This summer the New Orleans Business Alliance released its ProsperityNOLA plan, a comprehensive strategic plan for the economic development of New Orleans over the next five years. The plan focuses its strategy on the development of five distinct clusters that will lay the groundwork for the economic growth of the city: Advanced Manufacturing, Bioinnovation & Health Services, Transportation, Trade & Logistics, Creative Digital Media, and Sustainable Industries. Throughout this series of articles EMH Strategy will be profiling local companies within each of these sectors to show what has made, and what will make, New Orleans the place for companies in these spaces to do business.
For the fourth post in our ProsperityNOLA cluster series, EMH Associate Robert Bray sits down with Charles Easterling, CEO of Crescent Unmanned Systems. Crescent Unmanned Systems, a company that fits in directly with the “Advanced Manufacturing” cluster highlighted in the plan, manufactures small, multirotor and fixed wing Unmanned Aerial Systems (commonly known as “drones”) for military, law enforcement, civilian, and research applications. The company is headquartered in New Orleans, and it operates out of the NASA Michoud Assembly Facility.
Q (Robert): Can you provide a brief background on your company, and explain why you decided to locate in New Orleans?
A (Charles): We were founded in April 2011 after deciding to locate in New Orleans over New Mexico. I had lived in New Orleans for a good while, so that definitely played a role, but the deciding factor in us setting up shop here was the NASA Michoud facility. We toured the facility when we were looking for commercial space, and it immediately became clear to us that it was exactly the space we needed to accommodate and enhance our company. The opportunity to work with NASA ensured any resources that we might need would be available. We also found the business community in New Orleans to be supportive with financial capital. We got our series A with a local firm in town, South Coast Angel Fund, and that really put us over the line to expand. We first focused on marketing our product to law enforcement, but we quickly found that there is a booming industry for commercial applications of Unmanned Systems, including oil and gas exploration, precision agriculture, and coastal restoration research in academia.
Q (Robert): What advantages and disadvantages have you found to operating your company in New Orleans?
A (Charles): As a start-up in New Orleans, we have an opportunity to rebuild and rebrand the city by attracting companies and creating jobs in advanced manufacturing. Advanced manufacturing as a cornerstone of our local economy was something previously unheard of, as the New Orleans economy is typically more synonymous with tourism and hospitality. GNO Inc. has also been exceptionally supportive in identifying resources for the local advanced manufacturing economy, particularly with building a skilled workforce. The local universities have been equally supportive. We have worked with both Tulane and UNO, and we’ve found that there is a strong academic ecosystem here that is dedicated to training a workforce to support our industry.
As far as downsides to operating in New Orleans, there are a lot of challenges associated with bringing a new industry here and rallying support for that industry among decision makers at the state level—not the city level. I think state decision makers really need to understand the potential of the advanced manufacturing industry for Louisiana, and work to support it. We have an opportunity to bring a high level of advanced manufacturing economic activity to our state, both among smaller companies and the major brands such as Boeing, Lockheed Martin, and General Dynamics. With the presence of Michoud, the necessary infrastructure and resources are here, we just need to make sure to continue to support the industry.
Q (Robert): What do you think that New Orleans needs to offer to attract future entrepreneurs, or well-established companies, involved with advanced manufacturing?
A (Charles): Louisiana already offers a lot of incentives, like the R&D tax break. I think that, again, it gets back to the need to continue to work out the kinks in developing this new industry, understanding what exactly quality advanced manufacturing jobs look like, and then creating a strategy for attracting talent and building it. We should implement programs in our universities to train graduates that can then enter our local workforce. Also, we need to develop an advanced composites hub here. Unfortunately, our company has had to outsource some things because there aren’t a lot of incentives for competitive manufacturers to be located here.
Q (Robert): Has your company taken advantage of any tax credits?
A(Charles): We anticipate the R&D tax credits will be great for us. But the tax credits can be expensive to process. They could yield more for younger, cash-strapped companies if the state had a more extensive program that guided start-ups through the process so that entrepreneurs did not have to rely as heavily on commercial entities that take a cut of the tax credits as compensation.
As Charles points out, New Orleans has the potential to develop into a vibrant economic hub for advanced manufacturing, both for start-ups and Fortune 500 companies. With the presence of supportive facilities like NASA’s Michoud Assembly Facility, attractive tax incentives, and universities that create cutting edge technology and develop a skilled workforce, New Orleans is well-positioned to develop a competitive advantage in the advanced manufacturing industry.