The Importance of Networking in Technology Convergence

1. The Importance of Networking in Technology Convergence Presented to Internet2 Fall Members Meeting Presented by Richard A. Bendis President & CEO Innovation Philadelphia September 20, 2005

2. “Innovation is fostered by information gathered from new connections; from insights gained by journeys into other disciplines or places it arises from ongoing circles of exchange, where information is not just accumulated or stored, but created.” - Meg Wheatly, 1941, U.S. Academic

3. Innovation Philadelphia A Public/Private Partnership created to Grow the Wealth and Workforce of the Greater Philadelphia Global Innovation Economy

4. 1999 – John F. Street Elected Mayor of Philadelphia 1999-2000 – Mayoral Transition Team Explores Ways to Make Philadelphia More Competitive 2000-2001 – New Economy Development Alliance (NEDA) Steering Committee Created (Univ. of Penn, Dr. Judith Rodin; Comcast Corporation, Brian Roberts; GlaxoSmithKline, Dr. Jean-Pierre Garnier) 2001 – Innovation Philadelphia Created Under the Leadership of Dr. Rodin $2.5 Million in Seed Capital from the City of Philadelphia Rich Bendis recruited to the City of Philadelphia, 12/01 IP Strategic Plan – Where We’ve Been

5. What is the Greater Philadelphia Region? • 3 states • 11 counties • Pennsylvania:Bucks, Montgomery, Philadelphia, Chester, Delaware • New Jersey: Mercer, Burlington, Camden, Gloucester, Salem • Delaware: New Castle Regionalism - learning to work to promote growth and development with the diverse interests of the11 counties in Greater Philadelphia

6. Attracting Growing Retaining Connecting IP’s Method of Achieving Mission Technology-based Businesses

7. IP Core Products / Services Global & Regional Economic Development Research & Marketing Commercialization Investment World’s Best Technology Network

8. Connectivity in Greater Philadelphia

9. Human Connectivity Communications networks have the ability to transform economic, political, and social relationships on a global scale. • In the past, organizations strategized to gain competitive advantage. • The emphasis in the future will be to gain cooperativeadvantage. • A core competency needed in individuals, organizations, and regions alike is connectivity. Source: Fast Growth

10. The Greater Philadelphia Region has the 5C’s of innovation connectivity: Cultivation Collaboration Capital Careers Commercialization Connectivity in Greater Philadelphia

11. Connecting the Dots…

12. …in the Greater Philadelphia Region

13. “Science, engineering, and technology are fundamental drivers in the economy of the future, providing the foundation for business growth and overall improvement in the quality of life.” - Mark Birrell, 1958, Australian politician

14. Greater Philadelphia – A leading Life Science Region

15. The biotech and pharmaceutical industries are responsible for employing more than 509,000people, either directly or indirectly in PA, NJ, and DE. These jobs result in $40 billion in business per year in the tri-state region. U.S. Production in the tri-state region 1st in pharma, medicine production, & healthcare industry employment 2nd for industrial R&D funds in pharma per capita 6th for venture capital investment in biotechnology 10th for medical instruments and supplies $1.6 billion in NIH funding with over 1,500 research grants awarded Regional Life Science Facts

16. 6 National Cancer Institute (NCI) designated Cancer Centers Fox Chase Jefferson Penn Temple Wistar Institute University of Pittsburgh Regional Life Sciences Employment & Training Regional Life Science Facts

17. MAGPI • MAGPI, the Regional Internet2 GigaPoP, has connected • 192 sites in the tri-state Region, including pharmaceutical • and government institutions • High performance connectivity opens the door to • advanced collaborations • Much of the Region’s academic research utilizes MAGPI • and Internet2 connectivity

18. Regional Life Science Facts • 40,000biological scientists in the tri-state region • 1,500+ biotechnology, device & diagnostic, • pharmaceutical, and bio-agricultural enterprises are • located in the Greater Philadelphia Region • 174,000people directly employed by the life sciences in • the 11-county Greater Philadelphia Region • 1 in 5 of the nation’s physicians train in the Region’s • medical schools and hospitals

19. 80% of the world’s pharmaceutical companies have presence within 50 miles of Philadelphia Regional Life Science Facts • Biotechnology companies include Centocor, Cephalon, Medarex, ImmuneControl, Macroarray, Gentis, Cira • Pharmaceuticals companies include Aventis, Merck, AstraZeneca, GSK, BMS, Johnson & Johnson • CROs include Covance, AppTec • Venture capital firms include Quaker BioVentures, PAX, Care Capital, Domain, TL Ventures

20. Wireless Philadelphia

21. Wired Internet Wi-Max Backhaul Mesh Cell Gateways Mesh Cell Nodes Indoor or Outdoor Antenna Portable Clients Nomadic Clients Fixed Clients

22. Mission - Wireless Philadelphia aims to strengthen the City's economy and transform Philadelphia's neighborhoods by providing wireless internet access throughout the city. Wireless Philadelphia will create a digital infrastructure to help citizens, businesses, schools and community organizations make effective use of this technology to achieve their goals while providing a greater experience for visitors to the City. Objectives - To spur economic development - To enhance community neighborhoods - To help overcome the digital divide - To reduce the cost of government Wireless Philadelphia Mission and Objectives

23. About Wireless Philadelphia • Estimate 2,500 WiFi cells and 5-7 WiMax bay stations will cover 135 sq. miles • WiFi cells will be mounted to light poles • WiMax bay stations will be mounted on rooftops • Network will support public access, gov’t field operation staff, public safety, smart parking system, Automated Meter Reading, and free public access in major parks

24. Identified Stakeholders Supply (Assets and Capabilities) Demand (Needs & Requirements)

25. There is a need for universally-available and affordably priced broadband Efforts to reduce the digital divide require broadband, computers in the home, training, content and a defined process The demographics and projected demand calculations show that there is a potential market for these services It is unclear if, when and at what price the private sector will provide these services The City will achieve greater success by partnering with the private sector Substantial involvement by the City is needed to ensure that the project gets off the ground and that all stakeholders benefit Stakeholder Results

26. Neighborhoods not served by high speed data access today will be new market opportunity Businesses can subscribe to wireless network to sell their services Small, mid-sized, and disadvantaged businesses can take advantage of affordable access to compete in Knowledge Economy Wireless will provide new opportunities for yet unthought-of new ideas and products Opportunity for businesses to market to tourists Impact on Businesses

27. Broadband availability allows local businesses to remain competitive, operate more efficiently, and access more consumers more quickly and thus grow faster. Smaller manufacturers need access to high-speed networks to remain part of the supply chain of larger players. Information businesses can start and locate anywhere they want, and they tend to look for areas with educated workforces, advanced infrastructures and high quality of life. Knowledge workers expect and require advanced telecommunications infrastructure. Economic Findings

28. Integrated into learning and communicated with the parents in the home, broadband connections can improve education for students. The Internet enables entrepreneurship, facilitates networking critical to funding start-ups, and encourages rapid tech-led economic growth, with broadband empowering smaller players to compete against larger and more established companies. A July 2005 Technology Administration roundtable on “BioCenters of Excellence” heard from several biotech and economic development leaders that high bandwidth connectivity is critical to advanced biotechnology research and database access. Economic Findings

29. Mayor incorporated Wireless Philadelphia as a 501(c)3 nonprofit March 30, 2005 Request for proposal to design, build and maintain network issued April 7, 2005 Responses received in June and review committees have made recommendation to the Board Hewlett Packard and Earthlink have been identified as finalists Winner will be selected and contract negotiated in September Construction to begin in September Entire city covered with wireless Summer/Fall 2006 Current Progress

30. The Greater Philadelphia Region’s Focus on Collaboration

31. Principles of Successful Partnership • Shared Ownership • Broad Participation/Diversity of Interests • Champions/Advocates • Operational Principles • Partnership Formalization • Merit-Based Decisions • Flexibility • Cost-Sharing • Evaluation • Stability/Long-Term Commitment MISC 01289959

32. Regional Collaboration The Greater Philadelphia Region (PA, NJ, DE) has the Regional assets to help technology companies succeed:

33. A resource dedicated to helping advance the companies and research institutions that are developing ground-breaking therapies, devices, diagnostics, and vaccines. Provides networking opportunities and targeted introductions to help members showcase their strengths and to meet people and organizations that will help them advance. The only statewide association in the Commonwealth dedicated to advancing the bioscience cause on both state and federal levels. Mission - To be a catalyst to ensure Pennsylvania’s position as a global leader in the biosciences by developing a cohesive community that unites the Region’s biotechnology, pharmaceutical, research, and financial strengths. Pennsylvania Bio

34. Located in the state's capital of Trenton, the Biotechnology Council of New Jersey (BCNJ) was chartered in 1994 with a three-fold mission: To formulate and advocate public policy to elected officials and regulators. To acquire and coordinate resources and provide services to members regarding issues critical to building successful biotechnology enterprises. To enhance awareness and appreciation of New Jersey's biotechnology industry. Biotechnology Council of NJ

35. Delaware Economic Development Office • Offers a variety of support and assistance to existing and new biotech companies including finding companies wet lab space, securing capital, locating networking opportunities, providing information on workforce training programs and tax incentives, and facilitating other needs.

36. Four Regional Technology-Based Economic Development Organizations How do they best collaborate? Regional TBED Organizations

37. Established in 1982 to stimulate economic growth through innovation, entrepreneurship, and the development and adoption of new technologies. BFTP operates on a Regional level through four centers strategically located throughout PA , with offices in Pittsburgh, State College, Bethlehem, and Philadelphia. Every dollar invested in BFTP yielded nearly $23 of additional income in the state. BFTP generated 93,105 job-years at a cost to PA of $3,342 per job-year*. The state garnered more than $400 million in additional tax revenue as a direct result of the program, which more than covered the operating costs of the program over the same period. BFTP boosted Pennsylvania’s economy by $8 billion Web site – www.benfranklin.org Ben Franklin Technology Partners

38. BioAdvance • Founded as part of the $2 Billion plus initiative by PA to strengthen the • commitment to life sciences • BioAdvance received $38 million from the State’s share of tobacco • settlement monies to spur the creation of life sciences jobs and businesses • Creation of PA Life Sciences Passport to provide a single gateway to major • research centers • Creation of statewide Clinical Trials Network • Greater Philadelphia region has 2nd largest concentration of • biopharmaceutical jobs in North America and earned $2.8 billion in NIH • funding from 1996 to 2000 • Web site – www.bioadvance.com

39. Science Center Mission: To be the world’s best science and technology commercialization engine. Web site – www.sciencecenter.org • Commercialization Hub • Sc Venture Formation • Sc Capital • Sc Management Services • Sc Knowledge and Information • Exchange Real Estate SBU Science & Technology Center

40. World’s Best Technology Network Funding amounts subject to change without notice. Science Center funding estimated funding is TBD.

41. The Importance of Academic and Industry Collaboration

42. Long term vision and planning Identify gaps and trends in science and technology environment Be a catalyst through strategic investments and partnering Encourage a balanced and flexible research and development portfolio Encourage private sector innovation Establish performance-based research and development Government’s Role in Science and Technology © KTEC 1998

43. Role of Industry: Wealth Creation Capitalism is a Process of Creative Transformation “The interaction of technological innovation with the competitive marketplace is the fundamental driving force in capitalist industrial progress.” Joseph A. Schumpetter, 1942

44. Role of Academia Building Capacity For Learning and Innovation Knowledge Integration Education Research Continuous Learning and Innovation Resource Investment Knowledge Creation Knowledge Transfer

45. Academia – Reasons Why There is Little Interaction with Industry • Educators say that they do not have enough time to create • programs or to meet with industry representatives • Space at research institutions to mentor students is very • limited • There are very few institutional arrangements • There are issues related to patents, trade secrets, and • proprietary issues. • The surveyed industry leaders also noted these same issues. Source: Human Capital Barriers and Opportunities for Growth in the Life Sciences

46. Industry-Academic Linkages • Schools and firms report limited exchange of firms and ideas. • Corporate and academic interactions are rare and often non- • existent • Leaders of educational programs and business leaders are • eager for such programs. However, they stated that they • have no time to build these linkages. Source: Human Capital Barriers and Opportunities for Growth in the Life Sciences

47. Recommendation - Industry-Academic Linkages • The Region would benefit from: • An organization that could facilitate corporate-academic • linkages. • Examples and models of successful collaborations. • A legal template that would facilitate corporate-academic • exchanges of ideas, scientists, graduate students, and • personnel, but at the same time protect the intellectual • property rights of the participants. Source: Human Capital Barriers and Opportunities for Growth in the Life Sciences

48. A Strategy for Intellectual Property Donation • Innovation Philadelphia (IP) and Phoenix IP Ventures • (Phoenix IPV) have introduced a new program that will • enhance the rate and magnitude of science driven economic • development in the Greater Philadelphia Region. • Under this model, IP and Phoenix IPV have established a not- • for-profit entity, which will accept intellectual property backed • assets from “Fortune 500 companies” as donations.

49. A Strategy for Intellectual Property Donation • In return for these donations, the donating companies have • the opportunity to receive tax credits for their philanthropic • efforts. • Donated assets will be commercialized subsequently by IP • and by Phoenix IPV primarily through investments in existing • companies or the creation of new companies. • The overall goal is to access worldwide science to increase • the overall economic growth in our Region.

50. Technology Transfer • Science Center – Currently home to 25 companies. • Have started over 350 companies. • Drexel University – Currently home to 10 companies. • University of Pennsylvania Center for Technology Transfer. • Launched 14 companies in 2004. • Set to launch 12 – 16 companies in 2005.