Building a World-class Innovation Ecosystem

1. Egils Milbergs Executive Director Washington Economic Development Commission Olympia, Washington www.wedc.wa.gov egilsm@wedc.wa.gov 360-586-5661 Innovation Partnership Zones Building a World Class Innovation Ecosystem Presentation for : Innovation Awards The Council of State Governments Edmonton, AlbertaJuly 19, 2012

2. The Problem We Need to Solve WEDC 2.0

3. A Ten Year Vision Make Washington the most attractive, creative and fertile environment for innovation in the world by 2020

4. New Economic Development Model WA Economic Development Commission

5. What do we need to do? Progress needed along four dimensions Emphasize career transition, access to learning resources and the skills that employers need. Create innovation ecosystem to foster new products, start-ups and manufacturing. Design a 21st century infrastructure, an efficient regulatory system and align to local objectives. Grow the global presence of Washington’s business. WEDC 2.0

6. Marine Agriculture, Composites World’s Largest Innovation Park Ocean Energy Biomedical District “Twilight” Interactive Media Aerospace Food Processing, Rail Innovation Global Health Medical Devices Wind, Solar, Data Centers, Adv. Mfg. Financial Services Defense Technology Clean IT Urban Clean Water Sustainable Industries Electric Cars Wine, Water Clean Tech, Smart Grid, Biofuels Biotech, Energy, Semi-conductors, Exports

7. Innovation Partnership Zones Community colleges Tribes Local government • Challenge: lots of innovation assets at the local level, but no coordination. • Assumption: innovation happens at the grassroots level. • Solution: identify a consensus vision based on local assets and capabilities and create organizational, leadership structure to coordinate and align local efforts among businesses, ports, higher education, local government, tribes, and other stakeholders. Private sector Universities Non-profits Ports WA Economic Development Commission

8. Case Study #1: Walla Walla • Zone Objective(s): Water resource management and viticulture promotion. • Region is home to more than 100 wineries. • Sustainable Living Center (SLC) is a new nonprofit educational tenant of the Water Center. • Nelson Irrigation Corporation is a private sector partner that engineers irrigation equipment and systems internationally and has developed groundbreaking products for water efficiency utilization. • City of Walla Walla • Confederated Tribes of the Umatilla Indian Reservation (CTUIR) • ETS Laboratories • Port of Walla Walla • Walla Walla County Commissioners • Walla Walla Valley Wine Alliance • Nelson Irrigation Corporation • Walla Walla Watershed Alliance • Walla Walla Watershed Management Partnership • Walla Walla Community College (WWCC) • Training: WWCC’s Enology & Viticulture Program includes a two-year, full-time course of study, designed for students pursuing careers in the wine industry. WA Economic Development Commission

9. Case Study #2: Tri-Cities Research District • Zone Objective(s): Energy storage, smart grid, and biofuels. • 1,700-acre area located in North Richland. • PNNL as anchor tenant. Highlights • Leveraged $155,000 of state capital grant funds with federal stimulus, port, and City of Richland funds for a total investment of $2.4 million for infrastructure and road construction. • Innovatek, a tenant of the IPZ, has a Department of Energy Phase Three Accelerant Grant for production of stand-alone electrical generation fuel cells. • PNNL received $14.2 million for its role in two biofuels research consortia funded by the Department of Energy. • Includes “STAR Researcher” Brigitte Ahring. Dr. Ahring is the Battelle Distinguished Professor of Chemical Engineering and serves as the director of the Center for Bio-products and Bio-energy for all WSU campuses. • City of Walla Walla Confederated Tribes of the • (WWCC) • Port of Benton • Columbia Basin College • Benton Franklin Workforce Development Council • Pacific Northwest National Laboratory (PNNL) • YAHSGS LLC • Western Sintering Co., Inc. • Science Applications International Corporation • MoravekBiochemicals, Inc. • Isoray Medical • Innovatek, Inc. • Areva NP • Surgical Implant Generation Network • Energy Northwest WA Economic Development Commission

10. Case Study #3: Grays Harbor Sustainable Industries IPZ • Zone Objective(s): Green and sustainable industries • Received $1 million at the time of designation in 2007 to build the lab and incubation space and leveraged with a 2010 federal Small Business Administration (SBA) grant ($427,500), allowing for acquisition of a 20,000-square-foot building on port property. • IPZ branding helps port’s efforts in leveraging assets and attracting new businesses. Highlights • Establishing a regional partnership to capture industrial byproducts as resources and share research and development efforts among a group of companies. • Grays Harbor Paper generates green paper byproducts that have been used by Paneltech in the manufacturing of their products. • Port of Grays Harbor • Grays Harbor Public Development Authority: Satsop Development Park • Grays Harbor College • Grays Harbor EDC • Pacific Mountain Workforc • Development Council • Imperium Renewables • Paneltech International • Wishkah River Distillery WA Economic Development Commission

11. Nascent Transformational Growth Emerging Regional Innovation Clusters Evolve Innovation Assets Trajectory Many nodes Dense linkages Region to Region Next generation Accelerated collaboration Many linkages Attraction of firms Talent IPZs STARS Few to many firms Fast growth Some linkages EIRs Patents None or few firms Growth potential JOBS Potential Incubators R&D Tax Incentives Gap Funding SBIR WA Economic Development Commission

13. Going Forward • Relationship capital is the secret sauce • More focus on local vision, plans and metrics • Operational funding is critical • New financing resources and tools e.g. TIF • Aligning agency programs to local priorities • “Porous” boundary definitions • Leveraging assets between IPZs • Web based collaboration platforms • Best practices clearinghouse • Rigorous evaluation of outcomes WEDC 2.0

14. September 2012 celebrates Commerce & Innovation Economy www.thenextfifty.org WEDC 2.0

15. Thank You! WEDC 1.1

16. Metrics IPZ Annual Reporting IPZ Performance Metrics Additional investment Private sector investment Investment from outside the zone Job creation / retention # of jobs created # of jobs retained within wage range Increased commercialization activity $ increase in sales or sales orders associated with IPZ research # of licenses, patents, applications for innovation research Increased collaboration and/or community partnerships Zone-hosted conferences, creation of incubator, visiting scholars Unique criteria Formation of an advisory board Incorporation as a non-profit Launching and IPZ website Creation of tailored curriculum • Number of trained workers added to state workforce as a result of training provided within IPZ • Number of potential business sites added (commercial and industrial building developed, redeveloped or newly occupied) attributable to IPZ innovation, research, and commercial application • Number and type of other assets developed (to retain, grow and attract business) • Dollar value of infrastructure and other investments completed • Evidence of commercialization of IPZ research (licenses, patents, trademarks, etc.) • Descriptions of research being conducted within the IPZ and potential commercial applications • Other reasonable performance criteria that may be developed by Commerce. WEDC 2.0