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KEYNOTE ADDRESS
The Role of Research Universities in the Formation of
Regional Innovation Clusters:
The Impact of Arizona State University on Metropolitan Phoenix
Michael Crow
Arizona State University
In an effort to establish an appropriate context for considering
the relationship of university research to the formation of innovation
clusters, Dr. Michael Crow began by underscoring the critical
significance of institutional structure and academic organization to the
network of innovation. As president of Arizona State University, the
nation’s youngest major research institution, he expressed his intent to
consider innovation clusters from the perspective of the research
university as the keystone of the knowledge creation network driving
discovery and innovation. Within this context, he interspersed summary
overviews of selected elements of the reorganization of the institution he
leads to be considered as representative of a case study in the facilitation
of innovation. He explained that ASU is the sole comprehensive
baccalaureate-granting university in one of the most rapidly growing and
demographically diversifying metropolitan regions in the nation. The
population of metropolitan Phoenix has grown by a factor of 13 over the
last 50 years, and with a regional economy excessively dependent on
population expansion and housing construction, the impact of the
recession there has been particularly severe. Property values in the
metropolitan region have declined by 50 percent since their mid-2006
peak while state revenues have declined by nearly 40 percent during the
last 18 months, following three years of unprecedented annual increases.
“I’m from one of the few large North American cities that’s still in its
early stages of development,” he said. “ASU is the only research
university in a metropolitan area of four million people that is growing to
eight million, at which point it will become the size of metropolitan
Chicago.”
He further specified that ASU efforts to facilitate innovation be
considered within the context of an ongoing comprehensive
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40 GROWING INNOVATION CLUSTERS FOR AMERICAN PROSPERITY
reconceptualization and restructuring of the university initiated in 2002.
While the complex redesign is shaped by a host of broad societal
concerns, the university has sought to align its public mission with
strategies to spur regional economic development, consistent with its role
as a center for discovery, knowledge creation, and innovation. The
commercialization of academic research is key to such efforts: One of
the university’s goals, he said, was to become the “central node of an
integrative knowledge discovery and commercialization network.”
To advance the role of the university in both knowledge creation and
the advancement of innovation networks critical to regional economic
development, ASU has developed its own approach to innovation and
commercialization, rather than following models developed elsewhere.
“We found that all the things that were important in California and in
other innovation clusters made sense,” he said, “but could not be copied
in Arizona. If you attempt to replicate what was done in Silicon Valley, it
just will not work. You need to learn from them, draw on their lessons,
and then work out your own solution.”
He considered the role of Arizona State University in the regional
approach to innovation from the following perspectives:
• Reinforcing existing knowledge clusters. While regional economic
development efforts generally focus on the formation of new
knowledge clusters, metropolitan Phoenix is reinforcing existing
industries—those that have been already successful over three or
four decades. Rather than “stepping past them and thinking that
somehow we’re going to evolve some completely new industrial
cluster,” stakeholders are asking the question, what can we do to
sustain the success of our industries? A dense concentration of
aerospace manufacturing companies, for example, has flourished for
decades in metropolitan Phoenix. Apart from their reliance on ASU
for engineering graduates, however, these companies have interacted
to a negligible and insufficient extent with the university or one
another. A first step was thus to help them continue to remain
competitive by integrating them into a cluster within which each
could draw on and build from knowledge created at the university.
• Group problem-solving (1). The second strategy, which Dr. Crow
called a “hard-fought lesson,” was to implement the practice of
group problem-solving. He used the example of a $100 million grant
awarded to ASU by the U.S. Army to develop a flexible display
technology that could be worn on soldiers’ uniforms in combat. The
university was not asked to “do research, problem solving, submit
scientific assessments about new materials, or publish papers,” he
explained. He offered the following summary of instructions from
the Army: “You cluster yourselves together with whoever you have
to and figure out how to manufacture this one thing. If you write
academic papers, that’s wonderful, put them off to the side. All we
want is a flexible display wearable on a soldier’s uniform in
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SUMMARY OF PRESENTATIONS
combat.” The university developed a cluster of 30 companies to
work together on the project, and some additional companies were
created just for the purposes of the collaboration. “We used a
completely differentiated mindset,” he said. “Just solve the problem,
build the end product.”
• Group problem-solving (2). A second problem addressed through
group problem-solving techniques is the impact of the built
environment on a fragile semi-arid ecosystem in the metropolitan
Phoenix region. He characterized sprawling development there as a
“huge energy footprint in a very complex natural ecosystem.” In
metropolitan Phoenix, he observed, the average nighttime
temperature has risen more than 10 degrees Fahrenheit over the last
20 years. “It affects the ecosystem, it affects energy consumption
rates, and it affects the quality of life.” Accordingly, the university,
the city, and the private sector have jointly agreed to reduce the
carbon footprint of Phoenix to the lowest possible number, by
whatever means necessary. “That means innovation and problem
solving, and modeling and networking, and materials advancement
and working together,” he said. “We’re finding that group problem-
solving is changing the way we’re able to move forward.” By clearly
defining the intended return on investment to stakeholders, the
partnership has been able to bring in funding from the university, the
EPA, local industries, and private foundations. “We will not know
that we are successful,” he said, “until we have collectively lowered
the trajectory of the nighttime heat index.”
• Innovation laboratories. Another technique developed by the
university to promote innovation in metropolitan Phoenix is the
formation of a number of innovation laboratories. The concept of
“innovation laboratories” is loosely construed as these can assume
various forms and configurations according to their purpose, Dr.
Crow explained. A leading example is SkySong, the ASU Scottsdale
Innovation Center. Unlike conventional university-affiliated research
parks, SkySong is a global business and innovation complex that
ASU established in collaboration with the city of Scottsdale to
advance education, entrepreneurship, and innovation. A number of
ASU innovation laboratories are focused on education in
entrepreneurship, including initiatives supported by an endowment
designated for the advancement of student ideas for new companies.
For life sciences entrepreneurs, ASU has established Technopolis, an
innovation laboratory to convert ideas into commercially viable
businesses, with guidance available for product development,
business infrastructure development, proof-of-concept capital
formation, and revenue development. The primary objective of these
innovation laboratories is to start new enterprises, Dr. Crow
emphasized, and depending on the objective, companies from the
United States and around the world are invited to participate. Some
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42 GROWING INNOVATION CLUSTERS FOR AMERICAN PROSPERITY
innovation laboratories focus on educational technologies and have
been created with the objective of improving education at all levels.
Other innovation laboratories may be clustered around issues
associated with disadvantaged communities or specific societal
challenges. The university welcomes input and support from the
public sector, private sector, and philanthropic institutions.
• Arizona State University Decision Theater. The “standard model”
of innovation, by which ideas are thought to move linearly from the
laboratory to the prototype to the marketplace, is in itself insufficient
and does not adequately represent the processes associated with the
formation of innovation clusters in twenty-first century metropolitan
Phoenix, Dr. Crow observed. A chief obstacle to the formation of
innovation clusters is lack of understanding and communication
between the public sector and the private sector, and between
scientists and engineers on the one hand and on the other those
responsible for the implementation of new technologies, including
decision-makers in business, industry, and government. In an effort
to overcome this obstacle and allow stakeholders from diverse fields
“who don’t speak the same language” to gather together and solve
problems, the university raised $6 million to build a facility termed
the ASU Decision Theater for the presentation of interactive and
immersive, three-dimensional scientific visualizations of complex
multivariate relationships based on actual environmental data and
modeling results (). A unit
of the Global Institute of Sustainability (GIOS), the Decision Theater
facilitates collaborative decision-making to address issues such as
water management, land use, and public health. In order for Arizona
to leverage its potential as a leading center for the development,
manufacture, use, distribution, and control of solar-based energy
systems, for example, ASU is developing robust modeling and
simulations tools to advance the hybrid public-private partnership
models and policy-driven market approach that will be required for
success. ASU researchers from various units are developing an
analytical tool known as RenewSim, for example, that will support
the development and deployment of a solar energy roadmap through
analysis, design, engineering, financing, and deployment. In order
for produce 20 gigawatts of electric power derived from solar
technologies for Arizona, Nevada, and southern California,
innovation challenges include not only the development of
engineering models for energy production and the grid infrastructure
but also economic models and quantitative analysis for budgeting,
efficiency, environment impact, and land use. The construction of
knowledge and research infrastructure is an imperative over and
above the urgent requirement for the construction of an adequate
civic infrastructure, and in this sense, ASU is breaking down barriers
to the formation of innovation clusters in the American Southwest.
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SUMMARY OF PRESENTATIONS
American innovation policy is limited to the extent that it fails to
recognize local expertise and regional innovation capacity, Dr. Crow
observed. Potential synergies remain unrealized because of the lack of
coordination and collaboration between the public and private sectors,
and between the federal government, regional enterprises, and academic
institutions. He relayed an example from Karen Mills, administrator of
the U.S. Small Business Administration, regarding such lack of regional
coordination in her home state of Maine. The University of Maine, he
said, was trying to build a materials research center while the nearby
University of Massachusetts boasts the world-class Materials Research
Science and Engineering Center (MRSEC). “They could be linked to and
clustered with this site,” he said. He said that a more synergistic strategy
for Maine would be to leverage its expertise in boat technology,
including the application of new composite materials for boats and the
development new engines. “We need to leverage local assets,” Dr. Crow
reiterated. “We need to build regional innovation clusters around local
expertise.”
Leveraging the Government’s Investment in Regional Growth
What should the administration do to leverage its investment in
regional economic growth? He proposed that one approach is to identify
regional problems of national importance. For example, the federal
government could help solve the ecological problems of the Everglades,
which he called “a train wreck happening before our eyes,” by assuming
leadership for an effort that will require a massive coordination involving
the public and private sectors. Solving the problem, he said, would
require innovations from mining, agriculture, urban planning, the
construction industry, water infrastructure, energy distribution,
ecosystem management, and fisheries. With sufficient resolve to solve
the impending ecological disaster, a host of innovations in a series of
industries could coalesce surrounding the causality of the problem. Such
federal leadership, he concluded is nor forthcoming.
Within the context of the global knowledge economy, Dr. Crow
argued, the present rate of innovation in the United States is inadequate.
He pondered, “Where then is the national innovation cluster working on
that problem?” He asked how the country could accelerate the process of
innovation, and expressed his agreement with Susan Crawford, professor
of law, University of Michigan, and special assistant to the president for
science, technology, and innovation policy, that the first priority was to
clarify outcomes. Today, he said, an outcome is often equated with how
many dollars are spent, with the assumption that investment in science
will automatically produce positive outcomes. Such investment
frequently does produce remarkable returns, he continued, but because
we are not sufficiently focused on outcomes, our success often comes in
spite of ourselves. A focus on outcomes would require coordination
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44 GROWING INNOVATION CLUSTERS FOR AMERICAN PROSPERITY
between the Department of Energy and Department of Defense and the
National Science Foundation, for example, as well as investment in
education in the STEM fields—science, technology, engineering, and
mathematics. It is common knowledge, he observed, that U.S. students
lag behind those of other countries in math and science education in
grades K-12. “Where is the national innovation cluster working on that
problem? Give me every possible tool imaginable that can drive math
learning across every cultural cluster in this country in every family of
every income.”
He concluded by urging a shift in perspective, particularly at the
federal level, from the “project mode of thinking” to the advancement of
policy that encourages “innovation clusters that are driven by outcomes”
followed by investment to facilitate those outcomes. He lamented the
present absence of analytical tools to measure outcomes as well as their
economic impact. He framed investment in math and science education,
for example, as an economic development opportunity. Speaking from
his perspective as the president of a research university guiding the
economic diversification of the economy in metropolitan Phoenix, he
observed, “What I can say is that standard stuff seldom works. The
country is evolving rapidly and the problems are challenging. Any
standard approach that’s not somewhat regionalized or localized is not
likely to succeed. We need customization, and that comes through the
establishment of new kinds of innovation clusters guided by new kinds
of tools and outcome measures.”
Discussion
Adam Rosenberg, of the House Science and Technology Committee,
asked whether the large energy institutes recommended recently by the
Brookings Institution1 might too easily become earmarks that are
difficult to terminate, and whether they are needed at all, given the
current availability of national laboratories and major universities. Dr.
Crow acknowledged the concern about earmarking, which he said had
been expressed by Chairman Gordon2 during congressional deliberations
on the proposal. However, Dr. Crow, who said that he co-chaired the
Brookings study, replied that the danger of earmarking could be
addressed by ensuring that the selection of institutes be done on a strictly
competitive basis.
1
The Brookings Institution's Metropolitan Policy Program—joined by a number
of leading universities, regional alliances, and corporate partners—has laid out a
detailed plan for launching a network of energy innovation institutes around the
country. These institutes would “serve as the hubs of a distributed research
network linking the nation’s best scientists, engineers, and facilities.”
2
Bart Gordon chairs the House Committee on Science and Technology.
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SUMMARY OF PRESENTATIONS
He noted that the Department of Energy was planning energy hub
projects that would likely have many of the features of the energy
institutes, but saw two differences between the plans. First, he said, the
DoE projects did not focus on solving a regional problem. Second, none
of the funding proposed by the Brookings report would go toward
infrastructure. The institutes would make use of existing institutions,
taking the form of coordinating hubs and distributed networks of
participants. He insisted that their efficiency and quality would be
ensured by a rule of “strict, rigorous competition, no exceptions.”
Dr. Edward Penhoet asked whether a criterion for locating a hub
would be local capability. Dr. Crow replied, “Yes, absolutely.”
Samuel Leiken, senior director of policy studies for the Council on
Competitiveness, commented that in the course of studying universities
and regional development, he had visited SkySong,3 the innovation
center Dr. Crow described during his remarks. He praised the usefulness
of SkySong in creating a “tool that promotes serendipity for free-
enterprise capitalism,” allowing entrepreneurs to find a foreign partner,
for example, or a university professor interested in collaborating. He said
he was troubled by the risk that clusters with strictly defined outcomes
might “define out” the essential “serendipity of free-enterprise
capitalism.” Dr. Crow replied that SkySong was a “transaction time
reduction facility.” He asked: “How do you take your idea and move as
rapidly as possible through whatever transaction you need to move it
forward.” The development of SkySong was made possible through
partnerships with the city of Scottsdale and private developers. More
than 50 global and American companies from more than 20 countries are
current participants, he explained. He suggested that the way to maintain
serendipity is to focus on the problem rather than to establish a rigid
regional structure. “You invite everyone to assemble around the problem
itself,” he said. “Then all the natural juices inside the university, the
start-up company, and the established company flow on their own. Stay
focused on the idea, not the structure.”
3
SkySong, located in Scottsdale, Arizona, describes itself as “a global portal
connecting the world through technology.”
.
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