Economic Development and Higher Education John W. Bardo Jbardo@wcu

1. Economic Development and Higher EducationJohn W. BardoJbardo@wcu.edu

2. Dual Economic Trends Globalization Regionalization Institute for the Economy and the Future

3. Megapolitans by 2050 * 2005 Metropolitan Institute at Virginia Tech Institute for the Economy and the Future

4. Critical Role for University: Building Regional Competence • Competence refers to the ability of a region to respond to economic opportunities and rapidly changing global conditions • Competence refers to the range of abilities, characteristics, and resources available in the region and the effective linkages of that region with resources from the systems of which that region is a part • Specific skill sets required to create competence will vary by situation; the general issues are common to all regions • Resource need analyses are not conducted regularly at either the federal or state level to understand what is required to build regional competence Institute for the Economy and the Future

5. What are the key elements of a successful program for universities to contribute to economic growth? Institute for the Economy and the Future

6. A relationship with the private sectors that: • spans the continuum of research activities; • facilitates placement of university • researchers in industry laboratories and accommodates private-sector researchers at the university; • and develops the curriculum and research programs that support the needs of local firms, particularly small and medium-sized enterprises. Institute for the Economy and the Future

7. Regions of Knowledge • Innovation is regionally bound; U.S. and European research suggests a functional region of innovation of 75 miles or less • It is unlikely, therefore, that investments in any one university can influence the prosperity of the state • To impact regional innovation requires a thoughtful policy linking regional potential, regional competence, and investments in infrastructure, regional facilities, and regional education institutions Institute for the Economy and the Future

8. % Expenditure of R&D(NSF 2006) Academic R&D Expenditure: 1970-2002 Current university expenditures: Disproportionately Big “R” & Little “d” Basic Research Applied Research Development Institute for the Economy and the Future

9. Difference between Federal and Academic Expenditures (NSF 2006) Federal R&D Expenditures Academic R&D Expenditures Institute for the Economy and the Future

10. The Economic Impact of R&D? • University Research takes an average of 20 years from publication to impact on the economy (James Adams) • University R&D, though measurable, has a minimal short- and medium-run impact on economic vitality (variety of studies in U.S. and Europe) • University patents take an average of 6-8 years to impact business • Joint research with business and a wide range of business interactions are associated with more university impact • Co-publication with academics has no impact Institute for the Economy and the Future

11. The Economic Impact of R&D? • Business R&D is more closely associated with economic development, especially for SMEs • University spinoffs may have higher failure rates than business spinoffs and they generally remain small; “home runs” are rare • Areas with strong business service sectors tend to have higher R&D success • Larger MSAs and NE MSAs tend to have more effective “spinoff” processes Institute for the Economy and the Future

12. Re-Conceptualizing the Research Enterprise: Innovation Systems Research = Innovation Institute for the Economy and the Future

13. Triple Helix Model Government Higher Education Industry Institute for the Economy and the Future

14. State Policy Recommendations • Innovation systems involve focus on intellectual capital, not R&D per se • Innovation systems focus on the triple helix and creating linkages among business, government, and universities • Innovation systems support and develop strong network functions and feedback systems Institute for the Economy and the Future

15. NGA’s State Policy Recommendations • Systematically implement NGA Best Practices approaches that link regional universities to economic development • Create focused laboratories, curricula, and support systems with outcomes indicators for the purposes of promoting economic development and security-related applications research Institute for the Economy and the Future

16. NCSL’s State Policy Recommendations • Set clear goals and identify strengths and weaknesses • Understand demographic trends • Hold institutions accountable; focus on productivity; and rethink funding and student aid • Recommit to access and success; support adult learners • Embrase innovation • Transform 12th grade/higher education linkages Institute for the Economy and the Future

17. Higher Education Policy Recommendations • Continue support of basic research at major research universities (emphasize Einstein’s quadrant) • Create research potential in other universities to stimulate industry relations and tap federal development funds (emphasize Pasteur’s quadrant) Institute for the Economy and the Future

18. Higher Education Policy Recommendations • Distribute R&D outside of research-extensive universities to enhance economic and security potentials of competitive economic regions (i.e., purposive research) • Provide IP clearinghouse and policies to support sharing of basic patent information (derived at research-extensive universities) that promotes technology transfer and commercialization to create economically-viable regions Institute for the Economy and the Future

19. Higher Education Policy Recommendations • University R&D needs to expand especially in applications-based areas and in support for development • Expand dual-use science and technology programs • Support non-standard degree programs such as Sloan programs Institute for the Economy and the Future

20. Further Considerations for R&D Funding Distribution • Globalization has created a national security environment that requires more thoughtful distribution of R&D funding • R&D funding must take into account the structure of regional economies • R&D must be linked to expected outcomes (Pasteur’s quadrant) Institute for the Economy and the Future

21. America’s Key Growth Engines of the Future - Entrepreneurship & Innovation • Underlying both concepts is the need for education that: • Promotes and trains creativity • Enables applied learning • Drives applied research • Ensures skills for business creation • Infuses technology into the learning process Institute for the Economy and the Future

22. Target Enablers: Faculty and New Business Start-ups • Institutional culture critical at both the university and departmental level • Faculty who studied with professors who had a positive attitude toward commercialization more likely to commercialize • Data from U.S. and Germany suggest that most prominent research-centered scientists do not successfully engage in new business start-ups: The negative and statistically significant coefficient of scientist citations suggests that more highly cited scientists have a systematically lower propensity to become entrepreneurs (Audretsch, 2006: 48). Institute for the Economy and the Future

23. Higher Education Winners Will Base Strategic Plans on Multiple Decision Points Identify Needs for Regional Competence Clarify Institutional Mission Target R&D Investments Produce Intellectual Capital Create Career Linkages • Economic regions are functional, not formal, and they reflect conditions in the economy which may not comport with political or cultural conditions. • Economic regions can be seen as linking in hierarchical systems that range from the highly macro (global economy) to the very micro (local economic exchange) • Economic regions are not “neat and tidy” creations: their boundaries may overlap and, in many cases, a sub-region could be a part of more than one larger region depending on the economic variables being examined • Economic regions have dynamic structure; they will change as the structure of the economy changes • A successful regional • university will have • the capacity and mission • to respond to the needs • of regions • Degree program arrays will reflect regional potential and development of “regional competence” • Applied research and development will play a significant role in the institution’s mission • Engagement of students, faculty, and staff with the region will be a hallmark of the university’s identity • System processes will be flexible to promote responses to changing regional conditions • Successful regional institutions will be highlighted and supported at the state level • Degree programs: well-articulated and focused on student learning outcomes • All undergraduate programs will be synthetical and oriented to creating versatilists • Students: active learners taking part in cooperative education, internship, and mentored research experiences • Students will be encouraged to have international experiences • Off-campus education, “just in time” training, and electronic education will play an increasingly large role • Student learning will be assessed using a portfolio model. Assessment will focus on demonstration of synthetical education • R&D emphases will reflect regional potential and building regional competence • Laboratories and facilities will be of highest quality in areas of strong regional potential • Internal and state policies will encourage co-location and co-investigation with industry scientists and engineers • Reward systems will support the various forms of technology transfer • “Star faculty” who are oriented to industry partnerships will provide leadership in key areas of science and engineering • Legal frameworks will be continuously examined to promote technology transfer • Career counseling will begin at orientation • Increasing emphasis will be placed on linking advising and career counseling throughout the student’s degree program • Off-campus education will emphasize workforce-related degree programs • Non-credit instruction will be developed to provide business with “just in time” training • Graduate program arrays will focus more clearly on professional development of adults and advanced workforce skills • New advanced degrees will support economic competitiveness, especially in areas of high regional value Institute for the Economy and the Future

24. Higher Education Winners Address Client Value Propositions Quality Education: (tools for successful life--ethics, creativity, understanding theory, analysis and knowledge synthesis—how to think) Return on Investment Dividends of Prosperity Maintaining Place: Quality of life, community and identity, supporting family and personal lifestyle (preventing the “brain drain” – availability of jobs) Competitive Advantage: Intellectual Capital and Technology (product/process development, career development) Value Proposition for State: “One” North Carolina Institute for the Economy and the Future