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By Don Boroughs
Photo-Illustration by Polly Becker
Photo-Illustration by Polly Becker


The industry-university partnership is this year's hot economic-development strategy. But not all "innovation clusters" prove to be winners.

If Washington has its way, America will receive job growth by letting a thousand Silicon Valleys bloom across the country. And among the gardeners tending these flowering fields will be engineering faculty from the nation's research universities. Secretary of Commerce Gary Locke early this year told a group of university and technology leaders that "encouraging the growth of innovative clusters is a national priority. . . creating ecosystems where universities, venture capital, entrepreneurs, and skilled workers are all amplifying each other's talents." Locke went on to host a series of forums on the topic at universities coast to coast, and President Obama's 2011 budget set aside $75 million for regional innovation clusters.

Congress is adding its voice to the chorus. In May, the House passed the 2010 America COMPETES Reauthorization Act, which calls for grants to universities and others to develop regional innovation strategies. Additional bills in the House and Senate would fund federal guarantees to cover $500 million in loans for the construction of science parks where university and private researchers can work together. The enthusiasm of Washington's leaders is summed up by the bill's cosponsor, Rep. Martin Heinrich of New Mexico: "When world-class scientists and entrepreneurs put their minds together, anything is possible."

So far, nothing concrete has emerged from these proposals, but universities have not been waiting for the government’s go-ahead. Already, more than 150 American university research parks offer space to private companies keen to feed off their expertise. Their number grew strongly in the ’80s and ’90s, and accelerated in the first decade of the new millennium.

Two Photos. Photo 1: NCSU student engineers. Photo 2: Redhat building.

In just the past 12 months, new research parks have been announced at Embry-Riddle Aeronautical University in Florida and Baylor University, where the Central Texas Research and Technology Park will provide space for Baylor graduate engineering research and private technology companies. And earlier this year, construction began on Clemson University’s new Innovation Center for Advanced Materials, which is meant to profit from Clemson’s strong department of materials science and engineering. “A lot of this innovation emphasis that is catching on is going to involve engineering,” says Don Giddens, dean of engineering for Georgia Institute of Technology. “This is a sweet spot for engineers.” The University Research Park at the University of Wisconsin-Madison, established in 1984 and now housing 126 companies, plans to add 50 new building sites. Engineering is “critical to our tech transfer program,” says URP Director Mark Bugher.

The parks are not just growing but also evolving. They have cut back on “buffalo hunting” for Fortune 500 tenants in favor of incubating homegrown talent. These increasingly nimble, focused parks developed from an understanding that people, not real estate, are at the center of the high-tech revolution. University leaders have come to realize that students and faculty alike benefit most when contact is maximized across the academic/industry divide. According to Brian Darmody, president of the Association of University Research Parks, the best research companies are drawn to research parks precisely for that human contact. “It’s not the cyclotron,” says Darmody. “It’s the people.”

"Intensely Social"

The phenomenon of research parks is built upon a paradox of globalization: Just when communication and transportation networks have made it possible for production and markets to spread out across the globe, the knowledge economy's dependence on person-to-person contact has led to dense regional concentrations of dynamic companies. So whether it's semiconductors in Austin or software in Bangalore, pockets of growth dominate the map of high-tech industry. "The enduring competitive advantages in a global economy lie increasingly in local things - knowledge, relationships, motivation," writes Michael Porter, the Harvard Business School professor credited with popularizing the idea of regional innovation clusters.

"Experimentation is an intensely social process," explains AnnaLee Saxenian, author of Regional Advantage: Culture and Competition in Silicon Valley and Route 128. "People literally bump into one another and realize that things that normally wouldn't work together can work together," the University of California at Berkeley professor adds.

Three Photos. Photo 1: Courtyard of a UA Office of University Research Parks. Photo 2: Two researchers/engineers at a computer. Photo Three: Photo of Purdue Research Foundation Buidling.

The cafeteria at Bell Labs was the iconic location for such informal technology transfer in the middle of the 20th century. In the 1970s, independent research at AT&T and other large companies accounted for nearly all of the annual top 100 innovations named by R&D Magazine, according to research by sociologists Fred Block and Matthew Keller. More recently, however, the majority of top innovations have been the product of partnerships between businesses and research from federal labs and universities. Says Darmody: "Research parks are the Bell Labs cafeteria writ large."

Of course, many clusters have grown and innovations been made without the benefit of an organized research center. But university research parks attempt to consolidate, strengthen, and even create clusters from scratch. "The ultimate value proposition for research parks is that one provides clusters," says Darmody.

Exhibit A for the proposition that university research clusters can perform such alchemy is North Carolina's Research Triangle Park. In 1959, when the cluster was founded, North Carolina was the second-poorest state in the Union after Mississippi, with an economy dependent on low-wage tobacco, furniture, and textile industries. "We had fine universities, but graduates were leaving," says Elizabeth Rooks, chief operating officer of Research Triangle. "We were a really primitive state."

With three major research universities - Duke, North Carolina State, and the University of North Carolina at Chapel Hill - 7,000 acres of land, and a half century of effort, the Research Triangle cluster has helped turn North Carolina around. Today, over 170 high-tech companies employ some 42,000 people in the park. Average wages for the Raleigh and Durham areas are now well above the national average.

Nonetheless, the early history of Research Triangle Park would give pause to any cluster-building enthusiast. For several years, the park went nowhere. IBM was lured only after the organizers tore up covenants demanding pure research facilities and allowed the company to set up a factory inside the park. "There used to be row upon row of tractor-trailer trucks," recalls Rooks.

Universities are in the business of education, not industrial development, however. They expect to see academic benefits from research parks. And the three universities were experiencing little in the way of technology transfer in Research Triangle's early years.

Photo: Three Purdue researchers

North Carolina was not alone. Purdue Research Park's largest tenant was a State Farm Insurance claims processing facility. The West Lafayette, Ind., project was one of the nation's first university parks, but "in all honesty, not much development took place until the 1990s," says Joe Hornett, who heads the Purdue Research Foundation. "Research parks are good for students, good for faculty, good for the university," adds Georgia Tech's Giddens, the current president-elect of ASEE, "but it's complicated. You can't just flick a switch and have it happen."

A Serious Game Plan

The lessons of these sputtering take-offs are not lost on Don Herriott, who recently took over the University of South Carolina's wobbly Innovista research park. "The biggest mistake people make is having an expectation of quick results," says Herriott. "It's not like recruiting an industrial company that's just looking at the financial equation," he adds. "Recruiting brains is extremely difficult." Innovista attracted the mocking ire of South Carolina's governor after spending some $100 million and producing half-finished buildings and no private tenants. Herriott's conclusion: "'Build It and They Will Come' is not a very good business concept."

But new approaches are transforming research parks from the Carolinas to the Corn Belt. Universities are taking a hands-on approach to making sure that park tenants are aligned with their academic strengths and needs. "We never had a game plan," says Purdue's Hornett, "a game plan that said, 'Let's be serious about this.'" Today, Purdue Research Park, like many others, has adopted covenants restricting the type of facilities allowed, and it makes sure that new tenants have a tangible relationship with a university or a plan for one. At North Carolina State, prospective and renewing tenants are "permitted" based on criteria such as joint research projects, hiring students, or serving as adjunct faculty, for example. "We make sure they connect up with some academic unit," says Associate Vice Chancellor Dennis Kekas, an engineer who heads the Partnership Office for NCSU. "They have to have some kind of relationship with the university to be here."

Of course, the most intense relationships are with a university's own spinoffs, which are now strongly encouraged and nurtured. Purdue Research Park has 365,000 square feet of incubator space, the largest in the country, according to Hornett. Today 45 percent of his tenants are homegrown. "We're more interested in growing and starting businesses based on Purdue technology rather than playing the attraction game," says Hornett.

Photo: Madison's University Research Park Buidling

In a survey of the Association of University Research Parks' members, 60 percent indicated that their tenants are more likely to be smaller, start-up enterprises or corporate mini-labs rather than the large companies of the past. And 95 percent reported that fostering entrepreneurship is a high priority. The Research Triangle Park, once almost exclusively the haunt of large firms, created its first business incubator in the 1990s and today hosts five incubators. More than half of the park's current tenants have fewer than 10 employees, most of them start-ups. In Columbia, S.C., as well, Herriott is shifting away from hunting big game and toward raising calves. "I would love to see one day that we've created a Fortune 500 company in our city that spawned from intellectual property from the university," he muses.

A growing awareness of the economic benefits of new businesses has also raised their profile. Bruce Wright, associate vice president for university research parks at the University of Arizona, notes that his three largest tenants, IBM, Citigroup, and Raytheon, shifted work to Tucson from some other location. "But we have 40 companies here, and all but three or four didn't exist before," he adds. "We're engaged in real job creation."

Wright says that a key to fostering such growth is to build a park with the flexibility to adjust to a start-up's changing needs. Arizona offers its tenants three levels of buildings. NP Photonics, a spinoff based on optical-fiber laser technology invented by Arizona materials science and engineering professor Nasser Peyghambarian, worked up its business plan in the park's inexpensive, small-office facility. In the product-refinement phase, the firm moved into a dry laboratory space. Now that the company is welcoming customers and investors to its headquarters, it has graduated to a Class A office building.

New companies also need services. Arizona offers night classes in business at a branch campus on its research park. "A lot of engineers and scientists are finding themselves having to do business management and finance," explains Wright. "They need to tool up."

Hornett takes great pride in the free services Purdue Research Park offers its tenants, including public relations, clerical services, copying, and access to metal workshops and laboratory stocks. "I believe it's what's made us successful," Hornett says. John Russek, an adjunct professor of aeronautical engineering and founder of nine-year-old Swift Enterprises, credits those services with his company's survival. "One year after we started, we would have been out of business if we had not been in the research park," says Russek. "We were hanging on by a thread." Today Russek takes advantage of access to Purdue's collection of more than 200 aircraft engines in testing the lead-free aviation biofuel Swift has developed.

Another important new approach for university research parks has been to focus only on industries aligned with the universities' own research strengths. Rooks, of the Research Triangle, says that for newer parks to succeed, "it's a matter of, 'can they identify their particular niche and take advantage of it?'" Arizona Research Parks have cast aside their shotgun approach: "We're aggressively pursuing solar energy, defense and border technology, optics/photonics, and biosciences," says Wright.

Wright adds that real estate demands also dictate a focused approach. "Bioscience needs wet labs and clean rooms; defense contractors need DoD-certified, secured facilities," he explains. "You can't be all things to all people."

BMW and Michelin

Regional strengths figure heavily in niche selection. Clemson Research Park existed for decades as an underdeveloped real estate project with no focus or close tie to the university. But in 2001, Clemson University decided to take advantage of South Carolina's emerging automotive cluster in planning its Clemson University International Center for Automotive Research. BMW, which operates an assembly plant in nearby Spartanburg, urged Clemson to create a graduate program in automotive engineering focused on systems integration. The German automaker also agreed to contribute $10 million toward endowed faculty chairs and $40 million for two new buildings housing $10 million in automotive testing equipment for the university and private tenants. In addition to BMW, Michelin and several smaller auto suppliers have moved researchers into the park. "We believe in focusing clusters," says Chris Przirembel, Clemson's former dean of mechanical engineering and recently retired vice president for research and economic development.

Photo: Alternate image of Madison's University Research Park Building at night.

Though the new center is located 45 miles from the main Clemson campus, automotive engineering graduate students there learn within shoulder-rubbing distance of private-sector researchers. This illustrates another trend in university research parks: integrating corporate and academic campuses.

The acknowledged pioneer in this regard is North Carolina State. NCSU forms one corner of the Research Triangle, but the Triangle Park, being roughly equidistant from the three universities, is not very close to any of them. In contrast, NCSU has built its Centennial Campus - adjacent to the main campus - as an academic campus and research park in one. Of the 3 million square feet of building space there, two-thirds is for the university, including most of the College of Engineering, while one-third is rented by 63 technology firms and research organizations. "Partnering is a contact sport," explains Kekas. "The whole campus is structured to encourage dialogue among people, to encourage people to bump into one another."

Open-source software developer Red Hat moved its headquarters onto Centennial Campus in 2002. "We believe the best ideas come from collaboration," says Tom Rabon, the company's executive vice president of corporate affairs. "The whole idea of being on a college campus had a great deal of appeal to Red Hat." Rabon adds: "Some of the best and brightest engineering students in the world walk by our building every day. From a recruiting standpoint, it's a great place to be."

The close contact has brought financial benefits. One collaboration among the College of Engineering at North Carolina State, the Army Research Office, Red Hat, and other companies, known as the Secure Open Systems Initiative, has drawn $6 million in research grants to Centennial Campus. More than a dozen computer sciences faculty and even more students are working on the project. The grant would not surprise Albert Link, an economics professor at the University of North Carolina, Greensboro, who has studied the connection between research park location and benefits. Comparing 29 universities that have research parks - at an average distance of 5.7 miles - he found that the closer the park to campus, "the greater the university's success obtaining extramural funding . . . and the greater the ability of the university to place its doctoral graduates."

Students are benefiting in the classroom, as well. Laurie Williams, who has her academic office across the road from Red Hat, annually invites company executives to guest lecture in her computer classes. And she has helped organize occasional informal networking lunches for engineering students, professors, and Red Hat staff that typically draw together at least 60 people. "They're perfect neighbors," says Williams.

Louis Martin-Vega, North Carolina State's dean of engineering, says that the visible involvement of businesses in campus life is a strong selling point with prospective students. "It's one thing to say that your culture promotes strong interaction between college and industry and provides opportunities for students to get good jobs," says the industrial engineer. "It's another thing for them to just see it."

Photo: Clemson University engineer working with blue lasers.

Patents and Publications

In fact, Link's research shows that any alignment with a research park benefits a university through increased academic patenting and publication, student placements, and the ability to hire pre-eminent scholars. Williams says that when she left the computer industry for NCSU's College of Engineering, "a big reason I chose NC State was the number of companies around." Likewise, Issam Mudawar of Purdue's mechanical engineering department says that having a company at the research park is "the only thing that kept me as a professor at the university." Mudawar, who has 150 journal articles to his name and numerous teaching awards, explains: "It created healthy balance, because I love teaching, and I love my research at the university, but I also love to develop things."

Of course, if the nation's goal is to let a thousand Silicon Valleys bloom, it's worth recalling that the original Silicon Valley required neither big-game hunting nor incubators - no federal cluster policies or loan guarantees, no strategic planning, and not even a research park. Stanford University has a research park that lays claim to being the oldest in the country. But "it's a mistake to say that Silicon Valley grew out of the science park," says Berkeley's Saxenian. For one thing, the semiconductor companies that gave the valley its name - Shockley Semiconductor, Fairchild Semiconductor, and their offspring, including Intel - were concentrated several miles southeast of the park. And the park has always been, first and foremost, a real estate venture to support the university's endowment, not an economic or academic development project.

"Silicon Valley was an accident," says Steve Blank, an adjunct professor of engineering at Stanford. "Most people don't realize just how serendipitous Silicon Valley was." Yet it was an accident waiting to happen. The university was - and is - stocked with dynamic engineering faculty encouraged to commercialize their discoveries at a time when most academics were still locked in their ivory towers. High-tech companies clustered in the Valley because they needed to be near Stanford.

By being first, Silicon Valley has raised the bar for every potential imitator: Half of the nation's venture capital is now based in California. But the composition of the bar remains the same. "You need to have a center of excellence that people are flocking to," says Blank, "a seat of influence that will get people to leave their jobs, leave their homes, leave their countries to come to you." In other words, before a university research park can do its job, the university's engineering faculty must do theirs.

Don Boroughs is a freelance writer based in South Africa.




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