Thursday, November 16

Making the Most of Tourism

New Jersey counties are 10 to 15 years behind the rest of the mid-Atlantic region in marketing for tourism, says Kim Stever, CEO of the Capital Region Convention and Visitors Bureau. Every month we remain behind means money lost to the local economy — money that could be used for improved education, lower taxes, and a better quality of life for all residents.

Stever speaks on “Tourism and Your Business: Perfect Together” on Thursday, November 16, at 9 a.m., at a meeting of the Mercer Regional Chamber of Commerce at Angeloni’s Cedar Garden in Hamilton. Cost: $50. Call 609-689-9960 for more information.

“Tourism is a huge economic driver,” says Stever, explaining the tourism “multiplier effect,” through which every dollar spent directly on tourism generates four more dollars for the economy. A couple who spend $50 on tickets to a theater production in Princeton, for example, could also spend $200 more on everything from parking to shopping for books or clothes to dinner.

Tourism is great for a local economy because it brings new money into the area, she says. But in her second year as head of the region’s tourism office, Stever is frustrated that people in the area don’t seem to understand the many benefits of tourism. She loves it that tourists, especially those from out of state, put money into New Jersey’s economy, but ask very little in the way of services. (If those theater-goers live in Pennsylvania, they are not going to be enrolling their children in New Jersey public schools.)

“Everywhere else people recognize that tourism is the good guy. Tourists spend money here, and then they leave — how great is that? They strain someone else’s infrastructure.”

Plans to develop tourism in Mercer County go as far back as 1998, when a feasibility study showed that the many historic and cultural sites in the area should be capturing a greater share of the state’s $36.3 billion tourism-related economy. In 2004 the Capital Region Tourism office opened. It is housed in the Mercer Regional Chamber of Commerce offices. Stever, who has over 20 years of experience in the tourism marketing arena, was asked to become its CEO.

A native of Philadelphia, Stever began her career in tourism right out of college. She graduated from Temple University with a degree in communications and took a job the Valley Forge National Historical Park. From there she went into the tourism marketing division of Anheuser Busch, then opened her own tourism marketing consulting business, Eastwick Marketing, in Maryland. She moved to Atlanta for a few years to work for a client that was a sponsor of the 1996 Olympics, and then returned to Philadelphia to work with the Philadelphia Chamber of Commerce.

Lack of awareness of tourism’s value and lack of funding for tourism marketing are the two biggest obstacles to increasing tourism revenue in Mercer County, says Stever. In most of the rest of the country tourism offices are funded by hotel taxes. However, New Jersey levies taxes of as much as 15 percent on hotel rooms, but local tourism offices see almost none of that money.

The hotel tax system is complex. First, there is the seven percent sales tax that goes directly to the state. On top of that, the state charges a five percent hotel tax. The revenue from this tax also goes to the state and is designated for historic preservation, arts and culture, and marketing. While a portion of that tax is used for tourism marketing, it does not really benefit Mercer County. “The commercials showing the beaches are not promoting Mercer County tourism,” says Stever. “I don’t have people calling here to find out where the closest beach is.”

In addition to the state taxes, municipalities are allowed to add as much as a three percent tax to hotel rooms. This money goes directly to the municipality and can be used in any way that local officials decide.

“This is a huge hot button,” says Stever. “The municipalities think it’s pretty cool. They can take the money and do whatever they want — buy a new fire engine, offset property taxes. But what is not being done is funding more tourism marketing.”

There is a direct correlation between advertising dollars spent on tourism and tourism dollars returned to a community, says Stever. “For every dollar in advertising on tourism, $10 to $20 returns to the community through money spent on hotels, attractions, restaurants, ATM fees, snacks, gas, and other items.”

In other words, she says, a $100 ad aimed at generating awareness of Mercer County as a tourist destination will return between $1,000 and $2,000 to the county.

Because hotel taxes are so attractive to municipalities, every township wants its own hotel. Three new hotels are slated to be built in Mercer County in the near future — in Hamilton, East Windsor, and West Windsor. Despite the tax advantages, more hotels are not necessarily a good thing. Currently hotel occupancy in the county runs at 60 to 64 percent, she says, a “good, but not great” statistic. More hotels without more tourism only means that the same number of dollars are spread more thinly. “It means that you can only charge $59 a night for a hotel room, rather than $110. Lower room rates mean lower tax revenues.”

Developing tourism means more than placing a few ads promoting Mercer County in newspapers around the region.

Find sustainable funding. The biggest challenge is sustainable funding for Capital Region Tourism and its programs. Stever would like to see money from hotel taxes used to fund more tourism marketing. Her tourism office still relies on grants and sponsorships for its budget, she says, rather than on a reliable, steady source of income.

Realize benefits of tourism. Stever wants both local officials and area citizens to understand the benefits of tourism to a community. “The growth of tourism supports a better quality of life, better education programs, more employment.” Dollars from tourism can offset taxes also, she said.

Make up for lost time. New Jersey in general, and Mercer County in particular, lag behind Pennsylvania, Delaware, New York, and Maryland in promoting tourism. Tourism doesn’t stop with gambling in Atlantic City, which is “not the draw it once was,” says Stever, and strolling the boardwalk at the Jersey shore. We need to more aggressively promote the area’s historic, cultural, and recreational advantages to communities within an easy day’s drive of Mercer County.

Become our own ambassadors. Advertising and marketing dollars can only do so much for an area. The development of tourism also depends on the pride of the people who live in the region. “When someone comes to visit do you say, ‘Let’s go into New York City or let’s go to Philadelphia?’ Or do you take them to see the attractions that are here?”

Mercer County boasts the greatest number of historic sites of any county in New Jersey. “We are the cradle of the Revolution,” says Stever. “So much of our history happened here. But when a family thinks about a vacation to see Revolutionary sites, they don’t think about Trenton and Princeton, or even Jockey Hollow in northern New Jersey. They think about Philadelphia. But, Stever points out, the Declaration of Independence was read in three places, Philadelphia, Delaware, and Trenton, and both Trenton and Princeton have served as the capital of the United States.

Develop an identity. New York is the Big Apple. Philadelphia is the Cradle of Liberty. “When you go to Williamsburg, Virginia, you can buy a tri-corner hat in any gift shop or drug store.” Mercer County needs to choose and develop a recognizable identity. “We have so much here,” says Stever. “We are the birthplace of the Revolution, we are the birthplace of genius, the birthplace of manufacturing and technology.”

She envisions gift shops selling replicas of the many unique products once manufactured here. “The Trenton Makes bridge is such a great ‘in your face’ symbol.”

The area has been home to many famous people, from Einstein to Paul Robeson, Antonin Scalia, and even Dennis Rodman. “What about ghost tours at Halloween of the homes of the historic people who once lived here?” she asks.

Last summer books featuring the Trenton area appeared on both the New York Times fiction and nonfiction bestseller lists. Janet Evanovich’s latest Stephanie Plum novel was in the fiction category, while “1776,” by David McCollough, was the non-fiction title. Stever would like to see tours of places Evanovich mentions in her mystery novels.

These are just a few of the many attractions that are not well-known or well-promoted in Mercer County. For tourism to become a major force in the area, says Stever, its residents need to discover and take pride in “the gems in our own backyard.”

— Karen Hodges Miller

Drug Development’s A To Z

Many people in the pharmaceutical industry just know bits and pieces of their business. “They know the area where they work well, and some upstream and downstream, but most don’t have a big picture view,” says Elizabeth Treher, cofounder and CEO of the Learning Key, a training company located in Washington Crossing, Pennsylvania.

To get the lay of the landscape, the first step is to use a wide-angle lens to take a snapshot of the context that drives the industry and its creation of new drugs. Pharmaceutical development is nothing if it is not a balancing act — between the public, the pharmaceutical industry, and the government. The public seeks effective and safe drugs at the lowest possible cost; the pharmaceutical companies are trying to research new drugs, sell existing ones, and make a profit at the same time; and the government is trying to ensure healthcare for the entire population, with drugs that are safe and effective.

Treher speaks about both the context and the process of drug development in a day-long workshop on “The Pharmaceutical Business: From Drug Discovery through Product Launch,” on Thursday, November 16, at 9:30 a.m. at the offices of the Learning Key (www.learningkey.com). Cost: $595. For more information or to register, call Marianne Speiser at 215-493-9641.

On the government side, one front-and-center influence is the Food and Drug Administration (FDA) — and some critical changes in its funding over the past decade and a half. The Pharmaceutical Drug User Fee Acts (PDUFA), passed in 1992, 1997, and 2002, generated more funds for the FDA and set guidelines as to how quickly the agency should be processing drug applications. The laws were enacted partly in response to pressure from groups of people with AIDS, cancer, and other fatal diseases who wanted to reduce waiting time for new drugs.

PDUFA generated funds in three ways: from new drug applications, from product fees, and per manufacturing facility. Although the proceeds enabled the FDA to hire more staff, the agency remains underfunded for many of the things it needs to be doing, says Treher. For example, “it is supposed to be inspecting all drug shipments into this country, which is impossible.”

Another phenomenon that affects the FDA and the pharmaceutical industry is drug counterfeiting — where supposed “drugs” either have the wrong ingredient, no ingredient, not enough of the right ingredient, or have not been manufactured under approved conditions. The incidence of counterfeiting, as estimated in two-week checks of certain ports, is more widespread and serious than expected. Whereas the World Health Organization claims the rate to be 7 percent, most people believe it is higher, says Treher.

In Mexico, it may be as high as 25 percent, and in parts of Africa 60 percent. “Every major company has had products copied,” she says, citing efforts underway to develop tracking for every single bottle to more quickly identify those not manufactured under approved conditions.

An aging population has further complicated the drug development process. Forty percent of Americans are over 50, says Treher, “and we have people taking more than one drug and neutraceuticals (like vitamins).” The increasing elderly population also means that long-term-care products need lower side effects than short-term therapeutics, so clinical trials need to be longer and are more complex. Even so, there are drug interactions that don’t reveal themselves until the drugs are in the marketplace.

Generic competition is also affecting the industry. Generic drug manufacturers can begin to develop the manufacturing process three years before a drug’s patent life ends and are ready to begin selling on the patent’s expiration date. “The Hatch-Waxman Act was trying to encourage generic manufacturing to do more,” says Treher, “and it had great success. But the major pharmas have paid the price.” In 2006 the big pharmas lost about $2.5 billion to generics, and over $6 billion in 2005, says Treher.

Other factors influencing drug development are the press and the public image of the pharma industry, patent law, mergers and acquisitions, globalization, direct-to-consumer advertising, the economy, and managed care. This last has pushed down prices in a number of ways, including economic credentialing of physicians that managed care companies see as prescribing higher-priced drugs than their fellows.

At the same time, the costs of development continue to rise. Drug development is a years-long process, which in the 1960s averaged about 8.1 years, was up to 15.3 years in the mid-1990s, and has now dropped closer to 12, and in some cases less, says Treher.

You might say that Treher, who started her career as a nuclear chemist and radio chemist, including work at Los Alamos, fell into the pharmaceutical world. Yet it probably had a little to do with her parents’ influence and with her own wide-ranging interests.

Her father was a physician and researcher, specializing in internal medicine and allergy. He was on the staff of Washington University School of Medicine and Barnes Hospital and was a founding member of the American Academy of Allergy. Her mother was the first editor of the journal Cancer, although after some time off, she eventually pursed a career as a foreign-language teacher.

Treher calls her father her coach. “My mother said, ‘Be a nurse,’ and my father said, ‘You can do anything you want to do.’” Early on Treher weighed medicine versus chemistry as a career choice, and she did a postdoc in nuclear medicine in 1977-’78, which was her first clinical experience. She also decided she would be a chemist for 20 years and then do something different. “You’ve got to pack in as much as you can,” she says. “That’s why I live in three states, New Mexico, Minnesota (mostly summers), and Pennsylvania.” She spends about half her time on the East Coast.

Treher received all of her academic degrees from Washington University: a B.A. in chemistry in 1969, a master’s in nuclear and radio chemistry in 1972, and a Ph.D. in the same field in 1976. Between her master’s and Ph.D. degrees she taught and created a chemistry curriculum at a private girl’s school, experience that would come in handy later: “Teaching high school helped train me to say things in a simple way,” she explains.

After leaving Los Alamos National Laboratory in 1983 she decided to try something new and led the research team at what was then Squibb Diagnostics, and was involved in the development of Cardiotec, a heart-imaging agent.

“I was always interested in helping people learn,” she says, “and it frustrated me in working and talking to so many colleagues that they didn’t have a better understanding of what it was all about.” So she left research and development, and started what became Squibb College, which she ran until the merger with Bristol-Myers.

“It had an integrated curriculum,” she says, “but I wanted to do more for people on the technical side and eventually got approval to set up the Center for Science Education.” She was able to provide internal courses where people could learn science as well as human skills like communication, teamwork, and leadership. Eventually she didn’t get enough support for teaching these human skills, which she says were often sorely lacking, so she left to start her own business, the Learning Key, in 1990 and incorporated two years later.

The Learning Key, which has a dozen employees and 135 associates, gives Treher a platform to do what she does best, bringing to bear her business understanding and scientific insight. She also develops support materials to help students in businesses and universities. One is the Pharm Game, a product that helps teach about the drug development process. And she doesn’t have to worry about scientists who challenge her about not knowing chemistry, as someone once did. As she observes, in the tones of an educator, “Why use jargon if I don’t have to?”

— Michele Alperin

Friday, November 17

Tech Goes Green

Environmentalists have raised their sights. These vocal stewards of the earth have raised their goals beyond short-term resource efficiency, and are calling for sustainability. Don’t waste efforts trying to make a gas gobbling Hummer more efficient, they say. Instead, seek long-term sustainable transport solutions that won’t poison our children’s children a century from now.

Ironically, today’s new environmental fervor has come from a partnering with an old enemy: technology. Formerly deemed major contributors to pollution, technological innovations have been the prime weapons in the green movement’s arsenal. In an international gathering of the latest green designers and promoters of environmentally sustainable lifestyles, Kean University hosts “The Technology Transfer 2006 Conference” on Friday, November 17, at 7:30 a.m. Cost: $100. Visit www.kean.edu/-techtran/.

Robert F. Kennedy Jr. gives the keynote speech, “A Contract with our Future.” An avid environmentalist, Kennedy was named one of Time Magazine’s “Heroes of the Planet” for his work in cleaning up the Hudson River. He is president of the Waterkeeper Alliance, and is the author of “Crimes Against Nature” (2004) and “The River Keepers” (1997), and other books on environmental issues.

“The environment in the next millennium will be a patchwork,” writes Kennedy. “You will find some communities that have gotten together, exercised leadership, and made their watersheds sustainable. You will find others that are a wasteland, and that’s going to be the Armageddon.”

A host of other experts join in the several panel discussions. James Heiden, veteran outdoor gear entrepreneur and founder of Teko, the sustainably-made sock manufacturing firm in Boulder, Colorado, speaks on the benefits of socially accountable businesses. Architect, urban planner, and inventor of flexible solar panels, Jamie Lerner leads an international panel on “Creating a Globally Sustainable Environment.” Melvin Feinstein of Rutgers University discusses how he streamlined the systems of ArrowBio, the international solid waste handler.

Few individuals represent more of the spirit, and possess more of the history of America’s green business movement, than Heiden. Born in Montana and raised in Minneapolis, Heiden joined the Boy Scouts and took to mountaineering. He summited every peak nearby and even climbed to the top of Mount McKinley. Recently, he and his wife, Susan, celebrated her 50th birthday by climbing the difficult western breach route to the top of Mount Kilimanjaro, Africa’s highest peak.

In l972 Heiden moved to Boulder, Colorado, to be near the mountains he loved. In nearby Estes Park, Heiden founded Banana Equipment, which quickly became the largest wholesaler of Gortex breathable waterproof clothing. After selling Banana Equipment, Heiden became product director for Performance Bicycles, and later joined Nike to design cycling gear. He then started InterSource, which distributed items for L.L. Bean, REI, and Land’s End.

Two years ago Heiden founded Teko, convinced that profit would be enhanced, rather than hindered, by being environmentally responsible. “I got sick and tired of the outdoor industry’s total apathy toward environmental concerns,” says Heiden. “They, above all, should champion the cause.”

This past year Teko sold nearly 250,000 pairs of its “smart wool” socks, at prices ranging from $10 to $22 a pair, netting Heiden’s firm just over $1 million. Sales are up 100 percent, with a projected jump of 20 percent next year. Heiden does not see his business as a green gamble. “Everyone wants a better environment — no brainer,” he says. “And today nearly everyone is looking at where and how things are made. Increasingly, businesses are seeing environmental concerns as a customer demand and are moving to meet it.”

What makes green? Recent surveys ranked Nike, the Gap, and Levis as clothing manufacturers with the most environmentally-sound production methods. All three firms have been using recycled polyester in their fabrics for over 20 years. Nike’s founder, Phil Knight, most accurately defined an environmental business by saying, “It’s a matter of consideration. When process comes up, we always try to see if there is green way of handling it.”

While any environmental consideration is helpful, Heiden warns about green marketing displays that, as he puts it, are merely “gathering low hanging fruit.” Several firms proudly print on their abundant packaging that their product is “carbon-positive manufactured.” This may mean that, indeed, no carbon pollutants were used to make the item. Or it may mean merely that the company purchased carbon offsets — environmental credits, perhaps from a wind or solar farm.

Greensourcing. How far back does a company need to reach to make itself environmentally pure? For Teko Socks, all the way back to the sheep’s pasture. Teko purchases all its wool from a single family farm in New Zealand that has practiced sustainable methods for most of a century and a half. The merino sheep that yield the wool feed from organic pastures. To provide durability, Teko adds its own polymer, called Ingeo, which is made from corn sugar, rather than a petroleum base.

Typically wools are made shrink resistant by use of a chlorine wash, but Heiden searched and found one Japanese firm which avoids the hazardous chemical by employing a more organic method. His packaging, kept to a minimum, is made from recycled chipboard and printed with soy ink. “You have to consider the whole process, if you are going to make a green product,” says Heiden. He is aware that however benign the production of his wool, the environmental cost of shipping this resource half way around the world by cargo ship is extreme. He is now seeking to partner with a domestic herder who has begun to raise merino sheep much nearer to Teko’s Colorado plant.

People power. Unlike more complex clothing, the cost of a pair of socks is mostly material and only eight percent labor. This low labor factor originally allowed Heiden to keep his workforce in the United States, and it brought him an unexpected benefit. The American labor force is highly skilled and motivated. He found the socks fit better when they were made by American workers. “This is not blind patriotism,” says Heiden. “It’s a fact that products of the same design, produced from the same machines, can be improved by the right people making them.”

Heiden and most environmentalists have concluded that we do not have to throw up our hands in the face of mounting a burgeoning global population — and the need for more fuel, food, clothing, and building products that comes along with it. We can feed and sustain ourselves with the resources available on this planet.

We can, perhaps, take some lessons from the first people to inhabit this country. Our Pilgrim forebears tried desperately to heat large rooms with a square box, wood-devouring fireplace designed to toss most of its heat up through the chimney. Meanwhile, in much cozier Native American dwellings, air flowed in from adjustable bottom vents, fanning the flames of a small central hearth, which circulated the warm air. So, while we look to 21st century technology for some solutions, we can also look back to the innovative skills of the people who keep comfortably alive on our planet for centuries — without leaving mountains of waste materials or clouds of toxic emissions. — Bart Jackson

Tuesday, November 21

Coming Back to Earth

Greg Olsen has spent the last year talking about his life and experiences, especially his ride into outer space. In October, 2005, Olsen became the third private citizen to orbit the earth on the International Space Station (ISS). He spent 10 days in space, orbiting the earth over 150 times and logging almost 4 million miles of weightless travel.

Olsen will speak talk about his “Personal Adventure: From Serial Entrepreneur to Space Traveler” at the Venture Association of New Jersey, on Tuesday, November 21, at 11:30 a.m. Morristown Hyatt Hotel. Cost: $75. For registration information call Clara Stricchiola at 973-631-5680.

The trip into space was the “climax of my professional life,” says Olsen, who founded, and then sold, three successful companies. He is currently the president of GHO Ventures (www.ghoventures.com) at 90 Nassau Street. An angel investor, he manages a variety of investments, from a winery in South Africa to a ranch in Montana.

Olsen is using the fame he garnered from his trip into outer space to encourage children, particularly minorities and females, to consider careers in science and engineering. The entrepreneurs he talks with receive “the same message as the kids,” he says. “Don’t give up.” Many entrepreneurs form new companies “thinking all we need is money,” but it takes much more than that, says Olsen.

Be prepared for the bad stuff. Things will go wrong when you are starting something as complex as a new business, he says. The entrepreneur who is not “ready when the bad stuff happens,” won’t be around very long. When Olsen looks at potential business investments he focuses on the people more than the idea. “Do they have integrity and honesty, can they stick it out?” There is no shortage of good business ideas, he says. “If the idea is reasonable, good people will make it a success.”

Be prepared to be lucky. “Being lucky is finding an opportunity you can be ready to take advantage of,” says Olsen.

Olsen says he is not a venture capitalist. “I don’t know how venture capitalists do it. They are always reading so much stuff.” Instead, he calls himself an angel investor. “I’m not out looking for deals,” he says. “I come across enough stuff I’m interested in.”

However fiber optics, the area where he made his money, is not one of those interests. “I’m less likely to invest in fiber optics because I know too much about what can go wrong,” he says. Right now he is looking at a lot of energy investments. “They may be good,” he says, “but who knows?”

Be focused on the outcome. Most new business owners focus on the mechanicals — on finding the space and setting up the business, says Olsen. Instead, they should focus on the ultimate outcome they want from the business. There are three possible outcomes, he says. The first is to create a cash cow, a little business designed to provide a steady income year after year. The second possible outcome is to make money by taking the company public, and the third is to get acquired.

For technology companies, Olsen sees acquisition as the best possible outcome because of the many problems associated with an IPO, the vehicle that takes a company public.

Going into outer space makes Olsen feel like he’s the luckiest guy on earth. “I was born in Brooklyn,” he says. “My dad was an electrician. This was a dream come true.”

He received a bachelor of science degree in physics in 1966 from Fairleigh Dickinson. He obtained a doctorate in materials science from the University of Virginia in 1971 and did post-doctoral work at the University of Port Elizabeth (South Africa), taught elementary physics classes, and then worked as a research scientist at RCA Labs, now Sarnoff.

He developed optoelectronic devices, including laser diodes and photodetectors for fiber optic applications based on the material indium gallium arsenide (InGaAs).

With Vladimir Ban, Olsen founded EPITAXX, a fiber-optic detector manufacturer in 1984. It was sold in 1990 for $12 million. He then founded Sensors Unlimited, a near-infrared camera manufacturer in 1992 with Marshall Cohen. Sensors was sold to Finisar Corporation for $600 million in 2000, repurchased by the management team in 2002 for $6 million, then sold again to Goodrich Corporation in 2005 for $60 million.

Olsen is active with a number of area organizations, including the New Jersey Technology Counsel (NJTC), the Institute of Electrical and Electronics Engineers (IEEE), and the NJ Commission on Science and Technology. He also supports Trenton Big Brothers and Sisters, Trenton Boys and Girls Club, Trenton Soup Kitchen, and the Princeton Historical Society.

What is left for Olsen now that he has traveled in space? “The kneejerk reaction would be to start another company,” he says. However he hasn’t yet decided exactly what he wants to do. After spending so much time “focused every day on going into space,” he has enjoyed the opportunity to not have a particular goal.

Going into space was an exciting adventure, “you get to be the experiment itself,” he says. His current opportunity to sit back, reflect on the past, and plan for the future is also “a great place to be.”

— Karen Hodges Miller

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