2020 Vision: the South Dakota Science and Innovation Strategy

2020 Vision: The South Dakota Science and Innovation Strategy SD EPSCoR REACH Committee April 2013 SD EPSCoR REACH Committee _____________________________________________________________________________________________________________________ David C. Link Thomas R. Loveland REACH Committee Chair USGS/EROS Executive Vice President Sanford Health Systems Gary Archamboult SBIR Coordinator Curt Hage Small Business Development Center REACH Committee Vice-Chair CEO, Home Federal Bank, Retired Mel Ustad Director of Commercialization James A. Rice SD Governor’s Office of Economic Development Executive Director, SD EPSCoR South Dakota State University Pat Lebrun SD Science & Technology Authority James W. Abbott President, University of South Dakota Melody Schopp SD Dept. of Education David Chicoine President, South Dakota State University Jason Dilges SD Bureau of Finance and Management Duane Hrncir Acting President, South Dakota School of Mines & Kirby Mellegard Technology Manager, Materials Testing, RESPEC Laura Jenski Pat Costello Vice President for Research, USD SD Governor’s Office of Economic Development Kevin Kephart Brad Wheeler Vice President for Research, SDSU Wheeler Manufacturing Ronald White Paul Batcheller Vice President for Research, SDSMT PrairieGold Venture Partners Georgia Hackett Eddie Sullivan Vice President of Institutional Relations Sanford Applied Biosciences Sinte Gleska University Scott Morgan Jack R. Warner Sisseton Wahpeton College Executive Director South Dakota Board of Regents Hannan LaGarry Oglala Lakota College Paul D. Turman System Vice President for Research and Donald L. Endres Economic Development, SD Board of Regents Glacial Lakes Capital, LLC Kathryn Johnson Christine Hamilton South Dakota Board of Regents Christiansen Land & Cattle, Ltd. Senator Phyllis Heineman Whitney Robertson Dir. of Commercialization, Sanford Health Senator Jeff Haverly Sherri L. Rotert Representative Susan Wismer Attorney, Novellus Law, P.C. Senator Corey Brown Ed Duke Director, SD NASA EPSCoR Table of Contents Executive Summary 1 Preface 2 List of Tables & Figures 3 2020 Vision 4 Why South Dakota Needs This Plan 4 The Approach 5 The South Dakota Innovation Equation 5 A Bird’s-Eye View: The Strategy Blueprint 7 The Target Sectors 8 1. Value-Added Agriculture and Agribusiness 8 2. Energy and Environment 9 3. Materials and Advanced Manufacturing 9 4. Human Health and Nutrition 9 5. Information Technology/Cyber Security/Information Assurance 10 How the Target Sectors Match the Criteria 10 The 2020 Vision Strategy 12 The 2020 Vision Strategy Map 12 Strategy Area: IDEAS 14 Resources and Assets 14 The Ideas Strategy 17 Strategic Investment in Research Areas and Assets Aligned with Target Industry Sectors 17 Animating the Next South Dakota Economy: The 2020 Vision New Value Project 19 1. Senior Faculty Science and Innovation Professorships 19 2. University/Industry Research and Innovation Centers 20 3. Target Sector Advisory Councils 22 4. Invigorate the On-Campus Innovation Orientation 22 Strategy Area: TALENT 23 Create a Culture of Entrepreneurship on the Campus 24 Faculty Release Time for Entrepreneurial Ventures and Commercialization Activities 24 Entrepreneurs in Residence within South Dakota’s Colleges and Universities 24 Implement Policies, Training, and Systems within Higher Education that Inform Faculty and Facilitate their Involvement in Entrepreneurship, Commercialization and Intellectual Property Development Activities 25 Promote Science, Technology, Engineering, and Math (STEM) Study at All Educational Levels 25 Expand Successful Middle and High School STEM Activities Creating Greater Exposure for Students Around the State 26 Build Stronger Foundations that Ease the Movement of Students with STEM Interest Between All of the Postsecondary Institutions in the State – The Regental Institutions, the Private Colleges and Universities, the Tribal Colleges and the Technical Institutes 26 Develop Incentives to Encourage Students to Pursue STEM Degree Programs, and Reward Institutions for Graduating Students in These High Need Areas 27 Refining the Role of Postgraduate Higher Education within The 2020 Vision Strategy 28 A Note on Postgraduate Education and the Target Industry Sectors 28 Guidelines for Aligning Higher Education within This Science and Innovation Strategy 29 Master’s Degrees: The Attractive, Expedient, Cost-Effective Option 30 The Ph.D. Degree 32 Strategy Area: COMPANIES 33 Access to Very Early Stage Capital and to Growth Financing: Filling the Gaps 33 Early Stage Funding Initiative 33 Addressing the Moderate Risk/Moderate Return Gap 34 Fostering Growth Management Experience in High Impact Companies 34 Design-Centered Manufacturing and Product Development Capacity 35 Establish Center(s) for Industrial Design that Reach Across College Disciplines and Functions 35 Assist Small and Medium-Sized Companies to Incorporate Higher Levels of Design into Existing and New Products 36 Create and Embed Improved Design and Creativity Curricula into Technical Programs at the State’s Four Technical Institutes and the Three Tribal Colleges, such as Engineering Technology, and Applied Design into Arts Programs 36 Management Matters 36 Organizing, Funding and Delivering Science and Technology-Based Innovation Services at the State Level to Enable Regional Economies 36 Tracking 2020 Vision Progress and Impact 37 The 2020 Vision Global Indicators: Overall Prosperity 38 Strategy Area: Ideas 38 Strategy Area: Talent 39 Strategy Area: Companies 42 2020 Vision Implementation Notes 43 2020 Vision Management 43 Strategy Area: Ideas 43 Strategy Area: Talent 45 Strategy Area: Companies 47 Appendix A 49 Calibrating South Dakota’s Innovation Capacity 49 Appendix B 52 Development of Target Industry Sectors 52 How the Target Industry Sectors in South Dakota were Selected 52 Target Industry Sector Criteria 53 The Target Industry Sectors 54 Target Sector Relationships 86 How the Target Sectors Match the Criteria 87 Appendix C 90 Indicator Descriptions ENDNOTES 98 Executive Summary The goal of 2020 Vision: The South Dakota Science and Innovation Strategy is to build science and technology capacity in South Dakota that will promote innovation, foster knowledge-based companies, generate higher wage jobs and build the capacity to sustain the prosperity they create. The South Dakota economy is in great shape by most accounts and that has been true for some time. From 2006-2011, during a period including the worst economic decline since the Great Depression, the state still managed to add 16,000 jobs, a 3% increase, while national employment was stagnant. However, in an era where robust economies are driven by talent that generates new ideas that create new value, there are some alarm bells sounding in the not-so-far distance. While South Dakota has the third lowest unemployment rate in the country, its median household income ranks 33rd; its workers earn, on average twenty-five percent less than their counterparts throughout the country; and the state ranks 49th in the U.S. in the number of high technology establishments as a percent of all business establishments. South Dakota’s state government, education, and private sector communities have recognized that to thrive in a knowledge-based economy change is needed and there are signs that this change has begun. But this recognition is tempered with the realization that there is more that needs to be accomplished. To provide a coordinated framework to launch the next stage of the state’s economic growth the SD EPSCoR Advisory Committee (REACH Committee) proposes 2020 Vision: The South Dakota Science and Innovation Strategy to address this challenge. The 2020 Vision Strategy is, at its core, a collaborative venture between the state’s public and private sectors to build the capacity to produce and grow the new ideas, the talent and the companies that will power South Dakota’s future innovation-rich, higher value economy. The strategy does this in two steps. First, through careful analysis it identifies the existing and emerging industry sectors that are best positioned to drive a robust future South Dakota economy. Second, it proposes eight initiatives that are defined by actions that will build the solid base of science, technology, engineering and math (STEM) knowledge and know-how needed to support and grow these target industry sectors over the next several decades. The 2020 Vision Initiatives 1. Strategic Investment in Research Areas and Assets Aligned with Target Industry Sectors 2. The 2020 Vision New Value Project: Building academic innovation capacity and leveraging research strengths within university/industry multidisciplinary centers to support new value creation and growth within the target industry sectors 3. Create a More Entrepreneurial Culture on Campus 4. Promote Science, Technology, Engineering, and Mathematics (STEM) Study at All Educational Levels 5. Refine the Role of Postgraduate Higher Education within The 2020 Vision Strategy to Provide Talent and Knowledge to the Target Industry Sectors 6. Access to Early Stage Capital and Growth Financing: Filling the Gaps 7. Fostering Growth Management Experience in High Impact Companies 8. Design-Centered Manufacturing and Product Development Capacity 1 Preface South Dakota has recognized that science, technology, engineering, and mathematics (STEM) research, an educated and skilled workforce, and an entrepreneurial business environment are the foundation of the state’s competitiveness in a global economy. If South Dakota is to effectively

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