Three Cincinnati companies that can change the world
Cincinnati has its share of companies that have redefined the global marketplace. Procter & Gamble is an obvious one, not only selling 300 brands in 160 nations, but leading innovation for decades in consumer research, product development and marketing. General Electric’s aircraft engines division, based here, is another, as every few seconds a commercial aircraft somewhere in the world takes off powered by engines designed, engineered or made in Cincinnati.
But what is Cincinnati’s next P&G or GE? Is there a business that has the potential to transform the world, move the marketplace and affect lives as those giants have? It turns out there’s a few potential World Changers here.
First, some criteria. To be considered, the companies must be selling products or services that can change, in a significant way, how people live, work or play. (Think of the impact P&G’s Pampers have had on mothers and children). Second, the companies must be established firms already making a mark in their industries. There are many early-stage companies here doing groundbreaking work with great potential, but the World Changers list is reserved for companies that already have a significant share of their markets and have the resources to grow and respond to opportunities quickly. Third, they must have experienced significant growth, and most importantly, have the potential, talent, expertise, financial resources and sheer will to accelerate that growth on an international scale.
Tall order. But after staff research, interviews and an informal survey, Soapbox has created the first list of three Cincinnati companies that have what it takes to change the world.
The history of innovation at AtriCure is displayed on a wall in its suburban Cincinnati offices, where a succession of prototypes of surgical instruments is framed. The first prototype was put together by inventor Mike Hooven, who had an early morning flash of inspiration about a product engineering problem he had been wrestling with. Jumping out of bed, he grabbed his wife’s fingernail scissors, some aluminum foil, electrical tape and wires and put them together to see if his idea would work. He was trying to find a way to contain an electrical charge so he could develop a safer electrical cutting tool to use in surgery. A quick experiment on a steak in the freezer showed his idea would work, and that was the genesis of AtriCure.
What Hooven and partners developed was a surgical instrument that has the potential to save the lives of people diagnosed with atrial fibrillation, a serious heart condition that affects more than 2 million people in the U.S. alone. People with AF suffer from hearts that quiver, rather than beat rhythmically. To date, the chief surgical correction has been to create a maze of small incisions along the heart's right and left upper chambers, or atria. When the incisions heal, scar tissue is created, blocking the irregular electrical impulses that cause AF. But the surgery is time-consuming and very complex, limiting its use. AtriCure’s innovation is its Isolator Synergy bipolar ablation system, what CEO David Drachman calls “a new treatment paradigm,” a way to conduct the surgery that is less invasive, safer, easier, and effective. It has the potential to make surgery for atrial fibrillation much more widely available and save the lives of some of those who die from AF or related problems, such as stroke and congestive heart failure.
“AtriCure is making a tremendous impact on people's lives through developing technology to treat the world’s most common heart irregularity,” says Hooven, now a board member.
So far, the AtriCure system has been used in more than 50,000 surgeries and its presence globally is growing. About 14 percent of its sales last year were overseas, Drachman says. AtriCure went public in 2005, raising $52 million that enabled it to double the number of engineers on staff, buy a supplier and commit resources to rapid growth. It’s been one of fastest growing medical device companies in North America over the last five years.
“We can replicate the only surgical procedure for AF that’s been shown to have high success rates,” Drachman says. “We can penetrate this large unmet need of more than 2.5 million Americans.”
General Cable’s roots date to the early 1800s, and its products seem to have a way of making history. It supplied the insulated wire when Samuel Morse made his historic “What hath God wrought?” first telegraph communication in 1844. Its wire lit the Statue of Liberty in 1886; it supplied all the cable to transmit the electricity from Hoover Dam to Los Angeles in the 1930s, manufactured 140 miles of hollow tubes to transport fuel undersea from England to France for the D-Day invasion, provided most of the battlefield telephone wire used by the Allies in World War II, supplied hundreds of miles of cable vital to communications at Cape Canaveral in the 1970s….well, you get the idea. This company’s products are counted on to do some pretty important stuff.
There’s still history to be made and General Cable will likely be there, as it’s positioned to take advantage of two major, long-term trends. Finding alternatives to traditional sources of energy is becoming virtually mandatory in the U.S. and around the world as the price of oil continues its staggering increase and fossil fuels are becoming more difficult to find. Secondly, developing countries are investing in their power grids, realizing its importance to economic growth. Africa, for example, says one industry analyst, will need a total investment of well over $500 billion in its electric infrastructure in the next 20 years to meet the growing demand. Similar trends are happening in South America, China, India and the Middle East, and General Cable is already on the ground in those places.
A few years ago, General Cable was rather narrowly focused on providing the wires and cable the telecom industry needed. Management made a strategic decision to expand into the alternative energy arena and other growing segments and to go global in a big way. “As recently as 2000, we were a North American company focused on the telecommunications industry,” says spokesperson Lisa Lawson. “Now, we are a global company.”
2007 was a transformative year for the company’s global growth strategy. It bought Phelps Dodge International, a $1.2 billion company that sells electrical infrastructure products in 45 countries, acquired a Chinese manufacturer of automotive and industrial cables, formed two joint venture companies in India, and acquired cable manufacturer NSW in Germany.
It is targeting fast-developing economies like Brazil, where the Northern Kentucky firm is positioned to deliver wire and cable for a $2.4 billion rural electrification program called Luz para Todos (Light for All).
“Their products are key to the industrialization of Third World, developing economies,” says Nat Kellogg, an analyst who covers General Cable for Chicago-based Next Generation Equity Research.
It’s innovating product lines that offer high growth. A recent example: a $40 million deal to deliver and install 2,600 miles of fiber optic cable under the Mediterranean Sea from France to Egypt, with connections in Italy, Turkey and Cyprus. Then there’s its move into alternative energy, a field that promises high growth and the potential for positive economic and social change. Management sees wind power as a growth opportunity given the development of the technology around the world. It’s currently working on a $30 million project to supply cables to the first wind farm to be located in the North Sea.
General Cable’s prospects for continued international growth, its capacity to further the spread of alternative energy in the U.S. and around the world and its key role in expanding the economies of developing countries earns it a place in Soapbox’s World Changers list.
Despite advancements in medical technology, diseases are emerging at an unprecedented rate, spread by the ease of world travel. Over the last few decades, dozens of new pathogens have been identified -- HIV, Ebola, Marburg fever and SARS, just to name a few. Not only are new viruses emerging, but the World Health Organization says centuries-old threats, such as influenza, malaria and tuberculosis, are still dangerous as strains mutate, gain resistance to antibiotics and public health systems around the world struggle to keep up.
A company based in the Cincinnati suburb of Newtown, Meridian Bioscience, has been a leader in developing the tools to diagnose, and ultimately treat, some of the most widespread pathogens afflicting the world today. Meridian develops, makes and sells test kits used by doctors, nurses and public health staff in 60 countries to determine exactly what bugs are causing people to get sick. Only when those bugs are correctly identified can health workers begin to help people get well again.
Take the flu. We’re talking about real influenza, which puts about 200,000 people a year in the hospital in the U.S. and kills about 30,000. Meridian recently was cleared by the Food and Drug Administration to market a new test, made in Cincinnati, which can quickly detect influenza. The rapid diagnosis of flu allows doctors to prescribe the right antiviral drugs, rather than waste time and money prescribing antibiotics that will have no effect on influenza. That can save health care costs and even lives.
“Everything they do is superb,” says Elliott Schlang, a Cleveland-based analyst whose Great Lakes Review focuses on medium-sized regional companies in the Midwest. “It’s one of our favorite fundamental companies.”
Meridian’s growth has come from its rapid tests that detect some common, but serious infections: a bacterium that causes an infection often acquired in a hospital; a bug that’s been identified as the primary cause of ulcers; and E. coli, the potentially lethal germ that seems to keep cropping up in food-borne outbreaks.
Meridian has been around for about 30 years, but in the last five years has accelerated its financial power to give it the muscle to expand globally. Profits have grown from $5 million in 2002 to $26.7 million in 2007, a gain of more than 400 percent in five years.
For its potential to improve public health around the globe, its innovation, and its financial performance that gives it the clout to grow, Meridian Bioscience earns the third spot on our World Changers list.
David Holthaus is Innovation and Job News Editor for Soapbox.
Photography by Scott Beseler
Windmill in Spain, provided by General Cable
AtriCure production line
Submarine power cable, provide by General Cable
Meridian Bioscience provided