A National Strategy for Building America’s Communities of Innovation

1. A National Strategy for Building America’s Communities of Innovation Washington Area Chapter of the Technology Transfer Society Brian Darmody University of Maryland Associate Vice President for Research and Economic Development March 18, 2009

3. Technology Challenges Facing the U.S. • 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 PAGE 3

4. Asia’s “World Class” Campuses New Songdo City – South Korea – 60 million square feet Comparison: Washington D.C. Total Office Market = 100 million square feet

5. Examples: China PAGE 5

6. Corporate R and D Support Declining Where has the Money Gone? Declining Industrial Support of Academic R&D NSF 06-328 | September 2006 Federal Support Declining 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.

7. 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

8. 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

9. 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

10. 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

11. Yes? Then You Have A Community of Innovation Federal Policies should support and invest in US Communities of Innovation

13. Sponsoring Organizations Bette Science;Better Innovation;A Better World Bio-Research & Development Growth Park at the Danforth Plant Science Center Saint Louis, Missouri University of New Orleans Research and Technology Park

14. The Power of Place: Opportunities • 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 PAGE 14

15. POLICY RECOMMENDATIONS: American Innovation Zones • 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.; PAGE 15

16. 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 PAGE 16

17. Building A Stronger America Act: America’s Infrastructure Solution: S. 583 • 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 PAGE 17

18. Federal obligations for R&D : FY 2006 • Intramural federal lab R and D: $ 25,521.5 billion • Universities and colleges: $25,332.2 billion

19. Federal Labs: Communities of Innovation 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 PAGE 19

20. Importing Innovation, Reforming Immigration Laws 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. PAGE 20

21. Details of Proposal : Thirteen Federal Recommendationswww.aurp.net

22. 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

23. 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

24. 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: ?

25. NASVF Public Policy National Innovation Seed Fund U.S. Small Business Administration 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 • 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

26. 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!

27. Better Science;Better Innovation;A Better World PAGE 27

28. An Improved Economy Better Science;Better Innovation;A Better World PAGE 28

29. Thank You Brian Darmody Associate Vice President Research and Economic Development University of Maryland College Park 301-405-1990 bdarmody@umd.edu PAGE 29