Innovation U: Long and Winding Road or Superhighway?

Leslie BoneyVice President, UNC System

International, Community and Economic EngagementAnnual Arkansas Trustees Conference

December 5, 2014

UNC-W

WSSU UNCSA UNCGNCA&TSU NCCU ECSU

NCSU

ECU

FSU

UNCP

UNCC

UNC-CHUNCA

WCUASU

NCSSM

UNC: A 17 Campus System

221,000 students; 11,500 ft faculty6 Doctoral/Research Universities6 Master’s3 Baccalaureate 1 Special Focus (art, music, and design)

3

Getting started: problem statements

“Too many Southerners see their careers based on their ability to do specific things: make things, drive things, dig things, lift things or pick things. The economy, meanwhile, is rewarding those – regardless of race, gender or ethnicity – who have the ability to think things.”

George Autry, Founder, MDC, Inc., 1998

“We are currently preparing students for jobs that don’t yet exist, using technology that has not yet been invented, in order to solve problems we don’t know are problems yet.” From “Shift Happens,” by Karl Fisch, 2006

Getting Started:NC Job Change 1990 to 2012

Textiles Tobacco App/Cut Sew Furniture0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000182,905

16,530

92,531 86,962

30,685

6,1198,338

30,229

19902012

Source: NCESC.com

The loss of about 80% of our traditional manufacturing jobs Courtesy: Ted Abernathy

A new model?Not your father’s Oldsmobile… battery

• Alevo, a company formed by an international management group, started with technology originally developed in Norway, with principal clients in China and Turkey, manufacturing new battery technology in Concord NC

• $1 billion investment• 2500 direct jobs• 6000 indirect jobs• Near infrastructure, UNCC

1. Innovation creates new products, services, practices that yield value

2. Innovation comes from the application of science & technology

3. Between ⅓ to ½ of U.S. economic growth comes from innovation

4. Innovation has a big (5x) multiplier effect (across sectors & skill levels)

5. High-tech companies’ biggest impact is to grow the labor market

One Solution: Relentless Innovation-- The Modern Economy’s Fuel

Bottom line for states:

Best way to create jobs for all is to start/grow high-tech companies – relentlessly.

Courtesy John Hardin, NCOSTI: SOURCES: U.S. Department of Commerce; Moretti 2013, “The New Geography of Jobs.”

NC is Below Average in High-Tech Companies

(NC’s economy is low on fuel)

NC

US

Yet NC is Above Average in Academic R&D

NC

US

UNC Research Trends and Innovation Snapshot

2013)

Invention Disclosures

US Patents Issued

Licenses or Options

Executed

Start-ups

Doctoral Granting Institutions

ECU 10 2 1 1NCA&TSU 8 2 0 1

NCSU 238 37 111 8UNCCH 138 25 56 14

UNCC 31 17 18 4 UNCG 18 1 10 1

All other Institutions

6 1 1 1

UNC and Innovation: Governor One:

“The Entrepreneurial State” (May-July 2006)“The Entrepreneurial University” (July-December 2006)11 UNC entrepreneurship “centers” form (2006-2010)

UNC and Innovation: Governor Two:

• The Innovation Papers – blog series (2009-2010)• Innovate, Collaborate, Accelerate report – UNC; IBM;

campus teams (2009)• Application to i6 program – ACTION fellows, shared

services approach (2010)• Individual campuses tweak RPT policy (ongoing)• Governor’s Innovation Council (2010-2012)• Blackstone Entrepreneurial Network (2011-) • UNC Strategic Plan (2013)

“Innovate, Collaborate Accelerate” recommendations (2009):

Figure out what we do well:• ID system unique strengths in research and IP• ID each campus strengths and roleStrengthen the culture:• Support entrepreneurial faculty and offer mentoring• Recognize entrepreneurial faculty and technology development

through RPTMake the process work:• Multiple models of relationships with businesses, focused on speed• Look for shared services – assessment, consistent legal guidance,

toolbox

UNC Strategic Plan, 2013• Support game-changing research that solves the problems

of North Carolina – and the world• Recruit highly-entrepreneurial grad students and post docs• Improve REACH NC research expertise portal• Connect campuses throughout the world• Develop “innovation discovery teams”• Advance early-stage ideas through proof of concept fund• Invest in commercialization of developed ideas

Windows of OpportunityWindows of Opportunity Open – Two or more “streams” (i.e., arenas, realms, contexts, etc.) converge – the streams include the problem, politics, or policy

Problem Stream

Politics Stream

Policy Stream

From Birkland: “After Disaster,” Political Science Quarterly, 1998

Courtesy Dr. John Hardin, UNC Chapel Hill and OSTI

Window of Opportunity

Econ dev board UNC Strategic Plan

Manufacturing Advanced mftgEnergyEnergyIT

Data ScienceDefenseDefense, mil, securityPharmaPharmacoengineeringTourismCoastal and marine sci

UNC and Innovation:Governor Three:

Governor convenes venture capital group (May 2013)Innovation Index (November 2013 – also 2000, 2003, 2008)Economic Development Board “Jobs Plan” (January 2014)Governor convenes universities to highlight challenges (April 2014)Governor forms Innovation to Jobs (I2J) committee, tasks OSTI, chief of staff to manage; university and venture co-chair (June 2014- December 2014)Survey of 1000 stakeholders (July 2014)Governor declares NC vertex of “innovation triangle” (October 2014)Governor speaks to UNC Board of Governors (January 2015)Governor introduces specific legislation (February 2015?)Emerging Issues Forum “Innovation Reconstructed” – 1300 attendees (February 2015)

Major Innovation Challenges(Components in short supply)

1. Translation – Insufficient development and/or dissemination of university-based structures and practices for technology commercialization

2. Capitalization – Insufficient funding for technology proof of concept, validation, IP protection, commercialization, early and mid-stage product development/production, and business expansion

3. Operation – Insufficient number and utilization of seasoned, mature, business professionals to run startups and guide companies through growth and expansion

What Does Big Picture Look Like?

Invention/Innovation

Proof of Concept

MarketValidation

ProductDevelopment

CompanyExpansion

(Jobs)

Pre-Commercial Arena Commercial Arena

Sequential Model of Innovation Commercialization

What Interventions Are We Working On?

Invention/Innovation

Proof of Concept

MarketValidation

ProductDevelopment

CompanyExpansion

(Jobs)

Pre-Commercial Arena Commercial Arena

Campus culture, funding for research in areas of strength

Discovery teams, proof of concept fund

SBIR/STTR matching fund, commercialization grants

Talent recruitment

Tax policy

Venture recruitment, some campus

Adapted from Innovation Index, Hardin

20

Innovation U 2.0 (2014): Themes for Success

A loud priority from the top. A cultural shift towards entrepreneurship/risk-taking on all levels. Inclusion in Mission Statement. Senior management some private sector experience.

Blurring of university/industry. Faculty with industry experience in hirings and promotion. Flexible faculty pay/time structures. Flexible requirements and class structures. Cooperative research projects.

21

Innovation U 2.0: Themes for Success

Restructure into more functional units.

A centralized point of contact for industry.

Explosion of student entrepreneurship opportunities, which work as a system: Curricular expansion (classes, minors and majors). Co-curricular (centers, incubators, accelerators, institutes, contests,

clubs, funds). Extra-curricular (internships, collaborative research). NOT JUST BUSINESS OR STEM STUDENTS.

22

Innovation U 2.0:Getting Beyond Research

Universities Loud, senior leadership makes commercialization a priority.

Identify and utilize alumni and/or local business people as mentors/facilitators.

Campus-wide entrepreneurship classes/projects (requirement?).

Funds/contests for students and faculty.

Focus on one discipline with potentially strong industrial consequences in hiring, internships….

Hire faculty/leadership with some industry background.

Create a system: strategy with several different parts.

Points of Emphasis for Universities and States:

• Bring in, raise up talent – in university students, staff and faculty• Get data on where you are• Deal with culture – eliminate penalties; find rewards• Find way to assess what you have – create easy decision trees• Look for shared services – in assessment, legal, template

agreements• Create different helps at different stages – proof of concept,

seed, growth• Bring in, raise up talent – in universities, in investors, in managers

Extra slides for reference

NC General Assembly SB 741• “Game-Changing Research (16011) – Funds

focused investments in faculty, research and scholarship in six priority areas: advanced manufacturing; data sciences; defense, military, and security; energy; marine and coastal science; and pharmacoengineering. The investment in data sciences shall include data sciences programs at UNC Charlotte.- $3,000,000. Recurring.”

ROIRFP rules:• Significantly advance UNC research and scholarship in

one or more of the six areas described above;• Demonstrate the potential for near-term and long-term

impact;• Develop programs with high potential to leverage

significant internal support and external funding from government, corporate, and foundation partners;

• Describe a realistic sustainability plan.

Prosperity Zone ComparisonsTotal Job Growth 2000-2012

Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

-1.8%

-21.4%

5.4%

-9.9%

9.2%

-2.6%-0.9%

6.4%

Source: QCEW County Sector Data