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Page 93 V RESEARCH PAPERS
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Page 95 Science and Technology Parks at the Millennium: Concept, History, and Metrics A Background Paper for Planners of the Ames S&T Park Michael I. Luger University of North Carolina at Chapel Hill INTRODUCTION As part of NASA's expanding strategy of leveraging federal resources with private sector activity and commercial technology, the NASA Ames Research Center is developing a science and technology (S&T) park at its 2,000-acre facility located in California's Silicon Valley. This paper provides an overview of S&T and related park developments around the world, as a way to provide NASA with a broader context for its planning activities. The paper briefly profiles the growth of the S&T park movement over the past 50 years. It then shows the diversity in park designs and concepts. The third section that follows describes four trends in park development that mark the early 21st century. The paper concludes with some comments about the use of parks as an economic development strategy. In particular: how do we know whether a park should be built, and how do we measure its success? DEVELOPMENT OF SCIENCE PARKS IN THE LATE 20TH CENTURY Since the Stanford Research Park was built in the early 1950s, many more such developments have been opened, both in the U.S. and abroad. Depending on how one defines “park,” there are many hundreds in existence, many more have been closed and many others are still in the planning stage. Today, there are 295 members of the Association of University-related Research Parks (a U.S.-based organization), several hundred members of the International Association of Science Parks (IASP), and dozens of members of several country-based
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Page 96 Types of “Parks” Research parks – Cater to R&D operations – Examples: Research Triangle Park, Stanford Research Park Science/technology parks – Focus on application of science and engineering to the development of new products and processes with commercial potential – Examples: Centennial Campus (North Carolina State University); University of Utah Research Park High-tech industrial (or agricultural) parks – Occupants engage primarily in production of relatively high value-added goods – Many parks in Asia Warehouse/distribution parks – Big boxes. But may incorporate high-tech elements (e.g., advanced logistics) – Includes “Global Transparks” built in Kinston, North Carolina, and in Thailand, on sites of decommissioned airfields. Office/headquarters parks – Sales functions, administrative activities; regional presence Eco-industrial parks – Input-output linkages among tenants optimized to minimize accumulation/discharge of waste and pollution – Not really a “park” but a region – Best known example: Kalundborg, Denmark 75 miles east of Copenhagen on coast Began in 1970s spontaneously; members trying to reduce costs and meet regulatory requirements park membership organizations. Parks have been built in almost every state, and in at least 60 countries around the world. The physical characteristics of these developments vary, reflecting differences in the host country's or region's level of development, and in the parks' objectives, industrial focus, and type of ownership. There are “research parks,” “science and technology parks,” “high-tech industrial or agricultural parks,” “warehouse/distribution parks,” office/headquarters parks,” and “eco-industrial parks.” (See box above.) The common elements among these different varieties of development include the following (as per the IASP): the existence of operational links with universities, research centers and/or other institutions of higher education;
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Page 97 their use to encourage the formation and growth of knowledge-based industries or high value-added tertiary firms, normally resident on site; and the presence of a steady management team actively engaged in fostering the transfer of technology and business skills to tenant organizations. Research/Technology Centers and Technopoli In the literature and common practice at least two additional terms are used that are not types of parks, but are related to park development: research/technology centers and technopoli. Research/technology centers are physical facilities in which science and technology-related activities take place, including R&D, meetings, skill training, testing, and tele-conferencing, for instance. Research/ technology centers are commonly used as anchors within parks: for example, the biotechnology and microelectronics/information technology centers built by the state within Research Triangle Park in North Carolina; centers for biotechnology, materials science, information technology, and microelectronics built by the government in the National S&T Development Agency park near Bangkok; and a training center for IT workers to be built as part of a new Palestinian initiative on the border of the West Bank and Israel.1 Technopoli are regions developed around several interrelated “knowledge” elements, including, but not limited to, science parks, research/technology centers, and universities. Technopoli require special planning, including infrastructure development, housing, and transportation, to make sure the elements work together. Prominent examples include Tsukuba Science City in Japan and Taedock Science Town in Korea. The Chinese (PRC) government is working on a plan to develop its largest metropolitan region—Chongqing—into a technopolis.2 DIFFERENT TYPES OF PARKS FOR DIFFERENT PURPOSES While these parks share common elements, they differ in terms of objectives; size and physical layout; ownership and management; typical activities and occupants; links to universities and technology bases; incentives; and infrastructure, facilities and services. 1 See TSG (The Services Group, Inc.) A Feasibility Study for the Khadouri Technology Development Center. Final Report to the U.S. Agency for International Development. Arlingon, VA: TSG, Inc., 1999. 2 See Michael Luger, Deog Song Oh, and David Gibson, Editors, Technopolis as Regional Development Policy. World Technopolis Association. 1998.
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Page 98 The discussion below reviews these differing aspects of science and technology parks, and outlines costs and benefits to the host country or region and to the individual company locating in such parks. Objectives The design, services, and functions of a technology park are first a reflection of its basic purpose. Many countries fail to recognize the fundamental diversity of science and technology parks, and tend to view these projects as specialized industrial parks. But the purpose and forms of science and technology parks vary greatly. Common objectives of science and technology parks are to promote research and development in leading-edge technologies; serve as a “growth pole” strategy for the development of regions; encourage entrepreneurship and business development in technology areas; and generate exports and create high-tech jobs. While none of these objectives are mutually exclusive, successful parks have generally had a clear focus and a limited set of objectives. Research and development. In some cases, parks are conceived as long-term instruments to transform economic bases from typically more traditional sectors to higher tech. Job growth in these instances must be measured over a longer period of time as new technologies are developed or different types of businesses are induced to locate in the region. A prime example is Research Triangle Park in North Carolina. The electronics, pharmaceutical, and telecommunications clusters now located there developed slowly over a forty-year period and gradually helped transform the central part of North Carolina from an economy based on agriculture and low-wage manufacturing to one based on high-tech R&D. Other examples are found in most advanced economies, including the science parks in Finland, Sweden, United Kingdom, South Korea, Japan, Singapore, and Taiwan. Growth poles. Other parks have been developed as so-called technopoles or growth poles. Parks have served as the cornerstone of growth pole strategy – as a way to move population from dominant cities—in Japan (in Tsukuba Science City and Kyoto), Korea (Taedok Science Town in Taejon), and Taiwan (Hsinchu Science City). In those cases, park development was coordinated with other investment strategies, for infrastructure, higher education and research, and housing. Other prominent examples include the Sophia Antipolis technopole in France and the Medeira Technopole in Portugal.
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Page 99 Incubation. Another explicit objective of science and technology parks is to serve as an incubator to promote start-ups and business development in defined technology areas. While many parks—such as the Singapore Science Park's Innovation Centre—house incubator facilities on-site, a few parks are incubators themselves. A prime example of this is the Tefen Park north of Haifa in Israel that serves as an incubator for export-oriented technology companies. Export generation. Another category of science and technology parks aim to generate exports in international trade services and products. A leading example are the twelve Software Technology Parks in India that currently account for 70 percent of India's total software and IT services exports of US$4 billion. Other examples are the 80 science and technology parks in China, and the Agean Free Zone Technopark in Turkey. Size and Physical Layout Parks range in size from one large building in an urban setting—for example, the University City Science Park in Philadelphia, Pennsylvania, and several facilities in Germany—to several thousand hectares, such as the 8,000 hectare Sophia Esterel Science Park in France. One common (if not universal) feature of science and technology parks is their physical attractiveness. Park developers believe that good design and natural amenities are necessary to develop a conducive work environment for knowledge-based industries. As a result, many parks are developed as beautiful campuses with office park facilities. A leading example is the Hsinchu Science-Based Industrial Park in Taiwan, which was deliberately developed to resemble facilities in Silicon Valley in order to attract diaspora Taiwanese engineers working in California. Ownership and Management Science and technology parks are owned by universities (University of Utah and Stanford Research Parks in the U.S.), government agencies (the National Science and Technology Development Agency Research Park in Thailand— NSTDA), by private companies (Kyoto Science Park), and by consortia of different public and private stakeholders. The objectives of the parks reflect their ownership. University-owned parks tend to focus on university-originated technology and on building industry-university linkages. However, universities also see parks as potential sources of real estate revenue (Centennial Campus at North Carolina State University; Cambridge Research Park, U.K.). Parks sponsored by government agencies are typically part of regional or national development efforts. An increasing number of
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Page 100 parks are privately developed and owned. Leading investors in these projects include U.S., French, British, Singaporean, Thai, and South African groups, most of which have a property development background. Management of parks also varies, but the industry trend is toward professional management services and away from the “do-it-yourself approach. Some universities and government agencies do continue to operate their own parks. Research Triangle Park, for example, is operated by a not-for-profit foundation that reports to an ownership team comprised of the region's universities and the state government. However, even under these management structures, outsourcing of professional services is becoming common. Typical Activities and Occupants Parks also differ in terms of their sectoral focus and industry orientation. Many parks tend to specialize in a few technology and industry areas, serving as “centers of excellence,” promoting innovation in a particular area. Examples include the following: Singapore Science Park, Singapore—information technology and telecommunications; Hsinchu Science-Based Industrial Park, Taiwan—computers, peripherals, integrated circuits; Bangalore Software Technology Park, India—software and IT services; Taedok Science Town, South Korea—memory chips, aerospace; Software Technology Park, Brazil—software engineering; University City Science Center, U.S.A.—engineering, biomedicine, materials; Helsinki Science Park, Finland—biotechnology, food industry; and National Science and Technology Development Agency Science Park, Thailand—biotechnology, metals and material technology, electronics, and computer technology. Government-run science and technology parks oriented to basic science and R&D typically host government labs. Examples include the NSTDA park in Thailand, the national science labs in the U.S. (Sandia, Los Alamos, and others), and Taedok Science Town in South Korea. Other science and technology parks resemble typical office or business parks, accommodating regional and international headquarters companies. Leading examples include Stanford Research Park, Cambridge Research Park, and Dublin Science and Technology Park in Ireland.
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Page 101 Links to Universities and Technology Bases Most successful science parks had a meaningful connection with an institution of higher education. As noted, some parks have been developed by universities as sites for university-related activity (e.g., Stanford Research Park, U.S.A.; Cambridge Research Park, U.K.; Parque Industrial de la Universidad de Guadalajara, Mexico; The Australian Technology Park). Others have forged relationships with nearby universities (Amsterdam Science Park; Sophia Antipolis, France; NOVUM Research Park, Sweden; Patras Science Park, Greece; Tecnopolis Csata Novus Ortis, Italy). Parks developing in regions without institutions of higher learning have created them as part of the park's amenities to tenants. That approach, clearly, is costly. Increasingly, parks are connecting to universities and colleges electronically, making immediate proximity less important. The second type of focus is around technology sectors, usually capitalizing on existing strengths in the regional industrial base and the local universities. Larger parks may have several foci (Research Triangle Park with electronics, pharmaceuticals and biotech, and telecommunications; NSTDA Park in Thailand around biotech, electronics, and materials science). But many parks focus more narrowly, and even use the focus in their name as a marketing ploy (Audubon Biomedical Science and Technology Park; Harry Hines Medical Research Park; Environmental Technology Center Neopoli Oy, Finland; Agro-Business Park, Denmark; Infopark, Budapest; and Kalundborg Eco-industrial Park, Denmark). Incentives Different parks provide, through their sponsoring entity, a wide variety of incentives for businesses. Those incentives tend to be largest when the park is part of the national or state government's economic development program. Israel's central government, for example, provides businesses moving to Tefen (and other designated locations) a benefit of 24 percent of their investment in building and equipment grants, or a ten-year income tax holiday. However, these types of incentives are usually available to all qualifying high-tech investments, whether or not physically located within a technology park. However, a few countries have either adapted existing incentives (usually within free zone schemes) or developed new packages specifically for enterprises located within science and technology parks. For example, the software-oriented parks in India (such as Bangalore) have done well, in part, because of the favorable tax treatment accorded those businesses locating there. The favorable treatment extends to foreign capital and has been responsible for an inflow of investment.3 3 See TSG (The Services Group, Inc.), A Feasibility Study for the Khadouri Technology Development Center, op.cit.
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Page 102 Infrastructure, Facilities, and Services Unlike most general industrial parks, science and technology parks emphasize purpose-built infrastructure and facilities, tailored to meet the requirements of target industries and activities. The range of facilities typically found include the following: research and testing labs—funded by government and major private corporations; business and technology incubators—operated by specialized subsidiary companies or independent operators on a commercial basis, providing a full range of business, marketing, legal, financial, and technical support services for start-up firms; high-tech office buildings with research units—usually pre-fabricated “intelligent” office buildings, for use on a multi-tenant basis with shared business support facilities and local area networking connections; standard factory buildings suitable for a variety of manufacturing and warehousing activities; residential, commercial, and recreational areas for employees and managers; exhibition areas, convention centers, and libraries; training and consultancy center—typically attached to an incubator or testing facility; dedicated, high-speed telecommunications facilities, offering high-speed (1.5 mbps) 7/24 lines at international prices, as well as value-added network services; and centralized support services including dedicated power, hazardous waste collection and disposal, as well as a range of business services at reduced rates (e.g., management training, technical assistance, procurement assistance, liaison with nearby universities and businesses, regulatory approvals, etc.). The overall objective is to create a conducive work environment that enhances worker productivity and promotes technological collaboration and innovation among a cluster of inter-related companies. BENEFITS OF SCIENCE AND TECHNOLOGY PARKS Depending on the type of park, industrial focus, extent of government funding, additionality of investment—the magnitude of economic benefits from science and technology parks varies significantly. The value of a technology park is also different for each potential beneficiary—the host country or region, private companies, or participating universities.
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Page 103 Host Country. From the perspective of host countries and regions, science and technology parks provide a number of potential benefits. The most important of these include the following: technological development—parks offer the potential for industrial upgrading, research and technological innovation in high-tech areas; cluster development—parks can create self-sustaining industrial clusters in core technologies, and lead to the development of technology corridors in a wider area; job generation—parks are an efficient means of creating high value-added jobs in leading technologies; business efficiency—parks can enhance the operating competitive, image and investment environment of a region; and university-industry linkages—parks can offer a concrete mechanism for collaboration between universities and industries, and a focal point for technology transfer. Assessing Economic Impact The economic impact of science and technology parks is difficult to estimate, given the large variations on types of parks worldwide. The science and technology parks that exist account for a significant part of high-tech manufacturing and services, especially in developing countries. The software technology parks in India, for example, account for 70 percent of the export earnings of the software sector overall. Selected examples of these types of projects are profiled in the following table: Economic Impact of Science and Technology Parks—Some Examples Technology Park Size Established Firms Jobs Singapore Science Park, Singapore 30 hectares 1980 226 7,000 Rennes Atalante Science & Technology Park, France 70 hectares 1978 250 8,000 Hsinchu Science-Based Industrial Park, Taiwan 580 hectares 1980 272 72,623 University City Science Center, Philadelphia, U.S.A. 7 hectares 1963 140 7,000 Kyoto Research Park, Japan 8.5 hectares 1988 80 2,400 National Technological Park, Ireland 260 hectares 1991 90 3,500 Technopark Kerala, India 73 hectares 1994 35 2,000 Surrey Research Park, U.K. 28.5 hectares 1974 76 2,000 Source: TSG, 1999
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Page 124 The projected future budgets of NASA do not provide adequate resources to meet the stated agency mission. The proposed NASA Ames Research Park would provide one mechanism for leveraging the limited resources of NASA with the private sector and major universities to contribute to the NASA mission. A Unique Goal Thus, the proposed NASA Ames Research Park has a very different goal than that of traditional S&T parks. While traditional S&T parks are oriented toward transferring technology from the knowledge source to the external regional community, the goal of the Ames Research Park is to provide the internal knowledge source—NASA—economically efficient access to knowledge and capabilities either found in the external community or which a strategic partnership could develop more efficiently and economically. Multiple Means This goal would be accomplished by the following: establishing strategic partnerships with major companies and universities in key research areas such as astrobiology, information technology, nanotechnology, and biotechnology; exploiting existing and developing new facilities for such collaborations; creating new opportunities for NASA education programs; contributing resources to spread the fixed costs of operations; and enhancing workforce capabilities through joint appointments and internship programs; access to graduate students, “post-docs” and future employees; and on-site workforce continuing education. The Role of Universities Universities will provide one leg of the strategic triad upon which the Ames Research Park will be based. In order for the NASA Ames Research Park to succeed, mechanisms have to be developed to facilitate the interaction of Ames scientists with the university research community. Such mechanisms are provided in the Ames Research Park design. The UC Partnership The University of California at Santa Cruz has been selected as the lead for the overall University of California System as the strategic partner with Ames. Under this strategic partnership, the NASA Research Park will be designated as
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Page 125 the preferred Silicon Valley site for regional research and education. This partnership should provide NASA with a vehicle for gaining access to the resources of the University of California system as well as a basis for collaborative research. The resources that NASA will be able to access at the University of California system are formidable, and include ten campuses with three Department of Energy national laboratories. With an annual budget of $13.6 billion, the University of California has an annual research budget of $2.0 billion. Of the 7,000 faculty, 40 have been awarded Nobel Prizes and 300 are National Academy of Sciences Fellows. One of the important assets that the University of California system will bring to the NASA Ames Research Park is a strong link to commercial biotechnology firms. In fact, one-third of U.S. biotechnology firms are founded within 35 miles of a UC campus. In California, home of the largest number of biotechnology firms, one-quarter of the companies were founded by University of California scientists, including Amgen, Chiron, and Genetech. In addition, 85 percent of the biotechnology firms in California employ alumni of the University of California system with graduate degrees. Providing access to NASA of the strong link between the University of California system and the private biotechnology sector should yield benefits in NASA's mission to develop a Center for Star Formation, an Astrobiology Institute, Remote Sensing, Data Visualization, Mars Missions, and Space Biology. The strategic partnership also envisages joint tenured appointments between Ames and the University of California. In addition, graduate students will work collaboratively between the university and NASA. Provisions are also made for the formation of joint research teams and for the creation of new and unique collaborative research facilities. NASA will participate in the development of the CASC teacher institute along with workforce development for high-tech employment. To extend the partnership beyond the University of California system, a consortium will be formed involving San Jose State University and Foothill-DeAnza Community College. There will be benefits from this strategic partnership for the University of California System, but particularly for the Santa Cruz campus. The partnership will create a new model for science education, which brings together the strengths of government, industry, and the university. Included in this new educational model are novel and innovative outreach programs focusing on the digital divide, and joint doctorates and research with San Jose State University and NASA. This new model should strengthen UC Santa Cruz and support its leadership's effort to make one of the most prominent research universities in the world. In particular, the collaborative research agenda between UC Santa Cruz and NASA will result in the UC Santa Cruz being the lead research university for the Carl Sagan Astrobiology Laboratory, and enhanced research and teaching capabilities
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Page 126 in the fields of biotechnology, information technology, nanotechnology, planetary sciences, K-12 and teacher education, and the digital society. The Carnegie Mellon Partnership A second initiative providing a framework institutionalizing interaction between Ames' scientists and the university research community is provided by a strategic partnership with Carnegie Mellon University. This partnership will have an initial focus on robotics and high reliability computing, two of the traditional strengths of Carnegie Mellon. Ames will provide Carnegie Mellon students with internships. In addition, the partnership will form the basis for consortia with Silicon Valley companies. The partnership will provide NASA with access to the research resources and scientists on the Pittsburgh campus as well as provide a gateway to Silicon Valley for Carnegie Mellon scientists and graduates. It is anticipated that NASA and Carnegie Mellon will develop some unique educational programs to meet the needs of the partnership. From its experience in partnerships with the Robotics Institute (with Westinghouse) and the Software Engineering Institute, Carnegie Mellon has learned that education complements research and is an essential component of technology transfer. The proposed partnership will involve collaborative research with NASA and other universities as well as companies located in Silicon Valley. This partnership should yield benefits for NASA's space mission, because Carnegie Mellon has extensive experience and expertise in developing robotic systems. This competence will be the basis for joint research on reliability, autonomy, robot team coordination, robotic work systems, and robotic exploration and discovery. This research is expected to yield valuable applications for life seeking in extreme environments and planetary global exploration. Industry Participation Private industry is a key player in the NASA Ames Research Park model. Potential industry partners, such as Lockheed Martin Corporation, argue that there is a critical mass of shared objectives to make the partnership successful. In particular, the complementary research assets in key technologies such as astrobiology, information technology, nanotechnology, biotechnology, life and microgravity sciences, and aeronautical and space technology provide potential gains to both industry partners as well as NASA. Joint research should be promoted through the creation of unique facilities and laboratories for research collaboration, as well as workforce enhancement, such as the joint appointment of scientists, internship programs, graduate students, and doctoral students. In addition, continuing education programs spon-
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Page 127 sored jointly by NASA and private industry should enhance the workforce of both partners. The Research Initiative Fund To support these goals, Lockheed Martin proposes the creation of a Research Initiative Fund, which would be held in an interest-bearing escrow account. The application of the Initiative Fund would be determined jointly by the three legs of the Ames Research Park triad—NASA, private industry, and the University of California at Santa Cruz. The funds would be used for grants for academic fellowships, funding for NASA research programs, and the development of new mechanisms to promote research. The facilities at Ames, including the buildings, would be used in a manner that utilizes the complementary assets between NASA and private industry. In terms of Lockheed Martin, this would involve facilities dedicated to information technology, including computer hardware, software, internet, electronics, broadcasting, and telecommunications, as well as astrobiology, aviation, aerospace, biotechnology, and nanotechnology. Managing the Tripartite Model The success of the NASA Ames Research Center depends not just on the conception of the model but also on how it is managed. The issue of Center management revolves around developing mechanisms and tools for NASA to access the resources of strategic partners and to focus them on meeting goals consistent with NASA's missions. Only through developing such instruments can the Ames Research Park reach its full potential. The Entrepreneurial Center One key instrument for park management proposed by the Commercial Technology Office of Ames is to create an Entrepreneurial Center. This Center will expand the pool of NASA technology resources through focused partnerships with industry. These partnerships will be selected to accelerate the fulfillment of NASA mission requirements. In particular, initiatives undertaken by The Entrepreneurial Center will seek to resolve common technology problems, accelerate spin-offs of NASA technology to the private sector, and expand opportunities for NASA incubators. The objectives of The Entrepreneurial Center are to create focused and dynamic commercial partnerships. For its part, NASA is to provide laboratory space, scientific expertise and experience, access to NASA technologies, and a long-term research focus. In return, the strategic partners will provide industry expertise, a greater awareness of potential commercial
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Page 128 applications, better access to venture capital and new-venture finance, and business experience, as well as an overall industry presence at Ames. These complementary assets are expected to result in benefits for both partners. In particular, these partnerships are expected to give NASA the capabilities to address problems on an industry timetable, rather than a government timetable. To facilitate The Entrepreneurial Center, the Commercial Technology Office can also rely on its existing tools, which include the following: technology assessment; marketing; intellectual protection and licensing; agreement development; regional and national industry networks; management of the Ames Small Business Innovation Research Program; and business incubation. Management responsibilities for The Entrepreneurial Center include identifying potential technologies appropriate for collaboration, preparing a finite project plan, and implementing the project upon approval. The Commercial Technology Office will be charged with approving a project plan, establishing and approving access to NASA labs, and establishing and approving access to NASA researchers. Potential Barriers It is anticipated that as a result of collaborations with industry and universities, NASA will be able to leverage its resources to effectively double its investment. However, in order to accrue the benefits of strategic partnerships with industry and universities, a number of barriers and hurdles must be overcome. Intellectual Property: One set of barriers involves issues surrounding the competing needs for intellectual property rights for each partner. Since the joint product of research collaboration is intellectual property, each partner has a vested interest in holding the rights to that intellectual property. Unless new models can be developed from sharing and/or allocating the intellectual property accruing from the joint research, industry and universities will be hesitant to join in such partnerships. Decision-Making: A second set of barriers involves bureaucratic processes. The pace of government is considerably slower than industry. Government processes typically require massive paperwork in decision-making processes and
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Page 129 for the approval of programs and initiatives. In addition, government activity is generally placed under a barrage of rules and regulations, making it considerably more rigid than private industry. Partners from the industry and university sectors are not likely to be patient and tolerant of such bureaucratic barriers, which could ultimately subvert the partnership. One important issue determining the success of the NASA Ames Research Park is the selection of strategic partners. Selecting the right partners will ensure that synergies are created that generate benefits for all parties. Selection of inappropriate partners will result in wasteful investments yielding few benefits. Ames' criterion for selecting strategic partners are based on four aspects: the strategic partnership results in an activity supporting the mission of NASA under the Space Act; the strategic partnership involves the appropriate use of Federal property; the strategic partnership is consistent with site environmental constraints; and the strategic partnership is consistent with local community needs and priorities. This broad selection framework provides appropriate standards for the selection of appropriate strategic partners. The NASA Enterprise Fund Another instrument for park management is the NASA Enterprise Fund. The business concept underlying the NASA Enterprise Fund is the establishment of a technology investment fund that is market driven and has a return on investment criterion. NASA can be included as a limited investment partner, drawing upon a portfolio of a $900 million annual technology program and a $100 million annual Small Business Innovation Research (SBIR) program. The SBIR projects span 18 major technology areas and cover around 95 projects per year. This will enable venture partnerships with NASA based on technologies not normally seen by the investment community. In addition, NASA will be able to participate in partnerships in an effective collaborative manner that is not limited by the traditional constraints and rigidities associated with government. These new ventures will be targeted in investment areas identified as critical to the NASA mission – information technology, nano-technology, MEMS, compact sensors, and biotechnology. The NASA Enterprise Fund will provide access to new technologies being developed by private industry as well as accelerated technology development.
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Page 130 For the Fund to succeed it needs to provide means of bringing high-technology investment opportunities not normally available to or recognized by the venture finance community; means for entrepreneurial firms to grow based on profits on technologies developed via venture investment shared by NASA; and opportunities for technical risk reduction in new ventures as a result of the technical participation by NASA. Two things in particular would doom the NASA Enterprise Fund: first, if it is seen as a direct competitor in the venture business community; second, if the government rules, regulations, and general bureaucracy associated with normal operations become extended to the Fund. To succeed, the Fund must avoid becoming a direct competitor with the venture investment community, as well as the imposition of government rules, regulations, and constraints. The NASA Enterprise Fund should prove to be a successful management tool for leveraging NASA's technological assets and gaining access to resources in the private and university sectors. This is because the Fund is based on bringing together the complementary research and technology assets of NASA with those in the private sector. NASA will gain by the creation of a profit center for innovative technologies focusing on NASA mission technology initiatives. The Enterprise Fund should provide NASA with the opportunity to accelerate technology and acquire technology from future commercial markets at costs that are substantially lower than if NASA had developed those technologies alone. The investment community should view the Enterprise Fund as an opportunity for profitable investments based on leveraging NASA technologies, and to reduce some of the risks associated with research and innovation in technologies where NASA has an expertise. MONITORING AND MEASURING THETECHNOLOGY PARK IMPACT Because the goals and mission of the Ames Research Park are markedly different from that of traditional S&T parks, monitoring and measuring the impact of Ames must reflect this difference. As explained in the second section, the approach to monitoring and measuring the impact of traditional S&T parks has been to focus on the flow of knowledge from the park to the external region with a particular emphasis on commercialization, job creation, and growth.11 However, the logic of Ames is radically different. The main mission of Ames is to facilitate the attainment of NASA's mission. Thus, the flow of knowledge is much more from external partners into NASA. At the same time, much 11 See the discussion in Luger's paper in this volume.
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Page 131 of the new knowledge is anticipated to emanate from the interaction among all three partners—NASA, private industry, and universities. In the case of Ames it would be inappropriate to monitor and measure the impact in terms of the usual criteria applied to judge the impact of traditional S&T parks, such as new firms created, new jobs generated, establishments and corporations locating in the region, and change in regional growth. Rather, the impact of the Ames Research Park must be measured in terms of the benefits to the three major participants compared to the counterfactual situation if no such research park existed. However, the economic attainment of NASA's mission must carry the greatest weight in measuring and monitoring the impact of the Ames Research Park: Economic Attainment of NASA's Mission This involves measuring the extent to which attainment of NASA's targeted technologies are attained at a cost below that which NASA would have incurred if it had developed the technologies by itself. In addition, it involves measuring and placing a dollar value on the accelerated time development of such technologies. There are a number of intermediate measures that are important indicators of the impact that the Research Park is having in facilitating the Ames mission. These include changes in the numbers and impact of patents filed jointly with Research Park partners; changes in the numbers of published articles and citations with Research Park partners; changes in different types of interactions between NASA and the external scientific community; and changes in the quality of the Ames and NASA workforce that is recruited and sustained. Improvements to Educational Institutions A different set of benefits is relevant for the impact on universities. These benefits focus on the impact that the Ames Research Park has on education and on the participating (and non-participating) universities and other educational institutions. In particular, the education delivered is compared to the counterfactual benchmark of what would be delivered in the absence of the research park. Measures and benchmarks need to capture educational gains that otherwise would not have occurred. Intermediate measures of the impact on education include the value of new programs and numbers of students enrolled, and graduates from the programs; the quality of new faculty attracted as a result of the new programs; and the changes in the output of the participating university departments and programs.
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Page 132 New and More Efficient Technologies Developed by Private Industry There are also benefits accruing from the Research Park in terms of new commercial products and technologies that otherwise would not have come into existence, or would have come into existence at a greater cost over a larger timeframe. The appropriate metric would be the dollar value of costs incurred developing new technologies jointly with NASA and other Ames Research Park partners compared to the costs that would have been incurred in the absence of such partnerships. Such measures and monitoring will require the assessments of experts familiar with the technology and costs of research. Intermediate measures to indicate these types of gains include joint patents between NASA and private industry; joint publications in scientific journals by NASA and private industry; changes in the workforce as a result of the partnership with Ames; and measures of new-firm startups resulting from the Ames Research Park, such as the number of new startups, employment in firms started at the park or as a result of the park, numbers of IPOs, and value of external finance invested. Hardest to measure may be initiatives that can be undertaken cooperatively with the involvement of the Ames Research Center and its partners which otherwise would not have been undertaken at all. CONCLUSIONS The traditional S&T parks were founded on the premise that a government and/or university institution had the competitive advantage in the production of knowledge over private industry. The goal of the S&T park was to provide an instrument for channeling that knowledge into commercialization opportunities for private industry. Through the flow of knowledge from the source within the park to commercial opportunities in the region, the traditional S&T park served as an engine for regional economic development. The Ames Research Park is founded on the very different premise that private industry is no longer at a competitive disadvantage in the production of knowledge, but is at least an equal, if different, partner. In order for NASA to attain its mission, access to the knowledge resources in the private industry and university sectors is required. Thus, the flow of knowledge is no longer outward, with the aim of regional economic development, but rather inward and interactive, with the goal of enabling the government agency to achieve its goal by accessing the complementary knowledge assets in the industry and university sectors. As private industry becomes increasingly based on knowledge in the New Economy, the Ames Research Park model for an interactive industry-government
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Page 133 partnership is likely to become more prevalent than the one-way knowledge flows found in the more traditional model of industry-government partnerships. REFERENCES Audretsch, David B. and Roy Thurik. 1999. Innovation, Industry Evolution, and Employment. Cambridge: Cambridge University Press. BankBoston Economics Department. 1997. MIT: The Impact of Innovation. Boston, MA: BankBoston Economics Department. Feller, I. 1990. “Universities as Engines of R&D-Based Economic Growth: They Think They Can” Research Policy. 19(4): 335-348. Glasmeier, A. 1987. “Factors Governing the Development of High-Tech Industry Agglomerations: A Tale of Three Cities.” Regional Studies. 22(4): 287-301. Glasmeier, A. 1990. The Making of High Tech Regions. Princeton: Princeton University Press. Link, Albert N. 1995. A Generosity of Spirit: The Early History of the Research Triangle Park. Durham, NC: Duke University Press. Luger, Michael. 1987. “The States and Industry Development: Program Mix and Policy Effectiveness.” in J.M. Quigley (ed.). Perspectives on Local Public Finance and Public Policy. Greenwich, CT: JAI Press, pp. 29-64. Luger, Michael. 2000. “Science and Technology Parks at the Millennium: Concept, History, and Metrics” in this volume. Luger, Michael and H. Goldstein. 1991. Technology in the Garden: Research Parks and Regional Economic Development. Chapel Hill: The University of North Carolina Press. National Research Council. 1999. Industry-Laboratory Partnerships: A Review of the Sandia Science and Technology Park Initiative. Charles W. Wessner, ed. Washington, DC: National Academy Press. National Research Council. 1999. The Small Business Innovation Research Program: Challenges and Opportunities. Charles W. Wessner, ed. Washington, DC: National Academy Press. Saxenian, A. 1994. Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Cambridge, MA: Harvard University Press. Sternberg, R. 1990. “The Impact of Innovation Centres on Small Technology-Based Firms.” Small Business Economics. 2(2): 105-118. Sternberg, Rolf. 1996. “Technology Policies and the Growth of Regions.” Small Business Economics. 8(2): 75-86.
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Representative terms from entire chapter: