on RESOURCES then CONSULTANTS ON DEMAND. Go1099 also offers without charge a prime opportunity for consultants and professionals to access and bid on projects, increase their income and actively manage and optimize their career. Consultants and professionals work with the small business clients of Go1099 on a contract basis, skills and knowledge are kept fresh, and diversified experience is gained. Go1099 also has a professional coaching service to mentor professionals on business creation and how to successfully become an independent contractor. Go1099 only charges for results in the form of overrides on actual contracts between businesses, consultants and professionals.

For more information, contact Stover at dick@go1099.com and 480-585-5580.

At the Top Imagine participating in a group whose members are peers with whom you can discuss your most difficult decisions.

For CEOs, those decisions can indeed be difficult, if not life-altering.

The Arizona Technology Council addresses this need by offering its members the CEO Network, a professional peer-to-peer board of advisors assembled to help business leaders reach their highest levels of success. CEO Network provides in a confidential, non-competitive environment, Network members can share experience-based knowledge to solve business problems addressed by every businessperson. It’s like having your personal board of directors.

Each trusted peer group consists of 10 to 14 individuals with diverse backgrounds who meet once monthly to discuss business issues. Meetings are chaired by an experienced entrepreneur and follow

CEOs help each other with challenges a structured protocol to ensure rules of engagement are followed and topics are relevant and productive.

Although important relationships are often forged within the group, CEO Network is not a “leads” group. It is also not a networking association or intended for members whose companies are in “turnaround” situations.

Members are the CEOs, presidents or owners of their respective companies, with decision-making and budgetary responsibilities. They are Council members in good standing with a minimum of three years’ experience (equivalent experience will be considered). Over a one year period each member must offer at least two business issues for discussion.

To become a member each person must complete an application, which shares information about his or her business that includes revenue, number of employees, a

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description of products and services, and current business issues. Also evaluated are the candidate’s experience, education and core competencies to determine the “fit” with the group. Vendor/client associations will be evaluated for potential issues and competing firms will not be placed in the same group.

An annual nonrefundable fee of $350 for returning members and $450 for new applicants is payable upon acceptance of an application. (Comparable programs offered by for-profit firms begin at $2,500 per year.) The fee covers session materials, refreshments, and parking.

Applications for the 2011sessions will be accepted through Jan. 7. For additional information, contact the Arizona Technology Council at 602-343-8324 or events@aztechcouncil.org.

connecting & empowering technology The Arizona Technology Council brings together all sectors of progress in Arizona—networking, small business, academia and government to the top thinkers in technology.

We promote exposure and visibility by unifying technology groups around common goals. Join today at our Web site, www.aztechcouncil.org.

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Second Chance Keep it green with Technology Recycling Day

Management and Staff

Every year our nation’s landfills are filled with toxic waste that once sat on our desks and in our homes.

Computers and other electronics contain lead and other poisonous materials. To help, the Arizona Technology Council is preparing to host the first statewide Technology Recycling Day of 2011.

The Jan. 22 event will be held 8 a.m. to 3 p.m. in conjunction with Westech Recyclers. Any used or no longer operating computers or electronic equipment will be accepted for recycling and refurbishing. If recycled, the materials received will undergo domestic and global processing through responsible processors.

Material will be handled in accordance with all state and federal recycling regulations.

Everything donated will help make an impact on our environment. Americans disposed of 157 million computer products, 126 million cell phones and more than 20 million televisions in 2007, according to the most recent figures from the U.S. Environmental Protection Agency. Only 18 percent of the computer

Steven G. Zylstra President and CEO products and TVs and 10 percent of the cell phones were recycled.

Accepted at Recycling Day will be computer equipment, such as PCs and laptops; point of sale, telecom, printing and audio/visual equipment; electronic components; miscellaneous electronic items; and surplus metals and wire and cable.

All Data Doctors locations will be accepting donations. For their locations and hours, got to www.datadoctors.com/locations.

Additional information and locations can be found at the Council site, www.aztechcouncil.org.

We’ve Got You Covered

Workers’ comp coverage need not be too pricey If you’re doing business in Arizona, you can’t afford to be without workers’ compensation insurance. Now Arizona Technology Council members can make the expense better for the bottom line.

The Council has entered into a partnership with SCF Arizona, the state’s largest provider of workers’ compensation insurance, that could save members money. For example, policyholders with established good safety records may qualify for substantial premium savings by paying 10 percent less than the standard rate if they are SCF Arizona policyholders. Those who qualify for SCF Western or SCF Premier, two subsidiaries of SCF Arizona, could receive savings of 20 percent or 40 percent, respectively.

There is also an upfront 5 percent discount for implementing an approved drug and alcohol policy. SCF also allows policyholders to receive a 5 percent discount at the beginning of the policy year for additional savings at policy renewal time. And depending on the business, deductibles can range from $100 up to a maximum of $25,000 per claim.

Because safety is the key to whether workers’ compensation costs rise or fall over

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the long run, SCF offers its Association Safety Program, which provides myriad training opportunities designed to make workplaces safer. Member businesses with good safety records and SCF policies can enroll in the program, which carries no cost, but offers a number of benefits.

For example, policyholders who earn individual dividends for their good safety records also are eligible to receive an additional ASP bonus dividend should the SCF Board of Directors declare one.

(Dividends are never guaranteed, but they can be declared annually.) Also, SCF provides safety-related services to help ASP members maintain good safety records and manage workers’ compensation costs, both of which can translate into lower premiums.

SCF’s loss control consultants will work with you to identify and solve potential workplace hazards to reduce workplace injuries. You also can receive SCF’s popular Safety Plan Template so you can design a safety plan that is unique to your business.

Members who want more information can contact Council President and CEO Steven G. Zylstra at sgzylstra@aztechcouncil.org.

Deborah Zack Director, Membership Services Merry Lake Merrell Director, Marketing and Communication Jamy Battle Director, Finance and Administration Leigh Goldstein Managing Director, Programs & Events Don Rodriguez Editor, TechConnect Ron Schott Executive Emeritus Justin Williams Director, Tucson Office Don Ruedy Executive Emeritus, Tucson Office Dan Semenchuck Sales Representative George Land Director, Arizona Innovation Institute Kim Kressaty Deputy Director, Arizona Innovation Institute Joe Tidwell Project Manager, GetSTEM-AZ, and State Director, Project Lead the Way Phillip Huebner Director, Arizona Science and Engineering Fair