state tech-based economic development: a national perspective presentation by: dan berglund march...
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State Tech-based State Tech-based Economic Development: Economic Development:
A National Perspective A National Perspective
Presentation by:
Dan Berglund
March 19, 2009
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State Science and State Science and Technology InstituteTechnology Institute
Mission
• Leads, supports, and strengthens efforts to improve state and regional economies through science, technology, and innovation
Funders
• Carnegie Corporation
• Kauffman Foundation
• MEP
• More than 180 state, local, and university TBED organizations
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What is TBED?What is TBED?Approach used to help create a climate where firms that
constantly innovate and maximize the use of technology can thrive
Emphasis: “grow your own”
Can be powerful partner with conventional economic development’s recruitment of companies
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Why do This?Why do This? Global competition
Lesser-skilled, lower wage jobs outsourced, or done more competitively, overseas
Quality jobs Technology industries’ wages average 84 percent more than U.S.
average
$69,000 vs. $37,500 (2003)
Changing demands of industry
Because of the growing technology-intensity of all industry, citizens’ success is increasingly dependent on their ability to learn, adapt, and contribute to innovation
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Kentucky vs. North CarolinaKentucky vs. North Carolina
State Average Personal Per Capita Income as a
Percentage of US Average Personal Per Capita Income
0.6
0.65
0.7
0.75
0.8
0.85
0.9
0.95
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000
Year
Sta
te A
vg
Inc
om
e/ U
S A
ve
rag
e In
co
me
NC
KY
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Major New InitiativesMajor New Initiatives Legislatures approved
• AZ-- $25M/year for four years for 21st Century Fund
• AR– up to $140M for various TBED initiatives
• CA-- $70M for two energy research centers
• FL-- $29.5M for Opportunity Fund; $180M for research
• IN-- $20M Life Sciences Fund
• IA-- $25M for Iowa Power Fund; $25M for next 3 years
• MO-- $15M for several new TBED initiatives
• WA-- $70M over biennium for Life Sciences Discovery Fund; 10 year commitment of $35M/year
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Energy in 2007Energy in 2007 Heavy emphasis on research
• Specific centers or demonstration plants
• CA ($70M), FL ($20M), NC ($5M), OK ($40M), OR ($6.7M), TN ($51.6M)
• Pool of funds to compete for
• IA-- $25M w’ $75M to come
• MN-- $5.65M
• NM-- $2M
• ND-- $14.9M
• TN– $13M
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Focus on Energy Continues Legislature appropriated funding in 2008
• AK-- $50M for Renewable Energy Grant Fund; up to $250M
• CO-- $7.65M for Clean Energy Fund; $2M for Colorado Renewable Energy Authority
• FL-- $50M for the Florida Energy Consortium for R&D
• HI-- $8.7M for Hawaii Renewable Hydrogen Program
• KY-- $7M for Energy R&D Fund
• MI-- $45M for Centers of Energy Excellence
• NM-- $1M for solar energy research park
• OH-- $150M for advanced and renewable energy distribution
• PA-- $40M for alternative energy development program
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Elements for Elements for Tech-based EconomyTech-based Economy
Intellectual infrastructure Spillovers of knowledge
• from universities
• from informal networks Physical infrastructure Technically skilled workforce Capital Entrepreneurial culture Quality of life
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Intellectual Intellectual infrastructure activitiesinfrastructure activities
Strengthen state’s higher education system R&D capacity
• Example: Kentucky’s Bucks for Brains
Invest in basic research in hopes of seeding economic development and new industries
• Example: California’s Embryonic Stem Cell Institute
Invest in higher ed in areas of industrial relevance
• Example: Georgia Research Alliance
Invest in areas to diversify economy
• Example: Michigan’s Life Sciences Corridor, Prop 301
Encourage greater university-industry interaction
• Example: Maryland Industrial Partnerships Program
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Improving Higher Ed Infrastructure Improving Higher Ed Infrastructure EmbracedEmbraced
Legislature appropriated funding
• AZ-- $25M for 21st Century Fund
• CA-- $70M for two energy research centers
• FL-- $80M for genomic res inst; $100M for Ctrs of Excellence
• ID-- $1.5M for Higher Education Research Council
• IN-- $20M Life Sciences Fund
• MO-- $13.4M for animal health & nutrition, renewable energy & plant sci
• NC– $25M to UNC-Chapel Hill for cancer research
• ND-- $20M for Centers of Excellence
• OH-- $100M for Ohio Research Scholars
• OK-- $75M for endowed chairs
• OR-- $11.5M for signature research centers
• WA-- $70M for Life Sciences Discovery Fund
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Higher Ed 2008-- Scholars Legislature appropriated funding in 2008
• KY-- $60M for Bucks for Brains
• LA-- $8M one-time funding for endowed chairs and professorships
• SC-- $30M for Endowed Chairs Program
• UT-- $32.2M for USTAR
• WV-- $50M for Bucks for Brains
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Spillovers of KnowledgeSpillovers of Knowledge Identify and remove barriers to commercialization of university-
developed technology
• Example: Oklahoma and Oregon
Encourage commercialization of university-developed technology
• Example: Utah’s Centers of Excellence
Encourage commercialization of federal lab technology
• Example: Technology Ventures Corporation
Provide seed funding to industry associations and technology councils
• Examples: MD, VA, and WA; more than 200 groups
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Spillovers of KnowledgeSpillovers of Knowledge Improve competitiveness of existing manufacturers
• Example: Manufacturing Extension Partnership
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Physical InfrastructurePhysical Infrastructure Research parks
• Example: Centennial Campus
Examine quality of infrastructure
• Example: e-Com Ohio, ConnectKentucky
Improve it through public or private action
• Example: Berkshire Connect, e-NC
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Technically Skilled WorkforceTechnically Skilled Workforce Increase exposure to math & science in K-12
• Example: Maine’s Laptops for 7th graders
Encourage more students to enter S&E fields
• Examples: SciTech Scholars and GI Bill for the New Economy in Pennsylvania
Create internships to link students with jobs in-state
• Example: North Dakota “Operation Intern”
Subsidize tuition for undergraduate education
• Example: Hope Scholarships
Training for workers in technology-based companies
• Example: Maryland’s Partnership for Workforce Quality
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CapitalCapital Use state funds to invest in technology companies
• Example: Massachusetts Technology Development Corporation
Use state funds to leverage private funds to invest in technology companies
• Example: Maryland Venture Capital Trust
Encourage angel investing
• Example: Arizona angel investor tax credit
Provide assistance to companies to access financing sources
• Examples: Oklahoma Tech Comm Center, Venture capital conferences, SBIR assistance
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Entrepreneurial CultureEntrepreneurial Culture Improve survival rate of start-up companies
• Example: Ohio’s Edison Incubators
Work intensively with entrepreneurs to develop their businesses
• Example: Oklahoma Technology Commercialization Corp.
Recruiting management talent
• Examples: Kentucky, BFTP/Central
One-stop resource directory
• Example: CREC Program Finder
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Kansas Kansas Technology Enterprise Corp.
• Investment Program
• Angel Investor Tax Credit Program
• Tech-based incubators
• Five small Centers of Excellence
• KTEC Pipeline
• MEP Center
• Annual budget $12.5M Kansas BioScience Authority
• Funded by TIF-like mechanism; sunset at $581.8M
• Lead agency pursuing National Bio and Agro Defense Facility
• Recruit eminent scholars and support rising stars
• Matching federal funds
• Pre-venture financing to early-stage bioscience firms
• R&D voucher program to support university-industry partnerships
• Awarded $86.7M as of Sept 2008
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Kentucky Council on Post-Secondary Education
• Research Challenge Trust Fund; $410M since 1998 Department of Commercialization and Innovation
• Coordinating and strategy organization
• Match SBIR Phase I and II awards
• High-Tech Investment Pool
• $16.9M in FY2008 (some of which flows to KSTC) Kentucky Science and Technology Corp.
• Kentucky Enterprise Fund• Kentucky R&D Voucher Program
• Kentucky Rural Innovation Program
• Kentucky New Energy Ventures
• Innovation and Commercialization Centers
• Kentucky Science and Engineering Foundation• Kentucky Commercialization Fund
• R&D Excellence Program
• SBIR/STTR Phase 0 and Phase 00 Program
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Maine Maine Office of Innovation
• Coordinating body and strategy
• $10M annual budget (most directed to MTI)
Maine Technology Institute
• Business Innovation Programs
• Seed Grant Program
• Development Awards
• Accelerated Commercialization Fund
• SBIR/STTR Phase 0
• Cluster Initiative Program
• Maine Technology Asset Fund
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Maine StrategyThree phases
1. Invest in R&D capacity, building up universities and non-profits such as Jackson Laboratory, Bigelow Labs using EPSCoR and R&D bond funds. Also Maine Technology Institute funds for private sector R&D. (1999- present)
2. Invest in research infrastructure competitively with focus on collaboration (FY08-09 $50 million bond).
3. Going forward – focus on commercialization – next steps increased support for technology transfer, proof of concept, entrepreneurship, venture capital
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State of Maine R&D Funding – FY1999/00-2008/09
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-2008 2008-2009
Fiscal Year
To
tal R
&D
Fu
nd
ing
TOTAL GENERAL OBLIGATION BONDS
TOTAL GENERAL FUNDAPPROPRIATIONS
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Maine State Funding for R&D by Program FY1996/97-FY2008/09
University of Maine System 49.9%
Maine Biomedical Research Fund 17.7%
Maine Technology Institute 14.2%
Maine Science and Technology Foundation 6.3%
Applied Technology Development Centers 3.2%
Small Enterprise Growth Fund 2.7%
Maine Marine Research Fund 2.0%
Gulf of Maine Research Laboratory 1.7%
All Other 2.4%
Total State Funding for R&D = $397,126,970
$397,126,970
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Lessons LearnedLessons Learned Committed high-level leadership is required that
understands:
• Economic impact further down the road than other approaches
• Research does not always succeed
• Significant cultural differences between actors
Action should be based on:
• Understanding of needs, capabilities, and gaps
• Filling gaps to encourage change in private sector behavior
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Lessons LearnedLessons Learned Characteristics of successful TBED programs
• Three hallmarks for long-term sustainability
• Do good work
• Measure whether they’re doing good work
• Telling people they’re doing good work
• Champions from more than one sector (ideally all three)
• Private sector, university, government (gov or legislature)
• Effective management and staff
• Entrepreneurial in approach/responding to change
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Contact Contact InformationInformation
For more information, contact:
Dan Berglund
614.901.1690
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http://www.ssti.org