“A Catalyst for Technology Led Economic Development”

Achieving economic sustainability in a globally competitive, knowledge based, innovation driven

economy

© 2012

Understanding the Innovation Economy

• Historically, research resulting in innovative technologies has been the primary driver of economic growth and development

• Technology led economic development has “clustered” around and been driven by major research institutions

• Research that supports and/or has commercial application is the basic cornerstone in the creation of technology start-ups and expansion, supporting the growth of integrated industry clusters

Building the Innovation Economy

Deal Flow from research leading to commercializable discoveries

Venture Capital to fund proof of (1) concept, (2) product and (3) market

Technical Assistance to license, patent, incorporate

Entrepreneurs to start companies

Business & Industry to commercialize and produce

© 2012

A Catalyst for the Innovation Economy

“The Center for Innovation”• Established 2001• Non Profit LLC• Partnership between the Arlington Chamber of

Commerce and UT Arlington• Oversight by Board of Managers

• Wes Jurey

• Robert Hernandez

© 2012

• Jim Spaniolo• Ron Elsenbaumer

•Jerry Hoodenpyle

Center For Innovation’s Strategic Goals• Create world class deal flow, fostering technology

discoveries, transfer and commercialization• Catalyze a strong regional venture capital

industry, creating access to venture capital, through proof of concept, product and market

• Develop and attract talent and know how, through entrepreneurial development and start-up assistance

© 2012

#1 Creating World Class Deal Flow• Federal Labs

−Facilitate commercialization of federal lab discovered technologies

• Universities

−Facilitate university research partnerships

−Facilitate commercialization of university invention disclosures

• Industry

−Facilitate commercialization of industry discoveries

−Create industry/academic research partnerships© 2012

#2 Catalyze a Strong Regional Venture Capital Industry• Establish the venture industry in our multi-state south

central region VenComm

Angel Investor Network/Arlington Angels

Proof of Concept Funds

• Provide access to state & federal funds SBIR/STTR grants

Texas Emerging Technology Fund

Treasury SSBCI Fund

© 2012

#3 Develop and Attract Talent & Know HowPublic Education• Develop entrepreneurial development initiatives with ISDs

Higher Education• Develop partnerships with MBA programs utilizing

Education Partnership Agreements• Support university business plan competitions• Develop regional network• Conduct entrepreneurial boot camps

Workforce System• Develop entrepreneurial training with Workforce Boards

The Texas Challenge

• 97% of patents granted to Texas Universities since 1990 have been commercialized out of state

• Price Waterhouse Cooper Report: Texas received 1.49% of all venture investments in U.S. in past year

• California has 10 Tier 1 Universities; Texas 3

• LA has 180+ Angel Investor Groups and Funds – North Texas has 7

© 2012

The North Texas Opportunity

4th largest region in U.S./fastest growing

Most Fortune 500 companies

UT Arlington is one of 27 four year colleges and universities in the region

UT Arlington is one of 7 universities in Texas designated as an “Emerging Tier 1”

TechComm-a unique opportunity to develop a new model for federal technology transfer

© 2012

“A New Model for Transfer of Federal Technologies to the Marketplace”

© 2012

Partnership Intermediary Authority

• Congressional authorization (15 USC 3716) grants federal agencies the authority to contract with non-profits as “partner intermediaries” to facilitate tech transfer

• The purpose of the Domestic Technology Transfer Program is to facilitate the transfer of federal technologies to U.S. businesses for their research, development and production to meet federal requirements as well as commercial applications

• Technology transfer simultaneously enhances the economic competitiveness of U.S. industry and provides the federal agency with products that meet their needs

© 2012

Premise

The Center for Innovation, a U.S. Department of Defense (DoD) Partnership Intermediary, is premised on the belief that our future economic sustainability is dependent upon our ability to foster collaboration among and between our nation’s federal labs, business and industry, research oriented universities, technology focused economic development entities, and the venture capital industry.

Center for Innovation’s Role

• Center has established TechComm, focused on building a new interagency model to facilitate access to federal labs and patented technologies

• Industry & University research is accelerated into the federal labs under Cooperative Research and Development Agreements (CRADAs)

• Federal technology discoveries are commercialized from the federal labs through Patent License Agreements (PLAs)

© 2012

TechComm Represents Multiple Federal Agencies as a Partnership Intermediary

• Defense (120 labs)

• Agriculture (100 labs & research institutes)

• Homeland Security (8 research centers)

• National Institutes of Health (27 institutes)

• Agreements with NOAA, the National Oceanic and Atmospheric Administration and Energy are pending

© 2012

TechComm Has Engaged Additional Federal Agencies as Partners

• Commerce Office of Business Outreach Economic Development Administration U.S. Patent Office National Institute for Standards & Technology

• Small Business Administration (MOU signed in February) Regional/District offices Certified Development Finance Institutions (CDFIs) Small Business Development Centers (SBDCs)

• Labor Workforce Investment Boards Training, Retraining Assistance Job Placement Assistance

© 2012

Federal Labs Represent a Significant Resource

• 255 labs

• $100 billion annually on research

• 100,000 scientists/researchers

• 30,000 patented technologies

© 2012

Status:Implementation Approach

Priorities:

• Execute Federal Agency PIA Contracts (4 of 7)

− 4 executed

− 3 pending

• Develop National Network of Affiliate Partners (20 of 40)

• Develop “Beta Lab” Network (7 of 13)

• Develop Internet-Based Portal (In Progress)

• Establish For Profit Venture Affiliate (Filed)

• Engage Small Business (In Progress) © 2012

Corporate Structure

TechComm Affiliate NetworkVision – to provide a national network of affiliate partners with each partner serving as a conduit to a greater number of local and regional entities, including venture funds and research institutions

Structure – selection of affiliate partners at state, regional, and local levels

• universities

• economic development organizations

• venture funds

• business and industry

© 2012

Engaging Business & Industry

• TechComm works with corporate partners to:

Engage them in the design and development of the model

Identify industry research aligned with federal priorities as the basis for CRADAs

Identify industry technology gaps that can be met through Patent License Agreements (PLAs)

Identify industry patents and products that can meet federal needs

© 2012

Engaging Universities

• TechComm works with research oriented universities to:

Identify research aligned with federal lab priorities to propose as Cooperative Research & Development Agreements (CRADAs)

Foster academic/industry partnerships to meet the common interests of the participant federal agencies

Identify university technology that can meet the needs of federal labs and corporate partners

© 2012

Engaging Economic Development Organizations

• TechComm works with technology-oriented economic development organizations to:

Conduct industry scans to determine technology needs, gaps, and capabilities within the organization’s membership and region served

Identify companies interested in accessing federal technologies as the basis for applications for Patent License Agreements (PLAs)

Enhance the flow of federal technologies to small and expanding businesses

Encourage technology based economic development

© 2012

Engaging Venture Capital

• TechComm works with venture partners to:

Ensure the model integrates the venture capital industry, inclusive of angel, pre-seed, seed and later stage venture funds

Provide opportunity to serve as a source of equity Engage their portfolio companies seeking technologies Participation in a Fund of Funds as a catalyst for formation of

venture and angel funds Provide technical assistance to establish Angel Funds,

supported by a TechComm Angel Fund Network

© 2012

VenComm – CFI’s for profit venturecommercialization arm

• Filed with Secretary of State as for profit, LLC affiliate of the Center for Innovation

• Serves as holding corporation for CFI projects

• Biojet Fuel Validations, LLC formed to support Biofuels Initiative

• UAS Validations, LLC formed to support UAS Consortium

© 2012

Connecting The Network:The “Portal” Connection

© 2011

TechMatch+ + +

Federal Agencies/Labs Inputs: – Patent Portfolios – Research Priorities

– Procurement PrioritiesOutputs: – CRADA proposals

– Licensing partners – Procurement Opportunities

Industry Inputs: – Capacity

– Patent Portfolios – Technology gapsOutputs: – PLA’s

– CRADAs

University Inputs: – Centers of Excellence – Patent Portfolios

– Research PortfoliosOutputs: – CRADA proposals

– Industry Research Partners

Industry/Academic Partnerships

TechComm Affiliate Partner StatusAs of March 19, 2012

Corporate UniversityBASF Tarrant County College Huffines* University of Texas at ArlingtonITECSKaoneticsLockheed Martin Pioneer Natural ResourcesSiemens Venture CapitalScrap Rubber 2 Oil Doskocil, LTDTexas Health Resources EFO HoldingsWalmart Texas Emerging Technology Fund

Economic Development GovernmentDayton Development Coalition City of ArlingtonEnid Regional Development Alliance DFW Airport*

* Agreement Pending

© 2012

“Beta Labs”

• Launched at Federal Lab Consortium (FLC) Annual Meeting May 2-5, 2011

• Labs will guide development of model from lab perspective

• Labs will serve as focal point for technology transfer, regional forums and regional economic development

© 2012

Beta Lab Focus

• National Network Integration

• Interagency Relationships

• Non Federal Research Funding

• Commercialization of Beta Lab Patents

• Special Projects

• TechMatch + + +

• Regional Technology Showcase Events© 2012

“Beta Lab” EngagementDevise process to:• Guide industry and university research proposals to

appropriate federal lab/scientist for research partnership (CRADA)

• Align industry capacity and technology gaps of private sector with federal patents to propose candidates for Patent License Agreements (PLAs)

• Enable marketing assessment of federal technologies from 3rd party sources (industry, colleges, angel investors)

• Develop regional “Federal Marketplace” events to facilitate partnerships with private sector companies and universities

© 2012

Beta Lab – Status ReportConfirmed List:• Air Force Research Lab – Propulsion Directorate – Wright Patterson• Aviation & Missile Research, Development & Engineering Center• National Renewable Energy Lab - NREL• Naval Surface Warfare Center – Crane Division• Office of Naval Research• SPAWAR (Navy) Pacific – San Diego• Tinker Air Force Base - Oklahoma• Telemedicine and Advanced Technology Research Center (TATRC)

Pending:• Kirtland Air Force Base – Albuquerque • Sandia National Lab (DOE) – Albuquerque• NAVAIR - China Lake – California

© 2012

• National Cancer Institute (NIH)• Homeland Security• USDA

Beta Lab – Project Example

• Tinker AFB – Oklahoma City

Warner Robins Air Logistics Center - Georgia

Ogden Air Logistics Center - Utah

• Logistics Center for Air Force

• Procurement Opportunities

• Technology Applications

© 2012

Beta Lab – Regional ExampleCrane Lab – Navy – Indiana• University of Southern Indiana (PIA)• GAGE (PIA & TA CRADA) • Radius Indiana (PIA & TA CRADA) • RF Alliance (PIA) • Terre Haute EDC (PIA)• Bloomington EDC (PIA) • Indiana University (EPA & PIA in process)• Ball State University (EPA & PIA in process)• Muncie Innovation Connector (PIA) • Indiana Purdue Fort Wayne (PIA in process)

© 2012

Beta Lab Showcase Events

• 2013 – 2014 ( Beta Test 2012)

• Regional Focus

• Beta Labs Co-host

• Technology Specific

• Industry Specific

© 2012

CFI Technology

Initiatives

3 Examples

Unmanned Aircraft Systems Consortium

(UAS)

• CFI has established a “UAS Consortium”• Primary focus – develop the UAS Industry,

from concept/design/prototype development to experimental flight/production/manufacture

• Arlington Police Department (APD) – FAA license to fly experimental UAVs over Arlington’s dense urban air space – only 1 in U.S.

UAS Consortium

• DoD currently buys 70% of all UAV’s manufactured in the world

• DoD currently spends $1.9 Billion

• DoD projects $36.9 Billion (2020)

• Homeland Security interest

• First Responder Community interest

• USDA interest for industry use

Federal Perspective

Aviation Industry Perspective

• Air Transport Association of America, established and leads the Commercial Aviation Alternative Fuels Initiative (CAAFI)

• FAA, Navy primary partners in CAAFI

• CFI has joined CAAFI as an invited participant

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Consortium Partners(As of March 1, 2012)

•Arlington Police Department

•Leptron

•DFW Airport

•Texas Office of Economic Development

•Lockheed Martin

•Raytheon

•Tarrant County College District

•University of Texas at Arlington

•Texas Department of Public Safety

•Texas Emerging Technology Fund

•Bell Helicopter

•Wills Point EDC

Biofuels

Consortium

Biofuels Consortium

• CFI has established a “Biofuels Consortium”• Primary focus – developing a sustainable,

replicable, scalable model for non food biofuel refinery

• White Paper submitted in October, 2011 at DoD’s request for Title III Funding

• Status: Identify and select partners for application process

Federal Perspective

• One of the top research priorities of DoD/USDA/DOE (TechComm represents all 3)

• Defense perspective: Lesser dependence on foreign oil

• Agriculture perspective: Establish new use for biomass

• Energy: Alternative fuel

Federal Response

• In 2011 DoD announced a new program to finance non petroleum fuel production, in collaboration with the Departments of Energy and Agriculture

• Invoked the Defense Production Act• Access to Title III funds• Establish joint ventures to invest directly in

new U.S. based production facilities

Primary Challenges

• Most formulas not proven

• Cost not competitive with petroleum

• Biomass used takes “food off the table”

• Future subsidies in doubt

Primary Criteria

• Non food sources of biostock

• Cost competitive with petroleum

• Proven formulas for JP-5 & JP-8

Primary Stages

• Identification of biomass• Process to acquire/move biomass to refinery• Process biomass to sugar• Process sugar to butanol • Process butanol to jet fuel• Engineer/design refinery• Identify owner/operator • Identify funding• Identify bonding

Red Cedar – Invasive Problem in Mid America Farm and Grassland

Initiative Status• BioMass Identified & Tested• Harvesting, Distribution Capacity Identified• Proprietary Technologies Identified• Second, Third Sites Identified (12 total)

• DFW Airport• Cherryvale, Kansas

• Funding Sources Identified• White Paper Submitted to DoD in October for

$100M• Meeting in DC anticipated in March/April

Initiative Resources

• DoD, DOA, DOE• DFW Airport

−FAA Test Facility−NASA Test Facility−2nd biofuel refinery

• Navy – agreement to provide takeout contract• China Lake – technology to convert butanol to JP-5• AFRL – Wright Patterson AFB – primary test center for biofuels• USDA/ARS - testing• TechComm Venture Capital Network/VenComm• Title III DoD – white paper submitted

Note: Biojet fuel standard approved by American Society for Testing

and Materials (ASTM)

Current Partners

• GreenG Development• W.B. Johnston Grain Company• Enid Regional Development Alliance• Queal & Associates• Pure Vision Technology • Green Biologics• Oppenheimer

Current Prospects

• Establish National Feedstock Resource Center

• Establish Prototype Refinery

• Testing & Validating Oil Seed

• Testing & Validating Woody Biomass

• Partnership with Southern States Energy Board

Procurement Pilot

Project

Procurement Pilot Project

• CFI in process of establishing Procurement Pilot in partnership with Air Force Logistics Center

−Challenge – finding manufacturers to make parts and components, post production

−Opportunity – Air Force represents $1.9 billion in annual parts/components production

−If pilot successful, Navy, Army Logistics Center plans to utilize CFI/TechComm approach

−Issueso Process managemento Capitalo Identification of Manufacturers

Progress

• SBA Loan Guarantees−MOU signed with Regional SBA Office−90% loan guarantee

• Accion Commitment−Commitment to provide $500,000 loans−MOU in process

• Searchable data base−Air Force has provided data base−Format in development−Navy, Army interest−$2 billion annually

VenComm, LLC

A For Profit Affiliate of the

Center for Innovation

VenComm, LLC

• Enables the establishment of multiple start ups

• Integration of state and federal grant funds with private sector investment

• CFI receives after tax profit• Enables CFI to retain equity and/or royalties

investment• Enables Chamber members to invest in CFI

projects

Current Structure

Current & Future Opportunities

• Biofuels Consortium• UAS Consortium• Procurement Initiative• Federal Lab Consortium/Affiliate Partners

Meeting – May 1-3 - Pittsburg• Regional Technology Showcase Events

2013/2014• VenComm

Regional Industry Clusters

• Advanced Materials & Manufacturing• Logistics & Distribution• Health Care & Life Science• Energy & Natural Resources

“Our challenge is to understand the difference between

accomplishment and impact”

Dr. Michael Postek

National Institute of Standards and Technology

“ Change is debilitating when done to you… but exhilarating

when led by you”

To succeed, we must effect a cultural change

“It’s how Northern California became

known as Silicon Valley”