Washington State Department of Community, Trade and Economic Development

1. Washington State Department of Community,Trade and Economic Development Innovation Partnership Zones August 27, 2008

2. Policy Drivers • Knowledge economy • Innovation and productivity • Green economy and sustainability • Local economies and regional competitiveness • Clusters • Global trade

3. The Role of Government Set clear direction Convene assets and actors Incent networks and collaboration Fund process, as well as outcomes Provide long-range support – commitment to strategy Coordinate / leverage other state efforts

4. Recent Examples Cluster planning grants Workforce and economic development alignment CTED Regional Services Associate Development Organizations Innovation Partnership Zones STARS program

5. Innovation Partnership Zones Created in 2007 by Governor Gregoire and the Washington State Legislature, through SHB 1091.  One of many efforts to stimulate the growth of industry clusters and to build regional economies.  Innovation Partnership Zones (IPZs) bring together… Research Workforce training Globally-competitive companies …within compact, geographically-distinct boundaries.

6. Goal To stimulate cooperative, research-based efforts that will lead to new commercially viable products and jobs. Policy Objectives Regional economies Stimulate or strengthen cluster formation Diversity of discovery Develop research capacity and research models

7. Expected Results Alignment between higher education research and targeted industry clusters. Increased commercialization activities at research institutions leading to new company formation and new products developed and produced in the state. Increased investment dollars available for Washington businesses. Growth in employment and revenues of targeted industry clusters. Expanded employment opportunities in high-skilled jobs. Enhanced tax revenue to the state and local governments.

8. Bellingham Innovation Zone - For low-wake, fast ferry vessel prototypes, hydroscience and engineering and design, wake wash energy studies, advanced composite and aluminum alloy techniques. Grays Harbor Sustainable Industries Innovation Partnership Zone – For research and development of bioenergy, bio-based product manufacturing, particularly high-value byproducts from bio-based energy production.  Pullman Innovation Partnership Zone – For clean information technology and datacenter technologies, such as energy efficient technologies, and power and cooling infrastructure.  Spokane University District Innovation Partnership Zone – For biomedical research such as computational biology, bioinformatics, systems biology, epigenetics, genomics, chromosomal biology, and drug discovery.  Walla Walla Valley Innovation Partnership Zone – For agricultural innovation with a focus on enology/viticulture and water/environmental studies.  Aerospace Convergence Zone (Everett) – For research in new materials and processes for aircraft production.  North Olympic Innovation Partnership Zone (Sequim) – For marine biotechnology, coastal assessment and restoration, forecasting stressors on marine and estuarine systems. Bothell Biomedical Manufacturing Corridor – For the establishment of a University of Washington Biotechnology and Biomedical Technology Institute, principally to support medical device/ultra-sound manufacturing.  Discovery Corridor Innovation Zone (Vancouver) – For semiconductor and micro-device design, IC manufacturing and processing, display technology and multimedia.  South Lake Union Life Science Innovation Partnership Zone (Seattle) – For bioscience and biotechnology, pharmaceuticals, cardiovascular and regenerative biology, cancer research, infectious disease research. Tri-Cities Innovation Zone – For research in sustainable development, with focus on integrated electrical-thermal production, solar dish generating systems, and commercial-scale fuel cells. 

9. Resources The legislation provided no funds for IPZ administration, start-up, or operations. A last-minute proviso, offered by the bill sponsors, was placed in the 2007 Capital Budget. The proviso gave CTED $5 million to award infrastructure grants to a handful of designated zones.  This was one-time, competitive funding.

10. In 2007, six of the 11 designated IPZs were awarded capital grants, ranging from $275,000 to $1 million.  The grants funded shared infrastructure, telecommunications, equipment or construction, and up to 10 percent for IPZ administration. Bellingham Grays Harbor Pullman Spokane Tri-Cities Walla Walla

11. Experience – 9 months Diversity occurred naturally. Remediation was a central theme. Clean technology is well-represented. Demand for research capacity and alternatives. Navigating higher education systems is very difficult.

12. Other Observations The designation process – in and of itself – was a very helpful organizing tool. The process of commercialization - and the balance between proprietary research and collaboration - has been a challenge. Getting the capital funds out-the-door has taken an exceedingly long time.

13. Comments from Zone Administrators More top-down strategic direction and coordination is needed. Stable, long-term funding & significant funding is needed. There are too many IPZs. Cap the designations. No more than five. Zones must aggressively seek federal and philanthropic funding, to augment and round out the IPZs.  Zones can – and should – be self sustaining. Part of the IPZ strategy should be a concentration on a few major themes and concentrate the zone resources to achieve critical mass.  Don’t restrict the number of zones, or bound the concept of innovation too narrowly, so that it favors only research institutions.  Recognize the special challenges – and opportunities – of rural zones. The program has all of the requisite parts…it’s a good mix. Funding doesn’t ensure success. Local partnerships need to have skin in the game and make this happen.

14. Recommendations – Beyond 2008 Put designation and performance criteria in context: Innovation Research Team (IRT) analysis & plan Statewide cluster analysis State Economic Strategic Plan Green Economy Jobs Initiative (HB 2815) All four products will be completed in late 2008 or early 2009.

15. More Recommendations Connect the IPZs, to foster collaborations and research. Boundary jumping. Enhance statewide marketing, to help IPZs leverage the IPZ brand. Put IPZs in leadership positions / roles, to increase credibility and leverage the institutional partnerships. Connect and coordinate public research institutions, to get more support to zones. Acknowledge, encourage, and fund the research capacities of community / technical colleges.

16. More Recommendations Continue capital grant competitions among designated IPZs. Separate the grant competition from the designation competition.

17. Choices & Possibilities Stable funding source to assist with administration / operating start-up Diversity v. targeting Augment research capacity Stratify the designated zones Link with cluster initiatives Reduce the frequency of designations

18. Challenges Funding Inventory of assets Network assets among and between zones Cluster identification and needs assessment Boundaries Supporting diversity v. picking winners Patience Demonstrating value of network / process

19. Julie Anderson Community, Trade, and Economic Development Senior Policy Advisor l Director’s Office Desk (360) 725-4029 l Cell (360) 481-5828 JulieA@CTED.WA.GOV CTED invests in Washington’s communities, businesses and families to build a healthy and prosperous future. Washington State Department of Community,Trade and Economic Development