A National Strategy for Building America’s Communities of Innovation

A National Strategy for Building America’s

Communities of InnovationWashington Area Chapter of the

Technology Transfer Society

Brian DarmodyUniversity of Maryland Associate Vice President for

Research and Economic Development

March 18, 2009

• National governments abroad are building large research parks and science centers, attracting top U.S. researchers and corporate research dollars

• Science and technology are now global commodities

• U.S. private corporate research centers are greatly downsized or no longer exist

• Corporate and federal support for R&D at universities is declining

• We are in midst of global economic turmoil

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Technology Challenges Facing the U.S.

Asia’s “World Class” Campuses

Comparison: Washington D.C. Total Office Market = 100 million square feet

New Songdo City – South Korea – 60 million square feet

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Examples: China

Where has the Money Gone?Declining Industrial Support of Academic R&D

NSF 06-328 | September 2006

Where has the Money Gone?Declining Industrial Support of Academic R&D

NSF 06-328 | September 2006

Funding for academic R&D failed to outplace inflation for the last 2 consecutive years, for the first time in the 36-year history of the NSF survey.Funding for academic R&D failed to outplace inflation for the last 2 consecutive years, for the first time in the 36-year history of the NSF survey.

Corporate R and D Support Declining

Federal Support Declining

America Needs an Economic Strategy

Beltway bureaucrats spend many billions of dollars on top-down, highly fragmented economic development programs. Yet these programs are not designed to support regional clusters, nor do they send money where it will have the greatest impact in each

region.

Harvard Professor Michael Porter: October 30, 2008

State Innovation Zones: Laboratories of Democracy

New Jersey Edison Innovation Zones: encompass state universities, research

institutions and related businesses.

Pennsylvania, Michigan and other states have similar programs

The Power of Place: A Federal Economic Development Strategy

– Creating an Alliance among universities, research parks, incubators, tech transfer offices and fed labs as focus for federal policy reforms and investment

– Increasing the commercialization of U.S. Government R&D to help feed innovation to U. S. Communities of Innovation

– Increasing domestic corporate research in the U.S.

– Strengthening existing and developing new Communities of Innovation

– Creating, retaining and importing technology innovation start-ups

– Aligning Federal incentives and reforms with state technology development zones

Does Your Community Have:

• A university or college;

• A research park;

• A technology incubator;

• A federal laboratory; or

• Land adjacent to federal lab or installation

Yes?

Then You Have A Community of Innovation

Federal Policies should support and invest in US Communities of Innovation

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Bette Science;Better Innovation;

A Better World

Sponsoring Organizations

University of New Orleans Research and Technology

Park

Bio-Research & Development Growth Park at the Danforth Plant Science CenterSaint Louis, Missouri

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• Studies show physical proximity of researchers (along with patents), is an increasingly important pathway to tech commercialization

• Science is becoming more inter-disciplinary and inter-institutional

• Private industry collaborations with universities and federal labs account for an increasing share of U.S. innovations and tech start-up companies

• State governments are experimenting with technology zones to support research parks and technology incubators, and to increase technology-led economic development clusters

• The federal government does not have a comprehensive strategy to take advantage of its innovation assets

The Power of Place: Opportunities

The American Innovation Zones should include:

• An enhanced federal corporate R&D tax credit for R and D performed in incubators, research parks and universities;

• Reforms in IRS regulations affecting tax-exempt facilities to encourage more corporate-sponsored research and development in U.S.;

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POLICY RECOMMENDATIONS: American Innovation Zones

• Incentives for creating Green Communities of Innovation: supporting mixed used and residential ‘smart growth’ development strategies

• Federal lab construction and leasing preferences in Communities of Innovation

• Encouragement of SBIR/STTR grants and SBIC support to companies located in the Zones

• Expansion of Enhanced Use Lease [EUL] authority to all federal agencies to increase Innovation Zones adjacent to federal laboratories

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POLICY RECOMMENDATIONS: American Innovation Zones

Introduced by Senator Pryor [D-AR] and others March 12, 2009, with Snowe, Durbin, Alexander and Johnson as co-sponsors

It offers for incubators and science parks:

•Initial funding for development of plans

•Loan guarantees for development

•Needs sponsors from DC region

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Building A Stronger America Act:America’s Infrastructure Solution: S. 583

Federal obligations for R&D : FY 2006

• Intramural federal lab R and D: $ 25,521.5 billion

• Universities and colleges: $25,332.2 billion

Develop National Federal Laboratory Foundation

to help better commercialize the $25 billion of internal

research and development spending within federal

labs in our communities, particularly in DC region

Reduce legal and administrative ‘knowledge

filters’ from federal lab technology commercialization

process

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Federal Labs: Communities of Innovation

The United States must support programs to encourage the move of technology companies and knowledge workers into the U.S. through HB-1 visas reforms.

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Importing Innovation, Reforming Immigration Laws

Details of Proposal : Thirteen Federal

Recommendationswww.aurp.net

Stimulus Opportunities and Power of Place

• Stimulus II? What To Do Next Time?

• Economically Distressed Zones: Lagging Economic Indicators of Distress: Federal Data Collection

• SBIR/STTR reauthorization

Infrastructure and Federal Stimulus Package

• US universities, research parks, and incubators have billions of dollars worth of un-met needs in capital construction for basic research, translational research, and private sector innovation

• Many of these projects are ready to be contracted out in near-term

It is All About Jobs: Do you Have Your Metric?

• Research Universities: Every $1 million of R and D = 36 jobs

• Incubators: Provide up to 20 times more jobs than water and sewer projects for same investment

• Research Parks: Each research park job generates 2.57 jobs resulting in a total impact of more than 750,000 jobs

• Tech Transfer: ?

NASVF Public Policy National Innovation Seed Fund

National Innovation Seed Fund

$2 billion fund

National Seed Fund of Funds

50 Seed Funds

$1.8 Billion

Innovation Capital Technical Assistance Grant Fund

$200 Million

U.S. Small Business Administration

• 50 State/Regional Innovation Seed Funds

• Receive approximately $10-15 M direct investment from NISF

• Has to match with $1 from other third parties

• Awarded on early-stage innovation focus and experienced managers

• Leverages successful federal SBIR recipients and like or similar state and regional investment programs

• Federal Government is a Financial Partner

• Available to both NISF funds • Grants are used to provide support and

technical assistance to fund managers, portfolio, companies & entrepreneurs

• The National Public-Private Partnership would administer the Innovation Capital Technical Assistance Grant Fund

• Approximately $200 M

How You Can Help• Give the Coalition ideas on additional

investments/reforms to consider in stimulus plans

• Talk to your local state economic development officials

• Work with your Maryland/Virginia Congressional delegations to find sponsors/supporters for Senator Pryor Bill and related reforms/investments

• Join the Coalition!

Better Science;Better Innovation;

A Better World

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Better Science;Better Innovation;

A Better World

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Brian Darmody

Associate Vice President

Research and Economic Development

University of Maryland College Park

301-405-1990

bdarmody@umd.edu

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Thank You