THE GOVERNMENT-UNIVERSITY-INDUSTRY RESEARCH ROUNDTABLE

Thinking Locally, Competing Globally:

Building Regional Innovation Systems

The Government-University-Industry Research Roundtable seeks to identify and to illuminate issues at the forefront of our nation’s science and technology enterprise. This brochure summarizes ideas exchanged at the June 1999 Roundtable Council meeting, which examined building government-university-industry stakeholding in regional innovation systems. It does not, however, represent the views of individual participants nor a consensus view of the Roundtable Council. For information on the Roundtable, consult our homepage at: http://www4.nationalacademies.org/pd/guirr.nsf. You may contact us directly at GUIRR @nas.edu.

High technology economic development can be promoted in a locality by government, industry, and universities acting together to strengthen community foundations: excellent schools, high workforce skills, and sources of scientific and engineering knowledge. Some metropolitan areas have been able to remake faltering economies and become globally competitive by investing in these foundations. Others have failed. San Diego is a case study of success. The economy, a decade ago heavily dependent on declining defense spending, is today more diverse and forward-looking, with strong contributions from wireless electronics manufacturing, biotechnology, and other rapidly growing, high-wage, high-technology industries. The 40-year-old Research Triangle Park in North Carolina provided one of the original prototypes for this kind of regional economic transformation. In each case the leaders of business, government, and universities have shown a sustained commitment to reaching a common goal, and the will to work and invest with a long time horizon.

The Research Roundtable met in San Diego in June 1999 to get a first-hand view of these issues. The discussion focused mostly on developments in San Diego, but featured perspectives and experience from other U.S. regions and localities as well. The Roundtable invited Robert Dynes, Chancellor, U.C. San Diego; Arthur Bienenstock, Associate Director for Science, White House Office of Science and Technology Policy; Andrew Viterbi, Vice Chairman, QUALCOMM Inc.; Alan Bersin, Superintendent, San Diego City Schools; Larry Rosenstock, Principal, High Tech High; Peter Preuss, Regent, University of California; John R. Howell, Associate Dean of Engineering Research, University of Texas at Austin; Patricia Winter, Executive Director, San Diego Science Alliance; Bob Conn, Dean of Engineering, U.C. San Diego; Anita Borg, President, Institute for Women and Technology; Dan Sullivan, Senior Vice President, QUALCOMM Inc.; Jon Paugh, Director for Technology and Competitiveness, U.S. Dept. of Commerce; Stephen Rockwood, Executive Vice President, SAIC; John Wooley, Associate Vice Chancellor for Research, U.C. San Diego; David Kingsbury, Vice President and Chief Information Officer, Chiron Corp.; Bernhard Palsson, Professor, U.C. San Diego; David J. Galas, Chief Academic Officer, Keck Graduate Institute for Applied Life Sciences; Susanne Huttner, Executive Director, U.C. University-Industry Cooperative Research Program; Michael Teitelbaum, Program Director, Sloan Foundation; Gregory Critchfield, President, Myriad Genetic Laboratories, Inc.; Tony Kerlavage, Senior Director of Gene Discovery, Celera Genomics; Steve Dahms, Professor, San Diego State University; Duane Roth, CEO, Alliance Pharmaceuticals; Julie Meier Wright, President, San Diego Regional Economic Development Corporation; and William Little, Professor Emeritus, University of North Carolina.

The meeting was organized with the initiative of the Roundtable’s University-Industry Partners, as an effort to relate the Roundtable’s policy discussions to activity in regions. The Roundtable thanks UCSD Chancellor Robert Dynes and the UCSD’s Office of Science and Technology Policy and Projects for the effort and resources they put into this successful experiment.

Clusters of High-Technology Industry

High-technology industry in America seems to often grow up in “clusters” (regional concentrations of related businesses and institutions, including suppliers, service firms, trade associations, and universities). Firms located in a cluster may compete for markets, but also may cooperate in pursuit of shared aims such as educational quality, academic research and technology transfer, and infrastructure improvements. Regions have tried a variety of strategies to promote the formation of these clusters, with mixed success.

Of the several dozen high-technology clusters in the nation, some grew more or less spontaneously (such as Silicon Valley and the Route 128 corridor in suburban Boston) around centers of academic innovation. With those clusters as templates, other regions have built the foundations of their own clusters, often around universities, by investing in education, building bridges between academic research and the private sector, and establishing the other conditions to nurture high-paying, high-technology companies.

The pioneering effort of that kind is the Research Triangle Park (RTP), which began in the late 1950s to transform one of the poorest regions of the nation into what is today a world center of technology, finance, education, and research. The centerpiece of the effort was the privately financed RTP, intended to house companies attracted to the technology and trained people generated by the three major universities (University of North Carolina, North Carolina State University, and Duke University). RTP today occupies nearly 7,000 acres, and the research organizations housed there employ about 50,000 people. Businesses in fifty or so additional satellite research parks within a fifteen mile radius employ an additional 70,000 people. A key contribution by the state of North Carolina was investing in improved educational infrastructure, including a new chain of community colleges and technical institutes, and support for universities.

A primary lesson of this history is the need for sustained commitment. Establishing the conditions in which high-technology growth can take off requires attention to basic economic and institutional foundations—education, research, private investment, infrastructure, and so on—all deployed to serve a long-term economic strategy. A second lesson is the need for partnership. None of the three parties (state government, business, and the universities) could have achieved this success without the steady cooperation of the other two.

Developing Local Talent for a Globally Competitive Workforce

Recruiting trained workers and managers is a constant concern for employers. A growing regional high technology economy can import some of the highly trained specialists it needs, but also needs to develop a significant fraction by itself. Recruiting locally requires sustained excellence in all phases of the education system. Technology-based industries—by definition—depend on fast-changing, specialized knowledge.

A Commitment to the Young

San Diego is focusing its strategy on a commitment to young people. To maximize their opportunities to pursue careers in technology, it has set a high priority on improving the quality of science and mathematics education, with special emphasis on developing the talents of students from backgrounds often underrepresented in today’s high-tech workforce. Several programs are being launched through innovative public-private partnerships. The Preuss School is a charter elementary school for the benefit of disadvantaged students on the campus of the University of California at San Diego. It is part of the San Diego public school system and is also supported through private contributions. The New Urban High School Project, also known as High Tech High, is another charter school with an emphasis on mathematics and science. High Tech High is supported by several government, industry, and university partners, including QUALCOMM, Inc.

Finding good teachers to help meet this challenge of broadening the high-tech workforce will not be easy. Two-thirds of the nation’s school teachers will retire in the next eight years. Finding replacements will be an important management challenge and also an opportunity to train and recruit teachers with new kinds of skills. The federal government can be a partner with research universities in efforts to improve educational opportunities. For example, a proposed $30 million federal program of interdisciplinary research in education and learning will bring new perspectives from social scientists and others into educational research.

Meeting Booming Demand for Technical Workers

Another challenge in this time of high-technology boom is to produce enough young engineers and technical workers to meet industry’s expanding demand. Employment in the high technology industries that define these regional clusters is growing more rapidly than the numbers of degrees in fields such as computer science and electrical engineering. The state of California has added $30 million to the annual budget of the University of California system to hire engineering faculty—enough to increase the output of engineering graduates by 1,000 per year, statewide. California-based companies played a critical role in making the case for increased educational capacity in engineering education.

The situation in California reflects the national shortage of workers in some important high technology fields. Foreign-born engineers and scientists recruited to fill jobs in high tech industries have made significant contributions. However, efforts to open more faucets of U.S. students into the science and engineering workforce pipeline are needed to avoid over reliance on immigrants, and to ensure that workforce development is not snared in politically charged immigration debates.

New Educational Approaches for Emerging Fields

In rapidly emerging fields, new education programs may be needed. This is the case in the new field “bioinformatics,” which is the interface and coupling of information science and engineering with biology. Bioinformatics has the potential to transform treatment of many diseases through greater understanding of gene location, function, and expression. Research is data-intensive and requires advanced computer skills, yet many of today's biologists lack the necessary quantitative training. Many of the firms working in bioinformatics are headquartered or have research facilities in San Diego or other parts of California. They require growing numbers of skilled people at all education levels.

Developing new research and education programs in bioinformatics involves overcoming several challenges. The field is expanding rapidly, but the time it takes to train new faculty and develop new courses is fixed. Securing funding for new multidisciplinary work hits snags in traditional peer review mechanisms. Yet a great deal of effort is being spent to overcome these challenges. For example, the University of California’s Industry-University Cooperative Research Program has made several awards in bioinformatics. The field is an area of focus for the Keck Graduate Institute of Applied Life Sciences, a new component of the Claremont Colleges in California that is working closely with industry to develop a professional masters degree. The regions that establish themselves as leaders in bioinformatics training and research will be well positioned to benefit from the explosion of companies and products anticipated in the coming decades.

Universities: More than Just Technology Transfer

Research universities are often at the center of the action in regional high technology clusters, as illustrated by San Diego, Silicon Valley, Route 128, Austin, Texas, and RTP. They educate young workers, managers, and entrepreneurs. They provide technology to industry. And they offer cultural and intellectual amenities that make it easier to recruit and retain skilled people. As permanent members of local communities, universities can commit themselves to a leadership role in technology development in the long run.

Academic research is vital to an economy built on new technology. Universities and industry have become increasingly comfortable with each other as partners, developing structured approaches to harmonizing the independence of research with the transfer of technology. Local bodies that bring the parties together as colleagues in regional planning can help build needed trust for more formal technology transfer arrangements. The San Diego Science and Technology Council plays this role, and provides a model for building sustained regional commitment.

Leadership from the Private Sector

The private sector in a technology cluster consists of established companies, young entrepreneurial ones, investors, and lenders. A healthy mixture of large and small companies, with their suppliers and service firms, provides intellectual ferment and competitive drive. In any effort to build a high-technology local economy, private interests will provide the leadership in identifying needs and judging outcomes.

There may be opportunities for state and federal governments to encourage and support private sector leadership, beyond the establishment of a healthy general business climate. Federal and state policies that affect the ability of universities and industry to work creatively together are important in building the regional innovation system.

Private investments often directly support local innovation strategies. Companies can help equip schools, fund the training of teachers, provide volunteers for community initiatives, and help raise public awareness of the economic achievements and potential of the region.

The Fundamental Things Apply

There are too many unknowns and intangible factors for anyone to predict the success and growth of one region while another stagnates. What is known is that sustained cooperation among the community sectors is an important part of the recipe for success. Certainly, in San Diego and other successful regions, success has been linked to broad consensus about the goals and objectives, coordinated action to put them into effect, and sustained commitment.

There is no magic formula. The fundamental goals of every region, however, include excellent educational opportunities for every citizen and a healthy climate for investment. Bringing resources together to create the strongest possible local research and education base has also often proven to be a turning point to success.

Also fundamental in setting goals for a region is the maxim that “what goes up eventually will go down.” America has benefited from a high-technology boom for most the past decade. Yet some of these same industries may be vulnerable to competition from newer technologies, or to general economic downturns. Diversification of one’s technology investments is always a wise policy. The wider the base of the regional economy, the more secure it will be.

Further Reading

De Vol, Ross. July 13, 1999. America’s High-Tech Economy: Growth, Development, and Risks for Metropolitan Areas. Santa Monica, Calif.: Milken Institute.

Schatz, Wendy H. Oct., 21, 1998. State Technology Development Strategies: The Role of High Tech Clusters. Washington, D.C.: Congressional Research Service, Library of Congress.

Siedsma, Andrea. Feb. 1, 1999. San Diego preparing region’s first high tech high. San Diego Business Journal, p. 1.

Wulf, William A. Winter 1998. Diversity in engineering. The Bridge, p. 8.

Government-University-Industry Research Roundtable: Background and Purpose

The Government-University-Industry Research Roundtable was created almost two decades ago to provide a forum for dialogue on science and technology issues among top government, university, and industry leaders. The purpose is to facilitate working relationships and the exchange of ideas about emerging trends, problems, and promising opportunities facing those charged with developing and deploying scientific resources.

The Roundtable also seeks to stimulate new approaches to issues by disseminating the product of its deliberations, and by actively fostering contact and collaboration with other organizations able to build further on the ideas developed.

The Roundtable is sponsored by the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine.

Funding

Core financial support for the Roundtable comes from federal R&D agencies and from our University-Industry Partnerships. Supplemental funding for specific activities comes from foundations, states, and other sources.

THE ROUNDTABLE COUNCIL

Members

JOE B. WYATT, Roundtable Co-Chairman, Chancellor, Vanderbilt University

WILLIAM H. JOYCE, Roundtable Co-Chairman, Chairman, President and CEO, Union Carbide Corporation

BRUCE ALBERTS, ex-officio, President, National Academy of Sciences

D. JAMES BAKER, Under Secretary for Oceans & Atmosphere, U.S. Department of Commerce

ROBERT BERDAHL, Chancellor, University of California-Berkeley

CAROL M. BROWNER, Administrator, U.S. Environmental Protection Agency

RITA COLWELL, Director, National Science Foundation

JAMES DECKER, Acting Director, Office of Science, U.S. Department of Energy

MORTIMER L. DOWNEY, Deputy Secretary, U.S. Department of Transportation

ROBERT V. EDWARDS, Chairman, Computer Sciences & Engineering, Case Western Reserve University

BRAN FERREN, Executive Vice President, Creative Technology, Walt Disney Imagineering

CHARLES GESCHKE, President, Adobe Systems Incorporated

DANIEL GOLDIN, Administrator, National Aeronautics and Space Administration

STEPHEN JAY GOULD, Professor of Geology and Zoology, Harvard University

I. MILEY GONZALEZ, Under Secretary for Research, Education and Economics, U.S. Department of Agriculture

JEROME GROSSMAN, CEO, Lion Gate Management

PAUL HORN, Senior Vice President, Research, IBM T. J. Watson Research Center

FREEMAN A. HRABOWSKI, President, University of Maryland-Baltimore County

SHIRLEY ANN JACKSON, President, Rensselaer Polytechnic Institute

DEAN KAMEN, President, DEKA Research & Development Corporation

RAYMOND KAMMER, Director, National Institute of Standards and Technology
U.S. Department of Commerce

RUTH KIRSCHSTEIN, Acting Director, National Institutes of Health

NEAL LANE, President’s Science Advisor and Director, Office of Science & Technology Policy

THE HONORABLE HANS MARK, Director, Defense Research and Engineering,
U.S. Department of Defense

JAMES MCGRODDY, Vice President (Retired), IBM, Advanced Network & Services, Inc.

THE HONORABLE ZELL MILLER, Former Governor of Georgia, Koellmann USA

MAYNARD V. OLSEN, Professor, Department of Molecular Biotechnology, University of Washington

KENNETH SHINE, ex-officio, President, Institute of Medicine

WM. A. WULF, ex-officio, President, National Academy of Engineering

Roundtable Staff

Thomas A. Moss, Executive Director

Raymond Fornes, Visiting Senior Scientist

Thomas Arrison, Senior Program Officer

Nina Kaull, Program Officer

Jocelyn Sands, Administrative Associate

Reginald Cunningham, Program Assistant