On the Cover: Louisiana Lands Tech Heavyweights

Five years ago, IBM set out to build a Smarter Planet. The strategy would help global clients harness exploding amounts of data, make better decisions and create more efficient business processes.

Today, IBM chooses talent-laden locations to execute the Smarter Planet initiative, and in March the $100 billion-a-year company chose Baton Rouge, La., for its latest major technology hub.

IBM’s decision to locate an 800-employee software technology center in Louisiana’s capital city demonstrates a dynamic new diversity in a state economy long known for oil, gas, agriculture and chemical production. The IBM center will anchor an urban development with nearly a half-million square feet of commercial and residential space in downtown Baton Rouge. The unique project also leverages a higher education partnership with the state that will propel Louisiana State University into the top 10 computer science programs in the U.S., based on bachelor’s degrees earned each year.

“The big promise of Smarter Planet is creating technology that delivers solutions to make the lives of citizens and clients better and that exceeds their expectations for what’s possible,” said IBM’s Cameron Art, general manager for application management services. “The IBM employees in Baton Rouge will be part of that promise and innovation.”

At the new Baton Rouge center, that promise might translate into finding ways to use predictive analytics to help police fight crime or creating technology for health officials to prevent the spread of food-borne illness. IBM programmers in Louisiana will also transform the way cities cope with aging infrastructure: Predictive maintenance systems will help engineers determine when or if maintenance is needed. The Baton Rouge center will create innovative technology to reach mobile customers in every sector of the economy, identify constantly shifting business risks and opportunities and create technology to deploy energy resources in more sustainable ways.

In Baton Rouge, IBM’s Smarter Planet advancement of analytics, cloud computing and other data tools is a leading example of why Louisiana has become a strong digital contender in the competition for new technology investment and knowledge-based jobs.

Digital Edge

Across the state, technology companies of every size are transforming the way customers and companies interact by creating software that powers sophisticated communications devices and Web platforms.

It’s a trend that touches several regions in Louisiana and shapes the work of companies from tiny, homegrown startups to Silicon Valley transplants.

Software development firms that choose Louisiana point to the state’s flexibility in responding to their specific business needs. Louisiana’s tool chest includes the ability to create custom workforce recruiting and training solutions and a landmark tax incentive for software and digital media firms.

The state’s Digital Interactive Media and Software Development Incentive enhances the strategic advantage of Louisiana’s low-cost, favorable business climate. The incentive provides a 25 percent refundable credit on software production costs and a 35 percent credit on in-state payroll expenditures. Yet the groundbreaking incentive is just one of many Louisiana advantages as a place to grow and thrive, according to tech firms.

Indeed, for IBM the quality of the available technology workforce and the state’s ability to nurture a promising collaboration between the company and higher education guided its choice of Louisiana for the new technology center.

A $14 million state initiative will expand the computer science curriculum and faculty at nearby LSU. The partnership means IBM will help cultivate the skills and knowledge of the next generation of computer science graduates emerging from LSU and schools across the state.

“There were so many things that were attractive about Baton Rouge and Louisiana [but the] partnership is a fascinating example of how forward-thinking leaders can create something that benefits everybody: the company, the university, the students,” Art said.

Louisiana is home to other digital innovators with a global reach. Globalstar, Inc., develops and deploys satellite communications and the software that powers mobile voice and data services used by customers in 120 nations, including some of the world’s most remote spots. Globalstar moved its headquarters to Covington, La., from California in 2010 to benefit from Louisiana’s incentive for software companies and to utilize additional tax breaks to benefit firms engaged in research and development.

The overall advantages of moving to Louisiana, said Globalstar Chairman and CEO Jay Monroe, “were simply too compelling to ignore.”

PreSonus Audio Electronics, Inc., of Baton Rouge creates software and hardware for music production tools used around the world. PreSonus, too, finds unique advantages in Louisiana. Launched in a Baton Rouge garage 20 years ago, the company leverages the state’s Digital Interactive Media and Software Development Incentive for growth that’s leading to a new headquarters and research facility in Baton Rouge, one that will double the size of its corporate office and research staff.

Broad Appeal

Louisiana’s ability to support digital innovators extends to startups and established firms. In Shreveport, La., Logic Nation is developing software to revolutionize how Internet users engage in discussion on websites where they interact and post information. The firm has raised $4 million from Louisiana investors since its launch in summer 2011. Logic Nation is also poised to launch a first-of-its-kind online platform that will allow anyone with a “Nation Page” to stream video and other live, exclusive and interactive content from mobile devices to the cell phones of paying customers.

Bart Bordelon, Logic Nation’s president, said the quality of the region’s tech workforce, the low cost of doing business in Louisiana and the state’s unprecedented incentives combined to help the firm create what he called “breakthrough technology.” Logic Nation’s platform already is drawing interest from celebrities and athletes by offering them a new way to communicate with their fans and monetize that experience.

“Nobody else is doing this,” said Bordelon. “We hope to have a global reach with what we are doing here in Shreveport.”

New Orleans continues to outpace the nation with the growth of its digital sector. Information technology employment rose 19 percent in the city from 2005 to 2012, compared with 3 percent for the U.S., according to Moody’s Analytics. That growth is being fueled by companies like Audiosocket, which develops Web-based, music-licensing technology used by film companies and sound professionals around the world. The company was founded in Seattle but relocated to New Orleans in 2011, in part to use the software incentive but also to tap into the city’s rich music heritage. Audiosocket also has used Louisiana’s Angel Investor Tax Credit.

“It comes down to the cost of doing business here and the quality of life,” said Brent McCrossen, Audiosocket CEO and a Louisiana native. “What we find here are things that aren’t found elsewhere on a number of levels.”

Local software talent and unique cost advantages have fueled years of rapid expansion at Bizzuka, Inc., of Lafayette, La., a Web design and development company that has been recognized for the past three years by Inc. Magazine as one of the nation’s 5,000 fastest-growing companies. Nick Mouledous, Bizzuka’s marketing coordinator, said economic growth in the Lafayette region – among the fastest rates in the South – has fueled much of the company’s own expansion.

But Bizzuka also utilized several state tax breaks for tech firms, including incentives for research and development and the creation of quality jobs. Those resources have helped Bizzuka devote ample resources to new product development, including its component-based content-management system used by clients across the country.

“Innovation is a huge part of what we do, and we’ve prioritized it this year to expand our offerings,” Mouledous said. “This is a great place for us to grow.”