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Looking for a Way to Grow Arizonan Jobs, Create Sustainable Businesses, and Boost Technology Innovation? Science Foundation Arizona Is It

I've been blogging a lot lately about the importance of innovation - and government support for it - in securing Arizona's competitive position in a new global economy.  (See WANTED: 100,000 Innovators in 100,000 Garages and Does China's Rise Spell America's Decline? and Is Energy Technology Our Last Chance? and A New Recipe for Job Creation in Arizona.) 

So I was thrilled last week to read this headline on the Arizona Republic's opinion page: "State should back real moneymaker."  The article was about Science Foundation Arizona (SFAz) and its role as a tool to get the " jobs, startup companies and bright ideas to drive new businesses" that Arizona needs.

What does the SFAz do?

According to the Science Foundation Arizona website: "Arizonans want a strong economy, a good education system, and the availability of high-quality, high-paying jobs.  Science Foundation Arizona was formed as a public/private partnership to help with exactly that." 

A report from the Battelle Technology Partnership Practice released last month, cites the direct impacts from SFAz programs as including:

  1. Increased total funds leveraged by industry match or other sources by $43M; in turn increased leverage per dollar awarded by $0.88 to $3.06 from non-state sources for every $1 in state funding.
  2. Increased direct jobs associated with the grants by 394 to 1,151.
  3. Increased companies formed by 5 to 16.
  4. Increased patents filed or issued by 34 to 84.
  5. Increased technology licenses by 2 to 11.
  6. Increased scientific publications by 407 to 760.
  7. Increased graduate research fellows by 46 to 223.
  8. Increased student involvement in STEM education programs (both direct and indirect) by over 78,000 to 160,000.
  9. Increased teacher involvement in STEM education programs (both direct and indirect) by more than 2,200 to 2,900.

Yet despite those very clear economic benefits that SFAz generates, last year the legislature swept the foundation's annual grant of about $25 million.  The foundation subsequently sued and the state restored $17.8 million.  But the legislature voted last year to officially end its annual $25 million funding of SFAz.  

According to the Republic, three Arizona business groups have agreed to pay the Foundation's operating costs, but SFAz won't be able to sustain its important grant programs unless public funding is restored.  The lack of funding combined with the results-generating work that SFAz does led the Republic to write this on its opinion page last week: "Brewer should show immediate support by using federal stimulus money to make up for the elimination of state support for Science Foundation Arizona in fiscal 2011, which begins Thursday. Critical projects and large sums of matching money are at stake. "

Okay, but what does SFAz do?

Science Foundation Arizona encourages the creation and growth of the kinds of businesses that can replace the highly-cyclical real estate industry as a driver of Arizona's economic growth.  Like UA astronomer Roger Angel's new company, which explores ways to make solar power competitive with fossil fuels.  SFAz gave Angel a $1 million grant, which was then matched by the Department of Energy and some private funding.

Or Tucson's Critical Path Institute, formed by the University of Arizona and the Food and Drug Administration to speed drug development.  When local funding evaporated, Science Foundation Arizona gave the Institute a $10 million grant, which it used to secure matches from the FDA as well as private firms - at a matching ratio of about six external dollars to every one SFAz dollar.  The Institute has since created four new companies.

It's the kind of development that I've blogged about before - a focus on high-tech industries that will give Arizona, and the US, a competitive advantage in the new global economy.  They're industries that offer the kind of high-wage jobs that will help Arizonans better secure their futures.

One of the best aspects of Science Foundation Arizona, I think, is that it's a public-private partnership.  It's a common criticism that government is notoriously bad at picking winners and losers.  I agree - I think that the innovation, or even the industry that prevails should be the one that is most productive, not the one that receives the most government subsidies.

So while the state has, and hopefully will again, fund SFAz, it's not giving money directly to fledgling companies, or even to schools to develop the kinds of programs that will educate tomorrow's high-tech workforce.  Instead, the state gives the money to this private firm which analyzes competing grant applications and determines, based on the advice of its industry experts, which most merits the grant.  Not a fool-proof process, I'm sure, but SFAz's record to date demonstrates a powerful ability to place grant money where it can be most productive.

What's your take?  Write a comment below - no registration required.

Written on Wednesday, 07 July 2010 15:38 by Gary Yaquinto

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