Panel
Universities Step Up Their Role in Regional Economic Development
Milken InstituteRoss DeVol, Ronald Daniels, Fred Farina, Bahija Jallal, Deval Patrick, Ross Duvall, Ron Daniels
- Economic success is predicted to rely increasingly on spatial clustering of innovative activity, particularly in technology and life sciences, where geographic proximity enhances knowledge generation and collection.
- Universities are expected to aggressively expand their commercialization roles by reducing bureaucratic hurdles, spinning out companies, and integrating entrepreneurship into tenure and faculty culture to meet pent-up demand among students and researchers.
- Government is forecast to play a critical catalytic role by funding the "valley of death" for early-stage ideas, leveraging public investment to attract significant private capital, and providing infrastructure in gateway cities outside elite innovation hubs.
- Specific forecasts include a life sciences initiative launched in 2007-2008 serving as a key engine for job creation, with projections that half a billion dollars in state funds will leverage $1.8 billion in private investment.
- Challenges to growth include a lack of contiguity between academic assets and industry, which hinders serendipitous interaction, and a 20% real-term contraction in the NIH budget over the last decade despite previous doubling.
- Commercialization success factors include inventor passion, as technologies without active involvement typically fail, with success rates estimated at roughly 1 in 100 pharmaceutical compounds getting approved and 1 in 10 venture investments being significant hits.
- Institutional strategies involve creating pathways for students and faculty to commercialize without dropping out, including entrepreneurship minors for over 30% of undergrads, PhD programs allowing industry work, and Entrepreneur-in-Residence roles lasting one to two years.
- Risks identified include the moral hazard of government funding, the potential negative impact of shifting focus away from blue-sky research, and the structural failure of K-12 education systems which act as a barrier to economic growth.
- Future clusters may be defined by the intersection of technologies, such as the convergence of biotech and high tech, while governments are advised to avoid short-termism and maintain 10-year initiative frameworks for flexibility.
- Successful partnerships require specific elements including scientific strength, mutual respect, and measurable deliverables, with the government acting as an honest broker to overcome institutional tribalism and coordinate collaboration.