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Boosting university research expected to pay off in
economic development
Editor's
note: This is the first of a two-part series on economic
effects of university research
by
Chris Dovi
Virginia Business
February
2005
In
October 2003, a panel of 16 National Research Council
experts representing a broad range of specialties gathered
in Herndon to help chart a path for Virginia’s
economic growth.
Brought
together at the direction of Gov. Mark R. Warner and
chaired by Virginia Tech President Charles Steger, the
panel’s members were not experts in finance, commerce
or economics. Rather, they represented the emerging
face of Virginia’s economy: life sciences, earth
sciences, computer sciences and engineering.
“When the governor came [to office], he said that
research needed to be a higher priority,” says
Peter Blake, Virginia’s deputy secretary of education.
“One thing the governor observed here is that
we did not focus as much on our university research
programs as we should have. [Research] is an economic
development issue. This is a quality of life issue,
this is a jobs issue.”
With traditional Virginia industries — such as
textiles, tobacco and manufacturing — arguably
on the wane in part because of emerging economies abroad,
the group’s mission was to recommend how best
to position the state for success in an information-driven
economy.
At first glance, research, by simple virtue of its trafficking
in theories and ideas, seems far removed from the reality
of today’s or even tomorrow’s jobs. So why
identify research at state universities as so critical
to Virginia’s economic health?
There’s no question about the relationship between
home-grown knowledge and a healthy economy, says Robert
Porter, research program development manager at Virginia
Tech, whose work includes helping build on the school’s
$247.8 million commitment to faculty research. “It’s
a standard five-to-one ratio,” Porter says, referring
to the accepted average of every $1 invested in research
at universities provides $5 in direct economic impact.
“Forty to 50 percent of the U.S. economy is based
on technology innovation.”
In Virginia, research and development already looms
large on the economic horizon. A May 2002 report from
the State Council for Higher Education in Virginia reported
that the state ranked fourth in the nation in terms
of federal government research, thanks largely to the
presence of NASA and the military, and the state’s
proximity to Washington, D.C. The same report showed
Virginia holding the 16th spot among states for industrial
research and development. But according to the SCHEV
report, which focused on the condition of research at
Virginia universities, higher education accounts for
only about 10 percent of Virginia’s research efforts,
ranking the state 17th among all for university-based
research and development. Virginia was 37th in terms
of per capita academic expenditure and 39th in percentage
of gross state product going toward new R&D at the
state’s universities.
So Warner challenged universities to take up the slack
— to increase their total investment in research
to $1 billion. It’s a lofty goal that the state’s
research universities along with other schools are already
stretching to reach.
Research funding at state universities has climbed dramatically
since his challenge and now totals an estimated $685
million.
An additional $3.5 million was added to the state’s
funding of sponsored research at state universities
on Dec. 17 when Warner announced his amendments to the
state budget.
Still, Blake says, “These things don’t happen
overnight and require a sustained investment. This has
to become a commitment of the commonwealth for the long
term.”
With the primary funding of that $685 million coming
from federal and industry grants, much of the state’s
commitment — its long-term mission — and
that of its universities becomes selling its schools
as places friendly to research. “We don’t
just want jobs in Virginia, we want high paying and
high-value jobs in Virginia,” says George Mason
University President Alan Merten, whose background is
in computer science. “If we don’t make an
investment, that’s what we’re going to lose.”
Although
the governor has committed his support, others in state
government are only beginning to come around to the
need to support research. “The Virginia government
does not in any way adequately support research at its
universities,” says Merten. “If you look
at what’s happening in states around us, they’re
investing in research facilities — hundreds of
millions of dollars — and in Virginia we’re
meditating over it.”
The General Assembly last year set new priorities for
funding research, but R. Dan Hix, SCHEV’s finance
policy director, says it wasn’t always that way.
“The real story within higher education is over
the years, when budgets are cut in the state, higher
ed seems to take a higher proportionate cut because
of [universities’] ability to raise tuitions to
make up for the deficiencies,” Hix says.
This approach, though it may seem reasonable to lawmakers
in a tight fix, actually serves as a potentially ruinous
policy down the line, Hix says. Raising tuition pays
the bills, but cutting state funding means students
and faculty alike recognize a lack of commitment. “You
need to keep good faculty,” he says. “You
want to keep good faculty, so salary increases on a
regular basis are desired — and we’ve had
some occasions where that did not happen.”
Research-oriented faculty and strong commitment from
state government are two components required to building
research capabilities and marketability for Virginia
universities. Another component is good facilities.
Investment is required that includes the cost of building
and maintaining facilities that will attract government
and industry grants. Says Tech’s Porter: “Research
labs are enormously expensive operations to run.”
Without them, there’s no reason for entities interested
in funding research to bring their business to state
schools.
In less than a decade, Virginia Commonwealth University’s
School of Engineering already has proved the worth of
proper facilities. Its clean room, where the microchip
designers of the future learn their skills, has been
cited by state officials as important in attracting
chip companies to the state.
Other VCU engineering programs — biomedical engineering
among them — are also gaining prominence due in
part to the school having spawned a third of all patent
applications made by VCU in recent years. Such patents,
for VCU and other state schools, provide long-term revenue
through technology transfer. Technology transfer allows
schools to provide use of patent rights to companies
who then market products based on those patents and,
in turn, pay universities.
Successes like VCU’s engineering school pale in
comparison to programs at other state schools such as
the University of Virginia and Virginia Tech. And even
they are mere shadows when compared to the real powerhouses
of technology transfer.
To the south, North Carolina’s Research Triangle
is a research giant, as is California’s Silicon
Valley. Research in these regions spawned industry.
And industry, rather than taking those ideas elsewhere,
saw the usefulness of putting its operations near the
very researchers responsible for technological innovations.
Virginia is a long way from anything so centralized
as a Research Triangle. But some sort of cooperation
may be the key to the commonwealth achieving success
in the market — and to both attracting and keeping
industry interested in Virginia-born ideas.
“It often depends on the kind of governance structure
[that] is in effect in the state, as to what level of
organization you have,” says SCHEV’s Hix.
“We have U.Va. and Tech that are working at very
high levels of research, but there is no high level
of administration as there is in North Carolina.”
There, an oversight board through the University of
North Carolina system allows the universities to coordinate
areas of research and to specialize and cultivate areas
of expertise. “This can’t be said in Virginia
yet,” Hix says.
Rather, schools in Virginia take a more piecemeal approach,
going it alone while attempting to create their own
private research triangles by incubating locally grown
ideas and businesses at university-supported research
parks. The goal is creating long-term businesses that
thrive around the university that first gave them life.
“Call us enablers of new businesses,” says
Chris Hill, GMU’s vice provost for research. “It’s
only become common knowledge among governors and county
executives over, I’d say, the past decade…[that]
the presence of a major research university in a given
area is seen to be one of the critical factors in whether
or not a region thrives.”
And regional successes help build statewide support
from the lawmakers who can help make Virginia’s
university research schools into tomorrow’s industry
magnets. “I think there’s real interest
in the intellectual and economic development that’s
related to research,” says Blake, the state education
official. “You put smart, innovative people together
and things happen.”
Blake frets only about keeping those smart people together
long enough to make the spark that will become a fire.
“This has to become a commitment of the commonwealth
for the long term,” he says.
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