Burlington Makes, the World Takes: The Story of NRG Systems

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A few days ago my wife and I were at a dinner at the public aquarium and science center on the waterfront of Lake Champlain in downtown Burlington, Vermont. The dinner was for a group called Vermont Businesses for Social Responsibility -- in keeping with the town-meeting vibe possible in a small state like Vermont, a sign outside the aquarium announcing the dinner said "open to the public" -- and it was to honor the winner of this year's Terry Ehrich Award.  Terry Ehrich, who died a decade ago at age 60, had been the owner and publisher of the very successful Hemmings Motor News, based in southern Vermont. The award in his name is supposed to recognize socially responsible business practice. This year it went to Jan Blomstrann, owner and CEO of the NRG Systems company. You see her picture below and her company's headquarters and factory above.

I mention it now for several reasons, which I'll arrange in a convenient-at-the-moment Reverse-Order Timeline fashion:

Longer-term future:  That dinner with a sample of the business and political leadership of Burlington has stayed in my mind for its interesting parallels and differences with a comparable event we attended, along with the Marketplace team, last month in Sioux Falls. Drawing those out, and suggesting some of the similarities we've seen in otherwise very different locales like these two, is the ambition for an upcoming (longer-term future) posting.

Immediate future: On this afternoon's Marketplace, I'll be talking with Kai Ryssdal about NRG Systems and other business dramas that we have seen in Burlington. Marketplace has a great "so you think you know Vermont?" quiz up now.  

Ongoing present: I would be remiss not to underline how many of the business stories we saw in Vermont involve organizations run by women. Seven Days, the profitable newspaper I mentioned last week, is run by co-founders Paula Routly and Pamela Polston. Main Street Landing, a "not your typical development company" responsible for much of the town's waterfront, is run by its co-founders Melinda Moulton and Elizabeth Steele. At the VBSR dinner, one main speech was given by former governor Madeleine Kunin, and another by the local artist Sara-Lee Terrat, plus VBSR's Julie Lineberger, all in support of the honoree Jan Blomstrann. We met plenty of men, too -- from one-time mayor / current Senator Bernie Sanders, to the male halves of the married couples who run Burlington's successful independent Phoenix bookstore and the Alchemist brewery. But for whatever reason we noticed a larger number of visibly successful women business figures here.

Immediate past: The business for which Jan Blomstrann (and her colleagues) were being honored occupies a fascinating niche in the world's energy business ecosystem. It does not directly manufacture power-producing equipment -- turbine blades for wind mills, solar panels, etc. But it sells to customers across the United States and in more than other countries the measurement, calibration, maintenance, and other equipment that is needed to keep the turbines running -- and to make sure they go in the right place to begin with.

For instance: you're on some wind-blasted plain in China or Patagonia and you want to know whether it has enough wind to make a turbine worthwhile. NRG ships out its tower, up to 90 meters tall, and all associated equipment to tell you. Plus, the electronic brains of the turbine once it's built, to keep it running at the right times, predict maintenance problems, and so on, all of which is built in the factory in Hinesburg just outside Burlington. "It's a hard engineering challenge, to make these readings robust through extreme cold," Barry King, a senior engineer at NRG, told us at the factory. "It's technically very challenging to heat them without degrading accuracy. You had to do this in the Vermont mountains" -- where America's first wind turbines were installed -- "and it turns out to be important in many other areas, like northeastern China."

Longer-term past: Why Vermont, for this kind of business? Away from traditional manufacturing centers, and tech-world complexes, and even easy transport routes? The cold mountains and the early wind turbines are a sort-of explanation. Plus, as I heard, a 19th-century-onward heritage of precision machine production in the area. But there were two elements of the "why here? why now?" story I found provocative for further discussion.

One was the long ripple effects of major R&D investments. Back in the 1960s, IBM decided to put a major chip plant next door to Burlington, in Essex Junction. At its peak, it employed more than 10,000 people; now it's closer to half that size. But we kept running into people whose parents had come to the area to work for IBM, and we kept hearing that this was one of the "everything was different after that ... " watershed events for local economy, even beyond the direct payroll effect. After that: the schools got better, the universities got better, there was a different talent pool, and a different sense of plausible businesses to be startup up and run in Burlington.

(The other great watershed event we kept hearing about: Bernie Sanders's very influential run as mayor in the early 1980s, about which there will be a lot more to say. One more: the real-world correlate to the "hippie utopia" stereotype of parts of Vermont in the 1960s and afterwards.)

The second principle of economic history that ran through many Burlington stories: the importance of college location, college friendships, college socialization, etc in the formation of businesses. Jan Blomstrann, the current head of NRG Systems, and her former husband (who founded the company) had both been students at the University of Vermont -- in her case, for training as a nurse. More times than not, when we asked a startup-founder, or his or her employees, why they were doing business in Vermont, the answer began, "We were up here for school ... "  That was an even more frequent response than the one beginning, "My parents came here with IBM .. " or "My parents were looking to get away from the big cities."

More to come.

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James Fallows is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. He has reported extensively from outside the United States and once worked as President Carter's chief speechwriter. His latest book is China Airborne. More

James Fallows is based in Washington as a national correspondent for The Atlantic. He has worked for the magazine for nearly 30 years and in that time has also lived in Seattle, Berkeley, Austin, Tokyo, Kuala Lumpur, Shanghai, and Beijing. He was raised in Redlands, California, received his undergraduate degree in American history and literature from Harvard, and received a graduate degree in economics from Oxford as a Rhodes scholar. In addition to working for The Atlantic, he has spent two years as chief White House speechwriter for Jimmy Carter, two years as the editor of US News & World Report, and six months as a program designer at Microsoft. He is an instrument-rated private pilot. He is also now the chair in U.S. media at the U.S. Studies Centre at the University of Sydney, in Australia.

Fallows has been a finalist for the National Magazine Award five times and has won once; he has also won the American Book Award for nonfiction and a N.Y. Emmy award for the documentary series Doing Business in China. He was the founding chairman of the New America Foundation. His recent books Blind Into Baghdad (2006) and Postcards From Tomorrow Square (2009) are based on his writings for The Atlantic. His latest book is China Airborne. He is married to Deborah Fallows, author of the recent book Dreaming in Chinese. They have two married sons.

Fallows welcomes and frequently quotes from reader mail sent via the "Email" button below. Unless you specify otherwise, we consider any incoming mail available for possible quotation -- but not with the sender's real name unless you explicitly state that it may be used. If you are wondering why Fallows does not use a "Comments" field below his posts, please see previous explanations here and here.
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