# Presentation: 278846

## Innovation Partnership Zones

**Innovation Partnership Zones**

**August 27, 2008 **

- Policy Drivers
- Knowledge economy
- Innovation and productivity
- Green economy and sustainability
- Local economies and regional competitiveness
- Clusters
- Global trade

## The Role of Government

Set clear direction
Convene assets and actors
Incent networks and collaboration
Fund process, as well as outcomes
Provide long-range support – commitment to strategy
Coordinate / leverage other state efforts

- Set clear direction
- Convene assets and actors
- Incent networks and collaboration
- Fund process, as well as outcomes
- Provide long-range support – commitment to strategy
- Coordinate / leverage other state efforts

## Recent Examples

Cluster planning grants
Workforce and economic development alignment
CTED Regional Services 
Associate Development Organizations
Innovation Partnership Zones
STARS program

- Cluster planning grants
- Workforce and economic development alignment
- CTED Regional Services
- Associate Development Organizations
- Innovation Partnership Zones
- STARS program

## Innovation Partnership Zones

Created in 2007 by Governor Gregoire and the Washington State Legislature, through SHB 1091.  
One of many efforts to stimulate the growth of industry clusters and to build regional economies.  

Innovation Partnership Zones (IPZs) bring together...
Research
Workforce training
Globally-competitive companies
...within compact, geographically-distinct boundaries.

- Created in 2007 by Governor Gregoire and the Washington State Legislature, through SHB 1091.
- One of many efforts to stimulate the growth of industry clusters and to build regional economies.
- Innovation Partnership Zones (IPZs) bring together...
- Research
- Workforce training
- Globally-competitive companies
- ...within compact, geographically-distinct boundaries.

## Goal
To stimulate cooperative, research-based efforts that will lead to new commercially viable products and jobs.

Policy Objectives
Regional economies
Stimulate or strengthen cluster formation
Diversity of discovery
Develop research capacity and research models

- To stimulate cooperative, research-based efforts that will lead to new commercially viable products and jobs.
- Policy Objectives
- Regional economies
- Stimulate or strengthen cluster formation
- Diversity of discovery
- Develop research capacity and research models

**Notes:**
This is a State Initiative to grow the state’s knowledge economy, but there should be an explicit acknowledgement that the IPZs support local economies and clusters.   These are not mutually exclusive goals. 
Not the only arrow in the quiver.  No substitute for a classic “STARS” approach.

## Expected Results
Alignment between higher education research and targeted industry clusters.
Increased commercialization activities at research institutions leading to new company formation and new products developed and produced in the state.
Increased investment dollars available for Washington businesses.
Growth in employment and revenues of targeted industry clusters.
Expanded employment opportunities in high-skilled jobs.
Enhanced tax revenue to the state and local governments.

- Alignment between higher education research and targeted industry clusters.
- Increased commercialization activities at research institutions leading to new company formation and new products developed and produced in the state.
- Increased investment dollars available for Washington businesses.
- Growth in employment and revenues of targeted industry clusters.
- Expanded employment opportunities in high-skilled jobs.
- Enhanced tax revenue to the state and local governments.

## Bellingham Innovation Zone  - For low-wake, fast ferry vessel prototypes, hydroscience and engineering and design, wake wash energy studies, advanced composite and aluminum alloy techniques. 
Grays Harbor Sustainable Industries Innovation Partnership Zone – For research and development of bioenergy, bio-based product manufacturing, particularly high-value byproducts from bio-based energy production.  
Pullman Innovation Partnership Zone – For clean information technology and datacenter technologies, such as energy efficient technologies, and power and cooling infrastructure.  
Spokane University District Innovation Partnership Zone – For biomedical research such as computational biology, bioinformatics, systems biology, epigenetics, genomics, chromosomal biology, and drug discovery.  
Walla Walla Valley Innovation Partnership Zone – For agricultural innovation with a focus on enology/viticulture and water/environmental studies.  
Aerospace Convergence Zone (Everett) – For research in new materials and processes for aircraft production.  
North Olympic Innovation Partnership Zone (Sequim) – For marine biotechnology, coastal assessment and restoration, forecasting stressors on marine and estuarine systems. 
Bothell Biomedical Manufacturing Corridor – For the establishment of a University of Washington Biotechnology and Biomedical Technology Institute, principally to support medical device/ultra-sound manufacturing.  
Discovery Corridor Innovation Zone (Vancouver) – For semiconductor and micro-device design, IC manufacturing and processing, display technology and multimedia.  
South Lake Union Life Science Innovation Partnership Zone (Seattle) – For bioscience and biotechnology, pharmaceuticals, cardiovascular and regenerative biology, cancer research, infectious disease research. 
Tri-Cities Innovation Zone – For research in sustainable development, with focus on integrated electrical-thermal production, solar dish generating systems, and commercial-scale fuel cells. 

- Grays Harbor Sustainable Industries Innovation Partnership Zone – For research and development of bioenergy, bio-based product manufacturing, particularly high-value byproducts from bio-based energy production.
- Pullman Innovation Partnership Zone – For clean information technology and datacenter technologies, such as energy efficient technologies, and power and cooling infrastructure.
- Spokane University District Innovation Partnership Zone – For biomedical research such as computational biology, bioinformatics, systems biology, epigenetics, genomics, chromosomal biology, and drug discovery.
- Walla Walla Valley Innovation Partnership Zone – For agricultural innovation with a focus on enology/viticulture and water/environmental studies.
- Aerospace Convergence Zone (Everett) – For research in new materials and processes for aircraft production.
- North Olympic Innovation Partnership Zone (Sequim) – For marine biotechnology, coastal assessment and restoration, forecasting stressors on marine and estuarine systems.
- Bothell Biomedical Manufacturing Corridor – For the establishment of a University of Washington Biotechnology and Biomedical Technology Institute, principally to support medical device/ultra-sound manufacturing.
- Discovery Corridor Innovation Zone (Vancouver) – For semiconductor and micro-device design, IC manufacturing and processing, display technology and multimedia.
- South Lake Union Life Science Innovation Partnership Zone (Seattle) – For bioscience and biotechnology, pharmaceuticals, cardiovascular and regenerative biology, cancer research, infectious disease research.
- Tri-Cities Innovation Zone – For research in sustainable development, with focus on integrated electrical-thermal production, solar dish generating systems, and commercial-scale fuel cells.

## Resources

The legislation provided no funds for IPZ administration, start-up, or operations.

A last-minute proviso, offered by the bill sponsors, was placed in the 2007 Capital Budget.  The proviso gave CTED $5 million to award infrastructure grants to a handful of designated  zones.  This was one-time, competitive funding.

- The legislation provided _no_ funds for IPZ administration, start-up, or operations.
- A last-minute proviso, offered by the bill sponsors, was placed in the 2007 Capital Budget.  The proviso gave CTED $5 million to award infrastructure grants to a handful of designated  zones.  This was one-time, competitive funding.

## In 2007, six of the 11 designated IPZs were awarded capital grants, ranging from $275,000 to $1 million.  
The grants funded shared infrastructure, telecommunications, equipment or construction, and up to 10 percent for IPZ administration.

   Bellingham 
   Grays Harbor 
   Pullman 
   Spokane 
   Tri-Cities
   Walla Walla

- The grants funded shared infrastructure, telecommunications, equipment or construction, and up to 10 percent for IPZ administration.
-    Bellingham
-    Grays Harbor
-    Pullman
-    Spokane
-    Tri-Cities
-    Walla Walla

## Experience – 9 months

Diversity occurred naturally.
Remediation was a central theme. 
Clean technology is well-represented. 
Demand for research capacity and alternatives.   
Navigating higher education systems is very difficult.

- Diversity occurred naturally.
- Remediation was a central theme.
- Clean technology is well-represented.
- Demand for research capacity and alternatives.
- Navigating higher education systems is very difficult.

**Notes:**
   REMEDIATION - Many communities are using IPZs to initiate substantial Brownfield clean-up and redevelopment. 
DIVERSITY -  Small communities to metro centers; Range of industry sectors, from biomedical to clean tech to agriculture; Geographic location, from eastern and western Washington, beyond the I-5 and I-90 corridors.
GREEN - Of the eleven (11) designated IPZs, seven (7) of them are conducting research and growing jobs for the Green Economy.
The Green Economy is rooted in the development and use of products and services that promote environmental protection and energy security.
RESEARCH INSTITUIONS - Outside of the three research institutions (WSU, UW, National Labs).  Small rural communities had to adapt and use community / technical colleges. Not a bad result. Collaboration with the public research universities has been a challenge, especially for the smaller, isolated zones. 

## Other Observations

The designation process – in and of itself – was a very helpful organizing tool.  
The process of commercialization - and the balance between proprietary research and collaboration - has been a challenge.
Getting the capital funds out-the-door has taken an exceedingly long time. 

- The designation process – in and of itself – was a very helpful organizing tool.
- The process of commercialization - and the balance between proprietary research and collaboration - has been a challenge.
- Getting the capital funds out-the-door has taken an exceedingly long time.

**Notes:**
COMMERCIALIZATION - Requires technical assistance.  Shared space and shared resources. 
APPLICATION PROCESS - The competition accelerated key partnerships and visioning. The preparation required for designation (formalized relations between research, workforce training, private sector, and local government, focused on targeted research) placed a natural “lid” on the number of applicants.
CAPITAL GRANTS - However, the prospect of capital grants – and the short 2007 timeline – produced a crop of proposals that seemed rushed and not ready to proceed. 

## Comments from Zone Administrators

More top-down strategic direction and coordination is needed. 
Stable, long-term funding & significant funding is needed.
There are too many IPZs.  Cap the designations.  No more than five.
Zones must aggressively seek federal and philanthropic funding, to augment and round out the IPZs. 
Zones can – and should – be self sustaining.
Part of the IPZ strategy should be a concentration on a few major themes and concentrate the zone resources to achieve critical mass.  
Don’t restrict the number of zones, or bound the concept of innovation too narrowly, so that it favors only research institutions. 
Recognize the special challenges – and opportunities – of rural zones.
The program has all of the requisite parts...it’s a good mix.  Funding doesn’t ensure success.   Local partnerships need to have skin in the game and make this happen.

*More top-down strategic direction and coordination is needed. *
*Stable, long-term funding & significant funding is needed.*
*There are too many IPZs.  Cap the designations.  No more than five.*
*Zones must aggressively seek federal and philanthropic funding, to augment and round out the IPZs. *
*Zones can – and should – be self sustaining.*
*Part of the IPZ strategy should be a concentration on a few major themes and concentrate the zone resources to achieve critical mass.  *
*Don’t restrict the number of zones, or bound the concept of innovation too narrowly, so that it favors only research institutions. *
*Recognize the special challenges – and opportunities – of rural zones.*
*The program has all of the requisite parts...it’s a good mix.  Funding doesn’t ensure success.   Local partnerships need to have skin in the game and make this happen.*

## Recommendations – Beyond 2008

Put designation and performance criteria in context:
  Innovation Research Team (IRT) analysis & plan
  Statewide cluster analysis
  State Economic Strategic Plan
  Green Economy Jobs Initiative (HB 2815)
All four products will be completed in late 2008 or early 2009.

- Put designation and performance criteria in context:
-   Innovation Research Team (IRT) analysis & plan
-   Statewide cluster analysis
-   State Economic Strategic Plan
-   Green Economy Jobs Initiative (HB 2815)
- All four products will be completed in late 2008 or early 2009.

**Notes:**
Time to incorporate conclusions in the 2009 IPZ designation process.  These products will enhance existing zones (targeting IRTs), as well as help to refine designation criteria.
Link the STARS program and the IPZs more explicitly.  Identify other ways that the higher education systems can resource zones.  Acknowledge, encourage, and fund the research capacities of community / technical colleges.

## More Recommendations

Connect the IPZs, to foster collaborations and research.  Boundary jumping. 
Enhance statewide marketing, to help IPZs leverage the IPZ brand.  
Put IPZs in leadership positions / roles, to increase credibility and leverage the institutional partnerships.
Connect and coordinate public research institutions, to get more support to zones.  
Acknowledge, encourage, and fund the research capacities of community / technical colleges. 

- Connect the IPZs, to foster collaborations and research.  Boundary jumping.
- Enhance statewide marketing, to help IPZs leverage the IPZ brand.
- Put IPZs in leadership positions / roles, to increase credibility and leverage the institutional partnerships.
- Connect and coordinate public research institutions, to get more support to zones.
- Acknowledge, encourage, and fund the research capacities of community / technical colleges.

**Notes:**
Link IRTs and IPZs more explicitly.  Identify other ways that the higher education systems can resource zones. 

## More Recommendations

Continue capital grant competitions among designated IPZs.  
Separate the grant competition from the designation competition. 

- Continue capital grant competitions among designated IPZs.
- Separate the grant competition from the designation competition.

**Notes:**
$ 5 million decision package request. These funds are more flexible and easier to administer than CERB, LIFT, etc. 
Merit-based.  Readiness to proceed.

## Choices & Possibilities

Stable funding source to assist with administration / operating start-up
Diversity v. targeting
Augment research capacity
Stratify the designated zones 
Link with cluster initiatives
Reduce the frequency of designations

- Stable funding source to assist with administration / operating start-up
- Diversity v. targeting
- Augment research capacity
- Stratify the designated zones
- Link with cluster initiatives
- Reduce the frequency of designations

**Notes:**
Funding for capital projects as supplied to some zones.  But we also need to get the zones properly organized, structured, managed, and marketed.  

## Challenges

Funding
Inventory of assets
Network assets among and between zones
Cluster identification and needs assessment	
Boundaries
Supporting diversity v. picking winners
Patience
Demonstrating value of network / process

- Funding
- Inventory of assets
- Network assets among and between zones
- Cluster identification and needs assessment
- Boundaries
- Supporting diversity v. picking winners
- Patience
- Demonstrating value of network / process

## 
Julie Anderson
Community, Trade, and Economic Development
Senior Policy Advisor    l   Director’s Office 
Desk (360) 725-4029    l   Cell (360) 481-5828
JulieA@CTED.WA.GOV

CTED invests in Washington’s communities, businesses and families to build a healthy and prosperous future.

**Julie Anderson**
- Community, Trade, and Economic Development
- Senior Policy Advisor    **l**   Director’s Office
- Desk (360) 725-4029    **l**   Cell (360) 481-5828
- JulieA@CTED.WA.GOV
*CTED invests in Washington’s communities, businesses and families to build a healthy and prosperous future.*

**Washington State Department of Community,****Trade and Economic Development**