Taking aim homeland defense

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Duncan Stewart is the head of the new Homeland Defense Alliance, a business incubator designed to create and attract security-sector businesses to Colorado.

Colorado Springs has a new player in economic development and job creation: the Colorado Homeland Defense Alliance.
The alliance joins the Colorado Springs Technology Incubator, the Rocky Mountain Technology Alliance, the Colorado Springs Economic Development Corp. and the Center for Homeland Security in an attempt to develop new technology companies in El Paso County.
The fledgling organization hopes to create businesses that focus on homeland security and defense technology — based on expressed needs from Colorado’s defense industry.
The organization, a spin-off from the technology incubator, has a single employee and is currently creating a board of directors. Duncan Stewart will lead the alliance, and anticipates that it will represent clients such as NORAD, U.S. Army Northern Command and private sector companies.
“Just as the Denver area is becoming a niche market for bioscience, we want Colorado Springs to become a niche market for defense technology,” he said. “We’re going to focus on a niche that the technology incubator was unable to fill.”
The group received $25,000 from the state and has raised matching funds for that amount. Colorado also has promised an additional $125,000, as long as the group can raise matching funds.
“We’re also hoping to raise funds by creating partnerships with some of the large defense companies in town,” Stewart said. “We’re going to be networking, making those connections between small start-ups and big corporations.”

Good timing

The time is ripe for organizations to develop new technology companies, said Dr. Steve Recca, director of the Center for Homeland Security at the University of Colorado at Colorado Springs.
“It’s a comfortable environment — plenty of room to grow,” he said. “It’s not cut-throat. People are sharing information. My interest is to see companies grow from the research at the public level to the private company to creating a security contract with the federal government.”
Recca is a board member for the Homeland Defense Alliance, and Stewart is also recruiting from other sectors — hoping to create the right entrepreneurial mix.
The organization will go beyond typical online assistance to obtain federal contracts, Stewart said.
“We’ll be much more proactive,” he said. “We’ll be helping write a business plan, raise capital — a variety of things that will help these small start-ups be successful.”

Successful model

The alliance is modeled after the Washington, D.C.-based Chesapeake Innovation Center, which has been in operation since 2003. The center is just outside Fort Meade, Md., close to the Baltimore and Washington, D.C., markets, and in the same county as the National Security Administration.
“It’s a power location,” said Alexis Henderson, spokeswoman for the CIC. “We have eight out of the 10 top defense contractors located in the county. We noticed a tremendous spike in activity after 9/11, and the industry has steadily grown since then.”
In Chesapeake, major companies let the incubator know what kind of technology they need — and the incubator finds it.
“The companies give us a shopping list of their technology interests, and we go out, spread the word, and look for this type of technology,” she said. “We’ve been very successful.”
In the four years since the Chesapeake center opened, five companies have been created and now are profitable outside the incubator.
“We’re not sure how that ranks with other incubators,” said President Bob Hannon. “But we’re very proud of the way we’ve been able to create companies that stay in the area and create jobs.”
In Colorado Springs, the goal is similar, to create companies for technologies that larger defense companies need. Although Fort Carson, the Air Force Academy, Peterson Air Force Base and Schriever Air Force Base are in close proximity, Stewart said the incubator is focused on growing companies for the entire state.
“We’re going to provide a whole new set of connections,” he said. “The whole point behind the alliance is creating partnerships, networking — collaboration with government, military, university and corporations in the aerospace, defense and security industries.”

Funding difference

There is one major difference: the Colorado Spring’s organization hopes to raise money from federal grants, as well as fees from major defense contractors. In Maryland, the CIC was created using local money.
It is owned by the Anne Arundel County Economic Development Corp.
“It’s very much a local initiative,” Hannon said. “We did a feasibility study of the different applications that we could create businesses from, and found that because of our proximity to D.C., and our location close to the National Security Agency, we decided there was a need there that was both appropriate and opportune.”
The Colorado Homeland Defense Alliance is unlikely to receive the same support from El Paso County, which is struggling with major budget cuts.
But Recca believes funding will come from the federal level.
“We certainly don’t think the state will be a major source of funding,” he said. “We think some funding will come from the federal government providing seed money. And we think we’ll get funding from companies in the defense sector.”
Stewart isn’t worried about funding sources. He said there are a variety of ways to earn money to make the alliance self-sufficient and successful.
“We’ll be charging fees to some of the large corporations to go out and find what they need,” he said. “Some companies need a grant writer, but not on a full-time basis. We can supply the contract worker, and they can use that person as long as they need.”
The homeland security field is so new — and still growing — that Recca believes there is plenty of room for all the organizations to be successful.
“The seed money from the federal government comes from FEMA (Federal Emergency Management Agency) regions,” he said. I think there’s definitely enough funding to generate interest in defense and homeland security technology companies — for those companies to be productive. It’s a very promising field.”