Welcome to Orlando
Orlando's newest attraction does not have a water slide, although parts of it are near the tourist corridor on International Drive. Its employees do not wear name tags, or happy faces for that matter. Nor will the 30 million tourists who jam Orlando each year plunk down wads of cash to see this attraction - indeed, it is not even on the map. Instead, it lies a world apart, thriving quietly in the shadows cast by one famous pair of Ears. Yet, in its own right, it's every bit as magical as that other well-known kingdom. In this other world, light is a powerful tool that saves lives. Battles are fought without bloodshed. And computer geeks beat back job offers with a stick. The latest attraction in Orlando is not named Tomorrowland or Fantasyland. But you could call it Nerd World - its employees do sport slide rules and pocket protectors. Welcome to high-tech Orlando, which in the past few years has developed a name for itself in three areas: lasers and electro-optics, simulation and training, and banking software. Orlando companies manufacture lasers that help unclog arteries, correct imperfect vision and erase the tattoos of former gang members. They use sophisticated graphics and virtual reality to simulate wars or natural disasters, allowing battles and rehearsals ad infinitum, within the confines of a laboratory. And they write the lines of code for the software that runs it all. In fact, by one estimate, high-tech Orlando employs darn near as many people as that Mouse Magnet down the street. "It always amazes me that people are so surprised when I talk about high-tech industry in Orlando," says Daniel Lynch, President of the Economic Development Commission of Mid-Florida. "I guess it's because Disney and Universal do such a good job marketing the tourism side."
© tourism has been the biggest game in O-town ever since 1895, when John B. Steinmetz built Orlando's first water slide on the ruins of his frozen citrus groves. The area's fate was sealed when a fellow named Walt Disney came along seven decades later to announce he was building his own little world there, too. The rest, as they say, is history. Today, the Orlando area boasts more than 66 separate tourist attractions, which collectively employ about 41,000 full-time workers, according to the latest figures compiled by the EDC, released a few years ago. But here's a figure that's somewhat eye-opening, by comparison: Those same EDC estimates show Orlando's high-technology sector employs about 40,000. And the numbers have probably gone up since then, Lynch says. Does that really mean that Orlando's highly visible tourism sector employs just 1,000 fewer full-time workers than Orlando's high-tech industry? Lynch, the area's official cheerleader, says it does. Lest you think Lynch is bedazzled by pixie dust, CorpTech, a Woburn, Mass., directory publisher that tracks high-technology manufacturing, recently said Orlando has the fifth-highest employment rate for high-tech jobs in the Southeastern United States. While those numbers are paltry compared with Silicon Valley, it's quite a statement for a region long dismissed for what one economist derisively termed its "water slide economy." To be fair, it may be a temporary aberration. Both Disney and Universal Studios Florida already have announced ambitious expansion plans and will hire about 22,000 additional hospitality workers by the year 2001. Disney is building six new attractions, including an animal kingdom and a cruise line, and will hire about 8,000 additional workers over the next five years. Universal plans to add theme parks, a multi-screen theater complex, and hotels, restaurants and clubs. Employment should jump from about 5,600 now to 20,000 by 2001. How many of those jobs are full-time, as well as how much they pay, remains to be seen. Lynch says it's a common misperception that all Orlando's hospitality workers are flipping burgers or cleaning toilets for minimum wage. But he does concede most of them don't make a whole lot more than that. On the other end of the spectrum are University of Central Florida computer science grads. They make around $45,000 annually, although the figure can go higher - up to $70,000 - for those with hot programming skills, says Terry Frederick, who chairs UCF's computer science department. Orlando's simulation workers make upward of $50,000 per year, says Don Campbell, a retired Army colonel who heads up the Training and Simulation Technology Consortium, a 40-member technology transfer organization. Among other technology-related features: · Metro Orlando has the third-highest concentration of laser and electro-optics manufacturers in the country, behind Silicon Valley and Route 128 in Boston. · About 150 companies have been drawn to Orlando by a Navy contracting agency that holds the purse strings to just about half of the Pentagon's $2.6 billion a year simulation budget. · About a dozen Orlando companies provide software for financial institutions, making the banking software industry the city's largest. There are, however, a few dark clouds on the horizon, according to experts in each field: · Central Florida's laser industry, which is just now coming out of a slump, may never reach its full potential if area community colleges and vocational schools don't start training lower-level technicians for staff jobs at area companies. · The area's simulation industry is heavily dependent upon Pentagon funding and bureaucratic largess, and rumors circulate regularly that the operation will be moved during the next round of base closings. · Many of Orlando's banking software companies are going through new product life cycles, and the area lacks available talent skilled in the Visual Basic or C++ programming languages, which are essential for local area and wide area networks. Nonetheless, the future is extremely bright. Spending on simulation and training is expected to remain fairly constant, despite dwindling defense budgets. The $3 billion global market for lasers and electro-optics holds much promise, as applications expand beyond cutting beer bottles or supplying diodes for CD players. And a CorpTech survey of 1,585 U.S. software companies shows more than 10,000 workers being added in 1997. One in five project job growth of 25 percent or more.
the entrepre-neurs who started Orlando's 3,000 high-tech companies sprang largely from aerospace and defense roots. Well-known contractors, such as Harris Corp., General Electric, McDonnell Douglas and Boeing, located substantial divisions in Orlando because of its proximity to the Space Coast. Leading the pack was the Glenn L. Martin Company of Baltimore, which announced plans to build a missile factory in Orange County in 1956. The missile factory is still there. It is tucked away in Lockheed Martin's sprawling Sand Lake Road facility, about half a mile from I-Drive. Local legend has it that Soviet spies - not to mention enterprising Orlando Sentinel reporters - flocked to a certain Peabody Hotel room during the Cold War because it overlooked the facility, which today bristles with concertina wire and machine gun-toting guards. It was Martin refugees who started some of Orlando's best-known high-tech companies. One is William C. Schwartz, who directed Martin's laser research program until 1968, when it decided not to build its own lasers. Schwartz formed International Laser Systems to supply them. Martin bought Schwartz out; he then started Schwartz Electro-Optics. The company, which has spun off nine other laser companies, had 150 employees and its best year ever in 1996, with sales of $20 million. Another was the late Jeff Coleman, who worked on Martin's Patriot missile program. Coleman started his systems integration and simulation company, Coleman Research Corp. in 1980, with $200,000 in Martin stock options. He sold out to Thermo-Electron Corp. of Waltham, Mass. in early 1995 for an estimated $110 million in stock. Coleman planned to start again until he was felled undergoing laser angioplasty for a bad heart. One entrepreneur who is not an ex-Martin employee is Kenneth Kirchman, who started Florida Software Services in Altamonte Springs in 1968. The company, now Kirchman Corp., was the first to offer prepackaged software for commercial banks. By the 1970s, ex-Kirchman employees had formed their own companies; now, they swell the payrolls of others. Privately held Kirchman has about 300 employees and is believed to have sales of $60 million.
Orlando's pho-tonics industry has received much attention since 1992, when Business Week dubbed Orlando "Laser Lane." Area laser and electro-optics companies employ more than 3,600 workers, about 70 percent of whom are involved in manufacturing and engineering. About 100 Florida companies make lasers or the sophisticated electronic systems that control them. Half of them are in metro Orlando. Many are members of the Florida Electro-Optics Industry Association, a lobbying and marketing organization for 32 local companies. FEOIA members make lasers or electro-optical systems for defense, medicine and surgery, industrial cutting and welding, and computer-generated imagery. Perhaps the most diverse local company is Schwartz Electro-Optics, which makes lasers that remove tattoos, dispense pesticide, detect illegal aliens and differentiate between a semi and a Suburu. Advanced Laser Systems Technology, a Schwartz spinoff, took a different road. ALST makes rugged, portable eye-safe lasers for use by NASA and the military. President Bob McKinney formed ALST in 1987, intent on developing medical lasers. Later, he sold that operation, then spun off the industrial laser operation into Orlando's K-O Concepts. Ironically, defense is now "strongly growing as a result of the larger defense companies' decisions not to manufacture their own lasers," McKinney says. ALST has nine employees, posted sales of $1.5 million in 1996 and has made a profit in its last two years. While his company has yet to make a profit, Randy Frey, CEO of Autonomous Technologies (Nasdaq-ATCI), hopes to exploit an exploding global market for laser vision correction. Autonomous is in clinical trials of its second-generation laser radar eye tracking system, which keeps the laser trained on the cornea during surgery, even if it moves slightly. (The result should be less pain and scarring.) Along with the number of photonics companies, Orlando has other strengths, including the Laser Institute of America, which sets international laser safety standards, and UCF's Center for Research and Education in Optics and Lasers (CREOL). UCF has awarded 117 advanced degrees in optical science; at any given time, there are 800 optics undergraduates. "I don't think the people in Florida, or even Central Florida, appreciate the worldwide reputation CREOL enjoys," says Art Guenther, an optics expert with Sandia National Laboratories in Albuquerque. "It goes way beyond the boundaries of Florida." CREOL could become a third national optics research center, but it may never reach its full potential unless changes are made, Guenther says. CREOL is a research unit, not an academic unit. Unlike the Rochester Institute of Technology and the University of Arizona, CREOL cannot run its own programs, award degrees or hire faculty, who must be hired through another department. "We sensed there was less than optimum interaction" there, says Guenther, who chaired an external review committee that endorsed CREOL's elevation to a separate unit. "It's silly to say that, without this happening, we won't be successful," says CREOL's director, M.J. Soileau, the current president of the International Society for Optical Engineering. But it sure would help, he says. A university committee has been appointed to study the issue, but Soileau is not optimistic.
Central Flo-rida's simulation industry got started in the mid-1960s, when the Navy moved its Training Device Center to Orlando. By 1985, more than 75 firms had established an Orlando presence, about half the 150 companies there today. The draw is the Army simulation command and a Navy contracting agency that controls the purse strings for simulation spending for all four armed forces. Orlando also is home to UCF's Institute for Simulation and Training, which conducts cutting-edge virtual reality research for the military. About 40 companies, including Evans & Sutherland and Silicon Graphics, have offices in the Central Florida Research Park, where the relevant Army and Navy offices are located. Others include Lockheed Martin, TRW, Hughes, Cubic Systems and Reflectone. They include companies that, on the government's behalf, successfully launched and conducted space exploration, landed on the moon, and trained troops for Desert Storm. Some industry consolidation is occurring. For example, Hunt Valley, Md.-based AAI Corp. closed its Ocoee plant in 1996 and moved its operations to Baltimore. ECC International Corp. is looking for a buyer for the company, including its Orlando simulation unit. Still, the market is robust overall. Frost & Sullivan, an international defense technology market research and consulting firm headquartered in Silicon Valley, projects spending of about $2.6 billion on military training and simulation projects each year through 2001. No estimates exist for the commercial market potential of simulation technologies. Campbell, former head of the Army's Orlando simulation command, says the Navy agency will let about $1.4 billion in contracts during the current fiscal year. Campbell says local defense simulation firms employ about 12,000 at average annual salaries of $45,000 to $50,000. Orlando is "the center of the Earth, as far as the development of simulation training systems" is concerned, says Anita Jones, director of the Pentagon's research and engineering office. Still, about every two years, when the bean counters at the national base closure commission sharpen their budgetary axes, the local industry is beset with rumors that the Navy brass wants to move the Orlando operation. With the next round of base closings expected next year, the rumors are already flying. Local officials, still stinging from losing the Naval Training Center, vow to avoid losing another skirmish. The rumors are "a persistent sort of thing, and we need to continue building the industry's base here to make it difficult to move," says Michael Cooney, an EDC vice president. In what they hope is a preemptive strike, U.S. Rep. John Mica and former U.S. Rep. Lou Frey are backing an effort to designate Orlando as a national center for excellence in simulation. "No other area has the number of companies and the number of people that we do here," Campbell says. "It would take three or four years to reconstitute it elsewhere." At last count, Orlando had about 200 software companies, including a dozen that develop banking software. In fact, four of the area's top 10 developers are banking software companies, which employ about 2,000. One of them is Kirchman Corp., the first U.S. provider of prepackaged commercial banking software for main frames and mid-range computers. Another is the new kid on the block: publicly traded Phoenix International (Nasdaq-PHXX), which sells client-server banking software. Orlando also hosts two Texas companies, Hogan Systems of Dallas and EDS, a giant in the industry. Hogan established a Winter Park office last fall to develop client-server programs to rate the credit risk of loan or credit card applicants. Hogan located in Orlando because of the talent pool. It already has hired away several employees of PaySys, formerly known as Credit Card Software. EDS took over Orlando's Newtrend Group from giant Computer Associates International in late 1994, after a business deal between Newtrend and Computer Associates turned sour. About 250 EDS workers in Orlando sell main-frame software and data processing services. Milwaukee's Fiserv, whose banking software division is located here, also competes with EDS. So does Orlando's own FIS, which hopes to broaden its reach by selling electronic commerce and Internet banking software developed by another local company, FiTech. PC and home banking were the top priority of 800 bankers surveyed at a recent trade show by Orlando bank technology consultant Ronald Rovig. Second was data warehousing and mining; third was branch automation. Companies with those technologies, or those that provide software for local area and wide area networks, should do well in the future, he says.
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