Headquarters 6262 N. Swan Rd., Ste. 105 Tucson, AZ 85718 P 520.529.2521 F 520.529.2499 Washington D.C. Office 10 G St. NE, Ste. 710 Washington D.C. 20002 P 202.248.5026 F 202.248.5099 www.aurp.net • A NATIOnaL STRATEGY FOR BUILDING AMERICA’S COMMUNITIES OF InnOVATION WHITE PAPER ADVISORY COMMITTEE ASSOCIATION OF DEFENSE COMMUNITIES Michael A. Houlemard, Board President Executive Officer, Fort Ord Reuse Authority COUNCIL ON COMPETITIVENESS Deborah L. Wince-Smith, President Samuel Leiken, Senior Director of Policy Studies GOVERNMENT-UNIVERSITY-INDUSTRY RESEARCH ROUNDTABLE Susan Sauer Sloan, Director THE NATIONAL ACADEMIES Charles W. Wessner, Director, Technology, Innovation, & Entrepreneurship NATIONAL ASSOCIATION OF SEED AND VENTURE FUNDS Richard A. Bendis, Acting Chair President, Chief Executive Officer, Bendis Investment Group LLC NATIONAL BUSINESS INCUBATION ASSOCIATION Dinah Adkins, President, Chief Executive Officer NATIONAL CENTER FOR SMART GROWTH RESEARCH & EDUCATION Gerrit Knaap, Professor, Executive Director NATIONAL COUNCIL OF ENTREPRENEURIAL TECH TRANSFER Tony Stanco, Executive Director NATIONAL GOVERNORS ASSOCIATION Raymond C. Scheppach, Executive Director Erin Lamos, State Technology Policy Analyst STATE SCIENCE AND TECHNOLOGY INSTITUTE Dan Berglund, President, Chief Executive Officer THE UNIVERSITY FINANCING FOUNDATION Kevin Byrne, Chief Investment Officer The individuals named above served in their individual capacities. The endorsement of the views expressed in this document, of each advisory committee member or their associated organizations, is not implied. tors, university financing foundations, seed and venture capital groups, and science and technology development organizations. The Power of Place explores a number of suggested federal initiatives, reforms OCTOBER 2, 2008 and investments that will leverage the power of innovation in this country. DEAR COLLEAGUES: With the new Presidential Administra- tion and Congress in 2009, we hope The last decade vividly demonstrates The Power of Place stimulates discus- the economic forces leading to the sion, legislation, and the expansion globalization of science and innova- of and support for Communities of tion. Delegations of federal officials Innovation within the United States. have visited China, India, the Middle East and other countries, and returned The Power of Place: Better Science; amazed at the speed and scale at Better Innovation; A Better World. which national governments outside of the United States are developing university research and science parks Sincerely yours, and centers, national laboratories, and other physical manifestations of sci- ence and technology. J. Michael Bowman Within our own nation, research and President, Association of University science parks, technology incubators, Research Parks venture accelerators and research Chairman and President universities traditionally have been the Delaware Technology province of state and local govern- Park Incorporated ments. Individual entrepreneurship, local financial investment, and world- class research universities are part of the genius of the American innovation Michael Bowman system that still leads the world. The United States government annually funds billions of dollars of Brian Darmody research and development, and it AURP Power of Place Advisory Board plays a major role in setting national Chair and Principal Author economic development programs. Associate Vice President for Research Earlier this year, the Association of and Economic Development University Research Parks (AURP), in University of Maryland conjunction with the National Academy of Sciences, conducted a forum in Washington D.C. to examine the role of research and science parks within the global context. As a result of that forum, AURP has developed a set of recommendations and assembled an advisory board who represent research and science parks, technology incuba- RECOMMENDATIONS SUstaininG MemBers and SPonsor List 4 5 introdUction6 CreatinG CommUnities OF InnoVation reWardinG commUnities OF innoVation 10 CollaBoration and Commerciali15Zation 17INVestinG in CAPital concl18Usion 20 POLICY RECOMMENDATIONS · Establish American Innovation · Reform Federal Tax Provisions · Establish a Federal Zones: The Innovation Zones would for Facilities Funded by Technology Foundation serve as the centerpiece of efforts Tax-Exempt Financing: A federal technology foundation to modernize the U.S. approach to Current federal policy on corporate should be established to work with fostering competitive research and sponsored and/or funded research government managed federal labs. development. Innovation Zones are performed in facilities funded through A foundation modeled on existing a critical next step towards Ameri- tax-exempt bonds unduly restricts university research foundations could can competitiveness, encourag- flexibility in negotiating corporate enable these laboratories to more ing research in such a way as to intellectual property (IP) rights. Elimi- effectively commercialize technology accelerate investment and economic nating the current IRS restrictions or and use existing federal research development around research clus- increasing the safe harbors under assets for local technology-led eco- ters. The Innovation Zone approach IRS regulations in American Zones of nomic development. envisions establishing objective Innovation to allow greater flexibility in criteria for national innovation assets, intellectual property negotiations will · Develop Comprehensive including research parks, technol- improve U.S. competitiveness, and Government-wide Database ogy incubators, universities, federal increase the likelihood that corporate Access to a government-wide laboratories, and adjacent proper- R&D will stay in the U.S. database on all federal R&D funding ties, and then providing regulatory is necessary to ensure that impor- reforms and economic incentives for · Create Enhanced Preferences tant national innovation assets are their accelerated development. for Small Business Innovative properly understood and leveraged Research (SBIR)/Small Business for technology innovation. · Enact Federal Innovation Zone Technology Transfer (STTR) and Partnership Program: The federal National Institute of Standards · Fully Fund the America government should establish a plan and Technology (NIST) Technol- COMPETES Act to competitively create research ogy Innovation Program (TIP): The The U.S. Congress took a great centers within the Innovation Zones federal government should provide step forward in passing the America that would require matching grants incentives to small technology start- COMPETES Act in 2007. The Act from state governments, local gov- up companies located in American authorizes a substantial federal ernments and private industry. These Zones of Innovation to be awarded investment in high risk, high reward centers would focus on areas of high SBIR, STTR, and NIST’s new TIP research and improves funding to national needs, including energy contracts and grants. Cluster devel- many of the U.S. science agencies. research, homeland security, food opment, collaboration, and target- Research institutions and companies safety, and global climate change. ing the benefits of federal research in Innovation Zones stand to benefit dollars will provide incentive for new from the America COMPETES Act, · Build Sustainable Communities of investment in the Innovation Zones, but the Act has not been fully funded Innovation: Incentives for sustain- and improve the quality of research by Congress. The new Administra- able ‘smart growth’ development through greater cooperation among tion and the next Congress must should be central to establishing public and private researchers. make funding the America COM- American Innovation Zones. The PETES Act a priority. U.S. Department of Housing should · Solidify the Tax Benefits for explore best practices nationally to Research and Development: · Import Innovation: Research parks encourage density and mixed-use By reauthorizing the research and and incubators in American Innova- development in American Innova- development tax credit, Congress tion Zones should be targeted to tion Zones in urban areas, which will will return the U.S. to an even playing recruit foreign technology companies encourage researchers and entrepre- field with many of its global competi- using ‘soft landing’ techniques similar neurs to live where they work, and tors for research investment. Beyond to those pioneered by the National reduce sprawl. this first step, Congress should offer Business Incubation Association an enhanced benefit for companies (NBIA). · Encourage Federal Leasing and that perform their research within an Federal Lab Construction in Innovation Zone, or who contract · Welcome Human Innovation Capi- Innovation Zones: The federal gov- with Innovation Zones entities for tal to the U.S.: In order to ensure ernment should target federal leases research or development. continued retention of highly-skilled for research and federal lab construc- researchers and technicians, the tion and related activities within Ameri- · Expand Enhanced Use Leasing U.S. must offer competitive im- can Innovation Zones. (EUL) Authority: Expand current migration incentives that welcome enhanced use lease authority to foreigners into our Communities of all federal agencies to create more Innovation, and retain their talents American Innovation Zones adjacent through the H-1B visa process. to federal labs. THE POWER OF PLACE P5 ASSOCIATION