The next manufacuring revolution is around the corner, and Rockford will be ready for it — if NIU EIGERlab has its way. Discover how Rockford’s business accelerator is connecting with key players and changing its game.
Evolution is a difficult pill to swallow. Businesses must adapt to changing markets and technologies, but openly embracing change presents hazards. Sameness is comfort.
Lucky for Rockford, adaptability is where EIGERlab excels.
Now under the umbrella of Northern Illinois University (NIU), Rockford’s business accelerator is undergoing another shift in its model, this time with an eye on new technology. Since it was acquired by NIU in late 2014, NIU EIGERlab has refocused its mission to create in Rockford a regional hub for innovation.
To hear executive director Dan Cataldi speak of it, refocusing NIU EIGERlab isn’t so dissimilar from growing a business. All businesses must adapt and pivot with changing realities.
“NIU EIGERlab has all of the traditional needs of a growing business, so we need to continually focus on who our customers are and what value we can bring to their enterprises,” says Cataldi.
If all goes according to plan, this “Pivot 3.0,” as Cataldi calls it, could help to position the region as a leader in the next generation of manufacturing.
Setting a New Course
EIGERlab has owned several identities since it was founded by a group of manufacturers in 2004 to generate “the next big thing for Rockford.”
In its first iteration, it was a think tank and business incubator for companies in nanotechnology and micromachining. EIGERlab then shifted its focus to business incubation and rapid prototyping. The introduction of several 3-D printers to its Center for Product Development (C4PD) enabled it to support existing companies while generating additional revenue.
In 2010, EIGERlab entered its next iteration, when it came under the ownership of the Rockford Area Economic Development Council (RAEDC) in partnership with Rock Valley College (RVC). This “Pivot 2.0” continued the business incubation/acceleration and C4PD while creating a center for business startup resources and a fast-track education program for entry-level machining jobs. In this stage, EIGERlab was many things to many people, depending on which services they used.
In December 2014, EIGERlab was acquired by NIU in a move that emphasizes its competitive advantage: nurturing early stage companies that create physical and digital products.
“NIU EIGERlab is a commercialization center, and one that’s statewide or perhaps beyond statewide,” says Cataldi. “It’s a hub for the development of these new products, and then it’s a co-working space that supports solopreneurs and pre-revenue companies.”
Gone is the business incubation unit, which at its peak housed 18 tenants in about 35,000 square feet of office and shop space once housed in the Ingersoll building. Instead, a new coworking space at the NIU-Rockford campus provides a casual place for budding entrepreneurs to establish an office. Member companies have access to all of NIU EIGERlab business building tools while also making connections and swapping ideas with fellow entrepreneurs.
“We have a flexible membership model,” says Cataldi. “So, you can use the space exclusively during business hours, you can use it 24/7, or you can be a social member – just accessing the programming, and not the space.”
Nicole Sdao, founder/CEO of NonProfitThrive.com, became a co-working member when she won an award during NIU EIGERlab’s “Shark Tank” style FastPitch competition. During the competition, startup business owners pitch their company for a chance at winning early investment.
Since joining the coworking space in June, Sdao has found a ready network of resources. And, the space feels more professional than her basement office did, when she meets with potential clients and investors.
“I will definitely renew my membership,” says Sdao, who’s also a Freeport chiropractor. “Like any good entrepreneur story, mine started in the basement office. I had no windows, no one to talk to. To be able to step out into the light, have people to bounce ideas off of, have access to resources or conversations with someone who says, ‘I know so-and-so, and they can address that issue for you.’ That’s something I can’t do in my basement.”
Like Sdao, NIU EIGERlab is moving out of the basement. Its relationship with NIU broadens its reach beyond the Rockford area, creating revenue streams and networks that reach across Illinois and the Midwest. As part of NIU’s Division of Research and Innovation Partnerships, the NIU EIGERlab team is now developing an innovation network that will align the work of governmental labs, investors, coworking spaces and builder spaces. Cataldi says his team has already received interest from the Quad Cities and plans to also engage Peoria, Ill.
“We are building an inclusive innovation network,” says Cataldi. “We just want to create a support network where we can understand where all of the resources are, and how we can help companies that are truly innovative to move forward.”
Making the Move
The EIGERlab transition to NIU began with a coincidence. At the same time RAEDC was realigning its goals, NIU was seeking ways to enhance its innovation portfolio and regional economic impact. A partnership was born.
“RAEDC supported and sustained EIGERlab for a number of years,” says Mike Nicholas, RAEDC president. “However, we realized that to truly flourish, EIGERlab needed to be affiliated with a university-level program. RAEDC transferred ownership of EIGERlab to NIU and has supported this partnership financially.”
Dr. Rena Cotsones, NIU’s associate vice president for engagement and innovation partnerships, sees the matchup as a benefit for both the university and the Rockford region.
“Bringing EIGERlab into the NIU family has helped us to accelerate our innovation agenda tremendously,” she says. “EIGERlab is already here and has wonderful connections and resources – a great skillset and team, great relationships with the manufacturing community – so bringing them in advanced our goal, which is to help the community prosper and accomplish regional growth.”
Under its new business model, NIU EIGERlab comes close to self-sufficiency, with NIU providing critical supplemental funding. The new three-year business plan puts NIU EIGERlab on the path to sustainability.
Getting there has required the elimination of the incubation unit, which was replaced with a more fluid coworking space, now hosted at the NIU-Rockford campus on the city’s east side. Cataldi says the space currently has 12 members, though he expects to have 50 within the year.
As much as NIU EIGERlab’s local connections stand to benefit the university, the reverse is also true. NIU’s academic affiliation opens NIU EIGERlab to new grants and research dollars, while also putting the organization in front of more-powerful influencers and thought leaders.
“When we go to a meeting at NIU, we see leadership from Chicago, Quad Cities, Champaign,” says Cataldi. “There are people from all over the state, people from some high levels with some pretty big companies.”
The Next Frontier
Thanks to its new synergy, NIU and EIGERlab are leading the charge in manufacturing’s next frontier.
This November, NIU’s Office for Regional Engagement-Rockford, where NIU EIGERlab is housed, was named home base for the first-in-the-nation chapter of Chicago-based Digital Manufacturing and Design Innovation Institute (DMDII). The federally funded national innovation center is a public-private partnership with one focus: the intersection between advanced manufacturing and Big Data.
“It’s the understanding that new sensors can collect data during the manufacturing process, and it’s the process of collecting that data, processing that data and then utilizing that data in a way that helps transform manufacturing or the product itself,” explains Cataldi. “It’s all about information – collect more, understand better, and use what you collect to modify a process or a product.”
DMDII draws from a $70 million investment from the U.S. Department of Defense and investments from companies around the nation, including some – General Electric, Boeing and Caterpillar among them – that have a direct connection to our region. DMDII seeks input from small and medium manufacturers, develops new ideas and technologies, and then promotes those innovations within the marketplace.
“As we open DMDII’s first chapter, the Rockford region is poised to become a model community in the renaissance of American manufacturing,” says Dr. Dean Bartles, DMDII executive director.
Representative Cheri Bustos, whose 17th District includes parts of Rockford, the Quad Cities and Peoria, considers digital manufacturing the dawn of a new industrial revolution, an opportunity for producers of all sizes to pursue innovation in tandem.
“DMDII not only helps local manufacturers like UTC Aerospace and Woodward, but also the smaller manufacturers,” Bustos says. “This is about training the workforce for that next generation of workers. Smaller manufacturers can partner with the digital manufacturing lab for a very nominal fee and tap into its know-how.”
Cotsones believes the DMDII relationship is a big vote of confidence for Rockford.
“By establishing the first national chapter here at NIU and Rockford, DMDII is saying that it believes we have the collaboration needed and we have the ability to engage with our small and medium enterprises here, and that we have the businesses here that are ready for the next generation of manufacturing,” she says.
But around the Rockford area, many businesses are still asking why Big Data even matters. Why not do things the way they’ve always been done? A recent marketing campaign by GE sums up the real dilemma: A young kid named Owen mentions to friends and family that he has a job at GE, but they fail to understand how coding meets manufacturing.
“Mom and dad are standing there and handing the kid a big hammer, saying, ‘Now that you’re working for a manufacturing firm, you can use Grandpa’s hammer,’” explains Cataldi. “He’s going, ‘No, you don’t understand.’ GE is now calling itself the digital company in the industrial world, as opposed to just a manufacturing company.”
Cataldi recognizes the overlay between data and manufacturing in part because he’s seen it in Rockford.
“If you go to UTC Aerospace, they’re building simulation machines that are processing thousands of simulations a day – on controls for airplanes – to determine how the controls perform and what would happen under certain conditions,” he says. “That’s all programmers, that’s all computers. There are screens, there are data being collected and data being analyzed, and that’s changing the way they build their systems.”
But for smaller or less-adaptable companies, this overlay doesn’t come easy. New technologies often require heavy investments of capital and labor.
“The big companies are going to require more small manufacturers to collect more data, deliver more data, and the little manufacturers that don’t keep up with that are going to fall off the supply chain,” says Cataldi. “They’re not going to become certified suppliers. In order to keep up, little manufacturers in the supply chain have to move forward.”
Engaging the Next Generation
Staying ahead of technology is also a matter of workforce development. Remember Owen, the fictional GE coder? Preparing young people like him is crucial to Rockford’s manufacturing success. After all, some 20 percent of all area jobs are tied to this industry.
Cataldi sees a “tsunami” of impending retirements, as baby boomers gradually leave their high-skilled manufacturing jobs and older business owners follow through on their succession plans. In order for these businesses and jobs to prosper, and for Rockford to maintain its manufacturing dominance, younger people must assume these openings.
“Millennials are individuals who also want to make a difference,” says Cataldi. “You can come out of school and get hired as a PHP programmer and write an app or a game, make some money and have some fun. Or, you can come out of school, work for a manufacturing firm, write a code that can help machines talk together, and that ultimately helps society.”
As Cataldi sees it, the spoils will go to those companies most willing to embrace change and the workers who’ve gathered the right technological skills.
Nicholas sees it, too, as he and RAEDC help to retain Rockford companies and recruit new businesses.
“We’re trying to build that image of Rockford as a center of innovation, and when we have that, it makes it easier for other high-tech companies to want to come here,” he says.
Those companies need a ready supply of highly trained and capable workers – a supply that’s being home-grown in Rockford. Students in Rockford Public Schools are gaining extra exposure to manufacturing and engineering, and getting an extra push toward the necessary internships and training.
Starting in 2016, area students can complete a four-year degree from NIU’s College of Engineering & Engineering Technology while studying at Rock Valley College. The deal is expected to keep talented students in the region and reduce their higher education costs. Large manufacturers in the region, including Woodward and UTC Aerospace, have agreed to host interns and hire graduates.
“We’re starting to produce that pipeline to produce the workers we need to not only fuel the growth of our industries, but to replace all of the baby boomers who are going to retire over the next 10 years,” says Nicholas. “NIU EIGERlab is part of that. DMDII is part of that. The RVC and NIU engineering program is part of that.”
Undoubtedly, students will have the opportunity to engage with budding inventors and entrepreneurs through NIU EIGERlab, perhaps through internships at area manufacturers or by assisting accelerator clients. Cataldi also sees a potential role for business students.
“NIU is full of talented young people with great ideas,” says Cataldi. “I recently had the opportunity to be a ‘Shark Tank’ judge for a business class. NIU is helping to prepare students there for successful careers, whether they go into an existing business or turn their own ideas into a business.”
One virtue of the former EIGERlab was that it provided a one-stop shop, where clients could find business incubation, product development, and state and federal agencies able to guide fledgling enterprises. Housed on part of Ingersoll’s west-Rockford campus, EIGERlab had plenty of flexible space.
But when Ingersoll decided to put the space to other uses, NIU EIGERlab was forced into a hasty move. Resources once housed at the Ingersoll campus have been moved to multiple locations. The coworking and accelerator spaces are now at NIU-Rockford, while the C4PD is near the new Woodward campus.
There’s talk of eventually replicating NIU EIGERlab’s success elsewhere in the region, of creating satellites at NIU’s campuses in DeKalb, Naperville and Hoffman Estates. But for now, the focus is on the foundation.
First, the NIU EIGERlab team is building a network and aligning resources, both in and out of the region, in places like the Quad Cities, where another DMDII chapter was recently opened.
These early stages of the new NIU EIGERlab business plan require a new brand for Rockford, not just as an aerospace center but as a leader in technical and manufacturing innovation.
“Outside of Rockford, what they knew about EIGERlab was that we had a 3-D print center and the ability to help with prototypes, help with design of products and help with commercialization,” says Cataldi. “If you go down to Springfield and talk to legislators or visit Carbondale or Champaign, they knew EIGERlab as a commercialization center with 3-D printing that can help you to take products to market. NIU understood that, because NIU spends its time all over the state, and outside the state.”
Radically changing a business model is tough, and there still are challenges to come for NIU EIGERlab. But Cataldi is optimistic about this new phase in NIU EIGERlab’s existence.
“EIGERlab has always been a good idea and NIU’s investment is taking it to a whole new level,” says Cataldi. “EIGERlab is not only being sustained in the region, but we’re helping to link the region to a set of innovation assets that will allow for a broader regional success.”
What is the Digital Manufacturing and Design Innovation Institute?
DMDII is part think tank and part advocate for digital manufacturing technologies.
A collaboration with UI Labs, DMDII is funded by $70 million from the U.S. Department of Defense and contributions from companies such as Caterpillar, Lockheed Martin, Boeing and Microsoft. It receives input from academic/nonprofit organizations like University of Illinois, NIU and University of Wisconsin-Madison. Members agree to participate in research teams while creating solutions to digital manufacturing challenges.
Each year, DMDII releases “project calls” in which member organizations provide resources to research a given question. Project calls from 2015 encompass topics such as cybersecurity for manufacturing technology and open-source software. Once a project is completed, the results are shared with DMDII members as well as small and mid-sized manufacturers around the country.
The DMDII chapters in Rockford and the Quad Cities provide a bridge between organization members and area manufacturers.
“Our mission is not only to advance the technology but to help medium-to-small enterprises adopt the technology,” says Dr. Dean Bartles, DMDII executive director.
Meet an NIU EIGERlab Client: Nicole Sdao, founder/CEO of NonProfitThrive.com.
Nicole Sdao’s startup business began with a vexing problem: How can nonprofit organizations host a compelling fundraiser, without having to “reinvent the spaghetti wheel?”
“It arose from being frustrated with sitting around the table, thinking about spaghetti dinners,” says Sdao, who’s also a chiropractor in Freeport, with husband Roger. “Other people have done spaghetti dinners, so why are we trying to figure out how much we’re going to need and how much to sell tickets for, and how many volunteers we need? I started Googling and there wasn’t anything like this out there.”
Sdao set out to create a website where nonprofits could swap fundraising ideas for a small fee, essentially selling every detail needed to host an event from start to finish. In early 2015, she visited the Small Business Administration, which was then hosted at NIU EIGERlab, and began pursuing a spot at the accelerator’s “Shark Tank” style FastPitch competition.
Sdao’s pitch was so well received that she won a six-month membership to NIU EIGERlab’s new coworking space. Working there has allowed her to move out of her basement office and to build unexpected connections. It’s provided an ideal spot to meet with potential clients and investors, and the resources have helped her to identify a stronger mission.
“Things can happen at a faster pace than if left to my own devices, because they have the connections to resources,” she says. “That one introduction to so-and-so – that really helps. And being able to talk through something helps, because my business model has changed, and I don’t know in what timeframe that would have happened otherwise.”
Meet an NIU EIGERlab Client: Daniel Orto, president of Air Technology Solutions.
NIU EIGERlab’s many resources have been a boon for Daniel Orto, whose company distributes product for a manufacturer of air purification technology.
“We sell all over the U.S. and across the world – places like Korea and Germany,” says Orto. “Our product removes diesel carcinogens from the air, so we sell to a lot of automotive maintenance facilities, police stations and 911 dispatch centers.”
Orto was first introduced to NIU EIGERlab through the Small Business Administration, which was then located down the hall from the Illinois Procurement Technical Assistance Center (PTAC), an agency that helps small businesses to bid on government contracts. The PTAC provided an essential resource for landing new customers, says Orto.
Since the company was moved from New Jersey to Rockford in 2010, Orto has also started working with NIU EIGERlab’s Center for Product Development, in pursuit of new technologies. Orto says the company’s newest product is still in its earliest stages, but is expected to impact fire departments.
“We have lots of ideas, but nothing ready for development yet,” he says. “When we’re certain we know what we want to do, we’ll go there for help. I know they have electrical engineers who can help us to design these products.”