Growing Innovation
Clusters for
American Prosperity
Summary of a Symposium
Charles W. Wessner, Rapporteur
Committee on Competing in the 21st Century:
Best Practice in State and Regional Innovation
Initiatives
Board on Science, Technology, and Economic Policy
Policy and Global Affairs
NATIONAL RESEARCH COUNCIL
OF THE NATIONAL ACADEMIES
THE NATIONAL ACADEMIES PRESS
Washington, D.C.
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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.
This study was supported by: Contract/Grant No. DE-AT01-06NA26358, TO #28, between the Department of Energy and the National Academy of Sciences; and SB134106Z0011, TO #4, between the Technology Innovation Program of the National Institute of Standards and Technology and the National Academy of Sciences. U.S. Department of Commerce, National Institute of Standards & Technology (NIST). This report was prepared by the National Academy of Sciences/National Research Council under award number 99-06-07543-02 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce. Additional funding was provided by The Heinz Endowments, Acciona Energy, Dow Corning Corporation, IBM, SkyFuel Inc., and the Association of University Research Parks. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project.
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Advisers to the Nation on Science, Engineering, and Medicine
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COMMITTEE ON COMPETING IN THE 21ST CENTURY: BEST PRACTICE IN STATE AND REGIONAL INNOVATION INITIATIVES*
Mary L. Good, Chair
Donaghey University Professor
Dean, Donaghey College of Engineering and Information Technology
University of Arkansas at Little Rock and STEP Board
Richard A. Bendis
CEO
Bendis Investment Group, LLC
Susan Hackwood
Executive Director
California Council on Science and Technology
William C. Harris
President and CEO
Science Foundation Arizona
Mary Maxon
Initiative Lead
Marine Microbiology Initiative
Gordon and Betty Moore Foundation
Michael G. Borrus, Vice Chair
Founding General Partner
X/Seed Capital Management
W. Clark McFadden II
Partner
Dewey & LeBoeuf LLP
David T. Morgenthaler
Founding Partner
Morgenthaler Ventures
Edward E. Penhoet
Director
Alta Partners
Tyrone C. Taylor
President
Capitol Advisors on Technology
________________
* As of June 2009.
Project Staff
Charles W. Wessner
Study Director
Alan Anderson
Consultant
McAlister T. Clabaugh
Program Officer
David S. Dawson
Senior Program Assistant
David E. Dierksheide
Program Officer
Adam H. Gertz
Program Associate (through June 2010)
Sujai J. Shivakumar
Senior Program Officer
For the National Research Council (NRC), this project was overseen by the Board on Science, Technology and Economic Policy (STEP), a standing board of the NRC established by the National Academies of Sciences and Engineering and the Institute of Medicine in 1991. The mandate of the STEP Board is to integrate understanding of scientific, technological, and economic elements in the formulation of national policies to promote the economic well-being of the United States. A distinctive characteristic of STEP's approach is its frequent interactions with public and private-sector decision makers. STEP bridges the disciplines of business management, engineering, economics, and the social sciences to bring diverse expertise to bear on pressing public policy questions. The members of the STEP Board* and the NRC staff are listed below:
Edward E. Penhoet, Chair
Director
Alta Partners
Lewis W. Coleman
President & CFO
DreamWorks Animation
Alan M. Garber
Henry J. Kaiser, Jr. Professor
Professor of Medicine
Director, Center for Primary Care and Outcomes Research
Stanford University
Ralph E. Gomory
Research Professor
Stern School of Business
New York University and
President Emeritus
Alfred P. Sloan Foundation
Mary L. Good
Donaghey University Professor
Dean, Donaghey College of Engineering and Information Technology
University of Arkansas at Little Rock
Amory Houghton, Jr.
Former Member of Congress
David T. Morgenthaler
Founding Partner
Morgenthaler Ventures
Joseph P. Newhouse
John D. MacArthur Professor of Health Policy and Management
Harvard Medical School
Arati Prabhakar
General Partner
U.S. Venture Partners
William J. Raduchel
Chairman Opera Software ASA
_______________________
*As of May 2009.
Jack W. Schuler
Partner
Crabtree Partners
Alan Wm. Wolff
Of Counsel
Dewey & LeBoeuf LLP
STEP Staff
Stephen A. Merrill
Executive Director
McAlister T. Clabaugh
Program Officer
David E. Dierksheide
Program Officer
David S. Dawson
Senior Program Assistant
Charles W. Wessner
Program Director
Adam H. Gertz
Program Associate (through June 2010)
Daniel Mullins
Program Associate
Sujai J. Shivakumar
Senior Program Officer
CONTENTS
Charles Wessner, The National Academies
Susan Crawford, National Economic Council, The White House
Michael Crow, Arizona State University
Panel I: Why Clusters Matter: Innovation Clusters and Economic Growth
Moderator: William Kittredge, Economic Development Administration, Department of Commerce
Cluster Development: A Path to Growth
Maryann Feldman, University of North Carolina
Stimulating Regional Economies
Andrew Reamer, The Brookings Institution
Panel II: Regional Innovation Clusters: The Obama Administration’s Innovation Initiative
Moderator: Jean Toal Eisen, Department of Commerce
The Geography of Innovation: The Federal Government and the Growth of Regional Innovation Clusters
Jonathan Sallet, The Glover Park Group
New York State’s NANO Initiative
Pradeep Haldar, Energy and Environmental Technology Applications Center (E2TAC), Albany, New York
The Technology Innovation Program: Connecting the Dots
Panel III: State and Regional Initiatives
Moderator: Ed Paisley, Center for American Progress
Clusters Growing in Pennsylvania
Rebecca Bagley, Pennsylvania Department of Community and Economic Development
Building and Branding Clusters: Lessons from Kansas and Philadelphia
Richard Bendis, Innovation America
Virginia Industry Cluster Analysis
John Mathieson, SRI International
The Washington State Innovation Economy
Egils Milbergs, Washington Economic Development Commission
Karen Mills, Small Business Administration
Panel IV: The University Connection
Moderator: Robert Samors, Association of Public and Land-Grant Universities
Luis M. Proenza, University of Akron
The South Carolina Innovation Ecosystem
David McNamara, South Carolina Research Authority
Panel V: Filling the Gaps: The Role of Foundations
Moderator: Jim Turner, Association of Public and Land-Grant Universities
How Innovation Clusters Are Reviving the Economies that ‘Urban Renewal’ Destroyed
Christina Gabriel and Bomani Howze, The Heinz Endowments
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Responding to the challenges of fostering regional growth and employment in an increasingly competitive global economy, many U.S. states and regions have developed programs to attract and grow companies as well as attract the talent and resources necessary to develop innovation clusters. These state and regionally based initiatives have a broad range of goals and increasingly include significant resources, often with a sectoral focus and often in partnership with foundations and universities. These are being joined by recent initiatives to coordinate and concentrate investments from a variety of federal agencies that provide significant resources to develop regional centers of innovation, business incubators, and other strategies to encourage entrepreneurship and high-tech development.
This has led to renewed interest in understanding the nature of innovation clusters and public policies associated with successful cluster development.
Project Statement of Task
An ad hoc committee, under the auspices of the Board on Science, Technology, and Economic Policy (STEP), is conducting a study of selected state and regional programs in order to identify best practices with regard to their goals, structures, instruments, modes of operation, synergies across private and public programs, funding mechanisms and levels, and evaluation efforts. The committee is reviewing selected state and regional efforts to capitalize on federal and state investments in areas of critical national needs. This review includes both efforts to strengthen existing industries as well as specific new technology focus areas such as nanotechnology, stem cells, and energy in order to better understand program goals, challenges, and accomplishments.
As a part of this review, the committee is convening a series of public workshops and symposia involving responsible local, state, and federal officials and other stakeholders. These meetings and symposia will enable an exchange of views, information, experience, and analysis to identify best practice in the range of programs and incentives adopted.
Drawing from discussions at these symposia, fact-finding meetings, and commissioned analyses of existing state and regional programs and technology focus areas, the committee will subsequently produce a final report with findings and recommendations focused on lessons, issues, and opportunities for complementary U.S. policies created by these state and regional initiatives.
The Context of this Project
Since 1991, the National Research Council, under the auspices of the Board on Science, Technology, and Economic Policy, has undertaken a program of activities to improve policymakers' understandings of the interconnections of science, technology, and economic policy and their importance for the American economy and its international competitive position. The Board's activities have corresponded with increased policy recognition of the importance of knowledge and technology to economic growth.
One important element of STEP’s analysis concerns the growth and impact of foreign technology programs.1 U.S. competitors have launched substantial programs to support new technologies, small firm development, and consortia among large and small firms to strengthen national and regional positions in strategic sectors. Some governments overseas have chosen to provide public support to innovation to overcome the market imperfections apparent in their national innovation systems.2 They believe that the rising costs and risks associated with new potentially high-payoff technologies, and the growing global dispersal of technical expertise, underscore the need for national R&D programs to support new and existing high-technology firms within their borders.
Similarly, many state and local governments and regional entities in the United States are undertaking a variety of initiatives to enhance local economic development and employment through investment programs designed to attract knowledge-based industries and grow innovation clusters.3 These state and regional programs and associated policy measures are of great interest for their potential contributions to growth
_______________________
1National Research Council, Innovation Policies for the 21st Century, Charles W. Wessner, ed., Washington, DC: The National Academies Press, 2007.
2For example, a number of countries are investing significant funds in the development of research parks. For a review of selected national efforts, see National Research Council, Understanding Research, Science and Technology Parks: Global Best Practices, Charles W. Wessner, ed., Washington, DC: The National Academies Press, 2009.
3For a scoreboard of state efforts, see Robert Atkinson and Scott Andes, The 2010 State New Economy Index: Benchmarking Economic Transformation in the States, Kauffman Foundation and ITIF, November 2010.
and U.S. competitiveness and for the “best practice” lessons they offer for other state and regional programs.
STEP’s project on State and Regional Innovation Initiatives is intended to generate a better understanding of the challenges associated with the transition of research into products, the practices associated with successful state and regional programs, and their interaction with federal programs and private initiatives. The study seeks to achieve this goal through a series of complementary assessments of state, regional, and federal initiatives; analyses of specific industries and technologies from the perspective of crafting supportive public policy at all three levels; and outreach to multiple stakeholders. The overall goal is to improve the operation of state and regional programs and, collectively, enhance their impact.
This Summary
The symposium reported in this volume brought together state and federal government officials, leading analysts, congressional staff, and other stakeholders to explore the role of clusters in promoting economic growth, the government's role in stimulating clusters, and the role of universities and foundations in their development. Attention was drawn to specific strategies planned or in place around the country to promote cluster development as well as the challenges faced in growing and sustaining clusters.
This summary captures the presentations and discussions of the 2009 STEP symposium on innovation clusters. It includes an overview highlighting key issues raised at the meeting and a summary of the meeting’s presentations. This workshop summary has been prepared by the workshop rapporteur as a factual summary of what occurred at the workshop. The planning committee’s role was limited to planning and convening the workshop. The statements made are those of the rapporteur or individual workshop participants and do not necessarily represent the views of all workshop participants, the committee, or the National Academies.
Acknowledgments
On behalf of the National Academies, we express our appreciation and recognition for the insights, experiences, and perspectives made available by the participants of this meeting. We are indebted to Alan Anderson for writing a summary of the meeting and to Sujai Shivakumar of the STEP staff for writing the introduction to this volume.
National Research Council Review
This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Academies’ Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for quality and objectivity. The review comments and draft manuscript remain confidential to protect the integrity of the process.
We wish to thank the following individuals for their review of this report: Saul Behar, University City Science Center; Joseph Cortright, The Brookings Institution; Daniel Berglund, SSTI; Brian Darmody, University of Maryland; Timothy Franklin, The Pennsylvania State University; and James Gambino, Ben Franklin Technology Partners.
Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the content of the report, nor did they see the final draft before its release. Responsibility for the final content of this report rests entirely with the rapporteur and the institution.
Charles W. Wessner | Mary L. Good |