National Academies Press: OpenBook

Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century (2013)

Chapter: 8 New Initiatives in Illinois and Arkansas

« Previous: 7 The New York Nanotechnology Initiative
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

Chapter 8

New Initiatives in Illinois and Arkansas

The symposia held pursuant to this project identified a large number of noteworthy state and regional efforts to foster innovation clusters. Some of these stand out because of their apparent success, such as New York’s nanotechnology initiative. Others warrant attention because while their success or failure remains in the balance, they reflect sustained collective efforts by local stake holders to mobilize available resources, forge an innovation community, and confront longstanding intractable challenges posed by geography, historical industrial and cultural legacies, and international competition.

GROWING A BIOTECHNOLOGY CLUSTER IN ILLINOIS

Illinois confronts an innovation conundrum commonly found in advanced societies—the fact that excellent science does not necessarily translate into local economic growth. Former Provost of Northwestern University Lawrence Dumas observes that

The infrastructure and raw material of science and discovery are abundant across the Chicago region. We have every kind of powerful tool and multiple sites of leading-edge research, such as Argonne National Labs, multiple research hospitals, leading companies in drug development and prominent research universities. In spite of those assets, we just haven’t seen enough companies starting here.1

David Miller, leader of the Illinois Biotechnology Industry Organization (iBIO) echoes this concern, observing that the state has always been strong in research

_________________________

1Thomas O’ Halloran, “Disruptive environments that seed discovery and promote translation,” in National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, C. Wessner, Rapporteur, Washington, DC: The National Academies Press 2013.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

but lacked the ability to translate the research into companies that remain in Illinois—companies instead leave for the coasts and even Indiana, Michigan, Wisconsin and other places that have “more jobs, a good tax base, greater wealth creation, taxpayer-financed resources, and more excitement.” Miller faults the state for reliance on a “big company strategy,” seeking to attract large companies to establish new facilities or expand existing ones, comparing this to trying to win a baseball game by “hitting only slam home runs.”2 Thomas J. Meade, a Northwestern University professor, who started up a biomedical company, said with respect to the venture capital situation that in California, he could “raise angel money in a coma” whereas “the Chicago ecosystem is more like a dry well.”3

Illinois has one of the largest concentrations of university, nonprofit and government research institutions in the world, and the University of Illinois has one of the largest research budgets in the country.4 The Argonne National Laboratory, 25 miles from Chicago, was the site of the first creation of stem cells from adult cells in 2003. Chicago is home to eleven medical schools and enrolls more medical students than any other city in the country, but historically has been a net exporter of graduates with medical degrees.5 Illinois was site of the first planted biotechnology field in the world—tomatoes genetically engineered by Monsanto to ward off pests—in 1987, but has seen home-grown biotechnology companies and startups migrate to other regions.6 In 2013 a report by the Chicago Metropolitan Agency for Planning warned that in the preceding decade the Chicago region had lost nearly half of its private research and development jobs and was losing ground to smaller innovative regions like San Diego, San Francisco, Silicon Valley and Boston:

As these regions enhance the R&D intensities of their manufacturing clusters and the Chicago region lags behind, it becomes harder for northeastern Illinois to adopt new technologies and compete in global advanced manufacturing…While in 2000 the region produced the fourth most patents in the nation, by 2010 its rank had dropped to eighth. As manufacturing relies on R&D

_________________________

2Presentation of David Miller, “Early-Stage Finance and Support in Illinois,” National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, op. cit.

3Chicago Sun-Times, “Micro-Dollars—Nanotechnology Entrepreneurs See Small Window for Venture Funding,” March 30, 2009.

4“Magazine Ranks Illinois Top State for Biotechnology,” Campaign-Urbana the News-Gazette July 23, 2005. The University of Chicago Comprehensive Cancer Center, affiliated with the University of Chicago, has been responsible for path finding discoveries in cancer research, including the development of a new MRI procedure for the detection of early breast cancer, discovery of the molecular mechanism by which tamoxifen blocks the effects of estrogen, and the identification of the first chromosomal abnormality in leukemia.

5“Fertile Ground for a Biotechnology Hub,” Daily Herald March 8, 2001.

6Amgen started business in 1984 in an incubator in Chicago flanked by four hospitals, but eventually left the state for California. “Fertile Ground for a Biotech Hub,” Daily Herald March 8, 2001.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

support to fuel next-generation technologies and productivity gains, the region’s R&D decline contributes greatly to the challenges the cluster faces today.7

Numerous public and private initiatives are currently underway in the Chicago area to reverse these trends and promote innovation-based economic growth. Governor Patrick Quinn pressed for a public works bill in 2009 in a “very tough economy” which secured funding for broadband deployment in the region, including in a newly-created Chicago “medical district” encompassing four large hospitals and the University of Illinois at Chicago.8 In 2011, the Governor announced the launch of Startup Illinois, a web-platform to connect fledgling entrepreneurs with mentors, advisers, service suppliers, and sources of potential government funding.9 Chicago’s leading universities are upgrading their research infrastructure and technology transfer programs.10 The University of Illinois operates a Research Park at its Urbana campus, which includes an incubator providing SBIR collaboration, a Mobile Development Center, and other resources. The Research Park has worked with 140 start-ups in the past decade and has helped raise over $400 million in venture capital. The Research Park features a number of special programs:

•   1-Start Professional Launch is designed to free entrepreneurs from the distraction of all of the professional services they require in the early stages of development, delivering those services in a suite so the entrepreneur can concentrate on running the company.

•   Entrepreneurs-in-Residence pairs serial entrepreneurs, VCs, and industry executives with early-stage companies to help them adapt to the realities of the commercial world.11

_________________________

7“Region’s R&D Spending Plummets,” Crystal Lake The Northwest Herald March 3, 2013.

8Presentation by Governor Patrick Quinn, National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, op. cit.

9“Governor Quinn Announces Startup Illinois Institute,” Chicago Examiner May 20, 2011.

10Robert Easter, “The Role of Illinois Universities” National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, op. cit. See also in the same volume, Caralynn Nowinski, “New Initiatives at the University of Illinois.” At Northwestern University, the technology transfer office has been reorganized as the New Ventures Office with new rules requiring two-way collaboration between university researchers and companies with full data sharing. Richard B. Silverman, “University Technology Transfer: Lessons Learned from Lyrica,” National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, op. cit.

11Presentation by Caralynn Nowinski, “New Initiatives at the University of Illinois, National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, op. cit.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

Box 8-1
The Challenge of Early-Stage Financing

In most of the states surveyed in this project, local leaders cite the inadequacy of early stage financing for start-ups as a significant impediment to innovation-based economic development. The problem confronts small states like Hawaii and Arkansas and large states like Illinois and New York. Nationwide, most small firms that need financial backing are in the proof-of-concept, start-up or seed capital phases, and need $500,000 to $1 million for prototype development.12 For the most part, this need is not being met; seed stage investments by the U.S. venture capital industry fell by 48 percent in 2011 to $919 million, or only 3 percent of all venture capital investment.13 Venture capital has been moving downstream, toward safer investments in established enterprises and technologies, a phenomenon that makes it harder for innovative start-ups to acquire funding.14 Both of the states examined in this chapter are responding by seeking to create local institutions to close the gap in early-stage financing.15

The Illinois Science & Technology Coalition

The Illinois Science & Technology Coalition (ISTC) was created by the Illinois legislature to promote innovation and coordinate state, university and federal efforts in research and the sciences. Its mission includes fostering of public-private partnerships for R&D and innovation; attracting technology and innovation-related federal funding to Illinois; and advocating state and federal policies to advance innovation. The ISTC has been active in a number of innovation-related initiatives:

Early-Stage Financing

The state of Illinois recently succeeded in leveraging $78 million in federal funds from the Small Business Credit Initiative, part of which is being

_________________________

12National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, C. Wessner, Rapporteur, Washington, DC: The National Academies Press, 2012, pp. 56-62.

13PriceWaterhouse 2013 Money Tree Report.

14The current VC investment is $8.3 million, large-scale funding that is normally reserved for firms that already have substantial revenues. National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit., p. 59.

15This growing gap in early-stage financing is addressed in part, but only in part, by the federal SBIR program. The program provides some $2.5 billion in phased federal support to start-ups and small established companies to help meet government missions in security, health, energy, and the environment. Its grants and contracts often serve as a first step towards commercialization for many firms.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

used by a venture capital fund, Invest Illinois Venture Fund, which supports young innovative companies with high growth potential. As of mid-2012, this fund had invested $4.2 million in 14 deals, leveraging about $16.7 million in private investments.

Illinois Nanotechnology Collaborative (INC)

The INC represents an effort to coordinate the work in nanotechnology underway at over 20 departments and divisions in Illinois universities and hospitals. It has developed Proof of Concept Centers to accelerate commercialization; a Shared Facilities Program to make expensive and specialized tools available for research; and a Work Force Development Program.

Support for Research and Technology Parks

The ISTC is working to increase available space at the 1981 Digital Tech Incubator, a 50,000 sq. ft. technology park that supports technology-based startups, and is helping to “reinvigorate” the Illinois Science and Technology Park in Skokie.16 ISTC is also working to “reinvigorate” the Illinois Science and Technology Park in Skokie as a public-private partnership, backed by a $20 million capital commitment from the state and the collaboration of the Forest City Science and Technology Group. Partners include the city of Skokie and community colleges that will use it for technology training programs. The site is also designed as a location for spin-offs from Northwestern University, and already hosts nanotechnology firms which include NanoInk, Nanotype, and NanoSonix.

Fostering Biotechnology

The Illinois biotechnology Organization (iBIO) was formed in 2001 through a merger of the state’s two largest biotech coalitions to promote development of the biotechnology industry in the state.17 David Miller, the president, warned in 2003 that while Illinois was good at building infrastructure for biotechnology, “other states are providing support at every level in the process, and we aren’t.”18 In 2007, an Illinois biotech executive said that he did not

even try to get state grant money as it was too little financing for all the trouble. Instead he blamed the lack of venture capital in the area

_________________________

16Mark Harris, ”Illinois Science and Technology Coalition,” in National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, op. cit.

17“Chicago Stakes Claim to Biotech Supremacy,” Chicago Sun-Times December 17, 2001.

18“Biotech Progressing Without State Support,” Chicago Sun-Times October 20, 2003.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

for making many small biotech companies look to either of the two coasts for more adventurous financial backers.19

iBIO has taken a number of actions to reverse trends evident in the early 2000s. iBIO was the driving force in creating a state tax credit for angel investments, and has supported legislation to re-fund the Technology Development Account that provides start-ups with early stage financing. iBIO launched the PROPEL program and co-founded Chicago Innovation Mentors, two programs that provide expertise and advice to startups. PROPEL was assisting 44 active companies as of mid-2012, and in 2011 42 U.S. and international patents were issued and over 145 patent applications were filed by PROPEL firms. iBIO’s David Miller said in 2012 that in biotechnology, the Chicago region has “the essential outlines of a critical mass,” and that the task is now to “shore this up and bolster it.” He points out that iBIO was forced to become involved in some of the state’s macroeconomic issues because unless the state’s fiscal problems were resolved—most notably costs associated with pensions and debt service—“we had no hope of making this one of the top life sciences centers of the world.”20

Nanotechnology at Northwestern

In 2000, Northwestern University established the International Institute for Nanotechnology. The Institute has grown to 190 faculty and 500 graduate students. By 2007, Northwestern’s nanotechnology research had succeeded in attracting state and federal funding totaling $350 million, including $100 million for new and upgraded equipment and infrastructure.21 In 2005, Ford and Boeing announced a research partnership on nanotechnology with transportation applications with Northwestern.22 Chad Mirkin, the current director of the Nanotechnology Institute has launched a series of companies to commercialize nanotechnologies developed at Northwestern:

•   Aurasense Therapeutics was established to commercialize a spherical nucleic acid platform to target disease, and it has amassed a patent portfolio of 70 filings in numerous countries.23

   Nanosphere, a molecular diagnostics company, commercialized technology combining gold nanoparticles and nucleotides to create a

_________________________

19“Will Biotech Firms Keep Flocking to North Suburbs?” Gurnee Review August 2, 2007.

20David Miller, “Early Stage Finance and Support in Illinois,” National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, op. cit.

21“Call it Nano U—NU’s Visionary Leader Seized the Day,” Chicago Sun-Times August 13, 2007.

22“Ford, Boeing, Northwestern in Partnership on Anotech,” The Anniston Star October 7, 2005.

23“What the Giant of Teeny-Tiny is Up to Now,” Crain’s Chicago Business October 13, 2012; Van Crocker, “The Industry Perspective on Illinois,” in National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, op. cit.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

   detection system for nucleic acids and proteins. Based on this technology, the company has raised $100 million in private and $180 million in public funding.24

Chemistry of Life Processes Institute

Chicago’s universities are implementing institutional innovations to break down disciplinary silos and foster start-ups. The Chemistry of Life Processes Institute (CLP) was established at Northwestern University in 2004 with the mission of becoming one of the U.S.’s leading centers of biomedical research. CLP seeks to foster collaborative research in the interface areas between the chemical, physical, engineering, and life sciences.25 CLP recruited leading scientists in synthetic chemistry, proteomics, molecular imaging, materials science, synthetic biology, and other overlapping fields. CLP is characterized by its founding director, Dr. Thomas O’Halloran, as a “common playground for many disciplines” and “an effort to lower the hurdles in getting scientists to work across their chosen disciplines.”26

CLP has encouraged entrepreneurialism in the biomedical sector. One of O’Halloran’s first acts as director was to recruit an entrepreneur-in-residence, Andrew Mazar, as a CLP faculty member to whom members of the CLP community could “go to and say, ‘I’ve got a result, I’ve got a patent; what do I do next?”27 CLP fostered two start-up companies that ended up operating outside of Illinois because they could not raise local venture capital and “the investors they found were in North Carolina and in Madison, Wisconsin, where the companies are now operating.” However, OhmX, founded by CLP professor Thomas Meade, secured funded from an investment team headed by a CLP Board Member and began operations in nearby Evanston, Illinois, developing bioelectronic protein-specific monitoring devices.28

_________________________

24Roger Moody, “Industry Perspective on Illinois,” in National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, op. cit.

25CLP’s director of operations, Sheila Judge, has a doctorate in biochemistry and works directly with the faculty to assemble team-based science grants and facilitate interconnections between fields such as endocrinology, materials science, and synthetic chemistry. Ibid.

26CLP’s building occupied in 2009, is designed so that faculty from different disciplines work together on every floor and the environment is designed to make best use of “collisions” between different programs. Thomas O’ Halloran, National Research Council, Building the Illinois Innovation Economy: Summary of a Symposium, op. cit.

27Mazar had previously served as chief science officer and senior vice president of R&D at Attenuon Laboratories, a biopharmaceutical company in San Diego. Longview News Journal, “Health Center Receives Almost $7.8 Million Grant,” October 28, 2005.

28Ibid.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

Educational Programs to Foster Entrepreneurialism

A number of educational programs have been implemented in Illinois to foster entrepreneurialism in a local culture, which is frequently said to inhibit start-ups. Caralynn Nowinski, Associate Vice President for Innovation and economic Development at the University of Illinois, summarized a number of these initiatives at the symposium convened for this project in Chicago in 2012.

•   Innovation Living Learning Community (Innovation LLC). Innovation LLC is a dormitory with 130 students from different fields of study who are interested in becoming entrepreneurs. The dorm features a garage where they can work on prototyping (including a 3-D printer), programs to foster interaction and mentorship, and a curriculum centered on idea development.

•   Business Plan Competitions. The University of Illinois introduces students with business skills to those with engineering/science competencies and encourages them to find commercial applications. One of these programs, Tech Ventures, partners business school students with the University tech transfer office to create a business plan and identify a commercial application. Some of these projects have resulted in successful start-ups, such as OrthoAccel Technologies, which secured funding and in 2011, won FDA clearance for a medical device to accelerate the orthodontic process.

•   IP Coffee Breaks. In this program, faculty and grad students discuss IP protection, disclosures, and getting assistance forming a company.

•   Proof of Concept. These programs, at the Chicago and Urbana campuses, provide up to $75,000 to faculty entrepreneur teams and helps companies prepare SBIR applications.

DEVELOPING ARKANSAS’ WORKFORCE AND WIND POWER

Arkansas is a small state that has grappled with economic forces largely beyond its control for over half a century. After World War II, when automation of agriculture eliminated many farm jobs, the state government managed to attract manufacturing firms from other states on the basis of its low costs, low taxes and favorable business climate, factors that still work in its favor today.29 Many of these industries began moving offshore in the 1970s, and the state has

_________________________

29In 1955, Arkansas’ state legislature established the Arkansas Industrial Development Commission (AIDC) with a mandate to promote industrial development, and under its first Chairman, Winthrop Rockefeller, began to recruit out-of-state businesses. The result was an influx of manufacturers and the addition of 51,000 jobs between 1955 and 1960. Watt Gregory, “Evolution of Innovation in Arkansas,” in National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

continued to fight a steady erosion of manufacturing jobs. Arkansas business, academic and government leaders have been working closely together for roughly fifteen years to expand the number of knowledge-based jobs and companies in the state and in the process to raise the state’s per-capita standard of living. A key concern, expressed by University of Arkansas Chancellor David Gearhart, is the fact that roughly one quarter of the state’s college graduates leave the state after graduation—“if graduates are leaving to go where [established] businesses already are, how do you reverse the process and attract these businesses to your region?”30

Although Arkansas has long faced a bleak economic landscape, the state enjoys a number of advantages in the global competition for investment, technology and jobs. Arkansas entrepreneurs have founded a number of world-class companies that began as start-ups within the state.31 The state’s location in the center of the North American market, supported by a modern infrastructure of road, rail and river based transportation, have given it an edge in attracting new manufacturers, particularly those for whom transportation costs are key competitive factors.32 Finally, the state’s work force, although faulted by some would-be employers for its low education and skills levels, has been prized by others for its deeply-ingrained work ethic and can-do spirit.33

Arkansas has also benefitted from a strong commitment to economic development by a succession of Democratic and Republican governors, a supportive legislature, and groups of business, academic and government leaders working on a volunteer basis to study the challenges facing the state and develop a strategic response.34 For decades, Arkansas government authorities have used economic development incentives to considerable effect in attracting and

_________________________

30David Gearhart, “Arkansas 180: Teaching and Research,” University of Arkansas website, <http://chancellor.vark.edu/13132.php>.

31J. B. Hunt, which began in 1961 as a small “Arkansas trucking firm (five trucks and seven refrigerated trailers) had become this country’s largest trucking firm by the 1990s. Tyson foods, based in Springdale, Arkansas, began as a farmer driving one truck to deliver chickens to Chicago and evolved into the largest U.S. poultry processer and the world’s second largest processer of chicken, beef and pork. Wal-Mart, which started out with a single retail outlet in Rogers, Arkansas in 1960 became the largest retailer in the U.S. in 1991.

32River Bend Gets Kosmo Work,” Plastics News November 7, 2011; Interview with Joe Brenner, Vice President for Production, Nordex, in Wind Systems January 2011; “Nucor Makes Blytheville Steel Capital of the South,” Arkansas Business December 16, 1996.

33“Mitsubishi Breaks Ground on Nacelle Facility in Arkansas,” North American Windpower October 8, 2010; “Nucor Makes Blytheville the Steel Capital of the South,” Arkansas Business December 16, 1996.

34One of the civic groups, Accelerate Arkansas, commissioned professional studies of the Arkansas economy, most notably a 2004 report by the Milken Institute that represents the most comprehensive study ever undertaken of the Arkansas economy. The study, which laid out the steps the state needed to take to move toward a knowledge-based economy, formed part of the intellectual base for Governor Mike Beebe’s development of a long range strategic plan. Watt, “Evolution of Innovation in Arkansas 2010, op. cit.; Milken Institute, Arkansas’ Position in the Knowledge-Based Economy: Prospects and Policy Options, 2004; Arkansas Strategic Plan, 2009.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

retaining innovative companies in the state.35 In 2007, the General Assembly created the Quick Action Closing Fund, which was intended to empower the Governor to “act quickly and decisively in highly competitive situations to finalize an agreement with a company to locate” in the state, and the fund has repeatedly demonstrated its effectiveness as a policy tool.36

For roughly the past 15 years, Arkansas has implemented a sustained array of initiatives to foster the emergence of a knowledge-based economy in the state. Accelerate Arkansas, a group of business leaders working on a volunteer basis, commissioned a series of studies about the Arkansas economy, the challenges it confronted in transitioning to knowledge-based economy activities, and possible policy initiatives. Ultimately, the studies have provided the basis for a systematic, sustained strategic effort to address the principal challenges facing the state, which included work force development, upgrading education at all levels, and fostering entrepreneurship, innovation and the start-up of new, technology-oriented companies.37 The most recent survey of the state’s economy concludes that “Arkansas has enjoyed clear economic benefit from activities to create a knowledge-based economy, and is now poised to take critical next steps to maintain momentum.”38

Workforce Development

Arkansas is taking a number of steps to meet its increasing need for highly educated and skilled workers.39 The Arkansas Task Force on Higher

_________________________

35“Choosing a Greenfield Site: Steelmakers are Drawn to Rural Areas,” Iron Age March 1992; “Factory Closing Shocks Community Into Opening Wallets for Economic Development,” The Regional Economist October 2010; “Arkansas Legislators Present Their Proposal for Tax Breaks for Proposed Steel Mill,” Arkansas Democrat-Gazette December 7, 1987.

36Letter from Arkansas Economic Development Commission Executive Director Maria Haley to Senator Mary Anne Salmon and Representative Tommy Lee Baker, Arkansas Legislative Council, August 22, 2011; Caterpillar Opens New Arkansas Factory Hiring 600,” Cleveland.com September 1, 2010; “Windstream Picks Little Rock, AR for HQ,” Business Facilities July 13, 2010.

37These efforts are summarized in National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit., pp. 14-20.

38Battelle Technology Partnership Practice, Arkansas’ Knowledge Economy Initiatives: Analysis of Progress and Recommendations for the Future, November 2012. In support of its conclusion, Battelle cited the fact that (1) knowledge-based initiatives based on research has received $61.2 million in state funding in the period 2008-2011 leveraging $191.8 million in non-state support; (2) that the state’s innovation initiatives has fostered 135 new companies directly employing 1,259 workers; and (3) job gains in high-wage, typically knowledge-intensive industries exceeded 6,000 jobs during a period in which the state experienced a net decline in private sector jobs.

39Arkansas Department of Education, Combined Research Report of Business Leaders and College Professors on Preparedness of High School Graduates, January 2007. Similarly, the human resources manager at Kagome/Creative Foods, a food processor with a facility in Mississippi County, Arkansas, said in 2010 that despite the county's high unemployment, it was "very, very hard to find people to work," partly a case of "too many undereducated, unemployable youth." Susan C. Thompson, "Factory Closing Shocks Community into Opening Wallets for Economic Development," The Regional Economist, October 2010.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

Education Remediation, Retention and Graduation Rates was formed pursuant to legislation enacted by the General Assembly in 2007 to increase the percentage of citizens with bachelor's degrees. At that time, the percent of adults in Arkansas holding bachelors' degrees was 22.3 percent—well below the average for the 16-state Southern Regional Education Board (SREB). While Arkansas exceeded many Southern Regional Education Board (SREB) states in the number of high school graduates entering college, a greater percentage of those entering college failed to complete bachelors' degree programs.40

Acknowledging that the state lags in per capita baccalaureate degrees, where it stands 49th in the nation, Governor Beebe noted in his keynote address to the National Academies symposium on Building an Arkansas Innovation Economy that he was determined to change that ranking.41 The state has initiated policies that include higher standards, higher expectations, and more advanced placement. The state has approved a lottery, with all of its available revenues targeted for college scholarships. “There will be no excuse for Arkansas to stay 49th in per capita BA degrees,” he said.

Arkansas has 11 four-year colleges and universities, including four with a major research orientation, the University of Arkansas for Medical Sciences, the University of Arkansas—Fayetteville, Arkansas State University and the University of Arkansas at Little Rock.42 A study by Battelle Technology Partnership released in 2009 found that Arkansas’s growth in investments in university research between 2001 and 2007 was strong, albeit from a low base, exceeded the national average (20 to 51 percent) and vastly outpaced the national average in key “hard” research disciplines.43

A 2012 study by the Battelle Technology Partnership Practice found that Arkansas universities were outperforming the national average in technology transfer activity relative to the size of the research base, measured in terms of licenses and startups per $10 million in research expenditures.44

_________________________

40The Arkansas General Assembly set an ambitious goal in 2007of increasing the percentage of degree-holding Arkansans to the regional average by 2015. Describing a recently released update, Jim Purcell, director of the Arkansas Department of Higher Education, noted that “despite significant improvement in the rate at which high school graduates who enroll in college—very nearly the national average, in fact—the percentage of Arkansas residents with college degrees is on the decline.” Arkansas Business, “Purcell Seeks to Raise Rates of Graduation,” March 5, 2013.

41Recognizing these realities, Governor Mike Beebe’s Strategic Plan for Economic Development points out that Arkansas is “at a critical disadvantage in competing for opportunities in the 21st century economy,” and that the state had “not kept pace” with the requirements of the global knowledge-based economy. See, the Executive Summary of Governor Mike Beebe’s Strategic Plan for Economic Development, Little Rock: Arkansas Economic Development Commission, 2009.

42The University of Arkansas at Pine Bluff is sometimes regarded as a fifth research university because of its work in the field of aquaculture.

43Battelle Technology Partnership Practice, Opportunities for Advancing Job-Creating Research in Arkansas: A Strategic Assessment of Arkansas University and Government Lab Research Base, 2009.

44Battelle Technology Partnership Practice, Arkansas’ Knowledge Economy Initiatives: Analysis of Progress and Recommendations for the Future, November 2012, p. 18.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

TABLE 8-1 2001-7 Growth Rate in University R&D Funding


Field Arkansas (percent) National Average (percent)

Biological Sciences 133 55
Physics 94 31
Chemistry 205 44
Other engineering 105 28
Other life sciences 443 50.5

The state’s universities have benefitted from substantial upgrading of their cyberinfrastructure, which includes capabilities in high performance computing, visualization technology, data repositories and storage systems, advanced instruments, and the advanced networks which link such resources. Led by the University of Arkansas High Performance Computing Center, a committee of external experts was convened to assess the state’s cyberinfrastructure needs, and on the basis of its recommendations the state launched the Arkansas Cyberinfrastructure Initiative.45 Underlying that initiative was the recognition that computing has become the most important general purpose instrument of science, and research in a number of key fields requires millions of hours of computing time annually.46 Arkansas launched the “Star of Arkansas” in 2008, a computer at the High Performance Computing Center

TABLE 8-2 Technology Transfer Performance from Arkansas Universities

Year Licenses per $10 Million in Research Startups by $10 Million in Research
Arkansas U.S. Average Arkansas U.S. Average
2007 0.50 0.18 0.84 0.32
2008 0.31 0.04 0.78 0.12
2009 2.92 0.14 0.77 0.11

_________________________

45The Arkansas High Performance Computing Center supports research at the University of Arkansas in computer science, nanoscience, computational biomagnetics, and chemistry, material science, and spatial science. The Arkansas Cyberinfrastructure Advisory Committee, comprised of external experts, was partially funded by NSF through the University of Arkansas and the Arkansas Science and Technology Authority. The Advisory Committee drafted a strategic plan for the buildout of the state’s cyberinfrastructure. National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit., p. 24.

46Recent nanotechnology device research at the University of Arkansas required 70 million hours of computing time annually. Another project seeking to create three-dimensional models of alloys that do not yet exist, using 20 million or more atoms, required 6 million hours of computing time annually. Ibid.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

capable of storing five times the data found in the entire Library of Congress. In 2011, the Center acquired another powerful supercomputer, “Razor.”47 The University of Arkansas cyberinfrastructure has been linked to, and supports, the state’s other research universities and four-year colleges.

The state is also taking steps to improve PreK-12 education. A decade ago, the shortcomings in the state's PreK-12 educational system were sufficiently severe that the Arkansas courts declared the state's system of school funding to be “inadequate under … The Arkansas Constitution.”48 In 2007, the percentage of freshmen entering the University of Arkansas at Pine Bluff requiring remedial courses was 75.5 percent for English, 84.9 percent for math, and 73.6 percent for reading.49 A 2006-7 survey which asked Arkansas college faculty members to grade the Arkansas public schools on preparing students for college found that over half gave the schools grades of D (50.2 percent) or F (9.6 percent).50

The constitutional challenge to the state’s funding of the public schools led to a court order that pursuant to the state constitution, financing of the schools should be sufficient to provide an “adequate educational system” based on a cost study, a decision that was upheld by the Arkansas Supreme Court in 2002. The net result has been a substantial increase in state funding for operations and facilities in elementary and secondary schools as well as overhaul of the curriculum, increased teachers' salaries and increased requirements for accountability from school districts.51 Arkansas is now winning accolades for levels of per-pupil funding, test scores, transparency, accountability, standards, and increase in advanced placement students.52 A 2012 assessment of state K-12 science standards concluded that between 2005 and 2012, the Arkansas school system had moved from a grade of D to B.53

_________________________

47Ibid. Both of these machines were partially funded by the NSF. “Rick McMullen Appointed Director of the Arkansas High Performance Computing Center,” University of Arkansas Newswire, July 31, 2012.

48Lake View School District No. 25 v. Huckabee No. 1992-5318 (Pulaski County Chancery Court) May 25, 2001.

49Arkansas Department of Education, Combined Research Report of Business Leaders and College Professors on Preparedness of High School Graduates,January 2007.

50Ibid.

51By 2008, over half of Arkansas’s students scored “proficient or above” on state tests of mastery of grade-level knowledge compared with levels of 20 to 40 percent a decade previous. In 2007 Arkansas was singled out along with Massachusetts by U.S. Secretary of Education Margaret Spellings as an example of a state educations reform program worthy of emulation by other states. Arkansas Task Force on Higher Education Remediation, Retention and Graduation Rates, Access to Success: Increasing Arkansas’ College Graduates Promotes Economic Development, August 2008.

52See the summary of the keynote speech by Governor Mike Beebe in the Proceedings chapter of National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit.

53The report observed that “Arkansas presents a well-organized and generally sound set of science standards, with thorough and excellent treatment of most—though not all—disciplines. Curricula that are well-aligned to this document ought to be solidly grounded and, provided they are staffed by

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

Also playing a key role is the Arkansas Science Technology, Engineering and Math (STEM) Coalition, a statewide partnership of leaders from the business, government, education and community sectors whose goal is to develop and implement policies to improve STEM teaching and learning in the state. Among other initiatives, the coalition has secured funding for 27 elementary school science specialists, sought state grants to STEM teachers to increase their income, established a web portal for STEM lesson plans, and advocated differential pay for STEM teachers.54

Early-Stage Funding

Arkansas’s efforts to foster innovation have long been hampered by the dearth of early-stage funding for start-ups. In 2002, a state task force seeking to foster the creation of knowledge-based jobs concluded that “a key element that has been missing from the entrepreneurial equation in Arkansas is the lack of venture capital to keep new knowledge-based businesses in the state.55 A 2012 study by Battelle Technology Partnership Practice found that “formal venture capital and private equity investments have been stagnant in Arkansas, with an average of less than one formal venture capital investment per year since 2007.56 Battelle commented that “as long as Arkansas lacks a locally based early-stage venture capital fund, the prospects for substantial investment of initial rounds of venture capital in emerging companies are not promising.”57

A number of public and private institutions are currently working to ensure that early stage financing is available to innovative start-ups.

•   The state provides extreme early-stage financing to start-ups via Business tax Incentives, the Arkansas Risk Capital Matching Fund, and the ASTA Seed Capital Fund.58

_________________________

scientifically competent teachers, classrooms of the Natural State could do a fine job of science education. Thomas B. Fordham Institute, The State of State Science Standards, 2012, p. 23.

54Michael A. Gealt, “Arkansas STEM Coalition Activities,” in National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit.

55Report of the Task Force for the Creation of Knowledge-Based Jobs, September 2002, p. 26.

56Between 2002 and 2006, the number of Arkansas companies receiving private equity and formal venture capital investments was 22, a figure that fell to 15 for the 2007-11 period. Battelle Technology Partnership Practice, Arkansas’ Knowledge Economy Initiatives: Analysis of Progress and Recommendations for the Future,November 2012.

57Ibid. p. 25. At the Arkansas symposium convened for this project, Jeff Johnson, recounting the start-up of his company, ClearPointe (a Little Rock-based managed service provider) said that his company’s only original source of capital was its receivables. ClearPoine did not succeed in raising venture capital in the early 2000s so it was forced to rely on loans from local banks, which “are not the best way to start a company, but we had no other options.” He identified access to funding as his company’s highest hurdle to overcome. National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit., p. 32.

58The Business Tax Credit program provides transferable tax credits to start-ups that do not have state tax liabilities given that they have little or no income at the early stages of growth. The ASTA

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

•   Arkansas Capital Corporation Group (ACCG), a private not-for-profit organization, provides early-stage funding through an affiliate, Diamond State Ventures (venture capital investments of up to $20 million) and Arkansas Capital Corruption (ACC) (long-term fixed-rate loans).59

   ASTA Technology Development Grants averaging $100,000 per year, are provided to state-based companies commercializing new technology-oriented products and processes involving royalty-based agreements.60

The Arkansas Development Finance Authority has encouraged out-of-state venture capital firms to monitor deal flow in Arkansas and to invest in the state, and ADFA has invested in six external venture funds, which have in turn invested in 4 deals in Arkansas.61 Battelle (2012) reported that between 2007 and 2012, state initiatives to promote innovation had assisted 135 new companies employing 1,259 workers in industries with average wage levels more than double the state average.62

Innovation-Based Development

Arkansas has implemented a broad array of policy measures to promote the establishment and expansion of knowledge-based industry in the state. The Arkansas Research and Technology Park has been established adjacent to the University of Arkansas at Fayetteville to nurture technology-based companies with a “set of core R&D competencies at the university.”63 In 2011, Arkansas State University at Jonesboro opened a commercial innovation technology incubator at its Arkansas Biosciences Institute Commercial Innovation Center, which provides offices and laboratory facilities for businesses seeking to turn biological innovations into services and products.64 In 2011, Governor Mike

_________________________

Seed Capital Fund provides an annual average of $750,000 for working capital to support initial capitalization and/or expansion of technology-based start-ups in the state. The Arkansas Risk Capital Matching Fund, administered by the Arkansas Development Finance Authority provides Technology Validation funding to assist very early stage start-ups in proof of concept, prototyping, market research, and other commercialization milestones. National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit., p. 31; Battelle (2012) op. cit., p. 7.

59National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit., p. 31.

60Battelle (2012), op. cit., p. 31.

61According to Battelle (2012), Arkansas’s innovation initiatives have fostered a number of start-ups through the angel-financed stage, and the funds are pursuing wider investments and later stage deals. Ibid. p. 24.

62Battelle (2012), op. cit., p. ES-2.

63Jay Chesshir, “Research Parks in Arkansas,” National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit.

64“Brian Rogers Named Director of Commercial Innovation Technology Incubator,” Arkansas State University press release, January 5, 2011.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

Beebe signed a memorandum of understanding with the U.S. Food and Drug Administration providing for establishment of a center of excellence in collaboration with the National Center for Toxicological Research (NCTR) at Pine Bluff, Arkansas to develop and commercialize nanotechnology products and processes associated with toxicology.65

Arkansas is leveraging federal resources to foster local knowledge-based economic development. The University of Arkansas for Medical Sciences (UAMS) at Little Rock operates a medical incubator, UAMS BioVentures, which as of 2009 had 44 start-up projects underway or under review and in which in 2008 accounted for $29.4 million in revenues from new products, services and research, and $52.4 million in economic output from BioVentures companies.66 The National Science Foundation, which funds Materials Research Science and Engineering Centers (MRSEC) at universities, has established a joint MRSEC with the Universities of Arkansas and Oklahoma to conduct interdisciplinary research in nanotechnology that had produced six spinoff companies as of early 2010.67 NSF has established an Industry/University Cooperative Research Center (I/UCRC) for engineering and logistics in a collaboration involving Sam’s Club and the University of Arkansas.68

Wind Power Manufacturing

Arkansas state and local authorities have augmented the state’s natural advantages and technological legacy in the electric power industry with incentives and support from state universities to establish the state as “a manufacturing powerhouse for the wind industry.” Arkansas is located at the edge of the “Saudi Arabia of wind,” the U.S. Great Plains, and its strategic geographic position is cited by manufacturers of wind power equipment as an important factor in their decision to locate facilities in the state.69 In addition, the University of Arkansas is the site of the National Center for Reliable Electronic Power Transmission (NCREPT), which emphasizes industrially-relevant research into future energy systems and operates as a testing, prototyping and

_________________________

65The collaboration will involve five Arkansas universities and will examine research themes such as evaluation of drugs for medical use, food contaminants, and detection of terrorist threats. “Beebe, FDA Sign First of its Kind Agreement at NCTR,” Arkansas Business August 12, 2011.

66Michael Douglas, UAMS BioVentures, “From University Research to Start-Ups: Building Deals for Arkansas,” National Research Council, “Building the Arkansas Innovation Economy: Summary of a Symposium,” March 8, 2010.

67Greg Salamo and Alex Biris, “Nanotechnology,” in National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit.

68National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit., p. 34.

69Joe Brenner, “The Wind Industry in Arkansas: An Innovation Ecosystem,” National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

industrial collaboration center for users of electricity.70 The competencies of the University of Arkansas in electric power were cited in a 2007 study by the Battelle Technology Partnership as a factor favoring the emergence of a local electric power-based industrial sector.71

Wind power manufacturers began to establish facilities in the state in 2007, citing locational advantages, support from the states’ political leadership, incentives, and the availability of an “able workforce.” Governor Beebe commented in 2008, when the state won a competition for the location of a plant by L. M. Glasfiber, a Danish firm making about one-third of the world’s turbine blades, that the state had run into work force issues in the past, and that “we had prioritized changing that.”72

One of the wind equipment manufacturers investing in Arkansas was Nordex USA, a subsidiary of Nordex SE, a German producer of wind turbines that was one of the pioneers of developing wind power technology. The company’s manager’s cited factors underlying their decision to locate a manufacturing facility for 2.5 MW wind turbines in Jonesboro, Arkansas—one of the most technologically sophisticated facilities of its kind in North America—as the availability of a trainable work force, Arkansas’ geographic location, the nearby presence of Arkansas State University, and the demonstrated commitment of state and local political leaders to economic development.73

Before the Nordex plant opened, the company developed a relationship with Arkansas State University, which implemented a workforce training

_________________________

70Alan Montooth, “Research in Advanced Power Electronics: Status and Vision,” National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit.

71Jerry Adams, “Understanding the Battelle Study,” National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit. Little Rock is the headquarters for the southwest Power Pool (SPP), a cooperative organization that manages the flow of electrical power to nine states. SPP manages the flow of electric power over networks, operates as a wholesale sales agency for power and sells transmission services. General Cable, a major producer of electric power transmission equipment, operates a plant in Malvern, Arkansas. Presentation of Nick Brown, “Arkansas’ Role in energy Transmission Management,” National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit. “Backers, State Will Benefit,” Fort Smith Times Record November 21, 2011.

72In 2009, Mitsubishi Power Systems Americas (MPSA) chose Fort Smith, Arkansas, as the site for a $100 million manufacturing plant to produce wind turbine nacelles. The City of Fort Smith agreed to extend a street and water and sewer lines to the plan site. State and local revenue bonds were used to underwrite some of the projects cost. Certain fees associated with the construction were waived. The Fort Smith Regional Chamber of Commerce provided an undisclosed amount of financial support. The University of Arkansas at Fort Smith agreed to support the plant through its training and certification programs. The University’s chancellor, Paul Berau traveled to Japan to meet the Mitsubishi team that would be sent to Fort Smith. The university’s assistant provost, a Japanese national, served as translator and helped with cultural affairs in the negotiations with Mitsubishi. Finally, Governor Mike Beebe made two “secret visits” to Fort Smith to speak with Mitsubishi executives. “Fort Smith Lands Wind Power Plants 400 Jobs,” Arkansas News October 16, 2009.

73Joe Brenner, “The Wind Industry in Arkansas: an Innovation Ecosystem,” National Research Council, Building the Arkansas Innovation Economy: Summary of a Symposium, op. cit.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

program in a type of “mechatronics” which involves teaching a combination of electrical and mechanical skills that are specific to the manufacture of wind turbines. The university worked with Nordex and Beckmann Volmer, a supplier to Nordex of turbine mainframes and other wind power components, to create specific classes and degrees to meet the unique needs of the wind power industry. Complementing these initiatives, Nordex built a 10,000 square foot training academy at its factory site. The city of Jonesboro authorized an industrial development bond issue of $100 million to finance the construction of the Nordex plant. Nordex responded that $125 million would be required. The city agreed to the increase. At the federal level, Nordex received $22 million in tax credits pursuant to the American Recovery and Reinvestment Act of 209 for its Jonesboro facility.74

The innovative wind manufacturing complex that has evolved in Arkansas since 2007 is now exporting wind equipment to wind farms in the Great Plains and Middle West, where its location gives it a transportation cost advantage relative to production bases in Europe and China.75 In 2011, Governor Beebe, who was serving as chairman of the National Governors Association Natural Resources Committee, noted that the wind power industry was a growing sector within Arkansas’ economy, and while the state’s own wind resources were not ideal—reflecting inconsistent wind patterns—he hoped the wind power industry in the state would continue to grow:

At some point we have to realize that our national security interests are best pursued when we’re not dependent on parts of the world that don’t like us very much … We weren’t satisfied jut to sit back and let other folks take the lead on that wind power.76

_________________________

74Interview with Joe Brenner, Vice President of Production of Nordex USA, in Wind Systems January 2001; “Beckmann Volmer Breaks Ground on Osceola Plant,” Paragould Daily Press September 14, 2011; “Nordex Opens Arkansas Wind Energy Plant,” REVE October 31, 2010; Jonesboro Asked to Increase Bond Issue for Plant,” Arkansas Business August 24, 2009; “Nordex Gets Council’s OK to Raise bonds to $125 M,” Arkansas Business August 24, 2009; “Firm building Jonesboro Plant to Get $22 million Stimulus,” NWA Online January 11, 2010.

75“Jonesboro’s Nordex Plant Secures Turbine Contract,” Associated Press State Wire: Arkansas February 24, 2012; “Nordex Wins 75-MW Project in Repeat Order,” Windpower Engineering December 2, 2010; “Nordex USA Wins 41 MW Wind Energy Order from Wind Farm,” REVE November 10, 2010; “Nordex USA Wins Two New Wind Turbine Orders for Iowa,” REVE November 23, 2011; “Texas Wind Farm to Use 30 2.5 MW Wind Turbines,” Windpower Engineering December 19, 2011; Way Wind and Nordex USA Announce New Wind Power Venture in Nebraska,” Windpower Engineering June 21, 2011; “Nordex, Michigan Firm Partner on 300 MW Wind Power Project in US,”REVE March 23, 2011.

76“Beebe Calls for More Wind-Power Growth in Arkansas” Associated Press State Wire: Arkansas March 24, 2011.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

LESSONS LEARNED

Illinois and Arkansas are each undertaking a comprehensive effort to address the core factors that act as a drag on innovation.

With respect to Illinois a key issue has been a low level of new entrepreneurialism reflecting factors such as a cultural aversion to commercial risk, the difficulty in securing early stage financing, and policymakers’ traditional emphasis on attracting and keeping big companies. State leaders are confronting these weaknesses through initiatives to support start-ups, university programs designed to foster entrepreneurialism and creation of new institutions to provide early stage financing.

Arkansas’s long standing weakness has been the low average educational and skills level of its workforce and the difficulty of starting new companies in the state, above all a reflection of the dearth of early-stage financing. The state has made substantial strides in improving its work force profile through substantial and sustained investments in its universities, programs to improve the caliber of K-12 education, and partnerships with companies to train workers in specialized competencies. The state has fostered a number of initiatives to increase the availability of early stage funding, but this remains an area of vulnerability.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×

This page intentionally left blank.

Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 165
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 166
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 167
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 168
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 169
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 170
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 171
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 172
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 173
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 174
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 175
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 176
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 177
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 178
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 179
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 180
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 181
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 182
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 183
Suggested Citation:"8 New Initiatives in Illinois and Arkansas." National Research Council. 2013. Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century. Washington, DC: The National Academies Press. doi: 10.17226/18364.
×
Page 184
Next: IV: BIBLIOGRAPHY »
Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century Get This Book
×
Buy Paperback | $52.00 Buy Ebook | $41.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

Most of the policy discussion about stimulating innovation has focused on the federal level. This study focuses on the significant activity at the state level, with the goal of improving the public's understanding of key policy strategies and exemplary practices. Based on a series of workshops and conferences that brought together policymakers along with leaders of industry and academia in a select number of states, the study highlights a rich variety of policy initiatives underway at the state and regional level to foster knowledge based growth and employment. Perhaps what distinguishes this effort at the state level is most of all the high degree of pragmatism. Operating out of necessity, innovation policies at the state level often involve taking advantage of existing resources and recombining them in new ways, forging innovative partnerships among universities, industry and government organizations, growing the skill base, and investing in the infrastructure to develop new technologies and new industries. Many of these initiatives are being guided by leaders from the private sector and universities.

The objective of Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century is not to do an empirical review of the inputs and outputs of various state programs. Nor is it to evaluate which programs are superior. Indeed, some of the notable successes, such as the Albany nanotechnology cluster, represent a leap of leadership, investment, and sustained commitment that has had remarkable results in an industry that is actively pursued by many countries. The study's goal is to illustrate the approaches taken by a variety of highly diverse states as they confront the increasing challenges of global competition for the industries and jobs of today and tomorrow.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!