Transforming Trash Into Crude Oil

Heaps of plastic rubbish, piles of tires, towers of discarded medical devices—all transformed into crude oil. It might sound like the stuff of far-fetched eco-nerd fantasy, but Jim Garrett and Bill Ullom, founders of Vadxx Energy, say they’ve unlocked the chemical process to make it a reality.

A decade ago, the duo—Garrett, the businessman, and Ullom, the scientist—might have felt compelled to head for the coasts in search of the right expertise and venture capital to grow their fledgling business.

Instead, you can find them in Garrett’s native northeast Ohio, with a demonstration facility up and running in Akron (poetically, the former tire and rubber capital of the world), investors eagerly eying their work, and plans to produce their first commercial units, in partnership with Fortune 500 company Rockwell Automation, by year end. At $40 to $50 a barrel, Garrett says Vadxx’s product will be both commercially viable and environmentally friendly when they make it to market.

“From a pure business perspective, we couldn’t put Vadxx in any other location in the world,” he says. “Now, we are going to try to pay it back with jobs and being a good corporate citizen.”

For decades, the economic landscape in Garrett’s home state was marked by the decay of aging industries: the closure of steel mills and factories and the hemorrhaging of manufacturing jobs. Those structural challenges are deep and persistent. But now an alliance of business, government, and private philanthropies is combating them with a remarkable ecosystem of institutions in northeast Ohio to nurture new companies like Vadxx and to help existing ones expand.

How did they do it? In 2004, members of the philanthropic community in the region collectively decided that economic development should be their top priority. Fifty-four foundations came together to form the Fund for Our Economic Future, putting forward a multipronged plan, called “Advance Northeast Ohio.” The fund not only channels money—$92 million since its inception—where it’s needed but also works to ensure close coordination among all the players involved in sparking growth.

Around the country, both struggling and thriving communities are increasingly recognizing the value of uniting public, private, and civic actors to forge innovative strategies for maximizing their economic strengths and bolstering their weaknesses. NationalJournal has honored Fund for Our Economic Future in Northeast Ohio as our winner in developing regional economic strategies because it took the lead in implementing a comprehensive plan that has ignited a tangible turnaround in a region that has symbolized American industrial decline since the 1970s.

Brad Whitehead, president of the fund, thinks of it as assembling a “kaleidoscope” of resources for businesses and workers—the trick is to get all of it to click into place.

“Not surprisingly. the answer is there is no silver bullet for a healthy economy, but it’s a variety of things,” Whitehead said. “The fundamental task in front of us is to transition from slow-growth commodity industries to higher-growth industries, and the key to that is education, research, innovation, workforce training, good governance, and, as we’re increasingly seeing, a strong manufacturing sector.”

Vadxx’s experience captures the array of support now available to entrepreneurs like Garrett and Ullom, carefully assembled by the fund. In-house engineers and experts at the nonprofit Manufacturing Advocacy and Growth Network advised them on how to scale up production. Through a seminar run by technology-based economic-development firm NorTech, they met their future business partners at Rockwell. JumpStart, a business accelerator, also provided early advice and capital. Case Western Reserve and Akron universities—leaders in the study of polymer technology—lent graduate students and offered technical expertise. In all, around a dozen organizations helped Vadxx take shape.

“To try to create the economic climate to support business growth and economic opportunity for workers is very hard to do,” said Amy Liu, codirector of the Metropolitan Policy Program at the Brookings Institution. “There are many different players and different initiatives, and many are working at cross-purposes; so to be aligned, to be working with one unified direction, to do so in a way that is in partnership instead of in competition, is hard to do, but northeast Ohio has transcended that challenge.”

The approach has paid dividends, in the form of 12,000 jobs created since 2004, $386 million generated in payroll, and $2.2 billion in capital infused into the region from 2004, when the fund started, through July 2012.

“This is still a very challenging region. I think we’ve turned the corner, and the precipitous decline we saw in the ’70s, ’80s, and ’90s has slowed,” said Dan Berry, the manufacturing network president. “We’ve turned the corner and now we have the infrastructure in place that can support more growth in the region. We don’t have everything under control, but we’re on the way up now.”

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