North Texas Commission Innovation Task Force

1. North Texas CommissionInnovation Task Force Initial Report to the Board of Directors September 18, 2008

2. “If the pace of change inside the organization is slower than the pace of change outside the organization… the end is near.” Jack Welch Retired CEO General Electric

3. “In the next 10 years emerging technologies will create $10 trillion in wealth.” Governor Rick Perry October 24, 2005 Fort Worth Petroleum Club

4. Understanding the Innovation Economy • Historically, research and technology have been the primary drivers of economic growth and development • Technology-led economic development has “clustered” around and been driven by major research universities • Research that supports and/or has commercial application is the basic cornerstone in the creation of technology start-ups supporting the growth of industry clusters

5. Case for Support: North Texas • North Texas is the fourth largest metropolitan MSA in the United States, with a population of 6 million • The region boasts the largest technology trained workforce in the U.S. other than Silicon Valley • We have 27 four year colleges & universities; however, no university has emerged as a primary driver of “tech transfer”

6. Charge The NTC Innovation Task Force, appointed by the Board of Directors March 25, 2008, is charged with developing recommendations to the Board, relative to the Commission’s role in maintaining and enhancing North Texas’ competitiveness in a “globally competitive, innovation driven” economy

7. Mission Given the Commission’s mission it is important to acknowledge the importance of incentivizing regional collaboration, and that the Commission consider its primary role as a convener, facilitator, and process manager to establish and support the framework need to support regional collaboration

8. Aligning with Texas • Texas Technology Initiative • State Cluster Initiatives • Emerging Technology Fund • Regional Center for Innovation & Commercialization (RCIC)

9. Aligning with Washington, D.C. • Support of commercializable research • Formation of industry/academic research partnerships • Federal research grants evolving to venture funding/commercialization

10. Initial Findings of the Task Force • Task force has met three times • We have identified three “strategic goals” critical to North Texas’ competitiveness • For each goal we have provided: • Metrics • Activities, initiatives, and/or projects • Listing of potential partners • We have not defined specific roles for the Commission

11. Strategic goalsfor North Texas’ Competitiveness • 1. Enhance the research capability of our universities • 2. Enhance the commercialization of innovation • 3. Develop and market our regional assets

12. Goal 1enhance the research capability of our Universities • The most successful “Innovation Economies” have been the result of effective partnerships between universities and the private sector, focused on technology transfer “from the lab to the market place.” • Stanford University and the University of California, Silicon Valley • MIT and Harvard, Boston Biotech Corridor • Duke and the University of North Carolina, Research Triangle

13. Initiative: Enable Regional University Excellence • Metrics: • External research funding secured • R & D spending at universities with focus on commercialization • University tech transfer • Activities • Identify ways to support aspirations of North Texas’ universities seeking Tier One research status • Encourage collaboration among and between our region’s universities (document the efforts, consider securing funds in support) • Develop one or more models to enable regional university excellence through collaboration • Resources are “locked up” in how universities/university systems operate (is this a state policy issue?) • Suggested partners • UT Arlington • UT Dallas • UT Southwestern • University of North Texas • University of North Texas Health Science Center

14. Define the Challenge & Opportunities for Tier One Research Universities Proposed Texas Tech UT San Antonio UT Arlington University of Houston UT Dallas University of North Texas UT El Paso Benchmarks PublicPrivateTotal California 6 3 9 New York 2 5 7 Pennsylvania 2 2 4 Texas 2 1 3 Massachusetts 0 3 3

15. Initiative: Enhance federal funding in support of regional university excellence • Metrics: • Regional applications submitted (collaboration) • Federal funds secured • Activities • Seek federal funding in support of university research collaboration and academic/industry partnerships • Engage universities to define, develop the model(s) • Identify and aggregate current research funding received, to better compare and sell region • Include concept of regional collaboration for state, federal funds, that could link to RCIC • Suggested partners • AHE/RCIC • Regional Incubators

16. Defining the Challenge & Opportunity for Federal Funding for Texas • Energy technology • Department of Energy funding • University of California $ 4.0 billion • University of Tennessee $530 million • Stanford $330 million • Texas $120 million • University of Chicago $ 80 million

17. Goal 2enhance the commercialization of innovation • Historically, research and technology have been the drivers of wealth creation • Three critical components • Technology discoveries • Venture capital • Entrepreneurs • The critical success factor is the means to bring these three key elements together

18. Initiative: Thicken spine of value chain from lab to market • Metrics: • VC funding in region • Other early stage funding in region • Activities • Identify specific areas that could be pursued through collaboration, such as clinical research trials • Identify specific areas that represent opportunities for joint industry/academic research partnerships, such as energy technology, medical devices • Work with RCIC to enhance access to venture funds in our region • Develop examples of “lost technology” from North Texas, as a result of not having adequate venture capital • Work on the “culture of commercialization” in universities • Encourage faculty tenure based on research activity • Suggested partners • RCIC • World’s Best Technologies Showcase (March 23-25, 2009) • Metroplex Technology Business Council • Center for Innovation

19. Defining the Challenge & Opportunity for Venture capital for Texas • VC investment in Texas $6 billion in 2000 • Down 76% since 2002 • VCs invested $7.4 billion in 990 deals in 2nd quarter ’08 - Texas received $257 million; 3.4% • VCs invested $1.513 billion in energy in 2nd quarter ’08 - Texas received $35 million; 2.33%

20. Initiative: Focus on disruptive technologies that stimulate new industries, new product concepts, new business models • Metrics: • New firm starts • Productivity enhancements • Gazelle companies formed • Activities • Identify and support research focused on and/or leading to disruptive technologies, to include efforts to secure research funds • Identify and support one or two “pilot projects” that represent the creation of regional capacity to drive commercialization of innovation that are inclusive of the region’s universities or incubators • Suggested partners • Center for Innovation at Arlington • Metroplex Technology Business Council • Regional Universities • Chambers of Commerce

21. The Collaborative Partnership • To lead innovation and maintain a competitive edge in the global economy, successful industry “clusters” build infrastructures or mechanisms that: • Speed the movement of new ideas into the marketplace • identify the expertise and resources that exist and their geographic proximity to one another • Allow for individuals to form partnerships and solve problems together • Academia is the nations’ greatest untapped resource and must become an integral part of the marketplace. The expertise and resources within academia are not well organized nor easily known. There are common resources within academia which can be linked and organized for the marketplace to consume and collaborate with for spurring innovation, solve problems or efficiently utilize: • People with Know-how (expertise) • Research Centers, Laboratories, Collaborative Groups • Technologies and Patents • Research Facilities and Equipment

22. Goal 3Develop & Market our regional assets • In September 2002 the Dallas Citizens Council released a comprehensive Benchmarking Analysis of the Metroplex by SRI International which clearly identified challenges, as well as resources available • In May of 2004, the UT System released the results of The Washington Advisory Group’s assessment of UT Arlington; this provides a “blueprint” for the development of a comprehensive plan to achieve “Top Tier” status

23. Initiative: Market the north Texas region’s assets relative to the innovation economy • Metrics: • Growth in technology companies • Growth in venture funding • Activities • Aggregate university R&D • Promote regional assets at national forums, events • Develop literature promoting the region’s assets • Suggested partners • Center for Innovation at Arlington • Metroplex Technology Business Council • Chambers of Commerce

24. Initiative: Assess the needs of the region’s primary clusters in order to remain competitive relative to innovation • Metrics • Defined needs of clusters (to be determined) • Activities • Secure grant funding to support regional planning • Work with region’s industry cluster leaders to identify needs • Utilize previous benchmarking (SRI, Washington Group, Texas Industry Cluster Report, etc) as starting point • Link universities to industry clusters, relative to research • Identify funding models that support the needs of faculty, facilities, and students • Suggested partners • Regional Workforce Leadership Council

25. Proposed roles for NTC partnership with RCIC In Formation of Venture Funds • Engage Incubators (there are currently four) • Engage Angels (there are currently five – LA has 160) • Engage VCs (there are a limited number) • Engage region in Worlds Best Technologies Showcase (WBT), which represents an opportunity to develop relationships with more than 100 venture funds.

26. Proposed next steps for the Innovation Task Force • Present interim task force report to NTC Executive Committee (September 11) and Board (September 18) for input and direction (Ken Barr) • Share NTC report with RCIC (David Chappell) September 23 • Identify initial pilot project(s) (Wes Jurey, Don Hicks) • Aggregate regional R&D data (staff) • Develop key contact list of individuals and organizations to engage in the region to inform of our work (Marcy Sherman) • Identify examples of “lost” technology (Ruben Esquivel)

27. Resources • It should be clearly understood by the Board that the Commission’s engagement in any or all of the three identified areas will require the Commission to secure additional funding and staff resources • This could initially be accomplished through (1) one or more grants to jump start the Commission’s involvement; (2) through the North Texas Futures Fund, or (3) supported through a special assessment to members of the Commission interested in participating • These are, however, only suggestion for start up funding; over the long term, these needs will have to be addressed through the Commission’s operating budget

28. Telling the Story • Our success will also depend on our ability to tell our story in a way that engages regional leaders. To do so, we propose to develop a ten year vision to utilize in informing the region, in order to ensure buy in and to cultivate support

29. Our Opportunities • Energy technology • Renewable energy • Nano energy • Medical devices • Micro manufacturing • Nano fabrictaion • Clinical trials

30. Our Challenge • U.S. is 4% of the world market, consuming 26% of the available resources • Most of the planet’s natural resources, people, and capital are somewhere else • Our competitive advantage has been and must remain at the leading edge of technology innovation

31. “ Change is debilitating when done to you… but exhilarating when led by you.” To succeed, we must effect a cultural change.

32. “It’s how Northern California became known as Silicon Valley.”