THE ROLE OF THE ECONOMIC DEVELOPMENT ADMINISTRATION
Mr. Johnson introduced his panel by reviewing the current status and mission of the Economic Development Administration (EDA). He emphasized that while federal programs are coordinated from the nation's capital, they were only meaningful in the local context. He said that the EDA had been eager to support the states and regions, especially by promoting more opportunities to innovate. Part of the EDA's current effort, he said, was “Innovate EDA,” a strategy to improve how activities are performed and sharpen the agency's mind-set on interacting in regional development.
The EDA's investments should go, he said, to places that have demonstrated a commitment to regional collaboration. “It's not just about building a road or a bridge that puts people to work,” he said, “but tying the goal to a greater plan for regional prosperity.” Such plans, he said, include funding research, investing in tools that regions can use, asset mapping, and investing in alliances that promote regional collaboration.
He also said that the department was about to announce the Technology Commercialization Enterprise Development Alliance, a group of business accelerators like “incubators without walls.” These would provide resources to help firms move from an idea to commercialization and help them locate the funding they need to cross the valley of death.
In addition, he described plans to staff the EDA's regional offices with people dedicated to Regional Innovation Clusters (RICs). “As more of our constituents and partners shift to this way of doing things, you'll have regional resources as well as a national resource to help.”
He said that EDA believes that its “policies have to change, because the world has changed. When you have unprecedented change, you need new responses. So we are going from silos to collaboration. We believe that this has to happen at the regional level” as well as the federal level.
He offered a formal definition of RICs as “geographically bounded, active networks of similar, synergistic or complementary organizations that leverage their region's unique competitive strengths to create jobs and broader prosperity.” He said that, on average, jobs within clusters pay higher wages, and regional industries based on inherent place-based advantages are less susceptible to off-shoring. Because RICs are locally led, they are able to stabilize communities in various ways: by re-purposing idle manufacturing assets, engaging underutilized human capital, contributing to improvements in the quality of life.
He said that five key components should be considered when defining unique regional assets:
- “the economic base: what you make, including your existing and prospective industry clusters;
- talent: workforce skills and the human capital base;
- particular local conditions: location, infrastructure, amenities, factor costs, natural resources;
- innovation and ideas: your capacity to innovate and generate new ideas; and
- entrepreneurship: your capacity to create companies wholly new or from existing firms.”
Arkansas itself had many of the assets that support RICs, he said, including the following:
- “A strong network of higher-education institutions,
- Geography and infrastructure that allow for efficient transport of goods and services,
- Good health-care facilities,
- Low factor costs for starting and operating a business,
- A diverse mix of industries in the state's economic base, and
- An integrated network of local, regional, and state development organizations.”
RICs are diverse, he said, and found throughout the country; therefore, there could be no standard definition. They support a wide array of industries, and vary in size, shape and reach. They often cross local, county, and state boundaries, and may be urban or rural.
For the energy RIC, or E-RIC, he said, a federal collaboration would grant the funding opportunity to a consortium. He disputed the notion that all boats must rise in a region for a RIC to be successful. “I believe that there is one boat in a region, and it must rise. Everyone who is not contributing is pulling away. Leaving certain organizations behind is a costly thing. Who in your ecosystem is not at the table that should be at the table? They all have some role to play.”
He summarized recent EDA activities in Arkansas. In 2009, these included 14 investments to support planning and implementation efforts aimed at encouraging regionalism and clusters across the state. A recent EDA Technical Assistance Grant helped establish the Center for Regional Innovation at the University of Arkansas at Little Rock, and a $1.75 million public works grant to Arkansas State University at Jonesboro helped establish the Arkansas State Biosciences institute Commercial Innovation Center.
He concluded by commenting on a $2 million EDA award that had recently been approved to convert the old Rock Island Railroad bridge into a pedestrian and bicycle crossing to link the river market areas of Little Rock and North Little Rock, completing the Arkansas River Trail. “We can't grant opportunities unless they are led regionally,” he said, “so I know that some of you made this happen.”
Dr. Good suggested that the state had two pressing needs. “One is to improve the access to very early stage capital for startup firms. We're beginning to get a fairly decent deal flow in the state, but not enough to take care of the ones we would really like to. Second, we have not been able to find enough funding for some of the innovative things we've done in the state, even though our budget is just a rounding error for the DoE. We are trying to bring others to the table who do have capital, and one conversation is with a network of foundations that want to target their giving at economic development opportunities. This is high among our priorities.”
Another participant said that in a state employment bill is a provision to renew a program called Build America Bonds that was a popular part of the ARRA. The bonding authority is dispersed to the states, which in turn disperse it to counties. The federal government pays a portion of the interest payments on the capital. “One of the bond programs, the Zone Bond Program, may be used for some of the early stage funding your talking about. This is a little-known provision, something to explore.”
INITIATIVES OF THE MANUFACTURING EXTENSION PROGRAM
Mr. Kilmer, director of the Manufacturing Extension Partnership (MEP), said that a current objective is to strengthen the “linkages back into the innovation and entrepreneur side of things.” MEP is a network of centers in all 50 states, and is “very much a partnership organization, both at national and local levels.” It has a staff about 1600, who are located in 440 service locations and 60 MEP Centers through the regions and states. The MEP reaches some 32,000 manufacturing firms and completes 8,000 projects per year.
“What we do,” he said, “is really based on what the manufacturers need. We help them find a solution. For example, we partner with community colleges and universities in training human resources, and in many cases we are located at universities to strengthen the linkage between the human resource side and the small to medium-sized manufacturers.”
A Portal to Connect with Solutions
He said that in Arkansas, the best portal to connect with the resources of the program is Arkansas Manufacturing Solutions (AMS). This program focuses on how to scale up small firms by working from a national perspective. It focuses more on helping existing manufacturers than on creating new companies, an activity he called “economic gardening.” He suggested further that there is or should be a marriage between existing firms and new ones. “If we could find a better way to bring them together,” he said, “we could develop more economies for both sides in getting new technology into commercial products and processes.”
The traditional emphasis of MEP, he said, is to focus on listening to manufacturers' short-term needs, as opposed to trying to push actions “from our own toolbox.” MEP Center projects include:
- Business growth services: what is best for that business in its particular industry and situation,
- Technology services to develop products and processes,
- “Lean” techniques that encourage continuous improvement,
- Quality systems and other standards,
- Advice on energy, environment, and sustainable services, and
- Talent development to meet future manufacturing needs.
He said that the MEP works hard to quantify what it does, beginning with an independent, third-party survey of manufacturing clients. The most recent client data, he said showed significant nationwide impacts, including $3.6 billion in new sales, $5.5 billion in retained sales, $1.7 billion in capital investment, and 52,948 jobs created or retained (in FY2008). He said that the jobs figure was especially gratifying.
AMS services had also helped clients obtain good results in Arkansas, he said, including $592 million in new and retained sales, $25 million in capital investment, $12.7 million in cost savings, and 3,335 jobs retained and created.
Because manufacturing techniques and challenges are changing so rapidly today, the MEP is having to move beyond its historical focus on productivity. “We've been looking at the environment manufacturers operate in, and trying to focus on new opportunities.” He began with the effects of globalization, beginning with outsourcing. “You always worried about the competitors down the road, and now you're having to do the same thing but on an international scale. Supply chains are a fact of life,” he said. “Two-thirds or three-quarters of small manufacturers are supplying to some other company, so understanding that is key. Companies need to be innovative, and they need to be more competitive. It's products that bring the home run, but today it's also processes and services and bundling them together. We have to look at different business models, where instead of trying to do everything yourself, you are really partnering to provide a complete set of products and services.”
Technology is a principal driver for this, he said. When the MEP was created in 1988, its sole mission was to transfer technology out of the NIST labs to small and medium-sized manufacturers. “We learned early that the kind of technology we were rolling out was not what the small guys needed. So we changed, and said let's look more closely at market pull: What do those manufacturers need, and how can we provide access to that?” Now, some 21 years later, the MEP is at a point where new technology is vital to improving the manufacturing, and the manufacturers are ready for it.
Building Sustainability into Design
Another new concern for the MEP, he said, is sustainability and green techniques of manufacturing. “We're not talking about your father the tree hugger; we're looking at it from a business perspective and asking what are the right things for a manufacturer to do. That comes from both the sales side – there is a market for green things – and also from an operations view: how do you build sustainability into the design, production, and processes? Can I use cleaner chemicals while still trying to conserve energy? At the end of the process can I bring that chemical back and use it somewhere else in the process? Sustainability is the complete ‘life-cycle-plus’ that includes all of those things.”
From the perspective of the MEP, he said, “we've gone from productivity to how do we get companies to focus on growth. And how do we bring technology into the equation.” One challenge, he said, is to bring a new mindset to a company – to get them thinking positively about how they can begin to grow the company. After years of difficulty for companies who want to invest in necessary change, he said, “the good news is that now we've got their attention. They know they need to adapt to global competition.” He defined MEP growth services as “providing a reliable scientific system that guides companies through the creation of new ideas, discovery of market opportunities, and the tools to drive the ideas into development.” It addresses every input to profitable manufacturing growth, including technology acceleration, supplier development, workforce improvement, sustainability, and continuous improvement.
Adapting to Global Competition
There are three strategies for doing this, he said. One is to help companies find, filter, and fast-track ideas. An example was Eureka!, an MEP program to help companies go through a structured analysis to develop the ideas they already have, identify the best opportunities, and develop a plan to address them. A case study was that of a Wyoming company called Precision Analysis, which makes hot water testing kits. With MEP advice, the company was able to re-vamp its marketing message, create a new home water testing kit in line with EPA regulations, develop and release the new product in five months, and double sales within five months.
Another example was a partnership with the Department of Commerce and others called ExporTech, a service to help companies enter and expand in global markets. For example, ExporTech helped the Wilco Machine and Fabrication company of Oklahoma visit the Middle East and establish relationships, negotiate a joint venture in Brazil, and raise exports from less than 8 percent of total revenue in 2008 to 51 percent halfway through 2009.
Finally, MEP has an emphasis on diversification into new customers and markets. An example from the MEP Center in Michigan, where auto suppliers are searching for new partners, is the J.C. Gibbons Manufacturing of Livonia. MEP helped the company move from automotive to medical appliances while using the same equipment and same manufacturing processes while retaining 25 jobs.
Another strategy of MEP is technology acceleration – “systematically identifying and capitalizing on opportunities to leverage technology into the process, products, and services of manufacturers.” The challenge, he said, was to link processes to the manufacturer and ultimately the market. “That's the key to this,” he said. “We've been swimming upstream, fighting these battles you all know about, and now what we've done is focus the MEP Centers to be that connector. We are not the technology experts. I have an engineering degree and work in a scientific institute, but the technology is so broad and changing so fast there's no way I can keep up, or my Centers can keep up. So the linkage back to the experts is still a key part of solving this.”
The issue, he said, is one of connection and scalability. For the manufacturers, there are many links – to their customers, either in an OEM supply chain or another kind of vendor relationship; to the technology sources; to capital and investors. “The question is how do you pull all these components together in a way that can get to efficiency and scalability.”
One approach of the MEP, which is at the pilot stage, is the National Innovation Marketplace, an online approach to connect the different links in the value chain. Through the Arkansas Manufacturing Services, MEP had created an Arkansas-specific portal into the National Innovation Marketplace that lists available technologies and opportunities for companies. This is called the Arkansas Innovation Marketplace (AIM), which seeks to provide a window into all the intellectual property and requests and capabilities of its entrepreneurs, inventors, and companies in the state. To date, AIM has about 50 technologies posted and 50 company “needs and wishes.”
Finally, he described the MEP sustainability initiative, which seeks to help manufacturers gain a competitive edge and to maintain profitability and job creation while increasing energy efficiency and reducing environmental impacts. In partnership with EPA and the Green Suppliers Network, MEP has for six or seven years helped companies identify where they can make savings and move from a compliance mentality to a search for constructive changes on the front end that can avoid costs and add to the bottom line. “We work with the waste and water management folks and suppliers to the utilities to focus on less waste, less energy usage, more efficiency, and better business practices,” he concluded “That also feeds into the concept of clusters in regions.”
Mr. Stanley, acting deputy director of NIST, expressed his enthusiasm for “trying to grow new companies that have difficulty finding early-stage investment money.” He also presented a picture of recent trends that have not been favorable to the development of technology-based business development.
He began with two sets of slides that illustrated what he called “disturbing trends” in R&D investment. The first set (Figure 2) began with a chart of R&D intensity, where the United States lags eight other countries.29 A second chart (Figure 3) showed that federal spending on R&D as a percentage of GDP has declined steadily since the mid-1960s.30
The second set of slides related more particularly to industry's relationship to R&D. The first slide showed an accelerating divergence since 1953 of industry spending on basic research, which has been remained nearly flat, and industry spending on development, which has risen rapidly in the past two decades. The second chart, spanning the same period, showed that the percentage of industry R&D funding allocated to long-term university research has also remained about the same. 31
He said that despite much discussion at the federal level about increasing support for R&D, virtually no legislative changes have moved to the appropriations stage. On a policy level, he said, the most significant need was for federal agencies to move beyond their restricted silos of activity to more collaboration with other agencies with similar objectives. He noted some movement in this direction during the present administration, and urged much more.
Key Areas for Collaboration
The key areas for collaboration, he said, were regional policy, economic and industry policy, education policy, and science and technology policy. For example, he said that NIST, through the MEP, would have a vital but limited role in the energy regional innovation cluster. “We have to see if we can get out of our silos and help states like Arkansas keep their students here, grow companies, raise good revenue, and help our country grow.” He said he was impressed with Arkansas' efforts to support its own innovation activities, especially in the face of a severe economic downturn.
He also said that he was proud of the administration's plans for the new RICs, and said that NIST had been building its own “RIC” model since 2007. The NIST version is call the Rapid Innovation and Competitiveness (RIC) Initiative, and its objectives are:
- Increase the nation's return on its R&D investments,
- Collapse the time scale of technological innovation,
- Encourage investment in need-driven research, and
- Stimulate the economy and enhance competitiveness.
This NIST RIC would be a public-private partnership for R&D investment, and began with reaching out to industries that already had a roadmap and helping them determine the research needs that would allow them to follow that roadmap. “This is highly industry-led,” he said, “and I would highly recommend it for anything you're going to do in Arkansas.”
The second objective of the RIC is research and knowledge transfer. Here, industry and government jointly fund goal-oriented basic research, measurement techniques, and the development of standards based on the needs and priorities of the roadmap. “As the governor said,” he noted, “you have to get the universities involved, because that's where the gold is.” Tacit knowledge transfer would be further facilitated by postdoctoral fellowships and personnel exchanges.
The third objective was to expedite the transition of scientific findings into commercial products. This may involve several approaches, such as helping companies find support as they cross the valley of death, and seeking to create a framework of support from state governments, regional organizations, and venture capital firms. It also paid attention to the need to evaluate each effort, which he called “a real failure on the federal side as well as the state side.”
Launching the NIST RIC initiative
When NIST launched its RIC initiative in 2007, it began with a pilot Nanoelectronics Research Initiative (NRI), which is part of the Semiconductor Research Corporation (SRC). As NIST examined what its role should be, along with industry, states, and universities, it decided to design a collaborative model that could embrace organizations across the country. A five-year cooperative agreement was signed, with NIST bringing primarily its expertise in measurements and standards. Four regional centers were selected, involving 35 universities from 20 states, through a partnership with the NSF. The contributions of the states included tax incentives, research parks, and grants to nurture SMMs through the commercialization process. The program also support 128 graduate students and 24 post doctoral scholars at the four regional centers. The partnerships invested about $25 million per year: $2.75 million from NIST, $15 million from the states, and $5 million from industry, including venture capital and direct investment.
For this investment, the partnership realizes more than $200 million per year in business start-ups, development, and commercialization. During the first two years it has generated 13 patent applications and 239 scientific publications.
Mr. Stanley read two quotes from supporters of the program:
“There is tremendous interest in every part of the world to win the nanoelectronics race and reap the economic rewards that will go with it. For America to win, it will take radical collaboration between government, higher education, and industry. The best example of this type of collaboration is the important work going on in the Nanoelectronics Research Initiative at more than 30 universities with funding and participation from NIST, IBM, and other major semiconductor and research institutions.”
-John E. Kelly III, IBM Senior Vice President and Director of Research
“The NRI experiment is working; we learned more about graphene for device applications in the last two years than we would normally learn in 5 or 10 years in the business-as-usual research model.”
-Industry member at INDEX review (9/08)
In conclusion, he said, two current initiatives at NIST are (1) to press toward an even more “lean, agile” organizational structure, and (2) to ensure transparency in how taxpayer dollars are spent. The objectives of NIST will continue to be needs-driven basic research, linkage of NIST activities with those at the universities and regions, and continuing the Institute's world-class R&D on measurements and standards. He closed by encouraging Arkansas to look for opportunities to join a RIC, given the success of the program and the benefits to regional participants.
UNIVERSITY-FEDERAL GOVERNMENT PARTNERSHIPS
Dr. Senich, senior advisor for small business procurement and research at the NSF, said that he would discuss NSF resources for the innovation ecosystem. A key to this approach, he said, was the effort of NSF director Arden Bement to better integrate research and education within the foundation. “That's the only way to get innovation,” said Dr. Senich. “And that's why I think we're seeing a big change at the NSF.”
He said that this year the Administration and Office of Management and Budget had put money into the NSF budget for innovation partnerships, intended to strengthen the innovation ecosystem. The important elements of that ecosystem, he said, included the universities, which were the source of new knowledge, but it also included other elements that were essential in promoting translational research. This approach, he said, had grown in importance across the NSF.
Funding Innovation is Expensive
Funding an innovation ecosystem, he said, was expensive, and the Recovery Act brought opportunities to accelerate critical ecosystem functions. But planners had to move both quickly and reasonably to allocate those resources. “Where could we quickly make a difference?” he asked. “With industry and the states. But how could we partner with them? We knew we had to grow our resources through translational research and working with partners, but we had to understand how that worked. That meant the right science and innovation policy.
“You can have all the research and education you want, but until you establish a well-grounded idea of innovation policy you're not going to go any place,” said Dr. Senich. “The goals of this innovation ecosystem were to grow the existing portfolio and strengthen the translational phase; extend the reach of industry-driven initiatives; and better understand the social dimensions of innovation.”
He acknowledged that innovation has many definitions and multiple elements. For this discussion, he defined innovation as a “new process, product, or service directed toward a social or economic change.” He said that for the NSF, innovation could be translated as research that leads to quantifiable economic benefits. And part of the effort was to build sound metrics into an innovation program so those benefits could be measured.
Innovation at NSF
While most of the NSF budget is directed toward university-based research of a fundamental rather than results-driven nature, he said that NSF had, over the course of recent years, established a range of programs that involve university-industry partnerships, are outcome-driven, and contribute substantially to innovation. Successful examples, he said, included the Engineering Research Centers (ERCs), Industry/University Cooperative Research Centers (I/UCRCs), Partnerships for Innovation, and the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.
Describing an innovation spectrum from discovery (on the left) through the “Valley of Death” to commercialization (on the right), he noted that most of NSF's traditional activities in scientific discovery lie on the far left of the “Valley of Death.” With regard to support for translational research, the major NSF programs were distributed across the spectrum from discovery to development according to their primary emphasis. He placed the Science and Technology Centers (STCs) and Materials Research and Science and Engineering Centers (MRSECs), with “the fundamental research activities” on the left. In turn, he placed the ERCs, then the I/UCRCs, and finally the SBIR programs successively on the right side of this spectrum, towards development and commercialization of new technologies.
He said he wanted to talk in more detail about “the space between the ERCs and the I/UCRCs.” There were about 23 ERCs, he said, with 50 partners. They pursued six- to 10-year programs funded at about $3 million a year. There were 53 I/UCRCs, two of them in Arkansas, with a total of 135 partners. There were about 31 Materials Research Science and Engineering Centers (MRSECs), which “do not have partners but instead become groups.” The most fundamental work was done by the STCs, of which there were 17, with 63 university partners.
‘Clear Economic and Social Benefit’
The translational research within this mix, he said, is interdisciplinary by nature, involves teams, and relies on institutional partnerships. The distinctive quality of translational research, he said, which may or may not be present in basic, applied, or even developmental research, is “clear economic and social benefit.”
Arkansas had received its own translational grants from the NSF, including some 20 awards in the SBIR (12) and STTR (8) programs between 2007 and 2009. These programs had brought a total of $4.25 million to the state. Fifteen of the awards were made to the University of Arkansas in Fayetteville, jointly with its center of excellence in education. The key features of NSF centers include:
- A culture that joins research, education, and innovation,
- Ability to develop a diverse, globally competitive workforce,
- Production of creative and innovative practitioners to lead teams,
- Ability to leverage NSF funds to support industry-relevant research, and
- Partnership with industry to speed implementation and technology transfer
Most centers, he said, have as many or more partners as they have lead institutions.
In Arkansas, NSF supports an I/UCRC for engineering logistics and distribution that is a joint activity between the University of Arkansas and Sam's Club. While it is based in Arkansas, it has 11 partner groups at universities around the country. The center has created an Excel-based simulator to replicate the functionality of the Sam's Club inventory and logistics software, and has so far achieved a more than 4 percent reduction in inventory costs. Savings are expected to be as much as $70 million annually.
Overall, the NSF has classified its centers according to six technology categories: advanced electronics, advanced manufacturing, advanced materials, biotechnology, energy, and information technology. All are located at leading academic institutions. And over all, he said with enthusiasm, they deserve to share the same goal: “Educate to innovate.” He closed by saying, “If I seem excited about what I'm doing, I am.”
FROM UNIVERSITY RESEARCH TO START-UPS: BUILDING DEALS FOR ARKANSAS
Dr. Douglas said that the objective of his organization was “building deals for Arkansas,” and that he would offer a picture of UAMS BioVentures by touching on “the numbers, the process, best practices, state incubators, and results.”
He defined UAMS BioVentures as a “biomedical and biotechnology incubator” for the University of Arkansas for Medical Sciences. UAMS itself, located in Little Rock, is the home of the state's only teaching and research hospital and hub of advanced basic and clinical medical research in Arkansas.32
UAMS BioVentures focuses on inventions by UAMS researchers and ways to maximize the impact of those inventions. He said the financial impact of university inventions in the United States from 1996-2007 had reached $187 billion on U.S. gross domestic product, and a total of $457 billion on the U.S. gross domestic output, generating some 270,000 jobs. Based on surveys by the Association of University Technology Managers about one-third of invention disclosures from federal funding to universities had become patents. Of the total impact, about one invention disclosure was generated per $2.3 million of funding to universities, and one university start-up was generated per $50 million of federal grant support. “We as a country generate two tech companies a day just from National Institutes of Health funding,” said Dr. Douglas.
He attributed much of the impact of university inventions to the Bayh-Dole Act of 1980,33 which allows universities, such as UAMS, to retain ownership of their federally funded research and seek private investment to commercialize their discovery for better health care. The Act has been described by key government and business leadership as “one of the most important pieces of legislation in the 20th century.”
The Complex Innovation Cycle
The process of commercializing even the most promising ideas is complex. Dr. Douglas described it as the innovation cycle, which he said created a “churn” of activities – knowledge creation (conception), technology transfer (formation), clusters and networks (maturity), and commercialization (growth). Because this churning process is fraught with resource limitations and uncertainties, he said, there is a need nationwide for incubators that can connect technology, people, and capital – to “fill the gaps” in commercialization. The Arkansas incubators, he said, perform that function through a number of mechanisms, including:
- Entrepreneurial training for the life scientist,
- Programs to train students to write and present business plans,
- Start-up advisory resources for early stage companies,
- A private equity roundtable network that extends over a seven-state area,
- Innovate Arkansas, a state-wide technology commercialization resource,
- Arkansas Development Finance Authority with its risk capital matching fund and tax credit programs, and the
- Research Park Authority, a new state authority to develop and support the acceleration of technology based companies and work force development.
These overlapping resources, he said, are viewed as elements in a “start-up continuum” extending from the university research investigator to the entrepreneur and venture funding within available capital and resource networks. “We have a small but well informed overlap,” he said, “and cooperation among the various networks within the State.”
A Profile of UAMS BioVentures
He then gave a profile of UAMS BioVentures as of 2009. The firm had two primary missions: (1) patent and licensing UAMS research and (2) starting technology-based biomedical companies.
Under the first mission, the company reported 296 patents or pending patent applications, 206 patent applications licensed, and 59 license and faculty support agreements. Royalty income from patents was about $1 million a year.
Under the second mission, the firm had helped form 12 companies that were currently operating, plus 22 client and pipeline companies. It had also set up Business Plan Teams at three state university campuses. In 2008, the companies paid a total of $21.5 million in salaries to some 420 employees.
In 2009, there were five business incubators in Arkansas, the first formed in 1986. (By comparison, he said, there were only two in the larger St. Louis metropolitan area with about double the population.) The incubators offered a total of 54,000 square feet of space to some 70 client companies and 33 operating companies. In Arkansas the incubators tend to be near the research universities in the northwest , northeast and central parts of the state.
He said that the economic productivity of the incubators was high, with an average annual wage of $56,000. The total capital raised by the incubators in Arkansas was $247 million, and the number of jobs created was 1252. He summarized the economic impact of UAMS BioVentures by the Institute of Economic Advancement, as of 2009, in the following terms:
- 44 start-up projects, with 22 in the portfolio and 19 in the impact study,
- $6.4 million in state and federal taxes generated,
- $76.3 million in total funding (debt, equity, and grants) to BioVentures' companies since 1997,
- $29.4 million in revenues (2008) from new products, services, and research,
- $52.4 million in 2008 economic output impact of BioVentures' companies, with 13 percent of the total out of state, and
- $184 million in total economic impact (1997-2008) as sales, investment, and research in the state.
He closed by characterizing with optimism the road ahead for commercialization of university research. The state has remarkable strengths in its strong business, government, and social networks, he said, and a “can-do approach” that was found in all of these sectors. Some challenges were to do a better job in “branding the region,” building proof-of-concept funding resources, and expanding entrepreneurial networks. In particular, he noted, the state was “lacking” in adequate space for commercialization of research and technology parks to accelerate and recruit additional further technology development.
OECD, Main Science and Technology Indicators, 2009.
National Science Board, Science and Engineering Indicators 2010, Arlington, VA: National Science Foundation.
Ibid., Science and Engineering Indicators 2010.
Also known as the University and Small Business Patent Procedures Act, Bayh-Dole was notable in reversing the presumption of intellectual property control from the federal government to individuals, small firms, or non-profits wishing to commercialize the results of their own federally funded research.
Barry Johnson, Moderator.
National Academies Press (US), Washington (DC)
Johnson B. Session III: Federal and State Programs and Synergies. In: National Research Council (US) Committee on Competing in the 21st Century: Best Practice in State and Regional Innovation Initiatives. Building the Arkansas Innovation Economy: Summary of a Symposium. Washington (DC): National Academies Press (US); 2012.