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Annex B Overheads on the Research Triangle Experience
Prof Michael Luger
THE ROLE OF S&T PARKS:
The Research Triangle Experience with Lessons for Sandia
Presentation at NRC Symposium on Industry-Laboratory Partnerships:
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Annex B
Overheads on the Research Triangle Experience
Prof Michael Luger
THE ROLE OF S&T PARKS:
The Research Triangle Experience with Lessons for Sandia
Presentation at NRC Symposium on Industry-Laboratory Partnerships:
The Role of S&T Parks
April 22, 1998
Prof Michael Luger
University of North Carolina at Chapel Hill
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Outline of presentation
I.
Basis for remarks
II.
Overview of S&T (research) parks in the US
III.
What makes them ''successful?''
IV.
The RTP phenomenon
V.
The rest of the world—further lessons
Basis for remarks
1991 book on US parks, including case study of RTP
Subsequent work on S&T parks and S&T policy in US, Europe, and Asia
Subsequent work on the role of universities and research centers/labs in regional economic development
Economic studies of Research Triangle; most recently, At the Crossroads: North Carolina's Place in the Knowledge Economy of the 21st Century
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Overview of S&T (research) parks in the US
Type of park
# of parks
Median Age, 1995
Mean # tenants, 1989
Mean # tenants, 1995
Fast growing
17
16
32
58
Growing
30
11
3
19
Stagnant
12
12
34
41
Declining
3
14
33
35
Early parks, no data
13
12.5
8
Later parks, no data
28
13
35
Newcomers
41
5
8
No longer park
4
10
Not located
16
12
18
Skipped in 1989
20
11
TOTAL
184
Overview of S&T (research) parks in the US
Type of park
% in NE and MA
% in S
% in W and NW
% with access to university
% with
infrastructure
Fast growing
42
29
12
88
76
Growing
10
30
24
80
80
Stagnant
25
33
33
58
33
Declining
67
67
33
Early parks, no data
30
38
15
77
62
Later parks, no data
18
25
21
Newcomers
35
34
9
66
59
No longer park
25
25
25
Not located
27
40
13
Skipped in 1989
44
17
22
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Overview of S&T (research) parks in the US
Specializations of different types of parks:
Fast growing
telecommunications
optics, lasers
medical research
biotech
software
chemical
Newcomers (>1988)
medical equipment
biomedical
information technology
software
environmental
health/medical/pharmaceutical
semiconductor/advanced materials
What makes parks "successful?"
"Success" is a normative concept; can be defined in several ways:
as a real estate project
in terms of "policy effectiveness" (outcomes vs. goals)
in terms of efficiency (is present value of net benefits > 0?)
in terms of ability to transform a regional economy (longer time horizon)
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What makes parks "successful?"
The U.S. story, in brief
Our 1991 study used net induced job creation in the region as measure of success; outcomes varied among parks
Research Park Success Indicators
NAME OF PARK
LOCATION
YEAR ESTABLISHED
DIFFERENCE (%)
Ada Research Park
Ada, OK
1960
-0.02
Ann Arbor Technology Park
Ann Arbor, MI
1983
-1.49
Arizona State University Research Park
Tempe, AZ
1984
-0.17
Carolina Research Park
Columbia, SC
1983
-0.16
Central Florida Research Park
Orlando, FL
1979
0.72
Charleston Research Park
Charleston, SC
1984
-1.20
Chicago Technology Park
Chicago, IL
1984
1.65
Clemson Research Park
Clemson, SC
1984
0.38
Connecticut Technology Park
Storrs, CT
1982
3.18
Cornell Research Park
Ithaca, NY
1951
9.48
Cummings Research Park
Huntsville, AL
1962
0.40
Engineering Research Center
Fayetteville, AR
1980
0.02
Great Valley Corporate Center
Malvern, PA
1974
0.08
Innovation Center and Research Park
Athens, OH
1978
1.94
Interstate Business Park
Tampa, FL
1983
-1.05
Johns Hopkins University Research Park
Baltimore, MD
1984
-0.64
Langley Research & Development Park
Newport News, VA
1966
-8.80
Maryland Science and Technology Center
Adelphi, MD
1982
1.44
Massachusetts Biotechnology Research Park
Worcester, MA
1984
3.48
Miami Valley Research Park
Kettering, OH
1981
0.11
Morgantown Industrial & Research Park
Morgantown, WV
1973
0.24
RTP DIFFERENCE is 4.45; DIFFERENCE is employment growth in park region minus employment growth in control counties after park opens.
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What makes parks "successful?"
Regression analysis of 70 parks (DIFF on explanatory variables and a hazards model), and case studies of 3 parks (RTP, Stanford, Utah) indicated the following common success factors:
-
parks had marketing and development strategy appropriate for region's resources and culture
-
parks provided services/infrastructure consistent with tenants' needs
-
park businesses and nearby university connected in meaningful ways
-
there was visionary leadership and cooperation
-
there were deep pockets and patience
-
there was good timing and good luck
The Research Triangle phenomenon
The region in 1959/early 1960s
traditional, low wage manufacturing
universities were regional
severe brain drain as a consequence
strategic location at doorstep of "new south"
large tracts of centrally located land
enlightened leaders from government and business: Sanford, Hodges, Guess
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The Research Triangle phenomenon
Strategic decisions in park development
get government anchors
get blue chip corporate anchor; branch plant location as regional HQ
sell land with covenants
provide high level of services
make sure universities have meaningful input in governance
RTP has used relatively little government assistance
The Research Triangle phenomenon
One out of 4 jobs created in the region between 1959-1990 traced to park (almost 60,000). INCLUDES:
jobs in park businesses (>30K, many would not have been there otherwise)
jobs created via spending multiplier from induced jobs in the park
jobs created in businesses that provide goods and services to induced businesses in the park
jobs in companies spun off from park businesses, and through that multiplier
We did not count jobs in businesses that moved to region not to be in park, but because of reputation of region, due to park
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The Research Triangle phenomenon
The region in 1998
high tech employment in universities, labs, hospitals gives region one of highest ratios of Ph.D.s per capita
three research universities are nationally ranked
brain drain is now brain draw
considerable volume of spin-off activity from industry and universities
region is fast growing; 1.2 million population
Spin-offs
Recent research identified a total of 32 high-technology spin-offs from North Carolina universities between 1972 and 1997. Sixteen of those taken place since 1991, implying a considerable increase in spin-off activity in recent years, though trend is difficult to assess since older spin-offs are more difficult to identify. Unsurprisingly, the state's three largest research universities, UNC-CH, Duke, and NCSU, generated almost all the spin-offs, and most were located in the Research Triangle area.
Spin-off/start-up activity from industry comes from high-level scientists and engineers let go in restructuring. . . having severance, pensions, savings, and real estate to use as seed capital
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S&T parks worldwide
Sample of S&T parks elsewhere:
South Africa (4)
China (8)
Japan (7)
Thailand (2)
Russia (11)
Canada (18)
Finland (10)
France (53)
Italy (11)
United Kingdom (44)
Australia (15)
Brazil (3)
These countries differ widely in their levels of economic development
Principles: Knowledge Along the Economic Development Continuum
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Policy: Services Along the Economic Development Continuum
Lessons for Sandia
With proliferation of parks, it may be difficult to achieve success in conventional terms
Park may help establish region as growth pole, substituting for urbanization economies
Planners need to heed lessons from successes:
parks had marketing and development strategy appropriate for region's resources and culture
parks provided services/infrastructure consistent with tenants' needs
there was visionary leadership and cooperation
there were deep pockets and patience
there was good timing and good luck
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