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RESEARCH PARKS AND JOB CREATION: 

INNOVATION THROUGH COOPERATION 

HEARING 

BEFORE THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

DECEMBER 9, 2009 

Printed for the use of the Committee on Commerce, Science, and Transportation 

( 

(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

JOHN D. ROCKEFELLER IV, West Virginia, Chairman 

DANIEL K. INOUYE, Hawaii 

JOHN F. KERRY, Massachusetts 

BYRON L. DORGAN, North Dakota 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas 

CLAIRE MCCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

TOM UDALL, New Mexico 

MARK WARNER, Virginia 

MARK BEGICH, Alaska 

KAY BAILEY HUTCHISON, Texas, Ranking 

OLYMPIA J. SNOWE, Maine 

JOHN ENSIGN, Nevada 

JIM DEMINT, South Carolina 

JOHN THUNE, South Dakota 

ROGER F. WICKER, Mississippi 

GEORGE S. LEMIEUX, Florida 

JOHNNY ISAKSON, Georgia 

DAVID VITTER, Louisiana 

SAM BROWNBACK, Kansas 

MIKE JOHANNS, Nebraska 

ELLEN L. DONESKI, Staff Director 

JAMES REID, Deputy Staff Director 

BRUCE H. ANDREWS, General Counsel 

ANN BEGEMAN, Acting Republican Staff Director 

BRIAN M. HENDRICKS, Republican General Counsel 

NICK ROSSI, Republican Chief Counsel 

(III) 

C O N T E N T S 

Page 

Hearing held on December 9, 2009 ........................................................................ 1 

Statement of Senator Pryor .................................................................................... 1 

Statement of Senator Johanns ............................................................................... 2 

Statement of Senator Nelson .................................................................................. 3 

Statement of Senator Warner ................................................................................. 4 

Statement of Senator Begich .................................................................................. 6 

Statement of Senator LeMieux ............................................................................... 16 

Statement of Senator Udall .................................................................................... 17 

Prepared statement .......................................................................................... 18 

Statement of Senator Klobuchar ............................................................................ 20 

WITNESSES

Hon. John R. Fernandez, Assistant Secretary of Commerce, Economic Development Administration, U.S. Department of Commerce .................................. 6 

Prepared statement .......................................................................................... 8 

Charles W. Wessner, Ph.D., Director, Technology, Innovation, and Entrepreneurship, Board on Science, Technology, and Economic Policy, National 

Research Council, The National Academies ...................................................... 22 

Prepared statement .......................................................................................... 24 

Brian Darmody, President, Association of University Research Parks and 

Associate Vice President for Research and Economic Development, University of Maryland ................................................................................................... 26 

Prepared statement .......................................................................................... 28 

Jonathan Sallet, Managing Director, The Glover Park Group ............................ 30 

Prepared statement .......................................................................................... 31 

Anthony Townsend, Research Director, Technology, Horizons Program, Institute for the Future ............................................................................................... 37 

Prepared statement .......................................................................................... 39 

APPENDIX

Hon. Olympia J. Snowe, U.S. Senator from Maine, prepared statement ........... 71 

Hon. David Vitter, U.S. Senator from Louisiana, prepared statement ............... 72 

Russ Lorince, Director, Research and Economic Development Office, West 

Virginia University, prepared statement ........................................................... 72 

Response to written questions submitted to Hon. John R. Fernandez by: 

Hon. Mark Warner ........................................................................................... 74 

Hon. Olympia J. Snowe .................................................................................... 76 

Response to written questions submitted by Hon. David Vitter to Dr. Charles 

Wessner ................................................................................................................. 79 

Response to written questions submitted by Hon. Olympia J. Snowe to: 

Brian Darmody ................................................................................................. 81 

Jonathan Sallet ................................................................................................. 84 

Dr. Anthony Townsend .................................................................................... 86 

(1) 

RESEARCH PARKS AND JOB CREATION: 

INNOVATION THROUGH COOPERATION 

WEDNESDAY, DECEMBER 9, 2009 

U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. 

The Committee met, pursuant to notice, at 2:34 p.m. in room 

SR–253, Russell Senate Office Building, Hon. Mark Pryor, presiding. 

OPENING STATEMENT OF HON. MARK PRYOR, 

U.S. SENATOR FROM ARKANSAS 

Senator PRYOR. Go ahead and call this meeting of the Commerce 

Committee to order. 

Thank you all for being here; I know that we have several in the 

audience. And also my colleagues, thank you. 

This is the hearing on Research Parks and Job Creation: Innovation Through Cooperation. 

I want to first welcome the Assistant Secretary, John Fernandez, 

for being here today. Thank you for coming, and I’ll give you a 

chance in a few moments to make your opening statement. I know 

we’ll have some questions. And then, we also have a second panel. 

The Nation is still experiencing an economic downturn. The national unemployment rate is right at about 10 percent. At a time 

when the economy has stalled and international competition is 

growing, we need to do everything we can to provide good-paying 

jobs for American workers. While fiscal and monetary policies provide dollars to bolster the economy, it is innovation of new ideas, 

products, and technologies that provides long-term growth. 

During the last several years, the United States has undergone 

a dramatic transformation as the Nation moves to an economy 

driven by knowledge and technology. However, states and regions 

must still have a strong economic base that can support the creation of the next generation of manufacturing jobs. 

Research parks are a typical public-private partnership that enables knowledge flow, often between parks—excuse me—park firms 

and universities, and contribute to regional economic growth and 

development. By providing a location in which researchers and 

companies can operate in very close proximity, research parks create an environment that fosters collaboration and innovation, leading to the commercialization of new products and technology. A lot 

of companies and products are spun out of these. And what they 

really do is, they institutionalize entrepreneurship, and they get 

good momentum going in certain areas with certain communities 

2 

and certain universities, and the successes just keep flowing from 

that. 

Other nations view research parks as the catalyst for the development of innovative clusters that support rapid economic growth. 

One approach to creating regional innovation clusters is through 

the deliberate creation of research parks. Today, successful created 

innovation clusters, such as the Research Triangle Park, are being 

emulated around the world, often on a much larger scale. Many 

countries, such as China, Hong Kong, Singapore, India, Japan, and 

the European Union, are investing heavily in research parks to attract talented, educated workforce. America should, too. 

Unfortunately, Federal programs to support research parks and 

regional innovation clusters have been lacking, but the trend is beginning to reverse itself. This Administration’s FY–2010 budget requested $100 million for economic development administration to 

support a Regional Innovation Cluster and Business Incubator Program. 

Now, I know that these work, because we have some firsthand 

experience in Arkansas, especially in Fayetteville, Arkansas, 

around the University of Arkansas. And that Arkansas Research 

and Technology Park has created 27 companies, 273 jobs, at an average salary of $72,000 per person. And they’ve done a lot of things 

that we can talk about there, but, really, if you look at the national 

studies, what’s going on in Fayetteville, Arkansas, we’re trying to 

duplicate in Jonesboro, Arkansas, and Little Rock, as well. 

If you look at the national studies, you see that there’s a lot of 

upside to this. For example, the typical North American research 

park is located in a suburban community with a population of less 

than 500,000. Most parks are operated by university or universityaffiliated nonprofits. More than 300,000 workers in North America 

work in a university science park, and every job in a research park 

generates an average of 2.57 jobs in the economy. So, we need to 

continue this, and invest in this, and not fall behind the rest of the 

world, when it comes to these research parks. 

But, again, I want to thank the Assistant Secretary for being 

here today. I look forward to hearing from you. 

But, first, I want to ask Senator Johanns if you have an opening 

statement. 

STATEMENT OF HON. MIKE JOHANNS, 

U.S. SENATOR FROM NEBRASKA 

Senator JOHANNS. Well, Mr. Chairman, thank you. 

Very briefly, I want to start out and just tell you how much I appreciate what you’re doing here. This is something that we can 

really dig our teeth into and work together on a bipartisan basis. 

There are so many good examples, around this country, of industry and universities developing very powerful partnerships. And 

through these partnerships, they pool their talents, their resources; 

they assemble that critical mass of expertise and training and basic 

research that results in that investment that you alluded to in the 

job creation. Not only is it a win-win for the direct participants, but 

the community wins, the economy wins, the state wins. And that’s 

just good news, in the current economic environment. 

3 

I would be remiss if I just didn’t mention a wonderful example 

of all this occurring back at the University of Nebraska. The university is in the process of constructing and developing what has 

been called the ‘‘Nebraska Innovation Campus.’’ It’s a public-private research campus. It’s set on 250 acres that I believe will be 

an economic catalyst for our state. And it sits right on the edge of 

the downtown in Lincoln. 

What you are trying to do here today could complement not only 

the efforts of those folks in my state, but other States, as well. The 

university and the community are really doing their best to accomplish several goals. They’re reaching out, they’re working with the 

community to foster innovation, expand economic growth, and create jobs. They’re also putting their money where their efforts are; 

they’re offering the expertise of their professors, and technical instructors to help drive R&D that supports economic development 

and also advances job training. 

Well, I wanted to be here today to applaud this effort, but also 

to applaud your efforts. This really makes a lot of sense. I think 

it’s going to get a lot of support. I think if we lay the proper 

groundwork, we’ve got a winner, here. 

Thank you. 

Senator PRYOR. Thank you. 

Senator Nelson. 

STATEMENT OF HON. BILL NELSON, 

U.S. SENATOR FROM FLORIDA 

Senator NELSON. Mr. Chairman, thank you for having this hearing. And, of course, it comes at an enormously important time. And 

this little agency is—just can be absolutely critical to helping out 

a number of areas. 

Now, you particularly tied the—this hearing to the research 

parks. And when this agency has the premise of helping Federal 

economic development by promoting innovation and competitiveness, then it is exactly—when you tie it in with the research park, 

it just makes all the more to create private investment and to generate jobs. 

I have had the privilege, Mr. Chairman, of talking to the Assistant Secretary before, because we—and I’m going to wait, because 

I want you to hear this particular part, because you’re my chairman and I’m going to have to come to you, because we are about 

to experience some massive layoffs at the Kennedy Space Center. 

Here is some of the finest technical expertise in the world, and, 

through no fault of their own, NASA had dropped the ball in the 

last 10 years and doesn’t have the new rocket developed in time 

for when the Space Shuttle is going to be shut down. And so, the 

Kennedy Space Center, being the launch center, doesn’t have that 

business. But, they do have the beginning of a research park, called 

Exploration Park, that does a lot of stuff in life sciences right now. 

And you’re going to have this wealth of talent, skilled labor, that 

needs to be employed. 

And so, when we get around to the questions—and I’ve already 

talked to Mr. Fernandez about what could the EDA—and I think 

he’s going to have some answers—help us with the situation where 

7,000 people are going to be laid off. And you know how many famVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
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ilies that affects. That ripple effect is three to one; that’s 21,000 

people, all within a confined geographical area. 

And so, as we get into this, I want to look at the unique assets 

that the Kennedy Space Center has, and how that can be leveraged 

to increase the private-sector investment and attract jobs, in addition to what we already have going on there. 

So, thank you, Mr. Chairman. 

Senator PRYOR. Thank you. 

Senator Warner, do you have an opening statement? 

Senator WARNER. No, Mr. Chairman. Are we still on opening 

statements? 

Senator PRYOR. We are. 

Senator WARNER. Good. OK, I will—— 

STATEMENT OF HON. MARK R. WARNER, 

U.S. SENATOR FROM VIRGINIA 

Senator WARNER. Thank you, Mr. Chairman. 

And a real pleasure to see you again, Mr. Fernandez. 

And I just want to make a couple quick comments. 

One, I appreciate your service as mayor and as somebody who 

has been involved in the nitty-gritty of economic development, I 

just want to commend—I know you’ve got, in your written testimony—you cite some of the wonderful roles that research parks 

can play, particularly in rural communities, and I just wanted to 

point out two in my home State of Virginia, one being down in 

Danville, Virginia, Mr. Chairman, who is a part of our State that, 

not unlike part of Arkansas and part of Florida, that tobacco, textile, and furniture, where the long-term industries have been hard 

hit. We’ve got a very innovative collaboration between Virginia 

Tech and the community, with an advanced learning research institute, where we’ve actually taken some of the research components 

from the home-based Virginia Tech in Blacksburg, and moved them 

down to a rural community, where they have built a close to $20- 

million building—fully staffed up, at this point, about 20-odd startups in and around it. And I appreciate the fact that you recognize 

that. And on kind of a more expanded basis, back—again, citing 

Virginia Tech, which I think has got some of the best records of research facility—or research university trying to branch out around 

the state, where—and, again, in more rural Southwest Virginia, 

the corporate research park there has now expanded to over 400 

companies that are actively engaged in collaboration with the university. 

So, I do appreciate and concur with my colleague from Florida, 

Senator Nelson, that the real value of these research facilities and 

their economic development potential. 

I also want to put a plug in for another issue that you and I have 

discussed, and as a—I’ve got a former mayor, to the right of me, 

who constantly reminds me of how much better mayors supposedly 

are than Governors. But, whether you’re a mayor or a Governor—— 

Mr. FERNANDEZ. I’ll stay out of that. 

Senator WARNER.—you’ll be—— 

[Laughter.]. 

5 

Senator WARNER.—you know, one of the things that we have— 

we do a lot of in both of these positions is economic development. 

Mr. FERNANDEZ. Yes. 

Senator WARNER. And—whether it’s a state or local economic development effort—and one of the things we’ve been working closely 

with you on in your department—and this is really to share with 

my colleagues—and we’ve got another Governor, a good friend, 

Governor Johanns—or Senator Johanns, behind—across the 

table—we’ve been working on developing legislation, in conjunction 

with EDA, that would say, ‘‘How do we supplement existing State 

and local economic development efforts for site location for those 

companies that—where the jobs might otherwise be going abroad?’’ 

So, we’ve got and America Recruits Act legislation, that we’re looking at introducing shortly, that would add a—up to a $10,000 forgivable loan; basically a $5,000-per-year credit that would be—for 

2 years—that would be forgiven, as long as the jobs actually stay 

in this location, that would supplement existing economic development efforts. Because, too often, you know, it’s—our economic development is Virginia steals from Arkansas, and Arkansas steals 

from Florida, and vice versa. This would be an effort that would 

not allow to supplement those efforts, but it would be for those 

companies, particularly foreign companies and others, that are 

looking at investing in America. 

I recall, a few years back, competing for a Dell plant that ended 

up—was looking at Korea, as well, where their national government was putting a lot of resources on the table. This is a small 

effort to add, at a national level, supplemental assistance to the 

kind of State and local economic development efforts, so that— 

again, not to compete between Nebraska and Virginia, but if we’ve 

got that German company that’s looking at choosing Nebraska or 

Quebec, or that Indian company that might be talking about moving back some of those mid-tech jobs that went abroad, that, kind 

of, call-center-plus, where we weren’t competitive a few years ago, 

but now, with broadband and—a lot of our rural communities are 

much more competitive—could be that supplemental assistance. It 

would be money that would only be spent if jobs were added to the 

marketplace. It would not require—it would be a—working through 

EDA—but it would not require massive new bureaucracy administration, because we’ve already got that in place at the local level 

or at the State level; it would be that add on. And for those jobs 

that otherwise might end up aboard, to try to make sure those jobs 

locate in this country. I think it would be a great value, and I’d 

welcome my colleagues’ ideas and input on this legislation. We 

hope to be introducing it in a bipartisan fashion in the next few 

weeks. 

And, again, I want to thank, particularly, Administrator 

Fernandez for his great effort in helping us get this program together. 

Thank you, Mr. Chairman. 

Senator PRYOR. Thank you. 

Senator Begich. 

6 

STATEMENT OF HON. MARK BEGICH, 

U.S. SENATOR FROM ALASKA 

Senator BEGICH. Thank you, Mr. Chairman. I’ll be brief. I’m anxious for the Assistant Secretary to talk a little bit about how he 

sees this working. 

I want to commend you, as mentioned earlier by several of our 

colleagues here, for your effort in bringing this forward. I think 

this timing couldn’t have been better, in a lot of ways, as we struggle in figuring out how to move our economy forward with an over10-percent unemployment rate, and working to figure out what’s 

the right approach in engaging and partnering with entrepreneurs, 

small businesspeople, universities, and others, to find the best way 

to bring new jobs to the equation. But, also recognizing that, as we 

move forward, hopefully after the first year, on some new energy 

policy for our country—and energy technology is going to be huge 

in the future. It’s big now, but I think the United States is losing 

its positioning in the global markets and the technology development, and I think this type of research-park job-creation idea may 

be able to, again, put us back in the forefront. 

So, I thank the Chairman for bringing this forward. I’m looking 

forward to helping support in any way I can, and then also hearing 

from the Administration how we can—not only if successful—the 

Chairman is successful in bringing the bill forward to a positive 

conclusion, how we implement it on a rapid basis, because I think 

sometimes we get great legislation, but it sits idle in the bureaucracy and waits and waits, and before we know it, we’re—you know, 

other countries are moving much more—I mean, they’re just moving at a rapid pace. And we have—need to catch up, in some cases, 

and be the leaders. And, obviously, in my area, of energy for Alaska, you know, the scenario—we’re losing ground in. And yet, we develop some of the greatest technologies, but other countries have 

moved much further than we are. So, I look forward to it. 

Again, Mr. Chairman, thank you for bringing this idea forward 

and having this hearing today. 

Thank you. 

Senator PRYOR. Thank you. 

I’m going to go ahead and introduce our first panel, our panel of 

one, and that would be Mr. John Fernandez. He’s Assistant Secretary of Commerce for Economic Development and Administrator 

of the Economic Development Administration. Prior to his appointment, Mr. Fernandez led the New Development and Acquisition 

Team at First Capital Group, an Indiana-based real estate investment firm. And he has a long resume. I’m not going to read it all, 

but very accomplished, very diverse background. But, to Senator 

Begich’s eternal glee, he is the former Mayor of Bloomington, Indiana. 

So, welcome. Thank you. 

STATEMENT OF HON. JOHN R. FERNANDEZ, ASSISTANT 

SECRETARY OF COMMERCE, ECONOMIC DEVELOPMENT 

ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE 

Mr. FERNANDEZ. Thank you, Chairman Pryor. 

You’ve all been so kind, I’d, kind of, like to just quit while I’m 

ahead and say thank you, but—— 

7 

Members of the Committee, I really do appreciate the opportunity to testify on behalf of the Economic Development Administration. 

You know, our policy priorities are designed to encourage collaborative regional economic development. You know, you noted, at the 

beginning, the title included ‘‘cooperation,’’ and I think that’s an essential part of what we try to do at the local and State level as we 

work to promote competitiveness, innovation, cultivate entrepreneurship, and spur our economic development partners to take advantage of opportunities in a global marketplace. 

The Obama Administration has developed a strategy to lay a 

new foundation for America’s innovation economy, investing in 

American innovations, such as fundamental research, world-class 

workforce, our physical infrastructure, and information technology. 

These all comprise key elements of the President’s strategy. 

As the economy begins to stabilize, our focus shifts from rescue 

to recovery. And at EDA, our priorities will reflect our view that, 

moving forward, we need a new framework for sustained economic 

growth. 

And this framework builds on two very important economic drivers, and that’s innovation and regional strategies. Now, this new 

framework really helps build the 21st-century infrastructure, which 

includes science and technology parks. 

Science and technology parks, when integrated into the region’s 

innovation strategy, can help create the environment where America’s world-class scientists can collaborate with entrepreneurs, they 

can commercialize technologies, create jobs and businesses that 

provide the products and services that are in demand in the global 

marketplace. 

Science parks are seen by many as a very effective policy tool to 

realize larger, more visible returns on the Nation’s investments in 

research and development. The intent of science parks is to encourage greater collaboration between our universities, private research 

labs, large and small companies, all in order to convert new ideas 

into innovative technologies for the market. They’re widely used as 

a tool to encourage the formation of innovation, innovative hightech companies, they generate employment and make existing companies more competitive through cooperative R&D, shared facilities, and all the benefits derived from colocation. These are important—an increasingly important tool for national and regional economic development. 

As was mentioned by many of you, the investments in research 

parks are being launched all over the world. In many instances, 

our international competitors come to the United States, they visit 

the Research Triangle, they go to other places around the—our 

country, and they learn from us some of the best techniques for 

building these innovative economies, and then go back to their 

countries and invest very heavily in this same innovative approach 

to economic development. It’s important, here, that we continue to 

sustain our efforts and investments in this proven methodology for 

innovative job creation. 

The Surrey Research Park outside of London, for example, is currently a home of 110 tenant companies that help to support the 

tech transfer work from the University of Surrey and a wider 

8 

knowledge economy into their international commerce efforts. Now, 

the Surrey Research Park continues to contribute significantly to 

their regional economy, even during the global recession. These are 

important sources of income and employment for all of the southeast region. And this is just one of many international examples. 

As was alluded to earlier, here in the United States there are 

many examples that EDA has helped fund. I won’t go into all of 

them. And we’re going to run short on time, so I’ll be happy to, 

maybe, present some examples, if you need them, during the Q&A. 

But, as was mentioned, as well, the 2010 budget for EDA includes additional funding to support regional innovation clusters, 

which are a part of this important innovation infrastructure. 

I’m going to just wrap it up there, and, again, just thank the 

Chairman and the members of the Committee for inviting me here 

today, and I certainly look forward to any questions you might 

have. 

Thank you. 

[The prepared statement of Mr. Fernandez follows:] 

PREPARED STATEMENT OF HON. JOHN R. FERNANDEZ, ASSISTANT SECRETARY OF

COMMERCE, ECONOMIC DEVELOPMENT ADMINISTRATION, U.S. DEPARTMENT OF

COMMERCE

Introduction 

Chairman Rockefeller, Ranking Member Hutchison, and members of the Committee, thank you for this opportunity to testify on behalf of the Economic Development Administration (EDA). EDA’s mission is to lead the Federal economic development agenda by promoting innovation and competitiveness, preparing American regions for growth and success in the world-wide economy. Through grants to local 

government entities and eligible non-profits to create jobs and generate private investment, EDA continues to seed our communities for success. Our investments create the conditions in which jobs are created, often in the midst of economic hardship 

or adjustment. 

EDA’s investments have two major goals: creating higher-skill, living-wage jobs 

and attracting private capital investment. EDA’s achievements are a reflection of 

our policy priorities: to encourage collaborative regional economic development; to 

promote competitiveness and innovation; to cultivate entrepreneurship; and, to spur 

our economic development partners to take advantage of the opportunities of the 

global marketplace. 

Obama Innovation Strategy 

The Obama Administration has developed a strategy to lay the foundation for 

America’s innovation economy of the future. The Office of Science and Technology 

Policy and National Economic Council’s A Strategy for American Innovation: Driving 

Toward Sustainable Growth and Quality Jobs builds on well over $100 billion of 

American Recovery and Reinvestment Act (Recovery Act) funds that support innovation, education and infrastructure in the Recovery Act, the President’s Budget, and 

novel regulatory and executive order initiatives. One of the key areas focuses on investing in American innovation, such as fundamental research, a world-class work 

force, physical infrastructure, and information technology. 

EDA is working to sharpen our strategic priorities in order to better promote innovation and entrepreneurship while integrating economic growth, environmental 

sustainability and global competitiveness. One way in which we can achieve these 

priorities is greater support for science and technology parks, which I would like to 

address here today. 

Science and technology parks provide the perfect environment for America’s 

world-class scientists to collaborate with entrepreneurs to commercialize technologies and create the products and services that the global marketplace is demanding. Some might argue that in today’s world, where advances in telecommunication have made it easier to share information and collaborate from dispersed locations, the need for science and technology parks is a thing of the past. However, 

ongoing economic research finds that commercialization and technology-based entrepreneurial activity continue to cluster near world-class scientific institutions where 

9 

scientific discoveries take place. U.S. universities provide the base for new industries and jobs of the future, but discoveries alone are not enough to form these industries. This is where science parks come in. 

Specifically, these types of science parks are seen by many as an effective policy 

tool to realize larger and more visible returns on a nation’s investments in research 

and development by bringing together established technology companies, technology 

incubators, and world-class universities. The intent of science parks is to encourage 

greater collaboration among universities, research laboratories, and large and small 

companies, in order to facilitate the conversion of new ideas into innovative technologies for the market. They are widely used as a tool to encourage the formation 

of innovative high-technology companies, generate employment, and make existing 

companies more competitive through cooperative R&D, shared facilities, and the 

benefits derived from co-location. Science Parks are a rapidly growing phenomenon 

and an increasingly common tool of national and regional economic development. 

International Community 

Many nations are currently adopting a variety of directed strategies to launch and 

support the development of science parks, often with significant financial commitments and policy support. To create a better understanding of the scope and scale 

of programs overseas to support the growth and development of science parks and 

to improve our understanding of the scale and contributions of parks in the U.S., 

the National Academies convened an international conference on global best practices in science parks. The resulting report captures the rich discussion of the diverse roles university and laboratory-based science parks play in national innovation systems. It was noted that in many cases, science parks are expected to generate benefits that go beyond regional development and job creation. Science parks 

are seen increasingly around the world as a means to create dynamic clusters that 

accelerate economic growth and international competitiveness. 

In the European Union, science parks are supported through a variety of local, 

national and EU programs. There are many programs that support the individual 

companies located within the parks. 

The Surrey Research Park outside of London is currently home to 110 tenant companies that help to support the technology transfer from the University of Surrey 

and wider knowledge economy into the international business world. The Research 

Park, developed by local and county planning authorities and the University, continues to contribute significantly to the regional economy, even during the recession, 

and is therefore an important source of income and employment for Surrey and the 

entire South East region. 

In Daejeon, South Korea, the national government began construction of Daedeok 

Science Town in 1973, an immense science park that has evolved today into 

Daedeok Innopolis, a research and development district made up of more than 20 

major research institutions and more than 40 corporate research centers. Over the 

last few years, a number of IT venture companies have sprung up in this region, 

which has a high concentration of Ph.Ds in the applied sciences and is famous for 

registering around 30,000 patents in Korea and abroad. 

EDA Funded Projects 

There are many examples of successful science parks across the nation, and EDA 

is proud to have played a role in their development. 

• The Sandia Science and Technology Park in New Mexico, in which EDA has invested nearly $3 million, is an entire community dedicated to linking public sector research with private sector business opportunities. The park has 30 companies employing over 2,100 people in higher-skill, higher-wage jobs. 

• EDA also invested $4.7 million in Recovery Act funds to support the development of the Arizona Bioscience Park in Tucson. The new biosciences park will 

provide a separate facility designed especially for companies working in biosciences, biotechnology, life sciences and pharmaceuticals. Its sophisticated, 

high-technology biosciences facilities will be integrated into a multi-use development, including a hotel and conference center, retail and residential development. 

• Another example is the Virginia Tech University Institute for Advanced Learning and Research in Danville. Virginia Tech established a branch of the University in this very rural area near the North Carolina border. The regional economic impact of this science park may be felt well beyond the state line. EDA’s 

University Center, Planning, and Public Works grants have supported this effort for its entire history. Most recently, EDA awarded $1.8 million for techVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
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nology commercialization activities (focused on nanotechnology, polymer science, 

etc.). 

The United States has made great progress in park creation and the generation 

of high-tech clusters, but we must continue to pursue public policies that encourage 

innovation and the commercialization of new technologies if we wish to remain a 

leader in high-tech industries. 

As you know, the President’s Fiscal Year 2010 Budget requests $50 million for 

EDA regional planning and matching grants to support the creation of regional innovation clusters that leverage regions’ existing competitive strengths to boost job 

creation and economic growth. Science parks play an important role in this equation. The request would enable EDA to provide greater support for science and technology parks so that the United States can seed future science park successes similar to the past successes I have just discussed. 

Conclusion 

Chairman Rockefeller, Ranking Member, Hutchison, and members of the Committee, thank you for your time today and for inviting me to discuss what I consider 

to be a critical component of our Nation’s economic recovery. Please note that this 

testimony does not address S. 583, which is pending before the Committee. Before 

the Committee considers that bill, I would appreciate the opportunity to share the 

Administration’s views on it. Thank you. I look forward to answering any questions 

you may have. 

Senator PRYOR. Thank you. 

And what I’m going to do for my colleagues—I’m going to split 

my time here, I’m just going to ask one question, and then go 

around the horn here with my colleagues, and allow them to have 

their allotted time to ask questions. 

But, the first question I have, just to lead us off here, is, How 

do you envision universities, research parks, business incubators, 

regional clusters all working together to make the U.S. more competitive and to stimulate the jobs that we need in this country? 

Mr. FERNANDEZ. Well, thank you. I think the—you know, the 

question sort of frames the answer in a way that, hopefully, is understandable. But, you know, they have to work together. Investing 

in research parks or science parks—it’s not the notion of a ‘‘field 

of dreams,’’ that you just build a facility and everyone comes. It’s 

really just part of that entire ecosystem that has to be created to 

support entrepreneurship and support innovative-led economic development. 

In most instances, there is a strong public-private organization 

that brings together all those—the leadership from those key 

stakeholders, to ensure that there is a shared strategy, that every 

one is moving in the right direction, that we’re leveraging the key 

competitive advantages of that region. But, it’s through that kind 

of public-private partnership that develops the regional strategy 

that enables all of the stakeholders to work together in a very 

smart way. 

Senator PRYOR. Thank you. And we may have some follow-ups on 

that. 

Senator Johanns. 

Senator JOHANNS. You mentioned, in your testimony, that you’d 

have some examples. I would like to hear about some of those examples. I’m especially interested in your opinion as to what they 

were doing right. What is the combination of things that make it 

work, if you will? 

Mr. FERNANDEZ. Sure. You know, in Sandia Science and Tech 

Park in New Mexico, that’s a park that has really supported a 

11 

broad public research institution and integrated it well into the private-sector companies. There are 30 companies there now, that employ over 2,100 people in very high-wage high-skilled jobs. Senator 

Warner mentioned the Virginia Tech example, in Danville. You 

know, there are others, but I think the key element—and that’s 

why I say that, you know, the—this is an important part of the infrastructure, when it’s embedded in a sound regional innovation 

strategy. And that way you bring into it not just the physical component, whether it’s the real estate or a building, but you’re pulling 

together venture capital, seed capital, you’re building in technical 

assistance from serial entrepreneurs that can help creative people 

figure out the best way to move an idea into an actual business. 

It’s the support of shared facilities, when appropriate, particularly 

in biotech. It’s a combination of all these different elements that 

create the entire ecosystem that supports innovation economy. 

Senator JOHANNS. From your perspective, give us some advice, in 

terms of what role we might play, here at the national level. You 

know, these are going to be driven at the State level, local level. 

They will be the main partner, if you will, the—kind of, the controlling-interest partner. But, what can we do? If you were to give us 

some advice, what are some key elements we should be focused on 

as we think about our role here? 

Mr. FERNANDEZ. Well, I guess I would just go back to what was 

included in our current budget proposal, which—and so, my comments will be fairly limited to at least the EDA perspective on this. 

I think what we have to do is introduce into the Federal discussion a strong sense of commitment to the notion of regional strategies. Many folks referred to the work in the EU and other parts 

of the world, and it’s very focused on regional advantages. If you’re 

a small business in—you know, pick your town—and you’re trying 

to compete in a global marketplace, independently, that’s a much 

steeper hill to climb than if you’re embedded into a regional strategy where there are strength in numbers. So, I think keeping a 

focus on this idea of regional strategies is very important. 

At the EDA, we’re trying to, you know, focus the investments we 

have by using the regional strategies as a organizing principle for 

where our limited resources go into specific grant requests, because 

we know if it’s tied to that regional strategy, there are so many 

more opportunities to leverage other State and local support, but 

also private-sector support, and really build on the competitive advantages of that area. So, I think the regional component is very 

important. 

Senator JOHANNS. OK. 

Thank you, Mr. Chairman. 

Senator PRYOR. Thank you. 

Senator Nelson. 

Senator NELSON. Mr. Chairman, thank you again for your zeroing in on this subject of the research parks and EDA. And we’re 

blessed to have quite a few research parks; right now, ten and another two that are coming online in Florida. 

But, I want to confine my question to you about the EDA’s role 

in helping out the folks that are going to be dislocated at the Kennedy Space Center, and the fact that we do have the beginning of 

this research park there that also augments the very significant reVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00015 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
12 

search park over at the University of Central Florida, in Orlando, 

this new research park at the Kennedy Space Center, called ‘‘Exploration Park.’’ And given the fact that the new rocket is not going 

to be ready for another 6 years after the Space Shuttle is shut 

down, a decision that occurred as a result of budgetary decisions 

that occurred over the last decade, and now this dislocation of highly-talented, highly-skilled people, what are some of the things that 

you think that EDA might be able to do to help? 

Mr. FERNANDEZ. Well, you know, I guess, fortunately and unfortunately, depending on how you look at it, EDA has, you know, a 

lot of experience in dealing with plant closings and BRAC changes. 

So, there’s a wealth of experience, in terms of how to pull together 

some of the key institutions and develop renewed strategic plans. 

You know, as recent as October, I know the people in our Atlanta 

regional office were having discussions with the Technological Research and Development Authority to look at potential proposal to 

expand the original incubator, which EDA actually helped fund, 

back in 2005. The Brevard Workforce Development Board, along 

with the TRDA, in June 2009, began a major study of some of the 

workforce issues around the NASA facility, and that was an EDAfunded study. So, that work has already begun, in terms of assessing some of the human capital and how to develop a longer-range 

strategy to, kind of, create the businesses and accelerate some of 

the job opportunities for the existing workforce. 

You know, and it’s kind of a—one of the points I wanted to mention, that I did not get out very clearly, in the context of the previous question, is that, you know, when we look at what makes a 

science or research park successful, another very critical piece of it 

is the workforce and building into the strategies, you know, the 

traction of the right kinds of entrepreneurial activities that feed 

into the existing workforce. So, that’s clearly a very important ingredient, among these others, that make a successful research park 

environment. 

Senator NELSON. Well, are there any particular things that come 

to mind, in the Kennedy Space Center’s assets that could be leveraged to increase the private-sector jobs and to attract jobs? 

Mr. FERNANDEZ. Well, clearly, there’s an incredible amount of research talent and engineers and scientists. I won’t pretend that I 

know the best roadmap today, in terms of how to connect all the 

dots that are part of that industry, but there have been, like I said, 

the—they are working together at the local level, already, to start 

identifying the most strategic way to leverage those assets. 

Senator NELSON. If we just leave it up to those local institutions—and I’ve been involved in getting appropriations, in order to 

carry out what you said, with the TRDA and the Brevard Economic 

Workforce Board—but those are studies. And studies are one thing. 

Moving jobs is another thing entirely. 

Mr. FERNANDEZ. Yes. 

Senator NELSON. So, how do we get from a study over to the next 

thing? 

Mr. FERNANDEZ. Well, I mean, the truth of the matter is, a lot 

of it really does depend on those local stakeholders. We can provide 

technical assistance. We can help identify and build strategies. But, 

ultimately, it is the private sector and the local players that have 

13 

to implement it. And so, hopefully, we can provide the—some of the 

resources to help build the plans. We can seed some of the investments, whether it’s in additional workforce investments, whether 

it’s in support of the research, or even into the infrastructure. But, 

you know, they have to fit into that local strategy if it’s going to 

have traction that’s sustained over the long haul. And we’re—you 

know, I think we can build a toolkit that can help folks rebuild 

their, you know, new future, but the local actors ultimately have 

to be highly motivated and engaged to build that future. 

Senator NELSON. And that seeding of the investment, seeding of 

the infrastructure; that would apply as well to the research parks. 

Mr. FERNANDEZ. Absolutely. And, you know, we—at EDA, we 

certainly have funded quite a bit of infrastructure as part of research and science parks—incubators, graduation facilities, et 

cetera. And, you know, if we embed that into a well-developed regional strategy, it can be a great way to accelerate immediate job 

growth while also building the right foundation for more sustained 

effort. 

Senator NELSON. Thanks. 

Senator PRYOR. Senator Begich. 

Senator BEGICH. Thank you very much. 

I want to kind of stick on the bill, for a second, if I can, just, kind 

of, some technical comment or questions. 

First, obviously you’ve read the legislation, gone through it, to 

some degree. What do you believe—do you think, first, that your 

department, with the current resources you have and the ones that 

may be allocated through this legislation, will be enough for you to 

have the expertise and be able to move requests through in a timely manner, and also set up the program? 

Mr. FERNANDEZ. Yes—— 

Senator BEGICH. What do you think some of the challenges might 

be that we need to be aware of? 

Mr. FERNANDEZ. Well, you know, to—I mean, candidly, the bill 

has not been fully vetted through the DOC and OMB structure, so 

it’s a little difficult to get too technical at this point, but we certainly are prepared to do that as the bill moves forward. 

I think the—in terms of the personnel, I’m confident that we 

have the expertise and the capacity to implement a program like 

this. And if the bill moved forward, we would certainly want to 

work with committee staff and others to develop the right kind of 

application mechanisms and metrics to make it a very strong program. 

Senator BEGICH. Do you—in recognizing your statement that it 

hasn’t gone through its whole process on your end of it, do you 

have any red flags that have popped up, just from the cursory review or discussion within your area? I understand there’s more vetting to continue. 

Mr. FERNANDEZ. Well, in a general way. The initial conversations 

I’ve had with Chairman Pryor have revolved around just ensuring 

that the—as part of the process—and I think it’s something that 

can be dealt with in the context of developing the applications—it’s 

to ensure that you really have that kind of strong public-private 

governance structure—— 

Senator BEGICH. Right. 

14 

Mr. FERNANDEZ.—so that if—you know, I mean, the private sector and the public sector are going to have slightly different objectives, in terms of how to look at investments in the science part. 

If it’s a fully—if it’s strictly a private-sector investment, their motivations might be a little different than if it’s a broader regional 

public-private partnership. And I’m not saying that’s a—you know, 

it’s a better motivation, or a worse; it’s just different. 

Senator BEGICH. Just have different criteria, potentially, in the 

decision. 

Mr. FERNANDEZ. Yes, in terms of—— 

Senator BEGICH. Yes. 

Mr. FERNANDEZ.—timelines and motivations, in terms of how 

they define success. And—but, I think the important thing is to ensure that you have that broad governance structure of a public-private partnership that’s looking at the entire regional strategy for 

innovation-led economic development, so that you’ve got the workforce folks involved, the research folks involved, the business community involved, so it’s not just entirely focused on the real estate 

component, but the much broader regional strategy. 

Senator BEGICH. Very good. 

And if I can follow up, because the Chairman pointed out, and 

I appreciate that it—you know, I love mayors, and I think they 

know exactly what they’re doing, and so, I appreciate—I had to do 

that for my Governor friend, next to me. 

[Laughter.]. 

Senator BEGICH. But, knowing that—one of the things you mentioned to Senator Nelson’s commentary and concern that he has, 

how does EDA engage in local community when they’re trying to 

figure it all out, in the sense of a situation as he laid out. How— 

where does EDA play a role? When do they play a role?—I guess 

is the first point. And then, how do you see their role? 

Mr. FERNANDEZ. Well, you know, EDA is administered through 

six regional offices, and we have economic development representatives assigned to various regions within regions. And so, their daily 

activities involve maintaining a strong network and ongoing communications with many of the people on the ground throughout the 

region, so that they—like in the case of—that Senator Nelson mentioned, I mean, those conversations about what to do when the program slows down, they start well before the program slows down, 

because they have that kind of on-the-ground intelligence. And in 

that context, there are lots of opportunities to provide consultation, 

to point folks in directions, not just in terms of the programs that 

EDA is engaged in, but the entire Federal Government. You know, 

we’re pressing very hard—and I’m sure you’ve heard this before, 

but the Obama Administration is absolutely committed to blowing 

up silos and looking at these things much more from a place-based 

solution, not individual programmatic solutions, but how do we 

marshal the resources of all the relevant Federal agencies to come 

in and engage. And, you know, the people at EDA, in the regions, 

are professionals, understand the wide array of Federal programs 

that can be helpful. 

So, we do that. We do some, you know, networking, matchmaking, seeding of strategic thinking, and try and support those 

projects on an ongoing basis. And in many cases, as was mentioned 

15 

with the incubator near the Kennedy Center, you know, we did the 

initial investment 5 years ago, but once an investment’s made, we 

don’t—usually that relationship doesn’t stop. There’s ongoing communication, and we look for other opportunities to leverage investments. 

Senator BEGICH. Very good. Thank you. My time has expired, but 

thank you very much. 

Mr. FERNANDEZ. Thank you. 

Senator PRYOR. Thank you. 

Senator Warner. 

Senator WARNER. Thank you, Mr. Chairman. 

I just want to make one comment and one very brief question. 

The comment is just that I’m very supportive of your effort, in 

terms of these innovation centers and research capabilities, and 

commend, again, Administrator Fernandez for some of the efforts 

that EDA has taken in my State, in Virginia. 

But, you know, one question I’d love us to think about—I’m not 

sure this is the right forum, and I’m not going to put the Administrator on—but, you know, I used to be in the venture capital business for years, and be one of those folks who tried to help fund 

those innovations as they came out of those research parks, 

through that valley of challenge or death, ’til they get to the point 

where they’re sustainable and, you know, one thing, as an overall 

system, we’ve seen in the last decade, I believe, is an enormous migration that is already in the tax code, but it seems to have been 

expanded, of debt over equity. And, you know, why would anybody 

go innovate anymore? Why would anybody go and be an entrepreneur and—if you can go create some financial engineering instrument on Wall Street? And I’ve nothing against Wall Street, 

but—you know, but if—you can supposedly get much better guaranteed returns, supposedly with no risk—and how we rebalance 

our financial system to give a little more—to take away some of the 

preference of overleveraged debt to equity. We’re going to need 

more equity. As much as EDA can do, we’re going to still need people that will then be willing to go be innovators, go be entrepreneurs. And then having a path to success that existed in the 

1970s, 1980s, and 1990s, and, I think, unfortunately has—if we 

look around our country, in the last decade, has not been as prevalent as—and in—both from the kind of quality of talent becoming 

entrepreneurs and, kind of, the system and where the financing 

has gone. I—just a comment. 

And my quick question is, I would love for you to take a moment—and I know this is more about the Chairman’s bill and innovation centers—but, if you wouldn’t mind taking a moment and 

commenting on the initiative we’ve been working on, in terms of 

having this site location initiative, to try to support—particularly 

bring offshore jobs back into America, that can supplement local 

economic development efforts. I’d appreciate any comments on that. 

Mr. FERNANDEZ. Thank you, Senator Warner. 

The offshoring concept, I think—you know, I guess one of the 

things that strikes me about it is that, not only is it a mechanism 

to potentially bring back that sector of employment to the United 

States, but bring it back into some of the most highly targeted 

areas, in terms of distress. So, it could be a very meaningful way 

16 

to leverage the competitive advantages of some of these rural areas 

while also supporting the broader national agenda, in terms of 

bringing those kinds of jobs back to the United States. 

We’ve not delved deeply into the vetting process on that particular bill, as well. So, I think I probably need to leave my comments there. But, we certainly look forward to continuing the conversation. 

Senator WARNER. Look forward to working with you. 

Thank you, Mr. Chairman. 

Senator PRYOR. Thank you. 

Senator LeMieux. 

STATEMENT OF HON. GEORGE S. LEMIEUX, 

U.S. SENATOR FROM FLORIDA 

Senator LEMIEUX. Thank you, Mr. Chairman, and thank you for 

holding this meeting today and focusing on this important issue. 

Administrator, I want to follow up on something that Senator 

Warner just mentioned, this death valley issue, where entrepreneurs—you have scientists at the bench coming up with a good 

idea, but the venture capitalists want to see a prototype, and that 

middle section there, where good ideas go to die. We need funding 

for those matters. I just had, recently, some folks in my office affiliated with the life sciences industry—which I’ll also throw a question to you about in a minute—and University of Florida, which 

does very good at tech transfer in Florida—and they tell us that, 

‘‘If we could just get some more funding in that middle area, that 

we could bring so many more inventions and so many more jobs to 

our State.’’ And I wonder if the administration has a theory about 

that. Is that a ripe area for us to be focusing on? 

Mr. FERNANDEZ. Yes, absolutely. You know, within the EDA, we 

don’t directly engage in direct investment in private companies. 

We’ve supported revolving loan funds that have the potential to 

serve that purpose. There are certainly other parts of the Federal 

Government that are focused on this very clearly. I mean, the SBA 

has had a number of discussions about how to accelerate access to 

capital. Our Secretary of Commerce has, you know, launched his 

Office of Innovation and Entrepreneurship. These are all very 

front-burner issues for the administration, although it’s outside the 

focus of the EDA. 

Senator LEMIEUX. Right. I am following up on your thread of 

eliminating silos and having everyone work together. I hope that 

that’s something that you can bring back, because it is a frustration. We—folks are having a frustration with the SBA. I’m not 

casting aspersion as to which administration, but it just doesn’t 

seem like it’s working as quickly as it could have. And to the extent 

that you can bring that message back, I would appreciate it. 

Mr. FERNANDEZ. Will do. 

Senator LEMIEUX. I also want to speak to you—Senator Nelson 

spoke a lot about the space industry and concerns there—I want 

to talk to you about the life sciences industry in Florida, and research parks. We are very fortunate that Florida is becoming an 

emergent life science power, a bioscience power. But, the challenge 

that we have—and this goes to your idea of a regional strategy, 

and maybe you could just give us some advice for Florida—is that 

17 

these life science centers are spread out all through—across the 

state. And I’ve talked to venture capitalists—it’s something I focused on even before my time in the Senate—and they’re challenged, in Florida. They’re challenged by trying to get around the 

state. We’re a big state. We’re geographically disparate. It’s hard 

to get from one place to the other. We’ve got University of South 

Florida doing life science, we have University of Florida, we have 

Burnham in Orlando, we have Torrey Pines, we have Scripps, Max 

Planck, down in Palm Beach County, and the University of Miami. 

These are tough places to try to find your way around, as opposed 

to other places in the country, where you can do some one-stop 

shopping. 

What advice do you have for emerging industries in different 

states, trying to focus on particular areas of the market, about how 

they can work together to establish these clusters? Because I think 

our challenge down in Florida is that if you put all of these locations together, we’d be a super powerhouse. It’d be a life sciences 

Silicon Valley. But the fact that they’re disparate makes it challenging. 

Mr. FERNANDEZ. Yes, and I think—you know, part of that is developing this—if you will, a public-private partnership that serves 

as an umbrella organization that facilitates the cooperation and integration as strategy among those various regions or parts of your 

state. You know, we provide, and can provide, a lot of the technical 

assistance to facilitate those conversations. That’s what we’re seeing work elsewhere. And there’s no magic bullet here. But, if you 

can get all the right people at the table to start addressing those 

issues and looking at how they can work in a collaborative way, 

they can identify who’s doing what and where they can work together and not compete against each other in certain ways, I think 

you make tremendous progress. 

I mean, not all—you know, there’s an opportunity to do some of 

these things virtually, as well, as we’ve seen with some other examples—the folks who are up in Cleveland, with JumpStart, very 

successful organization that’s really designed to bring together venture capital as well as the innovators, to accelerate job creation. 

They’ve done a phenomenal job of bridging geography and using, 

you know, some virtual mechanisms, as well. 

But, I think, at the end of the day, the most important thing is 

to get people together and start building those strategies among 

the various stakeholders. 

Senator LEMIEUX. I appreciate your answers. 

Thank you, Mr. Chairman. 

Senator PRYOR. Thank you. 

Senator Udall. 

STATEMENT OF HON. TOM UDALL, 

U.S. SENATOR FROM NEW MEXICO 

Senator UDALL. Thank you, Chairman Pryor. 

And let me, at the beginning, just ask to put my statement in 

the record, and then get directly to—— 

Senator PRYOR. Without objection, thank you. 

Senator UDALL.—questions—questioning, here. 

[The prepared statement of Senator Udall follows:] 

18 

PREPARED STATEMENT OF HON. TOM UDALL, U.S. SENATOR FROM NEW MEXICO

I want to thank Chairman Pryor for holding this hearing today and for his leadership in promoting innovation and job growth through stronger science parks. 

Senator Pryor’s bill to promote science parks, the ‘‘Building a Stronger America 

Act,’’ would help research parks across America by providing grants and loan guarantees. These are appropriate investments to spur innovation and promote technology transfer. 

New Mexico is home to five science parks that employ more than 4,200 people. 

I am proud that Sandia Science and Technology Park, located in Albuquerque, was 

recognized by the Association of University Research Parks (AURP) as the Nation’s 

‘‘Outstanding Research Park of the Year’’ in 2008. 

Sandia Science and Technology Park helps private firms commercialize technology 

developed at nearby Sandia National Lab. This science park helps almost 30 firms 

that employ over 2100 workers at the science park. 

In addition, the Sandia science park has indirectly created over 5,000 jobs. These 

are very good jobs, too. The average wage at this science park is about $70,000 a 

year, which is almost twice the average wage for the surrounding region. 

This is just one example of how research parks in New Mexico and across the 

country help create good jobs and fuel American economic growth. 

However, there are many challenges to building successful ‘‘innovation clusters’’ 

or regional hubs for high technology or other strategic sectors. Not every science 

park has been as successful as those hubs at Stanford in Silicon Valley or the Research Triangle in North Carolina. America also faces stiff competition from other 

countries that are eager to create innovation clusters of their own. 

So, I look forward to hearing from Assistant Secretary John Fernandez and all 

our witnesses today about what policies will best assist science parks and spur economic growth in all areas of the country. 

Senator UDALL. And thank you for holding this hearing. A very 

important subject, science parks, and I’m glad you’ve focused in on 

this. And I also think, Mr. Chairman, you have a very good bill— 

S. 583, Building a Stronger America Act—and I’d like to be included as a co-sponsor on your bill, because I think—— 

Senator PRYOR. OK. We’ll take care of that. 

Senator UDALL.—it’s a fine piece of work. 

Senator PRYOR. Thank you. 

Senator UDALL. The—your testimony, Assistant Secretary 

Fernandez, on science parks, talked about the Sandia Science and 

Technology Park. And you’re probably aware, they just received an 

outstanding award, called the ‘‘Outstanding Research Park of the 

Year,’’ which I’m very proud of. Sandia is in Albuquerque, New 

Mexico. And it’s one of these quality institutions that’s always out 

there on the cutting edge. 

And I’m wondering—you know, your testimony cites that the 

EDA has invested $3 million to support this leading science park, 

which, last year, this award was given to—and I’m wondering how 

that compares. You know, when we talk about Europeans and 

other countries investing, how much are they investing? What are 

the comparative numbers there, and what do they tell us? 

Mr. FERNANDEZ. Well, you know, I can’t tell you that. But, I 

know that there are several gentlemen, behind me, who are coming 

up here, who have some very detailed numbers on that, from what 

I would suspect. 

But, the interesting thing about what—at least in part what I’m 

hearing, is that while there’s a very—I guess—I can’t talk about 

the numbers, specifically, but I can talk about the policy framework. And relative to the United States, at least in the European 

community, I mean, you have, you know, Cabinet-level, regional 

policymakers. And they look at things in that kind of regional noVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00022 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
19 

tion, which is a big difference from the way we are organized here. 

So, there’s a focus that’s different. 

In terms of the specific investments, again I’d have to get back 

to you on that, Senator. But, I suspect that one of the folks behind 

me has got that in their testimony. 

Senator UDALL. OK. Well, the—and I’m sure they do. I—and the 

comparison, I think, is that China and Hong Kong and France and 

others—and we’re going to probably hear from them—are investing 

a lot more. And I think that says a lot about where we should be 

heading. 

One of the important things that we try to do in New Mexico, 

and push Sandia National Laboratory in this area, is the area of 

technology transfer. So, you’re taking research institutions and trying to—such as the national labs, and then trying to get that technology out in the community. And I’m wondering what else the 

EDA can do to promote science parks as incubators and engines for 

economic growth and job creation in regions across the country, 

and especially promoting technology transfer and commercialization. 

Mr. FERNANDEZ. Well, again, Senator, I think we’re—the role we 

try and play is to, at the front end, ensure that—either through a 

process that we fund or just in recognition of processes that have 

already happened, ensure that there’s a really well-grounded strategy in place to leverage the investment. And, as I had mentioned 

before, it’s not a ‘‘field of dreams’’ kind of approach to economic development; you have to have the other complementary activities 

and investments in place so that those facilities really do produce 

the kind of job creation that you need. 

So, I mean, if the strategy’s there, we can build on it. If it’s not, 

we can help provide technical assistance to build a strategy. And 

then, where necessary, get in and actually invest specifically in the 

facility. 

I’ll just make one other comment, if I could. And, you know, 

the—Senator Warner was talking about, sort of, the differences, in 

terms of how our economy is changing, and one of the big differences is that many of our large companies, you know, aren’t 

building the massive R&D labs within their own facilities anymore. 

And they’re relying heavily on small entrepreneurial scientists who 

are developing some of the base research and early commercialization activities. And then, as those products or those ideas move forward, they acquire and bring them into the fold for, you know, further development and distribution. In the context of that kind of 

business model, investing in science parks, investing in wetlabs, investing in incubators, graduation facilities, that’s all very critical 

infrastructure for the 21st century economy. And that’s why I think 

the science parks and other kind of work we’re doing with incubators and graduation facilities is absolutely essential. 

Senator UDALL. Thank you very much. 

Thank you, Mr. Chairman. I yield back. 

Senator PRYOR. Thank you. 

Senator Klobuchar. 

20 

STATEMENT OF HON. AMY KLOBUCHAR, 

U.S. SENATOR FROM MINNESOTA 

Senator KLOBUCHAR. Thank you very much. And thank you, Senator Pryor, for holding this important hearing. I know you’ve been 

long advocating for this important subject, and trying to get more 

research parks out there. 

As Chair of the Competitive Innovation and Export Promotion 

Subcommittee, I’ve traveled all around my State to try to figure out 

how can we increase jobs and, particularly, high-end jobs. And one 

of the things I’ve really settled upon is this export market, and 

with the weak dollar and the possibilities there. But, the only way 

we’re going to get that export market going is not just to have the 

available resources so small and medium-sized businesses can access these, but it is also to have the products and the development 

and the things that we need to get there. And I come from a State 

that produced everything from the Post-it note to the pacemaker. 

So, we truly believe in science and research and technology, with 

Medtronic’s pacemaker starting out in a garage and growing into 

a worldwide global company. And a lot of that was, you know, risks 

and taking the risk of doing research and putting the money into 

it. So, I want to thank you for this. 

I guess my question here, Mr. Fernandez, is, first of all, To what 

extent do you think that, when you look back—and we used to 

have those AT&T, General Electric, IBM labs, during the heyday 

of the beginnings of research in this country—to what extent can 

research parks or other regional tech collaborations pick up where 

those industrial labs left off? 

Mr. FERNANDEZ. Well, as I mentioned, I think that’s a very important part of the new, kind of, business model, is to provide those 

facilities, to invest in those facilities where there’s some shared 

risk up front, and bring down the cost, in some cases, for entrepreneurs. You know, particularly with the wetlabs and some of 

those kinds of facilities, it’s very difficult to go out and get financing, to—if you wanted to build those new ideas within your own, 

you know, facility, as an entrepreneur, it can be extremely difficult 

to get financing to do. 

Senator KLOBUCHAR. Right. You know—— 

Mr. FERNANDEZ. And so—— 

Senator KLOBUCHAR.—so I heard some of my colleagues mention, 

obviously, other countries—China and Japan and what they’ve 

done. Do you think that they’re doing better than we do, in terms 

of developing research capabilities? What can we learn from them? 

Are we falling behind? 

Mr. FERNANDEZ. I think that, you know, America’s position to 

continue to be a strong leader in innovation—we—you know, many 

of the investments that are made abroad are built on the models 

we created. And we’ve not lost the leadership, but it’s threatened. 

And it’s important that we ramp up our commitment and investment now, to maintain that leadership. 

Senator KLOBUCHAR. A recent National Research Council Report 

found that soft infrastructure, the human capital that encourages 

networking and entrepreneurship, is often as important as physical 

facilities in ensuring success, especially in today’s economy. How do 

21 

we encourage and maintain those important relationships as we 

look at these research parks? 

Mr. FERNANDEZ. I’m glad you raised that question, Senator, because that’s often underappreciated, and that’s clearly a place 

where EDA can play very effectively, in terms of investing in that 

soft infrastructure. And that’s—you know, part of my job, I think, 

is to try and help broaden the definition of ‘‘infrastructure,’’ particularly infrastructure in the context of an innovation economy. 

And that soft infrastructure—you know, seeding those public-private partnerships, helping to build that structure in place that ensures effective collaboration and cooperation and networking— 

that’s very important infrastructure. And in many cases, especially 

with the regional strategies, you start bridging across all kinds of 

various jurisdictional lines within a State, across State borders. It’s 

very difficult to find folks willing to finance those kinds of soft infrastructure investments. And that’s certainly an area where EDA 

can play a very important role. And that’s why we’re trying to organize our entire framework for sustained economic development 

around these regional strategies for innovation. 

Senator KLOBUCHAR. Now, one last question. A Minnesota private developer is working to launch a biomedical-oriented research 

park outside of Rochester—obviously, the home of the Mayo Clinic—it’s in Pine Island, Minnesota—with the goal of recruiting researchers from the University of Minnesota, as well as Mayo Clinic 

and other Minnesota biotech companies and medical device manufacturers. What role do you see private developers would have in 

the construction and promotion of research parks? In other words, 

if private developers build these parks, will they come? 

Mr. FERNANDEZ. I guess, depending on—well, I—I guess it depends. You know, if they have a big enough balance sheet and 

they’re going to seed research and VC-type activities to other companies, I think they would come. But, I think, again, any—whether 

it’s a publicly-funded research park or a private research park, if 

it’s going to have sustained success, there needs to be a network 

of other kinds of stakeholders that are integrated into their strategy, from workforce, especially, to higher ed, to community colleges, 

the business community, the VC community, and others. 

So, I think a private research park definitely can be very successful, but I think it still has to have all those essential ingredients 

that bring the stakeholders from the region into play. 

Senator KLOBUCHAR. Thank you very much. 

Senator PRYOR. Thank you. 

I want—Secretary Fernandez, thank you for being here. 

Mr. FERNANDEZ. Thank you. 

Senator PRYOR. You’ve been great. I really appreciate your time 

and your willingness to be here and change your schedule for us. 

Thank you very, very much. 

I’m going to go ahead and introduce the second panel now. And 

what I thought I would do is go ahead and do the introductions of 

the individuals on the second panel, as we—as I do the introductions so that—I mean, as they take their seats, so that we can do 

both at once, and save everyone a little time here. 

22 

Let me start by saying that I would very much appreciate everyone keeping their opening statements to 5 minutes, if possible. 

That helps speed things along. 

The first witness we have on the panel is going to be Dr. Charles 

Wessner. He’s Director of the Program in Technology Innovation 

and Entrepreneurship at the National Research Council of the National Academies. He is recognized nationally and internationally 

for his expertise on innovation policy, including public-private partnerships, entrepreneurships, early stage financing for new firms, 

and the special needs and benefits of high-technology industry. 

Second, we have Mr. Brian Darmody. He is the Associate Vice 

President of Research and Economic Development at the University 

of Maryland and President of the Association of University Research Parks. He’s the principal author of ‘‘The Power of Place,’’ a 

national policy document focused on technology-led economic development, and serves as co-principal investigator on the $3.5-million 

Proof of Concept Alliances, a Department of Defense-funded commercialization project. 

Next, we have Mr. Jonathan Sallet. He’s the Managing Director 

of The Glover Park Group, but is testifying in his capacity as coauthor of ‘‘The Geography of Innovation: The Federal Government 

and the Growth of Regional Innovation Clusters,’’ published by 

Science Progress at the Center for American Progress. And as I understand it, he also used to be a big celebrity on the Brown campus 

radio station. 

Mr. SALLET. It’s a long time ago. 

Senator PRYOR. And last, but certainly not least, we have Dr. Anthony Townsend. He’s a Research Director for the Institute of the 

Future. His work focuses on several interrelated topics: mobility 

and urbanization, innovation, science and technology parks, and 

economic development. 

So, I want to thank everyone for being here. And I would ask you 

to keep your opening statements to 5 minutes, if possible. 

Dr. Wessner, would you start for us? Thank you. 

STATEMENT OF CHARLES W. WESSNER, PH.D., DIRECTOR, 

TECHNOLOGY, INNOVATION, AND ENTREPRENEURSHIP, 

BOARD ON SCIENCE, TECHNOLOGY, AND ECONOMIC POLICY, 

NATIONAL RESEARCH COUNCIL, THE NATIONAL ACADEMIES 

Dr. WESSNER. Thank you very much. 

Please let me know if the audio is not what you need. 

The—I thank you for the honor of being able to speak before you 

today. As mentioned, I direct a program on technology, innovation, 

and entrepreneurship. 

At the National Academies, we’ve recognized the importance of 

targeted government promotional policies for innovation around the 

world. And, consequently, we have been studying foreign innovation programs, and comparing them to U.S. programs. 

Only too often in this town, strangely enough, we talk about the 

global economy, and then we reason, in completely local, often inside-the-Beltway, terms. And I think it’s important, as a last resort, to do what we would do with any good football team, and that 

is, look at what the opposition is doing. And that is, in essence, 

23 

what we’ve been focused on in our program on comparative national innovation policies. 

One of the basic findings we have is that there is an enormous 

growth in locational competition. We have jobs, we have technologies, we have industries, and the rest of the world—our friends 

and competitors—are willing to take them from us. And if we don’t 

work to avoid that, that is exactly what will happen. 

Countries as diverse as China, Singapore, France, and Mexico 

are undertaking very substantial national efforts to develop research parks of significant scale and significant scientific and innovative potential. One of the Senators, Senator Udall, just a few 

minutes ago, asked about the levels of investment, and was there 

more overseas. I think the short answer would be that where we 

invest millions, our colleagues are investing billions. We’ll have to 

decide how that comes out in—over time. 

But, the—China, in particular, is a leading practitioner of research-park strategy for economic and regional development. They 

have made enormous investments in order to grow and become 

internationally competitive. 

If possible, I’d just like to bring to your attention—the scale 

there is really significant. On the green side, that’s one park; that’s 

54 parks. We, on the other hand, have one park that approaches 

that size. So, I just assume that we’re 50 times smarter than our 

Chinese friends, or we’re being out-invested very substantially. The 

park, where you can barely see it, is the average size of most American parks. 

Now, that doesn’t mean—I don’t mean to imply that we should 

invest exactly the way our Chinese colleagues are investing. But, 

when you take, for example, the Zhong Guan Cun science park outside of Beijing, there are some 20,000 enterprises, with nearly a 

million employees. The park has attracted almost 10,000 ‘‘sea turtles.’’ These are people who have worked in the United States or 

elsewhere in the world, who are first-quality researchers, administrators and managers. 

The contribution of parks, I think you understand. Whether it’s 

Dr. Dan Mote, the President of the University of Maryland, who 

emphasizes the key role that it helps the university to reach beyond its walls and help develop the region, or President Barker of 

Clemson University, came to see us, as part of this conference that 

is captured in this volume here, where the Clemson University 

ICAR technology park has been instrumental in attracting—in 

helping to keep technologically advanced manufacturing in the 

United States. 

Interesting enough, the National Cancer Institute has been 

working on a park in Fredericksburg. We provided guidance, early 

on, for this very successful Sandia park. Also, for a park that 

hasn’t been mentioned yet today, the NASA Ames park, where 

there were wide-scale predictions that that would never work. It 

has been a massive success. 

I’m always amused when people say that only losers place themselves in science parks. I’m not sure that Google and HP would be 

included in that category. They’re both there. 

The U.S., in short, has led the way in park creation and generation of high-tech clusters. As is often the case, we have not followed 

24 

up on that success. But, a message of hope that I would bring you 

is that, in the past when we got things wrong, we redoubled our 

efforts, as in the semiconductor industry, where we set up 

SEMATECH to emulate the effects of the koretsus in the 1980s. 

Others have imitated us since then, on a massive scale. 

And I want to stress that we don’t need to do exactly what our 

competitors are doing, but we do need to recognize the scale, the 

focus, the commitment, and the massive investments that are being 

made. And the question is, What can we do? And I’d be happy to 

discuss more about that in the discussion. 

But, just in closing, I would like to commend this volume, which 

captures what much of the rest of the world is doing, and I would 

also like to extend a small thanks to my colleagues—who is here 

today, Dr. Sujai Shivakumar, behind me, who also played an instrumental role in developing this volume. 

Thank you, sir. 

[The prepared statement of Dr. Wessner follows:] 

PREPARED STATEMENT OF CHARLES W. WESSNER, PH.D., DIRECTOR, TECHNOLOGY, 

INNOVATION, AND ENTREPRENEURSHIP, BOARD ON SCIENCE, TECHNOLOGY, AND

ECONOMIC POLICY, NATIONAL RESEARCH COUNCIL, THE NATIONAL ACADEMIES

Good afternoon, Mr. Chairman and members of the Committee. My name is 

Charles Wessner. I direct the program on Technology, Innovation, and Entrepreneurship at the National Research Council’s Board on Science, Technology, and Economic Policy. The Research Council is the operating arm of the National Academy 

of Sciences, National Academy of Engineering, and the Institute of Medicine of the 

National Academies, chartered by Congress in 1863 to advise the government on 

matters of science and technology. 

Recognizing the importance of targeted government promotional polices relative to 

innovation, the National Academies Board on Science, Technology, and Economic 

Policy is studying selected foreign innovation programs and comparing them with 

major U.S. programs. My statement today captures the insights and observations 

made by leading national and international experts during a high-level conference 

at the National Academies that focused on best practices among science and technology research parks around the world. 

The Growth of Locational Competition 

There is an intense and growing competition among nations and regions of the 

world for economic activity that creates high-value jobs and improves living standards 

• Research parks are seen increasingly as a means to create dynamic clusters 

that accelerate economic growth and international competitiveness. 

• Today, countries as diverse as China, Singapore, France, and Mexico are among 

those undertaking substantial national efforts to develop research parks of significant scale and scientific and innovative potential. 

China is a leading practitioner of the research parks strategy for economic and 

regional development. 

• China’s large science and technology industrial parks symbolize that nation’s 

strong determination to grow and become internationally competitive through 

significant national and regional investments in science-based economic development. 

Both the absolute number and scale of Chinese research parks are remarkable. 

• China’s 54 state-level science and technology industrial parks are designed to 

help develop the industrial base for advanced, high-growth industries in electronics and information technology, new materials, renewable energy, and biomedicine. 

• The average major science park in China is over 10 million acres. By comparison, the average American research park is 358 thousand acres. Research Triangle Park, one of our largest, is 7 million acres in size. 

25 

1 ‘‘Average North American Research Park’’ data are from ‘‘Characteristics and Trends in 

North American Research Parks: 21st Century Directions,’’ commissioned by AURP and prepared by Battelle, October 2007; ‘‘Average IASP Member Park’’ data are from the International 

Association of Science Parks annual survey, published in the 2005–2006 International Association of Science Parks directory. 

Figure 1: Research Parks in Comparative Perspective—an Issue of Scale 1

The growth of Zhang Jiang High Tech Park (ZHT) near Shanghai is illustrative. 

• Beginning almost from a clean slate, Chinese authorities encouraged more than 

30 research institutions to team up with R&D centers of multinationals to anchor the park site. Some 200 small and medium sized Chinese high-tech companies have joined these large research centers. 

• Outside the park, the Shanghai Jiao Tang University and Fudan University 

contribute to the park’s 8,600 strong workforce of scientists and researchers 

• The park also benefits from national polices to attract Chinese overseas scientists back home with low rent, tax breaks, and assistance with living needs. 

There were over 250 such ‘‘sea turtles’’ in 2004 alone. 

• The Chinese government is also a major financial supporter for biotechnology 

companies in ZHT Tech Park. This includes: 

• Grants from the National Technology Innovation Fund for SMEs. 

• The establishment of the Shanghai Pudong New Area Venture Fund to attract additional venture capital. In 2006, this amounted to more than $2.5 billion in venture funding for the ZHT Tech Park. 

The Zhong Guan Cun Science Park in Beijing is another example of the scale of 

Chinese efforts. 

• The park hosts over 20,000 enterprises and 950,000 employees, receiving total 

income of 850 billion Yuan (about US$ 124 billion). More than 800 enterprises 

among these each earn $15 million or more in revenue. 

• The park has attracted almost 10,000 ‘‘sea turtles,’’ who have set up 4,200 companies in Zhong-guan-cun Science Park. 

To the extent that they are effective in achieving their goals, these large-scale, 

well-funded research parks have the potential to enhance China’s capabilities in 

leading technological sectors 

The Contribution of Research Parks 

Research parks are widely seen, both in the United States and abroad, as an effective pubic-private partnership tool to increase the return on a nation’s investment 

in research and development. 


1209WESS1.eps
26 

• According to Dr. Dan Mote, President of the University of Maryland, research 

parks can play a key role in helping the university reach beyond its walls and 

help develop regional innovation clusters. 

• Similarly, President Barker of Clemson University sees research parks as playing a key role in promoting university-industry collaborations. He cites the 

Clemson University-International Center for Automotive Research (CU-ICAR) 

as a positive example of how such collaborations can help support technologically advanced manufacturing in the United States. 

• Interestingly, leaders of national laboratories, such as Sandia, NASA-Ames and 

the National Cancer Institute, have all found that research parks are an important tool for advancing their missions by building and maintaining ties to the 

private sector, generating greater returns on existing Federal facilities and capabilities, and helping to grow the local economy with well-paid jobs. 

By advancing the research and commercialization missions of universities and national laboratories, research parks often serve as catalysts for the development of 

innovative clusters. 

• The co-location of creative activity within the concentrated geographical area of 

a research park can help transfer of new ideas from universities and national 

laboratories to the marketplace. 

Research Parks in the United States 

The United States has led the way in park creation and the generation of hightech clusters. 

• In the United States, innovative clusters and parks have developed as a result 

of government action and private initiatives, and in some cases around government-funded laboratories. 

• One example is the high-technology industries that emerged and grew around 

the government laboratories and major universities in the Boston area. 

• In the case of Silicon Valley, multiple private industries interacting with a 

major university, and irrigated with substantial and sustained Federal funding, 

created powerful developmental synergies. 

• A third approach to the development of innovation clusters is through the deliberate creation of research parks, such as North Carolina’s Research Triangle 

Park, begun nearly sixty years ago, or the Sandia Research Park created in 

1999. 

Despite our early leadership, the United States is not making comparable efforts, 

nor are Federal programs supporting regional and state efforts to the same degree. 

• Investments by the world’s leading nations in research parks reflect an appreciation of their capacity to spur knowledge-based growth and a national commitment to enhance technological competitiveness through innovation. 

• While research parks such as those at NASA Ames and Sandia have recorded 

significant progress, and new Federal initiatives such as that of the National 

Cancer Institute are underway, the potential of research parks appears to be 

less appreciated by policymakers and the public in the United States. 

In the United States, support for research parks is principally undertaken by 

state and local governments with limited support by the Federal Government. 

• Given the limited scale of these efforts, some believe that the U.S. Government 

should pursue a more comprehensive strategy to support the growth of research 

parks and the benefits of economic growth and national competitiveness that 

they bring. 

Senator PRYOR. Thank you. 

Mr. Darmody. 

STATEMENT OF BRIAN DARMODY, PRESIDENT, ASSOCIATION 

OF UNIVERSITY RESEARCH PARKS AND ASSOCIATE VICE 

PRESIDENT FOR RESEARCH AND ECONOMIC DEVELOPMENT, 

UNIVERSITY OF MARYLAND 

Mr. DARMODY. I’m Brian Darmody, President of the Association 

of University Research Parks, and Associate Vice President of ReVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00030 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
27 

search and Economic Development at the University of Maryland. 

And thank you for inviting me to the Committee. 

AURP represents over 300 research parks and communities of innovation in the United States and the world, and works closely 

with other organizations representing technology, commercialization, seed, and angel investing, incubator development, and State 

economic development. And I think some of these topics have already been discussed in the questions by the Senators. 

Research parks account for over 750,000 jobs in North America, 

according to a recent study. This year, AURP held its annual conference in Vancouver, British Columbia, and I learned that, in 

1927, Charles Lindberg wouldn’t fly to Vancouver, because the airport was too small. Well, the Vancouver government immediately 

bought land and built a larger airport for the fledgling air industry, 

and that today serves as a major hub for international trade to the 

Pacific Rim and major—as a major job generator for British Columbia. 

We view—at AURP, we view research parks as the Nation’s 21stcentury innovation infrastructure, just as airports and railroads did 

in earlier centuries. Innovation is the key to job creation, and support for innovation is an important global competitiveness issue for 

the United States. 

The United States invented the research park model at Stanford 

in 1951. But, as Dr. Wessner has pointed out, other countries have 

copied this model, building large research parks, and attracting 

U.S. corporate research and development. So, we no longer lead the 

world in research parks. 

And, just to bring this—this is a atlas of innovation from—and 

the United States section in here is about 10 percent. I’ve clipped 

its pages. You can see how heavy this thing is. This is a worldwide 

atlas of innovation centers, and the United States comprises maybe 

10 percent of that. 

The—but, also importantly, the United States also invented university technology transfer, with the 1980 Bayh-Dole Act, linking 

our best-in-the-world research university system with technology 

commercialization. But, we no longer lead in this, either, as research universities in the United Kingdom now outperform U.S. 

universities on a proportionate basis, in terms of technology commercialization. 

We recognize, at AURP, that the U.S. Government is facing severe budget constraints, but we have a five-point plan to help harness more innovation and help build our research parks. Here are 

our five points: 

Number one, we support Senator Pryor’s bill on Building a 

Stronger America Act, to establish a loan guarantee program for 

research parks and park development. 

Two, taxes and financing of research facilities. We need to encourage development of privately financed facilities and support 

corporations to keep research and development in the U.S. Current 

IRS regulations on tax-exempt bonds need to be reformed to remove tests on technology licensing, to give greater flexibility to universities to negotiate with corporations on intellectual property. 

And in my testimony, I have the IRS regulation regarding limitations on tax-exempt bond and corporations. 

28 

Three, the Federal lab system. There has been some discussion 

about NASA and other Federal labs. Twenty-five billion dollars is 

annually spent in research and development activity internally 

within Federal labs. We’re suggesting that Congress create a new 

intermediary organization, modeled on best practices at States and 

at universities, such as the WARF Institute at Wisconsin, to more 

efficiently commercialize Federal intramural technology. 

When we—when the Congress wanted to help build—rebuild 

Pennsylvania Avenue, they set up the Pennsylvania Avenue Development Corporation. If we want to develop technology at Federal 

labs, we need to think about setting up an intermediary organization to take on that task. 

And we also need to work on programs to allow Federal researchers work more closely with the private sector. And I cite—we cite, 

in my testimony, an article I wrote regarding that. 

Fourth point, improving university technology commercialization. 

We have ‘‘cash for clunkers,’’ we need cash for commercialization. 

There are many ‘‘valleys of death’’ confronting university technology commercialization, but the first valley of death takes place 

when universities elect to take title to federally sponsor research 

under the Bayh-Dole Act. That’s at the very earliest stages. Often, 

unless an additional development work is done—and Senator Martinez mentioned that—these potential technologies lie fallow. 

So, developing a program to provide flexibility and recognize the 

cost of technology commercialization, and to develop proof-of-concept evaluations in Federal overhead rates or as a direct charge to 

research grants and contracts, would improve the success rate of 

university-owned technology development. That’s not an EDA 

issue, that’s really an issue about funding research at our Federal 

labs that goes to colleges and universities. And OMB Circular A– 

21 is a reference; it’s cited in my testimony. 

Finally, supporting science, technology, engineering and math— 

STEM programs—they traditionally focus on science and engineering skills. But, as has been mentioned, the key to employment 

growth in the U.S. is, we need to build careers and companies, not 

only jobs. Incubators and research parks are ideal places for new 

technology formation. Therefore, we want to suggest that, in the 

STEM idea, we also add the second ‘E’, so these would be STEEM 

programs—move from STEM to STEEM—so that would be science, 

technology, engineering, entrepreneurship, and math. Because, 

that philosophy is really what is embedded in the idea of research 

parks and research clusters. 

The Obama Administration singled—signaled its strong willingness to work on innovation, entrepreneurship, and we support 

what the EDA and others within the Administration are considering. And we also support, very strongly, Senator Pryor’s bill. 

I want to thank the Committee. 

[The prepared statement of Mr. Darmody follows:] 

PREPARED STATEMENT OF BRIAN DARMODY, PRESIDENT, ASSOCIATION OF UNIVERSITY

RESEARCH PARKS AND ASSOCIATE VICE PRESIDENT FOR RESEARCH AND ECONOMIC

DEVELOPMENT, UNIVERSITY OF MARYLAND

I am Brian Darmody, President of the Association of University Research Parks 

(AURP), and Associate Vice President for Research and Economic Development at 

the University of Maryland. 

29 

AURP represents over 300 research parks and communities of innovation in the 

U.S. and world, and works closely with other organizations representing technology 

commercialization, seed and angel investing, incubator development and state economic development policies. Research parks account for over 750,000 jobs in North 

America, according to a recent study. 

This year AURP held its annual conference in Vancouver, British Columbia. On 

his 1927 tour to celebrate his solo flight across the Atlantic, Charles Lindbergh 

wouldn’t fly to Vancouver because the airport was too small. The Vancouver government immediately bought land and built a larger airport for the fledgli ng air industry, which today serves as a major hub for international trade to the Pacific Rim 

and major jobs generator for British Columbia. 

We view research parks as part of a nation’s 21st century innovation infrastructure, just as airports and railroads did in earlier centuries, and high bandwidth 

Internet backbone serves today. Innovation is key to job creation, and support for 

innovation an important Federal mission. 

The United States invented the research park model at Stanford University in 

1951. However, other countries copied this model, building large research parks 

with investments from national governments, and attracting U.S. corporate research 

and development facilities. The U.S. no longer leads the world in research parks; 

See Wainova Atlas of Innovation (2009), and National Research Council, Understanding Research, Science and Technology Parks: Global Best Practices (2009). 

The United States also invented university technology transfer with the 1980 

Bayh-Dole Act, linking our ‘‘best in the world’’ research university system with technology commercialization. However, we no longer lead in university technology commercialization as research universities in the United Kingdom now outperform U.S. 

universities on a proportionate basis in terms of technology commercialization. 

AURP recognizes the U.S. Government is facing severe budget constraints, but we 

believe we can harness our existing research and development infrastructure to create new jobs, new opportunities, and new companies with administrative reforms 

and relatively modest Federal direct investments. See, Power of Place , A National 

Innovation Strategy AURP (2008). 

Here are our five points: 

1. Infrastructure for Innovation: Research Parks: We strongly support Senator 

Pryor’s Building A Stronger America Act to establish a loan guarantee program 

to develop research parks, and grant program for new park development. 

2. Tax-exempt financing of research facilities: We need to encourage development of privately financed facilities and support corporations to keep research 

and development in the U.S., instead of at research parks in other countries. 

Current IRS regulations on tax-exempt bonds should be reformed to remove 

tests on technology licensing to give greater flexibility to universities to negotiate with corporations on intellectual property issues. See, IRS Rev. Pro. 97– 

14 regarding limitations on university technology licensing in facilities financed 

with tax-exempt bonds. 

3. Federal Laboratory System: $25 billion annually in research and development 

activity takes place internally in Federal labs. Congress should: (i) create a new 

intermediary organization, modeled on what universities (such as WARF at U. 

of Wisconsin) and states (such as TEDCO in Maryland) use to more efficiently 

commercialize Federal intramural technology; (ii) develop programs to allow 

Federal researchers to work more closely with private sector, and (iii) create 

more Federal research parks. See Washington Business Journal, Unleashing 

Federal R and D, B. Darmody, Oct 30–Nov. 5, 2009. 

4. Improving University Technology Commercialization: There are many ‘‘Valleys of Death’’ confronting university technology commercialization, but the first 

potential valley takes place when universities elect to take title to federally 

sponsored research under the Bayh-Dole Act. Often unless additional development work is done, these potential technologies lie fallow. Developing a program 

to provide flexibility and recognize the cost of technology commercialization and 

the need to develop ‘proof of concept’ tests or evaluation of these technologies 

in Federal overhead rates would improve success rates of university-owned technology developed with Federal funds and create more companies to fill our incubators and research parks. See, OMB Circular A–21. 

5. Supporting Entrepreneurship: From STEM to STEEM: Science, Technology, 

Engineering, and Math (STEM) programs traditionally focus on science and engineering skills. The key to employment growth in the U.S. needs to include 

building careers and new companies, not only jobs. Incubators and research 

parks are ideal places for new technology company formation. Therefore we call 

30 

for Entrepreneurship to be imbedded in STEM programs and ideas, so the acronym would be STEEM: Science, Technology, Engineering, Entrepreneurship and 

Math. 

The Obama Administration has signaled its strong willingness to work on innovation and entrepreneurship, such as by creating the Office of Innovation and Entrepreneurship. We look forward to working with the Administration and Congress to 

efficiently and effectively build Communities of Innovation in the U.S. in a comprehensive fashion and maintain U.S. technological competitiveness. 

I want to thank the Commerce Committee and Senator Pryor for inviting AURP 

to the Committee. 

Senator PRYOR. Thank you. 

Mr. Sallet. 

STATEMENT OF JONATHAN SALLET, MANAGING DIRECTOR, 

THE GLOVER PARK GROUP 

Mr. SALLET. Mr. Chairman, members of the Committee, thank 

you very much for the chance to testify today and to apply some 

of the ideas that came out of our paper for the Center for American 

Progress to your legislation. 

You know, Mr. Chairman, if we were to look at an aerial view 

of an area with a science park, if we were up in an airplane, the 

landmass of a science park might be very small. It might not be 

a big part of the county or city in which it resides. But, the small 

mass of land is a very big idea. It’s a big idea because the notion 

that’s in your legislation is that there are areas that can act as innovation catalysts and therefore have economic effects, creating 

jobs much bigger than merely the area that they occupy. They do 

that because we understand how clusters work. And I commend 

you, Senator Pryor, for specifically saying, in your legislation, that 

the goal of the science parks is to promote the clustering of innovation. 

What we’ve learned about regional economic competitiveness 

over the last several decades is that the competitive advantages of 

a place, of a region, stand apart from the Nation, stand apart from 

the next area. They are unique, but that they have to be taken advantage of; that they are taken advantage of with real competition, 

but also, with very important collaboration; collaboration, particularly with universities, with local governments, with community 

colleges, and with nonprofits. 

This is something that we know. We know they help create jobs, 

they help spawn new businesses, and they help spur economic 

growth. And yet, as your bill recognizes, for far too long the Federal Government has administered economic development programs as if they didn’t have to be connected to regional economic 

strategies. But, that doesn’t make sense. 

The key point here is that leadership comes from the local people, the local businesses, but that there is an important role the 

Federal Government can play. It can help frame big national challenges that ought to be met, that would benefit the Nation as a 

whole. Clean energy is a good example. I know, recently in Arkansas, I think you were at the announcement of a new wind turbine 

factory that’s being constructed. That will have a positive impact, 

not just for Arkansas, but for the Nation, as we go to renewable 

energy. 

The second thing the Federal Government can do is to help facilitate success at the local level, particularly through information exVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00034 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
31 

1 Jonathan Sallet served as Assistant to the Secretary of the Department of Commerce and 

Director of the Office of Policy and Strategic Planning from 1993–96. He is employed by The 

Continued 

changes between data that the Federal Government has, and the 

local areas need, as well as best practices from among different 

clusters. 

And the third thing it can do is, in an appropriate way, as your 

legislation suggests, is fund activities. 

Now, what you call for in the legislation is for cooperation within 

a cluster, particularly with institutions of higher learning, in order 

to promote technology transfer; and you would award these funds 

through a competitive process. Those are very important goals, because those are the lessons we’ve seen in the last two decades. 

You also emphasize the importance of ensuring that innovation 

comes to every part of America, including rural America. And that 

is also a lesson we’ve seen as innovative state programs have led 

to greater development of economic possibilities in rural areas of 

America that we might not think of, at first glance, when we think 

about innovation. 

That’s why I believe that this is a very important piece of legislation, and one that I think can be put into the framework of a larger 

national strategy. The Administrator talked, in the first panel, 

quite rightly about having regional strategies. We need to do this 

at the Federal level. We need the kind of efforts that he is leading 

in EDA. We need to make sure all Federal programs are aligned 

with the strengths of their cluster. Export promotion, for example, 

ought to be promoting in an area the kind of exports that that area 

can best create. 

And third, there are a series of programs in the Federal Government, from the Department of Commerce to SBA, including programs like SBAIR, in the Department of Energy and Labor, in the 

Department of Agriculture, where the Secretary has talked about 

rural economic development, in the National Science Foundation, 

and the Department of Labor. These need to work together. The 

Federal Government needs to speak with a single voice to local 

leaders to make it as easy as possible to move forward. 

Senator, you were kind enough in your introduction to note that 

I was, at Brown, a college disc jockey, and one of the songs I used 

to play was the song called, ‘‘Won’t get Fooled Again.’’ And, I think 

a lot about your legislation is that we won’t be fooled again. We 

won’t be fooled again into forgetting one lesson, that ‘‘Made in 

America,’’ as an economic strategy, means we have to apply those 

lessons in America. That’s what your legislation would do, and I 

hope it’s speedily enacted. 

Thank you. 

[The prepared statement of Mr. Sallet follows:] 

PREPARED STATEMENT OF JONATHAN SALLET,1 CO-AUTHOR, The Geography of Innovation: The Federal Government and the Growth of Regional Innovation Clusters, 

PUBLISHED BY SCIENCE PROGRESS, A PROJECT OF THE CENTER FOR AMERICAN

PROGRESS

Summary 

I believe that the Federal Government can maximize the benefits of science and 

research parks, an integral part of sparking innovation and creating jobs in the 

32 

Glover Park Group, a private consulting firm. This testimony reflects Mr. Sallet’s personal 

views. 2http://www.scienceprogress.org/wp-content/uploads/2009/09/edalpaper.pdf. 

U.S., by supporting regional innovation clusters to promote a comprehensive, longterm economic growth and development plans across regions in the United States. 

My recommendation is that regional innovation clusters should become the centerpiece of a reauthorized Economic Development Administration (EDA), empowering the agency to work with businesses, universities, community colleges, state 

and local governments and community leaders to foster regional competitiveness 

strategies. This will help boost job creation and business growth by spurring the creation and growth of successful regional ecosystems, striking exactly the right balance between Federal leadership and local responsibility and between the private 

and public sectors. Science parks and regional innovation clusters are two vital 

parts to a long-term solution—science parks will drive the clusters forward while 

the regional innovation cluster will strengthen and support the local framework in 

which the park can thrive. This broader effort will be the most effective and sustainable. 

Testimony 

Introduction 

Chairman Rockefeller, Ranking Member Bailey Hutchison, and members of the 

Committee on Commerce, Science, and Transportation, thank you for the opportunity to testify today on innovation through collaboration and cooperation—particularly in the realm of regional and innovation ‘‘clusters.’’ 

Innovation is central to economic prosperity—driving productivity, ensuring sustainable broad-based economic growth, creating quality jobs and shared prosperity, 

and increasing national competitiveness. Innovation will aid economic recovery by: 

creating new jobs in high-tech and traditional sectors; creating higher returns to 

workers and increase living standards from better, more quality jobs; and making 

the economy more resilient and dynamic in the long-run, adapting to future challenges. 

With the current economic crisis and increasing unemployment throughout the 

nation, state budgets are tighter than ever, reducing education spending and R&D 

efforts, making this the best time to consider how the Federal Government can work 

with state and local entities, business, universities, community colleges and communities to restore long-term economic health to our Nation. 

Your focus today on the manner in which research, science, and technology parks 

can serve as a model for economic growth is welcome—and important. For too long, 

the Federal Government has administered programs for economic growth disconnected from regional strategies for growth and development. That is an omission 

that, in this economy and in a very literal sense, we can no longer afford. 

In September, Science Progress, of the Center for American Progress, released a 

paper that I coauthored with Ed Paisley and Justin Masterman.2 In that paper, we 

set forth the reasons why, we believe, the Federal Government should take an active role in supporting regional economic strategies. I should emphasize that when 

we talk about ‘‘regional innovation clusters’’, we do not mean that regional growth 

is necessarily focused on high-technology businesses. Rather, we mean that local 

leadership has the resources necessary to promote innovative strategies for economic 

growth—from any sector, from any kind of business, in any kind of region—urban, 

rural or suburban. 

Science Progress, led by Ed Paisley, is now engaged in a new project to extend 

those lessons to the Pittsburgh region. That geography includes Western Pennsylvania, Northern West Virginia and Eastern Ohio. The specific goal of our work is 

to identify the manner in which Federal efforts currently contribute to economic 

growth in that region, and to recommend specific ways in which the Federal Government could do an even better job in the future. 

We aim to advance the understanding of two important questions: 

• What is the current impact of Federal efforts on regional growth and job creation, and 

• How could the Federal Government be more effective in supporting local leadership? 

In this manner, the study of the Pittsburgh region will, we hope, yield national 

lessons of general application. 

The Pittsburgh region offers specific advantages to our work. It crosses state lines, 

which is characteristic of America’s regional economies but which poses obvious 

33 

3 Among Professor Porter’s extensive writings on the importance and nature of ‘‘clusters’’ is 

a recent paper summarizing both his academic work and his public-policy recommendations. 

‘‘Clusters and Economic Policy: Aligning Public Policy with the New Economics of Competition’’ 

(Revised December 17, 2008). His analysis is based on extensive research into the sources of 

competitive advantage, which he first discussed in The Competitive Advantage of Nations, (New 

York: Free Press, 1990) and explained in, for example, ‘‘Clusters and the New Economics of 

Competition’’ (Harvard Business Review, 1998). 4 Important additional research on this topic includes Karen G. Mills, Elisabeth B. Reynolds 

and Andrew Reamer, ‘‘Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economies,’’ (Washington, Brookings, 2008) and Robert Atkinson and Howard Wial, 

‘‘Boosting Productivity, Innovation, and Growth through a National Innovation Foundation,’’ 

(Washington, Brookings, 2008). 5Mills, Reynolds and Reamer, ‘‘Clusters and Competitiveness.’’ 

challenges in terms of state coordination and even the deployment of Federal efforts. 

It mixes the old and the new, from hard-hit automobile manufacturing in Ohio, to 

web-based start-ups in Pittsburgh and, of course, the National Energy Technology 

Laboratory in Morgantown, West Virginia. It spans urban and rural economies. It 

includes institutions, including foundations, universities and nongovernmental organizations that have carefully considered and implemented strategies of growth. Finally, and like the rest of America, the people and businesses of the Pittsburgh region are searching for better, more effective, means of creating jobs and growing 

their economy. 

In this work, we are building on much that is already known about the impact 

of regional economic units. 

The Geography of Innovation 

We know that ‘‘clusters’’—geographically concentrated areas of specialization— 

form the foundation of regional, and the basis for national, competitiveness.3 Clusters are geographic concentrations of firms, suppliers, support services, specialized 

infrastructure, producers of related products, and specialized institutions (such as 

training programs) whose expertise reinforces one another’s. So, for example, a successful cluster can connect firms with academic institutions, research labs, and 

other nonprofit organizations in order to create the kind of virtuous cycle of competitiveness that creates jobs, stimulates business formation, and improves productivity. 

Examples of U.S. clusters include metal manufacturing in the upper Midwest, entertainment in Los Angeles, information technology in Silicon Valley, and furniture in 

Mississippi. Clusters are common to every advanced economy. 

What are the kinds of advantages that are shared by the participants in clusters? 

They could be a set of workers who have honed particular skills, like building boats 

in Maine. Or community colleges that offer training to advanced manufacturing 

workers in places where advanced manufacturers have located. Or research centers 

that conduct basic research in biotechnology close to biotechnology firms. Anything, 

really, that creates what an economist would call a ‘‘positive externality’’—a benefit 

that is captured not just by a single firm, but that enriches the community as a 

whole. Positive externalities are nothing new—the externalities produced by K–12 

education is the basis for our public school system—but what is new is this: The 

notion that regions can consciously focus on the creation of shared advantages within clusters to create jobs, help businesses be created and, of course, stimulate longterm economic growth. 

Regional clusters enhance collaboration and value-creation, drive productivity, 

and play a fundamental role in knowledge creation, innovation, the accumulation 

of skills, and the development of pools of employees with specialized skills. They effectively lower the cost of capital, increase accessibility to specialized labor, create 

positive learning effects and decrease the cost of finding talented workers. They create an ecosystem that is helpful to the creation of new firms in which specialized 

advantages reinforce each other to the benefit of firms, workers and communities. 

Their operating principles could be phrased as ‘‘Innovation, Collaboration, Value 

Creation.’’ 

Scholarship from leading scholars 4 has established the real advantages of ‘‘clusters’’ for a growing economy, including strong correlations between: 

• Per-capita GDP and cluster concentration, 

• Cluster strength and wage levels, and 

• Cluster strength and higher wages.5

In other words, clusters are good homes for the high-growth, high-wage companies 

that move quickly to take advantage of competitive opportunity and create jobs as 

a result. And that means, of course, that successful clusters are important to the 

creation and application of successful innovation policy. Innovation—the use of 

34 

emerging and old information to create new forms of value—is absolutely critical to 

the future economic success of the United States. Indeed, in a globalized economy, 

our ability to be a smart economy is basically our ability to be growing economy. 

Innovation not only boosts the creation of value, but it also helps ensure that economic growth is sustainable—from the perspectives of both economic and environmental concerns. For example, increased advanced manufacturing correlates highly 

with increases in energy-efficient manufacturing—the more process technologies 

evolve, the more that they can do more with less. From this perspective, cluster policy is innovation policy. 

If clusters work on their own, what can be done to help them work even better? 

Specifically, what kinds of efforts can speed regional economic growth? In our paper, 

we identify four ‘‘lessons’’ that we believe are very important for policymakers to understand: 

First, Place Matters. It is important for regional economies to emphasize what 

they can do best, capitalizing on existing strengths or new strengths that spring 

naturally from existing advantages. Solar power is a good strategy for New 

Mexico, hydroelectric power is not. Existence of institutions of knowledge-creation, availability of capital and the presence of high-skill labor with programs 

to spur talent generation will all be parts of a region’s assessment of its competitive strengths. 

Second, Networks Are Key. The economic theory of a cluster recognizes the importance of both competition, which makes businesses more successful and increases consumer welfare, and cooperation, to create an environment of mutual 

advantage. Universities and community colleges, for example, can add to the 

store of knowledge and help educate workers in a manner that advantages multiple, even competing, local businesses. But that is best done with explicit networks of collaboration and knowledge-sharing of the kind found, for example, 

connected to the Albany nanotechnology cluster. 

Third, Practice Makes Perfect. As demonstrated by North Carolina’s Research 

Triangle and the Greater Phoenix cluster, it can take a long time, even decades, 

to build a new cluster from scratch. The observation re-emphasizes our belief 

that short-term gains will come mainly from existing advantages that have yet 

to be fully realized. For example, in our paper, we describe an analysis of Tennessee’s furniture cluster that both identifies existing strengths, as in office furniture, but only areas in which the region can be potentially competitive, such 

as mattress manufacturing. Areas of potential strength are likely to be areas 

that will result in quicker results. 

Fourth, Success Depends on Local Leadership. There is no substitute for the 

ability of local businesses, governments, non-profits, universities and colleges to 

all work together. That has been demonstrated in areas and industries as diverse as San Diego’s CONNECT program, Toledo’s photovoltaic cluster, and 

Minneapolis’s medical devices cluster. Toledo is a particularly good example. 

University of Toledo (UT), recognizing its strong engineering and manufacturing 

science programs and the city’s highly skilled workforce and economic infrastructure, led a 20-year effort to create a new photovoltaics and clean-energy 

cluster. UT has assembled a team of world-class faculty in photovoltaics and 

has built laboratories and support centers that have spun off dozens of businesses and reinvigorated the city. In partnership, the state of Ohio committed 

$18.6 million to UT in 2007 to spur the continued development of the 

photovoltaics cluster, generate new high-tech jobs, and to increase industry revenue. From this university and government leadership, the Wright Center for 

Photovoltaics Innovation and commercializiation is now an internationally recognized photovoltaics research and development center with infrastructure attractive to companies incubating the future generations of photovoltaic technologies. 

Federal Support for Regional Economic Strategies 

Against, this backdrop what can the Federal Government accomplish? And how? 

Let me begin with the specific proposal, S. 583, introduced by Senator Pryor to 

provide support for the development of science parks. The legislation begins quite 

specifically, and quite rightly, by emphasizing the creation of science parks ‘‘to promote the clustering of innovation. . . .’’ That is quite wise, and in complete accord 

with the experience of regional innovation that I have described above. 

In carrying out its goals, the legislation specifically calls for cooperation, including 

with institutions of higher learning, for the exchange of knowledge, through, for example, technology transfer and for the award of Federal funds through a competitive process. 

35 

6Mills, Reynolds and Reamer, ‘‘Clusters and Competitiveness.’’ 

7Office of Management and Budget, ‘‘A New Era of Responsibility.’’ 

In other words, S.583 is an embodiment of the lessons we have learned for the 

stimulation of regional economic growth. 

Analysis of successful clusters has shown that they succeed with local leadership 

from industry, non-governmental organizations, including universities and community colleges, and the public sector. Regional leaders have the best grasp of their 

own competitive advantages and prospects and they are in the best position to execute the kind of collaborative, bottom-up strategies that enhance cluster success. 

There is, however, a problem—and one only exacerbated by our current economic 

crisis. Cluster initiatives are ‘‘too few’’ and they are ‘‘thin and uneven in levels of 

geographic and industry coverage, level and consistency of effort, and organizational 

capacity.’’ 6 Moreover, traditional clusters are under terrible stress as state governments, under tight budget constraints, are cutting their own support for regional 

economic development. 

Now is the time for the Federal Government to play a critical role in supporting 

regional efforts by framing, facilitating and funding cluster strategies. By that I 

mean that the Federal Government can identify the critical national goals, like energy independence, that serve the national interests—an approach endorsed by Congress in the America Competes Act of 2007. The Federal Government can improve 

the efficiency of cluster strategies by improving the delivery of various forms of Federal expertise to the clusters that need them and by increasing the ability of clusters to learn from each other. And, of course, in difficult fiscal times for states, the 

Federal Government can provide additional resources that can smartly leverage existing local and private funds. 

Thus, in my judgment, S.583 should be supported by a broader effort. Rather, an 

emphasis on any particular means of regional economic growth, such as science 

parks or business incubators, should be incorporated into a broader Federal strategy 

that supports the full range of tools that can support regional economies. 

First, we need an explicit Federal focus on regional economic growth. The starting 

point should be the establishment of the President’s regional innovation cluster initiative at the Economic Development Administration of the Department of Commerce. The President’s FY2010 budget provides ‘‘$50 million for regional planning and 

matching grants within the EDA to support the creation of regional innovation clusters . . . and $50 million to create a nationwide network of public-private business 

incubators to encourage entrepreneurial activity in economically distressed areas.’’ 7

My recommendation is that this proposal—the conscious Federal adoption for the 

very first time of a plan to work with state and local governments to foster regional 

competitiveness strategies—becomes the centerpiece of a re-authorized EDA. In my 

view, it strikes exactly the right balance between Federal leadership and local responsibility and between the private and public sectors. 

For example, the EDA could ask regions, to compete for Federal matching funds 

by offering proposals created in collaboration with their companies, universities, research facilities and nonprofits. Funding would be provided for implementation of 

the best strategies. The EDA should establish a set of criteria that allow the plans 

with the biggest impact and best prospects for success to be funded quickly. Such 

criteria could include identifying the proposals that: 

• Move fast, with significant impact, 

• Use public-private partnerships and other forms of regional collaboration, 

• Have a proven track record, 

• Integrate distressed areas into larger regional economies, and 

• Further the goals of national ‘‘challenges’’ in areas such as energy, healthcare, 

manufacturing and life sciences. 

The Federal program should be flexible, of course, in order to respond to the best 

ideas that come from the regions. The cluster initiative could provide Federal 

matching funds for targeted, high-leveraged activities, such as university research 

consortia, business incubators, for community-college training programs and technology-transfer efforts focused on small and medium-sized firms. 

At the same time, small planning grants would be made available for those regions that have yet to formulate a cluster strategy. An advantage of the cluster approach, especially as we move into an era of budget-deficit reduction, is that the 

Federal funding need not be enormous—indeed, the President’s proposal of $50 million for regional innovation cluster and another $50 million for associated business 

incubators will get these efforts off to a strong start. 

36 

The establishment of this EDA effort would not, of course, be enough. That is why 

the second key ingredient for effective Federal involvement is this: Agencies that already support regional economies should tie their efforts specifically to locally-led 

regional economic strategies. Right now, the Federal Government spends roughly $150 billion annually on 

R&D. But, by our calculation, none of that money goes specifically to support regional economic strategies and only about $650 million goes to efforts that indirectly 

support regional innovation clusters. Nonetheless, important current efforts could be 

better harnessed to this goal, including additional programs from the Department 

of Commerce, the Small Business Administration (including the SBIR and STTR 

programs), the Department of Energy, the Department of Labor, the National 

Science Foundation and the Department of Agriculture. That should be encouraged. 

Third, Federal efforts can work better together and the Federal Government can 

work better in support of local leadership. 

The implications are larger, of course, than the EDA alone. One of the advantages 

of the regional cluster initiative is that it provides the Executive Branch as a whole 

with a good way of ensuring that micro-economic initiatives are effective and efficient. I would like to see the EDA become an evangelist for high-performance government, tailoring Federal efforts to best meet regional needs, fostering collaboration among Federal programs that are too often operated in ‘‘stovepipe’’ isolation, 

and ensuring that Federal funds are well-spent. 

For example, the Department of Commerce is the agency that, more than any 

other, focuses on economic competitiveness. Its programs range from assisting exporters to working with minority businesses and the telecommunications sector, to 

protecting our seas and coastlines, to gathering data on our nation, to working with 

small and medium-sized manufacturers, to creating industry standards, which are 

a critical infrastructure innovation. The National Institute of Standards and Technology, for example, has a highly successful manufacturing extension program and 

has worked with regional economic clusters through its Partnerships for Regional 

Innovation. As the EDA implements its ‘‘clusters’’ initiative, the Department more 

generally can align its efforts with the specific needs of regional economies. In this 

way, for example, the creation of business incubators, as proposed in the President’s 

FY2010 budget, should be constructed to dovetail immediately with regional clusters. 

The Federal Government also offers many forms of economic assistance to boost 

business creation and help communities grow economies that could be better aligned 

with regional competitiveness strategies. Federal efforts in the Department of 

Labor, the National Science Foundation, the Department of Energy and the Small 

Business Administration could all focus on clusters. 

In this way, the Federal emphasis on clusters can act as the ‘‘mortar’’ to bind together the ‘‘bricks’’ of economic recovery, providing, in essence, a multiplier effect 

that makes thriving initiatives even more successful. 

In sum, a huge opportunity beckons when the Nation needs economic renewal the 

most. Science and innovation are critical to the overall renewal of the American 

economy and to the restoration of the American job market. We know that clusters 

represent an increasingly important economic unit, but unfortunately it is one that 

has been virtually ignored in policymaking at the Federal level in the United States. 

By including regional competitiveness as a key mandate, a cluster approach can 

allow Federal policies to be implemented more effectively by better connecting them 

to regional leadership. In addition, Federal policy based on cluster principles will 

reinforce economic specialization across states and regions, increasing productivity 

in the economy as a whole. Ultimately, we can create the launching pads for what 

America needs the most right now—jobs and long-term, sustainable economic 

growth. 

Conclusion 

Some of our strongest international competitors, including Japan, South Korea, 

and many European countries, have invested in significant national cluster initiatives, directing great amounts of money and resources toward making innovation 

clusters the main focus of their economic and innovation policies. The irony is obvious—foreign innovation policymakers have come to the United States to study our 

successes and consult with our experts and yet the United States has conspicuously 

failed to embrace cluster initiatives as an explicit part of its own innovation policy. 

France, for example, has a £1.5 billion program called Poˆles de Compe ́titivite ́ that 

is focused entirely on creating, supporting, and encouraging the growth of innovation clusters throughout the country. In fact, 26 of 31 European Union countries 

have cluster initiative programs in place. Japan has made similarly large investments in two cluster programs called the Knowledge Cluster Initiative and the InVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00040 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
37 

dustrial Cluster Program, while South Korea has made innovation clusters the central organizing concept of its industrial policy. Numerous other countries in Europe 

and Asia, especially China, boast nation programs dedicated explicitly to promoting 

the development of specific regional innovation clusters. 

The lesson is clear. Economic strategies that have been ‘‘Made in America’’ must 

be ‘‘Applied in America’’ by the Federal Government and local leaders in order to 

employ more Americans and restore long-term economic growth. S.583 would be an 

important step toward implementing the lessons of clusters by promoting regional 

recovery and growth. 

Senator PRYOR. Thank you. 

Dr. Townsend. 

STATEMENT OF ANTHONY TOWNSEND, RESEARCH DIRECTOR, 

TECHNOLOGY, HORIZONS PROGRAM, INSTITUTE FOR THE 

FUTURE 

Dr. TOWNSEND. Thank you, Mr. Chairman, and members of the 

Committee, for the opportunity to share my expertise. 

I agree that America’s research parks are essential infrastructure for the Nation’s future competitiveness. Currently, I work as 

a technology forecaster for the Institute for the Future, which is an 

independent think tank established in Silicon Valley in 1968. 

I’ve spent the last 3 years working with research park managers 

and developers in the U.S., in Europe, Asia, and the Middle East. 

Today, I want to discuss this research park model, some of its advantages and disadvantages, but, most importantly, its future prospects. 

It’s an appropriate time to consider the research park model, because this year is the 50th anniversary of North Carolina’s Research Triangle Park. This is one of the largest and oldest and 

most successful parks in the Nation—in the world. But, like many 

parks today, RTP is also facing some potential threats to its success in the future. Put simply, the business model that was developed in 1959 isn’t going to work for parks created in 2009. And 

even established parks are going to need to evolve, as well. 

Three years ago, when RTP looked to the future, it established 

a partnership with our organization, to develop a broad and longrange forecast of the future of research parks, which you have attached as written testimony. We looked 20 years out, we engaged 

over 50 experts from over a dozen nations. We detailed 14 global 

trends that will shape the future for research parks, and we developed three scenarios to explore how parks might navigate a volatile 

and uncertain future. 

In the best-case scenario we developed, the research park model 

gets an upgrade, if you will, in part by building stronger ties to 

universities and new online science communities. 

In the worst-case scenario, the traditional business model, which 

depends very heavily upon big companies as anchor tenants, simply 

disappears as companies cut back on R&D and then virtualize or 

offshore whatever is left. 

The third scenario, a more decentralized research park model 

emerges and starts to challenge the traditional model. And this 

model uses digital networks to connect together lots of small spaces 

into clusters that function like today’s big research parks, and we 

call those ‘‘research clouds.’’ And these might form around univerVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00041 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
38 

sities and actually directly compete with research parks, particularly for smaller companies. 

But, the most important result from these scenarios is that none 

of them forecast a world where lots of new research parks succeed, 

based on this traditional real-estate-driven model that we’ve known 

for the last 50 years. 

And so, I know that you’re concerned about creating jobs quickly, 

as well as creating this long-term capacity for innovation and 

growth that we’ve discussed this afternoon. But, I think, rather 

than solely focusing on encouraging development of new research 

parks, we should also consider focusing investment on reinventing 

the parks that we already have. And there ares three key priorities 

to consider there: 

First, you can create jobs immediately by investing in upgrading 

the hardware of our research parks. It’s a great time to convert vacant buildings from single-tenant to multi-tenant, to support 

startups and younger companies. You can retrofit buildings with 

green technologies, create green-collar jobs, turn our research 

parks into living labs for a low-carbon economy. And you can fund 

shared infrastructure, like large scientific instruments, that create 

unique value to research parks. 

Second, you can invest in upgrading research park software. Research parks need to evolve from a model based on managing 

dirt—or land—to managing activities that support innovation. 

The best chance we have for rapid job creation, over the next 

year or two, is tapping this goundswell of entrepreneurship happening right now in the country. But, parks need to beef up their 

capacity to engage and nurture small companies, which is very different than attracting and retaining large ones. Grants that support expanded missions for research park managers, could greatly 

enhance their effectiveness as economic developers. 

And finally, as we’ve heard all afternoon, we should recognize 

that research parks are part of knowledge ecosystems; networks of 

people, organizations, and ideas that operate at a regional scale. 

We can’t just build parks in isolation and expect them to succeed. 

One reason why Research Triangle has been so successful is that 

it has had a strong regional partnership at its core from the very 

beginning. CEO Rick Weddle, of the Research Triangle Foundation, 

calls this the ‘‘grand vision.’’ And it was that vision, that was handed down from generation to generation, that allowed the project to 

stay on track during transitions in political leadership. 

Research park funding, such as was proposed in S. 583, should 

be tied to regional economic programs, such as what we’ve heard 

about from EDA as well as some other bills that are in the Senate 

right now. 

Thank you, Mr. Chairman, members of the Committee, again, for 

this opportunity. I welcome any questions, and comments you may 

have. 

[The prepared statement of Dr. Townsend follows:] 

39 

1This work is licensed under the Creative Commons Attribution-Noncommercial-Share Alike 

3.0 United States License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-sa/3.0/us/ or send a letter to Creative Commons, 171 Second Street, Suite 300, 

San Francisco, California, 94105, USA. 

Future Knowledge Ecosystems 

The Next Twenty Years of Technology-Led Economic Development 

Anthony Townsend, Institute for the Future; Alex Soojung-Kim Pang, Institute for the 

Future; Rick Weddle, Research Triangle Foundation 

IFTF Report Number SR–1236 1

Abstract 

The model of self-contained research parks and incubators that dominated the 

last fifty years of technology-based economic development is being challenged by 

deep shifts in the global economy, science and technology, and models of innovation 

. This paper describes fourteen emerging trends that will set the context for technology-based economic development in the coming decades. These trends are used 

to develop three scenarios for the future of technology-based economic development 

over the next two decades. In the first scenario, an incremental evolution of the research parks model takes place in a world of rapid, but steady and predictable 

change. In the second scenario, entirely new networks of R&D space emerge in a 

‘‘research cloud’’ that challenges current models to adapt, sometimes dramatically. 

The third scenario, the research park models is in rapid decline as R&D becomes 

highly virtualized and parks’ legacy cost structure makes them obsolete for young 

firms. We conclude by highlighting the strategic implications of these scenarios for 

existing and future parks and economic development. 

Forecasting Workshop Participants 

Forecasting and scenario development workshops were held during 2008–9. Organized by Research Triangle Foundation and facilitated by the Institute for the Future, these workshops were designed to engage a broad group of experts from different countries and different professions in brainstorming important trends and 

scenario elements. The results of these workshops are reflected throughout this report. The authors wish to thank Tina Valdecanas of the Research Triangle Foundation for organizing these workshops. 

40 

IASP 2008 

Johannesburg, South Africa 

Sue Bell 

La Trobe University R&D Park 

Joan Bellavista 

Parc Cientific de Barcelona 

Neville Comins 

The Innovation Hub 

Jeff Finkle 

IEDC 

Esteban Cassin 

Fundacı ́on Parque Tecnolo ́gico 

Misiones Argentina 

Herbert Chen 

Tsinghua University Science Park 

Douwe Dijk 

Zernike Science Park 

Mauricio Guedes 

Rio de Janeiro Technology Park 

Dennis Kekas 

NCSU Centennial Campus 

Lex de Lange 

Zernike Science Park 

Malcolm Parry 

The Surrey Research Park 

Josep Miguel Pique ́

22@Barcelona 

Luis Sanz 

Paulo C. De Miranda 

IASP 

Rick Weddle 

Research Triangle Park 

AURP 2008 

St. Petersburg, Florida, USA 

Pierre Belanger 

Bellatech 

Brian Darmody 

University of Maryland 

Bill Dean 

Piedmont Triad Research Park 

Greg Deason 

Purdue Research Foundation 

Charlie Dilks 

Dilks Consulting 

Vernon George 

George, Henry, George Partners 

Ron Kysiak 

IDEA Partnerships 

Amy Lubas 

NCSU Centennial Campus 

John Merrill 

Gateway University Research Park 

Ernest Paylor 

WorldTech International 

Fernando Quezada 

Biotechnology Center of Excellence 

Corporation 

Liz Rooks 

Research Triangle Park 

Luis Sanz 

IASP 

Rick Weddle 

Research Triangle Park 

Bob Wilhelm 

UNC Charlotte Research Institute 

Bruce Wright 

University of Arizona 

IEDC 2009 

Tempe, Arizona, USA 

John Adams 

Enterprise Florida 

Dorothy Baunach 

NorTech 

Ronnie Bryant 

Charlotte Regional Partnership 

Gary Conley 

TechSolve, Inc. 

Gene DePrez 

Creativesheffield 

Michael Finney 

Ann Arbor SPARK 

Norma Grace 

University of New Orleans 

Jackie Kerby-Moore 

Sandia Research Park 

Paul Krutko 

City of San Jose 

Gail Lewis 

AZ Department of Transportation 

Judy McKinney-Cherry 

Jay Moon 

Mississippi Manufacturers Association 

Robin Roberts Krieger 

Greater Oklahoma Chamber 

Bill Sproull 

Richardson Economic Development 

Partnership 

Eileen Walker 

AURP 

Steve Weathers 

Regional Growth Partnership 

Rick Weddle 

Research Triangle Park 

Online Expert Panel 

To complement our face-to-face workshops, the Institute for the Future convened 

an online panel of experts in March 2009 to map trends in areas that will shape 

the future of technology-led economic development and research parks: real estate, 

architecture, economic geography, public policy, entrepreneurship, history of science, 

and incubation. 

Thomas Campanella 

University of North Carolina 

Kamau Gachigi 

University of Nairobi 

Michael Joroff 

MIT 

Ilkka Kakko 

Karostech Ltd. 

Steve King 

Emergent Research 

Mitchell Moss 

New York University 

Fergus Murphy 

SRI International 

Margaret O’Mara 

University of Washington 

Hugh O’Neill 

Appleseed, Inc. 

41 

2Throughout this report, we use the terms research park, science park and technology park 

interchangeably. All refer to specific, contiguous development sites targeted to attracting and 

developing technology-intensive economic activity. 3 2009 survey of IASP members by Research Triangle Foundation. 

4 ‘‘Science: Innovation in the City’’ Ten Year Forecast: 2006. (Institute for the Future: Palo 

Alto, California) 5Manuel Castells and Peter Hall, Technopoles of the World: The Making of 21st Century Industrial Complexes, NY: Routledge, 1994. 

Rachel Park 

CUH2A 

Matthew Zook 

University of Kentucky 

Part I—Where We Are Today 

Introduction: A Postcard from 2030 

Fast forward to 2030, and imagine a late afternoon in Soweto, once a stronghold 

of resistance to apartheid, now a hotbed of small technology firms bridging Western 

technology and African ingenuity and markets. Scattered across the community’s 65 

square kilometers, some 150 small factories and wet labs are engaged in short-run, 

small-batch manufacturing of lightweight infrastructure technologies of all kinds— 

solar-powered ovens, nanomesh water filtration, genetically modified seed lines specifically designed for micro-climates across the sub-Saharan region. Collaborative 

R&D is mostly done in community-funded pop-up labs, cheap facilities built out of 

shipping containers and governed by open patent agreements—whatever goes in or 

comes out of them is common property for the whole community. 

For many, the future described here may be difficult to imagine, but it is a plausible one. It illustrates the degree of change that can happen in twenty years. In 

fact, the investment decisions we make today are likely to have impacts for at least 

this long. 

Thus, ask yourself, would I recognize this as a research cluster? Would I call it 

a research park? 2 What does this possibility mean for how research parks are likely 

to evolve, in the developing and developed economies alike? In this world, what is 

the role of research park developers, managers and economic development officials? 

The purpose of this white paper is, firstly, to explore the future economic, technological and geographical trends that might converge to make this vision a reality. 

Second, this is only one of many possible futures for technology-led economic development. Therefore, we present a set of three broad scenarios for the future of research parks and technology-led economic development. 

Building on Success: A Brief History of Technology-Led Economic Development 

2009 marks an important moment in the history of technology -led development. 

The Research Triangle Park of North Carolina turns fifty, and over 40 parks are 

twenty-five years old or more.3 As we begin thinking about the next twenty years 

of change and innovation in this field, it makes sense to review how the movement 

has evolved and the source of its past successes. 

The concept of the science city—a city built from the ground up to house scientific 

and technical research—emerged during World War II. The speed of technological 

development demanded by the war effort vastly exceeded any existing industrial 

R&D capability, and the concentration of existing research centers in cities was a 

security risk. As a result, both Allied and Axis powers created massive R&D facilities, isolated far from population centers. The British concentrated cryptography researchers in Bletchley Park; German rocket developers were centered at 

Peenemu ̈nde; and most spectacularly, America’s Manhattan Project built remote 

complexes dedicated to atomic bomb research and production in Tennessee, Washington and New Mexico.4

While the science city model was certainly effective at massive breakthroughs in 

both basic science and its technological applications, it was frighteningly expensive, 

and their geographic isolation meant that there were few opportunities for spin-off 

economic growth. The science city model was later used both successfully and unsuccessful in economies as different as Japan and the Soviet Union. Over time, the notion of science cities as a specific site gave way to ‘‘technopoles’’ as regional concentrations of public and private technological, financial and human capital.5

In the early 1950s, first at Stanford University and later in North Carolina, the 

science city model was adapted to a more manageable scale. Dubbed ‘‘industrial 

parks’’, ‘‘research parks’’ and ‘‘science parks’’ these projects were land-driven strategies primarily aimed at attracting the regional branch plants of large manufacturing 

companies. Over time, these places saw a growing share of their tenants engaging 

42 

6M. I. Luger and H. A. Goldstein. 1991. Technology in the Garden: Research Parks & Regional 

Economic Development. (University of North Carolina Press: Chapel Hill, NC) 7 National Business Incubator Association. 

8Luger and Goldstein, p. 181. 

9 Yusuf S. 2006. Postindustrial Asian Cities: Innovation for Growth. (World Bank: Washington, 

D.C.) 

in research and development functions. In many countries such as Japan, France 

and the Netherlands, central governments played a major role in the creation of research parks. In the United States, research parks more often were the result of 

sub-national governments.6 Over time, parks have tended to become more specialized, targeting specific industries or sectors. 

By the 1980s, the strategic focus of technology-led development shifted from the 

attract-and-retain model of industrial parks to a model based on business incubation. While technology transfer was an element of the business model behind industrial parks, in incubators it moved to the forefront. The thinking was two-fold: dating companies was a zero-sum game playing regions off against each other, and 

growing firms locally would be more ‘‘sticky’’ and likely to produce secondary benefits. Beginning with the first known business incubator, established in Batavia, New 

York in 1959, thousands of incubators opened throughout the world. Today, some 

3,000 business incubators exist worldwide, along with thousands of other facilities 

that perform similar functions under different monikers.7 The incubator model also 

marked a shift away from lowering real estate costs as the primary strategy (though 

rents are still typically subsidized), to providing seed capital, management expertise 

and intellectual property management needed to grow small companies into big 

ones. Almost universally, incubators have been positioned around universities, in 

the hope of leveraging their research and talent. 

Today, both the industrial park and business incubator model are widely used. 

However, in advanced industrial economies these models are less effective as the 

needs of startups evolve. In their 1991 study of U.S. research parks, Luger and 

Goldstein found that more than half of all research parks fail or shift their focus. 

Furthermore they found that ‘‘many research parks are unlikely to be appropriate 

for new start-up businesses, because minimum lots size requirements and high land 

prices make the cost of entry into parks high.’’ 8 Yet, existing parks still create great 

value for tenants, surrounding properties and regions—not because of the business 

model—but because they have become key nodes in larger knowledge ecosystems. 

This accrued value is being reflected in the market. For instance, land values at the 

Research Triangle Park have more than tripled in the last 5 years. 

But, as we illustrate through one of our future scenarios, the next few years may 

very well be a period in which no significant new research park projects are 

launched, and some parks fail. Any number of factors could drive this scenari o to 

the forefront—a protracted global recession, aggressive corporate cost-cutting and 

dematerialization of R&D or a return to high energy costs that put ‘‘legacy’’ parks 

at a carbon disadvantage. Signals of this future are already around us, from the 

endless delays of Russia’s ambitious national technopark project to bubble-era university-based efforts like the Harry Reid Technology Park at the University of Nevada Las Vegas. Even current success stories such as Singapore’s Biopolis have been 

called into question by the World Bank.9

On the other hand, the threat to existing parks could also come not from external 

economic shifts but from the emergence of entirely new models for building and organizing spaces for R&D. In our second scenario, ‘‘The Rise of Research Clouds’’— 

digitally connected networks of small spaces challenge existing parks and by providing more collaborative, more flexible and less costly homes for invention. Again, 

signals of this future abound if we raise our heads and look at innovative communities outside our own circle of peers. 

A third possibility, a very real future for many parks, is incrementalism—evolving 

and upgrading infrastructure and services to the next version, ‘‘ Science and Technology Parks 3.0’’. Indeed, an upgrade is desperately needed. Cities and metropolitan regions are increasingly seen as the drivers of national economic growth, making it likely that we will see renewed interest in the research park model as an economic development tool. Yet, while this scenario may involve survival and a limited 

degree of prosperity for some, it does not realize the full potential for innovation 

and socioeconomic gains that future scientific breakthroughs may hold. It is a likely 

scenario for many parks in the absence of external threats, but not necessarily the 

most desirable one. 

43 

10 Bahrami, Homa; Evans, Stuart. 2005. Super-flexibility for Knowledge Enterprises. Ch. 3. 

Toward Regional Knowledge Ecosystems 

Despite their stark differences, in all of these scenarios, we find one common element—regions will play a more important role than at any time in the last century. 

In fact, there will almost certainly be regions in which all three of these scenarios 

play out simultaneously over the next twenty years, with upgraded research parks, 

research clouds, and vacant tracts of research parks that never were, all exist ing 

side-by-side. The simple fact is that the complexity of science and technology today 

is too big for any one campus, firm or research park to tackle in isolation. 

The literature on knowledge ecosystems, developed in organizational studies over 

the last few years, provides robust framework upon which to develop a new understanding of how innovation happens in regions. A knowledge ecosystem refers to the 

events that occur as codified knowledge is transformed into tacit knowledge over 

time through learning and experience. Studies of knowledge ecosystems focus on 

how communities of practice interact with established bodies of knowledge and the 

tools and practices for upgrading that knowledge over time. 

At least one study has explicitly applied the knowledge ecosystem framework to 

understand a technology region.10 We believe that this framework can be used by 

the research parks and economic development community to better understand the 

processes by which communities of practice, embedded in metropolitan areas, generate ‘‘sticky know—how’’ that has real, unique economic value that is difficult to 

copy. 

The regional knowledge ecosystem framework has several advantages. First, it focuses our attention not on the existing institutions of economic development—universities, research parks, large companies, venture funds, etc—but on the dynamics 

of how they interact with each other and new non-institutional elements (talent, 

bodies of knowledge, virtual communities). While the economic development field is 

awash in talk of ‘‘networks’’, the concept has lost all meaning. A rigorous application 

of knowledge ecosystem theory will allow us to begin specifying the kinds of networks and how they ought to operate. Second, it brings a holistic approach to how 

we think of innovation in regions—not as an isolated activity that happens within 

specific firms or clusters, but as a cohesive system. Dysfunctional knowledge ecologies are costly to organizations, but in a regional context, they also impose costs on 

everyone else (if only opportunity costs). Finally, the knowledge ecosystems approach is particularly attuned to understanding how organizations perform in 

‘‘hyper-turbulent’’ chaotic environments, which certainly describes the global technological and economic landscape. 

Applying a knowledge ecosystem frame to regions immediately yields several insights that may dictate strategic shifts in the way we approach technology-based 

economic development. First, while land and leased space will continue to underpin 

the economics of creating research spaces of all kinds, the real added value will increasingly come not just from providing services (as many parks already do), but 

from actively managing activities and knowledge creation. Second, as scientific 

knowledge and tools become available anywhere on-demand, focusing on global 

domination of any particular industry will lose effectiveness. Growing the regional 

ecosystem elements that provide the capacity for repeatedly reinventing the cluster 

will become paramount. Third, all of these dictate a reduced emphasis on real estate 

development and infrastructure, and more emphasis on creating mechanisms that 

link local assets to global markets in ways that generate value. 

Our understanding of this tool is in its earliest stages, and will require further 

development. However, our forecasting and scenario-building exercise points toward 

a crucial need in every technology region, for new governance structures that are 

broader than a single industry. Acting as a custodian of the regional ecosystem 

frame, this body could perform several functions. In the short term, new tools are 

needed for measuring and mapping networks and flows of knowledge, money and 

ideas. In the medium term, new business models for managing regional assets and 

creating something that is great than the sum of its parts. In the long-term, the 

challenge will be leveraging this ecosystem and its many networks to help firms and 

clusters compete globally—by collectively figuring out where a region fits into global 

R&D ‘‘supply chain’’. Their goals will be to encourage knowledge creation at the cutting edge and develop the organizational, human and social capital to compete in 

the global economy. It would build networks that would stretch far beyond the 

major regional institutions of today to include informal networks of entrepreneurs, 

investors, professionals and hackers and other communities of mentoring and learning. 

44 

This is where the Institute for the Future and the Research Triangle Foundation 

find ourselves at the end of this study. This is merely a beginning, however. We 

will continue to examine the findings of this forecast with our partners and the global network of science parks and technology regions. 

We also will be working to develop realistic and implementable execution strategies that respond to the challenges of this forecast. These strategies will be shared 

in a ‘‘field manual’’ for existing research park and technology-oriented economic development managers—but also a framework for those considering the development 

of new parks or innovation-focused development programs. 

We believe the only way to invent the future will be through systematic futures 

thinking, risk-taking and experimentation. If the research parks and economic development community does not do it, they will leave it to others to lead. 

Part II—Trends Shaping the Future of Technology-led Development 

Our forecast research identified fourteen trends that will broadly set the context 

for technology regions and research parks over the next 5–20 years. They summarize keys global shifts in three domains: economy and society, science and technology, and the models and places for R&D. 

Each trend identifies a direction of change and consists of four main elements: 

Headline—a title that describes the overall direction of change 

Description—what is happening in this trend? What are the key drivers and 

enablers? 

Signals—what early indications of this trend are visible in the world today? 

Impacts—how will this trend shape the context for research parks and technology-based economic development? 

Economy and Society 

The first set of trends examines major global social and economic forces that will 

set the context for enterprises of every kind. 

First, the current global economic crisis will echo for a decade or more, putting 

governments at the forefront of funding basic science and technology research and 

constraining big new development projects. Second, new technologies of cooperation 

will elevate the economic importance of small groups in elation to corporations and 

individual consumers. This will transform entire industries and reshape the need 

for collaborative space. Third, as governments and industries work to address global 

warming through carbon markets and taxes, the measurement of the economic 

value of ecological processes will be increasingly important. 

From Free Markets to Stimulus Capitalism 

The economic crisis of 2009 will turn the tables on markets, putting governments 

at the helm of the global economy for many years to co me. Public investments in 

basic science and research infrastructure will be used as a primary tool to stimulate 

both short-term and long-term growth. In the United States, this shift is well underway, and in rising science powers such as the Gulf states and China, recent large 

public investments in research capacity will at least be are sustained and potentially will expand. 

Signals 

Harvard University will house Stem Cell Institute in renovated building instead 

of new science campus [http://tr.im/l8Wx] 

2009 U.S. economic stimulus provides $100b for science and technology [http:// 

tr.im/l8Vx] 

Corporate R&D spending holding steady, but real risk of decline in 2009 [http:// 

tr.im/ilMz . http://tr.im/ilMH . http://tr.im/ilMQ] 

China and Gulf States continue state-led development of R&D capacity and 

science cities [http://tr.im/lZOh . http://tr.im/mqC1] 

Impacts 

The economic crisis, and governments’ massive response through new science 

funding, will have both short-term and longterm impacts. 

An ‘‘innovation bottleneck’’ will form over the next 3–5 years, as companies trim 

R&D spending and focus on short-term, quick-to-market innovation during the crisis, and before the results of government-funded research projects can be commercialized. 

While companies will expand engagement with universities to accelerate technology transfer, there are few short-term solutions. 

The supply of venture capital will be constrained, as new funds and less experienced angels who entered the industry in recent years retrench to safer wealth presVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00048 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
45 

11 National Venture Capital Assocation and PricewaterhouseCoopers. MoneyTree Report 

[https://www.pwcmoneytree.com] 12 C. Shirky. 2008. Here Comes Everybody: The Power of Organizing Without Organizations. 

(Penguin Press: New York) 

ervation strategies.11 In global regions where venture capital markets are lacking 

or under-developed, the economic situation will slow the development of new funds 

and investor networks. 

The real estate industry will continue to struggle financing new projects and will 

avoid taking big risks. Real-estate investment trusts that focus on research parks 

and lab space have been especially hard hit. Even universities acting as developers 

are not immune to the slowdown, as endowments have suffered in proportion to 

overall market declines of 30 percent or more. Public universities will face large reductions in government aid, severely limiting their ability to develop new labs and 

research parks. 

Research clusters in developing economies are likely to make significant gains in 

market share for global R&D spending as they provide lower-cost alternatives to 

cost-cutting companies. 

Finally, existing research parks are likely to see increased tenant demands for 

flexible lease arrangements, as they plan for greater resilience to future economic 

shocks. 

The Group Economy 

New tools for cooperation will drive down the cost of forming groups around any 

shared interest, identity or activity. New models for creating wealth will emerge at 

the intersection of the social web and grassroots movements. Existing organizations 

will be transformed through the adoption of these tools and processes, becoming less 

hierarchical, more agile and more collaborative. 

Signals 

Companies adopt of social software as a knowledge management tool—Lotus Connections [http://tr.im/l972] 

Meetup.com’s rapid growth as a platform for organized ad hoc interest groups for 

face-to-face meetings [http://www.meetup.com] 

Obama campaign financed largely by small donations made online [http://tr.im/ 

l97d] 

Science bloggers convention at Research Triangle Park [http://tr.im/l989] 

Academic studies mapping scientific collaborations [http://tr.im/l998] 

Impacts 

As it spurs the creation of new kinds of ad hoc organizations, and transforms existing ones, the group economy will have major impacts for the kinds of places and 

spaces that are needed for collaborative innovation. 

New kinds of organizations will seek ‘‘landing spots’’ for meetings of various 

kinds—scheduled daily, weekly or monthly meetups, and ad hoc gatherings around 

interests, ideas and current events. The space and infrastructure demands for these 

kinds of activities are dramatically different from those supplied traditional research park—less permanently occupied, private spaces and more think-tank type 

collaborative spaces. The need for temporary, flexible and even mobile spaces will 

grow dramatically. 

The group economy will change the needs of existing organizations’ space as well. 

Existing tenants will require more meeting and collaboration spaces, and less space 

for ‘‘warehoused’’ workers. The goal will be to put collaborative activities in spaces 

that can amplify group economies, and provide opportunities for discovery. As open 

innovation strategies spread, there will be greater need for co-locating company employees and outsiders within shared spaces. 

Finally, the group economy will place new demands on the measurement techniques traditionally applied in economic development and research management. 

Today, most econometric data looks at outputs and uses existing organizations as 

its units of analysis—the firm, the research park, the region. However, in the group 

economy, there is are new needs to measure both the flows between organizations— 

the ‘‘in-between stuff’’—as well as the dynamics of small groups forming outside institutional boundaries. How do we measure the substantial impact of organizations 

without organizations? 12

Ecological Economics Comes of Age 

As governments and industries work to address global warming by developing environmental trading markets, carbon taxes, and other mechanisms, the measurement of the economic value of ecological processes will be increasingly important. 

46 

The first major efforts in this area are around carbon. Today, carbon trading is 

based on estimation more than on the measurement of real systems. Evolving carbon markets from estimation to measurement will generate complex scientific and 

technical problems requiring transdisciplinary solutions. Figuring out precisely how 

much carbon is sequestered in a parti cular preserve in Indonesia or Brazil, and 

how to turn that scientific knowledge into financial instruments will require basic 

research in botany, ecology, climate science, geology, remote sensing, and even accounting. As a scientific endeavor and information service industry, this will draw 

upon technological advances in sensing and measurement, simulation and supercomputing. 

Signals 

Carbon trading markets are growing rapidly, estimated to trade hundreds of billions of dollars of credits worldwide. [http://tr.im/lZOB] 

Efforts to construct valuation of environmental services (beyond environmental 

impact studies) [http://www.iftf.org/node/2789] 

Growth of bilateral trading regimes (e.g., between Northern companies and Southern forest preserves), supporting specific investments or environmental initiatives. 

[http://tr.im/mqEt] 

Commercialization of carbon offsets and their widespread adoption by travel 

agents and travel sites. 

Growing availability of personal carbon tracking estimators for travelers. [http:// 

tr.im/lM3l] 

Impacts 

The next decade will see the introduction of a new generation of sustainabilityrelated practices, technologies and services, built less around estimations of the environmental impact of manufacturing, transportation, and resource/energy use, and 

more on the measurement of actual resource use and pollution. 

In this new industry research parks can serve as test-beds for innovative environmental management practices and services. For companies developing these services, fellow research organizations are likely to be valuable beta-testers and early 

adopters. Research parks located near economically valuable and productive ecosystems could be attractive locations for both researchers developing tools for measuring ecological activity, and entrepreneurs developing instruments for monetizing 

that activity. 

Developing countries seeking to leverage natural resources could turn carbon offsets into a mechanism for technology transfer. By linking investment in science and 

technology infrastructure to carbon mitigation instruments, they could boost their 

own capacity for ecoscience at the same time they provide a valuable ecological service to carbon-hungry developed economies. 

Science and Technology 

Evolving in parallel to trends that will transform the economy and society over 

the coming decades, the subjects, methods, talent and institutions of scientific research and technological innovation will shift as well. 

Five trends will have the greatest impact on technology-based economic development and research parks: 

Biology by design will supplant physics as the most scientifically vibrant and economically important field, letting us read and write nature’s ‘‘source code’’ at will. 

The spread of ubiquitous computing will create massive new streams of research 

data, while simultaneously providing new tools for scientific collaboration in the lab. 

Social networks where people and computers work together to make sense of data 

will enable a shift from artificial intelligence to hybrid sensemaking. 

New scientists will transform the practice of science by forging transdisciplinary 

fields, multi-sector careers and bringing new cultural influences to bear. 

Science institutions will be transformed as collaborative, open and online models 

for collaboration and knowledge sharing break through obsolete barriers. 

Biology By Design: Nature as Source and Code 

From synthetic genomics (which seeks to design micro-organisms that perform 

useful functions) to stem cell therapy (which seeks to harness the body’s own ability 

to heal itself), biology will become a central source of scientific and technological 

breakthroughs. Key drivers include global ecological challenges, the health needs of 

a richer, aging global population and advances in informatics that help decipher the 

code of life. Biological concepts about how to organize systems and structures will 

also inspire designs for everything from buildings to organizations to algorithms. 

Yet many experts believe the biotech industry is structurally unsound—without 

47 

13Siemens AG. Fall 2008. ‘‘Magnetic Mission’’ Pictures of the Future. p.88. 

change it won’t be able to fully realize the commercial potential of these new technologies. 

Signals 

First synthetic genome created by J. Craig Venter Institute [http://tr.im/lfHL] 

Scripps Florida biomedical research center opens in Jupiter, Florida, home of the 

largest chronically diseased population in the world [http://www.scripps.edu/florida/] 

Massive public investment in biotech at the sub-national level [http://tr.im/ 

lfMW] 

Transdisciplinary and translational biomedical research centers at Stanford, MIT 

and UCSF 

Google launches venture fund, which will make some investments in biotech ‘‘to 

keep an eye out for disruptive ideas to its core search business that might come 

from unexpected fields, such as biotech.’’ [http://tr.im/lZDi] 

Impacts 

Biotechnology has not lived up to its economic promises—as Harvard professor 

Gary Pisano notes, while biotech has attracted more than $300B in capital over the 

last 30 years, it has produced profitless growth. Synthetic biology may change that, 

and increase the demand for research space over the coming decades. So-called 

‘‘white’’ biotechnology—industrial biotech for producing fuel and materials may just 

be mundane and scalable enough to produce sustainable profits, unlike earlier generations of ‘‘red’’ (biomedical) and ‘‘green’’ (agricultural) biotechnology. 

In the meantime, however, the sector will continue to require massive public investment in basic science to jumpstart economic activity. In the United States, state 

governments have invested heavily ($500M for California’s Institute for Regenerative Medicine, $1B for the Massachusetts Life Sciences Initiative, and $1.2B in 

North Carolina over the last decade). None of this will change the fundamental 

structural issues in the industry, which is largely borrowed from Silicon Valley’s information technology (IT) industry, and which Pisano argues are stifling innovation. 

Larger efforts, involving public, private and NGO stakeholders will have to address 

these on a broader scope. 

Biotech will also diverge from the IT industry in the ways and places in which 

it clusters. First, the translational nature of biomedicine means that researchers are 

often moving from lab to bedside frequently, requiring them to be located near research hospitals in large population centers, often in the center of large cities 

(versus a suburban research park). Second, it often involves specimens that cannot 

be removed from the lab—distributed work is less important since much of the 

‘‘code’’ is not portable as in the software world. Third, while IT infrastructure is becoming highly distributed, many of the most advanced biomedical research tools are 

becoming highly centralized. For instance, the next generation of high resolution 

MRIs used in brain imaging research weigh dozens of tons and take up an entire 

building.13 Finally, biological research will always entail a certain level of public 

health risk—while many factors cited above point toward centralization, the need 

to isolate hazardous materials may push in the other direction—some bioresearch 

will need to be located far from population centers. 

The sheer complexity of bioscience will require radically new approaches to designing research organizations. Research at the intersection of biology and 

informatics, and biology and nanotechnology, for instance, requires bringing together different disciplinary skillsets in the same place or even the same person. 

Parks and regions that can tap multiple disciplinary centers of excellence, or partner with transdisciplinary organizations and research communities will be well-positioned for biomedical innovation. 

Ubiquitous Computing 

The spread of ubiquitous computing (ubicomp)—the diffusion of unobtrusive digital sensing, computation and communications technologies into ever-larger parts of 

man-made and natural environments—will create vast new datasets for scientific research in fields from public health to civil engineering to marine biology. Mobilizing 

this computational infrastructures will require intensive collaborations between IT 

specialists, scientists, and engineers. But once in place, ubiquitous computing technologies will also generate very large quantities of information from everyday activities like travel, shopping, and communications. This will have substantial commercial value to companies that can manage and analyze it quickly enough. More imVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00051 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
48 

portantly , it will enable new research in social science, public health, and field 

sciences that will contribute to the further quantification of these fields. 

Signals 

The growth of environmental sensing research in ubiquitous computing, such as 

the Living Environments Lab at Carnegie-Mellon [http://www.livingenvironments 

.net/] 

Research in ‘‘smart dust,’’ cubic millimeter-scale computers that within a few 

years will allow us to place computing and reactive capabilities in a wide variety 

of built objects and environments [http://tr.im/mqIz] 

The growth of low-cost displays, and their diffusion into a variety of use contexts 

and devices, ranging from cellphones and iPhones to wall-sized digital billboards. 

Impacts 

Ubiquitous computing will collapse many of the distinctions we take for granted 

when doing everything from designing scientific research projects to designing research spaces. The distinction between online and offline environments, digital and 

physical worlds, even between natural and artificial, break down. This does not 

mean that physical places will become irrelevant: instead, the smart deployment of 

well-designed digital resources, and the early adoption of new digital technologies, 

will set smart places ahead of the pack. 

On the research front, ubiquitous computing creates opportunities and demands 

for new forms of cross-disciplinary research. Because ubicomp creates the potential 

to blend digital resources with a wide variety of materials and environments, research parks could create value by bringing computer scientists and engineers together with sculptors, textile designers, architects, and anthropologists—or with 

craftsmen and workers from established, mature local industries. It will also create 

a need for hyper-wired, digitally-mapped, configurable spaces that can be used as 

test-beds for new technologies. 

Ubicomp will also create a need for ‘‘living labs’’ like Seoul Digital Media City or 

Singapore’s Fusionpolis that combine vibrant real-world communities with research 

and prototyping. Ubicomp is as much about the use of technologies as their deployment; having spaces in which users can realistically interact with prototypes or enhanced spaces can generate valuable experiences and insights for researchers, retailers, and designers. 

From Artificial Intelligence to Hybrid Sensemaking 

For decades, computer science sought to create artificial systems capable of duplicating and even replacing human reasoning and communications. In the last few 

years, the excitement around collective intelligence experiments on the Web has established the value of a different approach: the creation of hybrid structures that 

combine social networks and more limited forms of machine intelligence, to collaboratively filter and extract meaning from data about our environments and ourselves. 

Such systems allow computers and humans to each do what they’re good at, and 

mix together formal and tacit and social knowledge. More broadly, the growth of 

these tools reflects a more nuanced view of intelligence as an inherently social and 

contextual thing, not something reducible to computer cycles or logical statements. 

Signals 

MIT and NYU trials of workplace infrastructures that mine social interaction data 

[http://tr.im/lM8Z] 

Experiments with ‘‘artificial artificial intelligence′′, like Google’s Image Search 

Game and Mechanical Turk, platforms for small tasks are trivial for humans but 

extremely difficult for computers. 

A San Francisco-based startup seeks make scientific distributed computing (made 

famous by SETI@Home) more accessible by combining a simple computing infrastructure with social networking tools to reach small, rich pools of talent or expertise. 

The Network Oasis in Joensuu, Finland’s GLOW system helps managers of an incubator space ‘‘manage serendipity’’ by understanding who is present and their 

skills and interests [http://www.globaloasis.fi/glow/] 

Impacts 

Artificial intelligence sought to make humans obsolete—as a corollary, it would 

have made place less relevant. But hybrid intelligence relies on a mix of unique 

places, strong algorithms, and vibrant human networks. Hybrid intelligences require interesting or unique working spaces, workplaces or other infrastructures that 

facilitate nonverbal communication. 

49 

Not only are there opportunities for research parks to provide rich physical spaces 

supporting hybrid intelligences. Hybrid intelligence could become a distinguishing 

feature of highly effective collaborative research spaces. By providing infrastructure 

and ‘‘reality mining’’ services, parks could distinguish themselves and move up the 

value chain. 

Hybrid intelligences often mobilize around very large, uncertain bodies of information. These are too complex and specialized to be usefully analyzed using commercial-grade Internet connections and servers; the grid computing architecture developed for high-energy physics is likely to be replicated in other fields. Research parks 

that can provide very fast access to grid-scale computational resources, often in support of groups of scientists or social networks, will have an advantage over less-connected competitors. 

The growing popularity of publications like the Journal of Visualized Experiments 

(JoVE) suggest that a new generation of experimental scientists will see the value 

of systems that allow them to communicate tacit knowledge at a distance. By employing hybrid approaches to map what people are actually doing in research environments, labs can help codify some of the things that were previously craft and 

technique. 

The New Scientists 

The next generation of scientists will transform scientific practice, the way scientific careers are constructed and managed, and the sources of knowledge they 

draw upon and develop in their work. As options outside academia grow, publishing 

becomes more open, collaborative and real-time, and entrepreneurship gains more 

legitimacy, the means by which scientists create professional reputation will be 

transformed. These new scientists will be both transdisciplinary and ultra-specialized, drawing on various disciplines to answer complex, focused questions. The role 

of amateurs will expand, as both independent researchers and partners of professional science. Scientists from emerging economies will introduce non-Western cultural, ethical and intellectual traditions into the practice of modern science. Science 

will also provide a pat h for women to achieve gender equality in nations with a 

high degree of gender segregation. 

Signals 

Increased competition for academic jobs, as PhD production increases and tenured 

faculty stay on staff is driving many doctoral graduates into private sector jobs. 

[http://tr.im/m20o] 

The Princeton Review and Fortune Small Business now produce annual ratings 

of the best schools for entrepreneurs—institutions are beginning to see these students as a significant segment of their market. 

Reward for entrepreneurship in tenure review is encouraging more young scientists to develop academic-industrial ‘‘bricolage’’ careers, moving back and forth between universities and business. 

Universities are responding to student desires for more transdisciplinary education especially around design: Finland’s Aalto University (created through the 

merger of 3 pre-existing universities), Stanford’s D.School, and Design London (a 

joint program of Imperial College and the Royal College of Arts) [http://tr.im/lmvl] 

‘‘Scientists of the self’’ are using ubicomp technologies to monitor their own bodies 

and lives, generating volumes of data and unorthodox research questions. [http:// 

www.quantifiedself.com/] 

Science is actively engaging many more amateurs, who may go on to science careers or make significant contributions to formal research projects (SETI@Home, 

Birdsource). 

Impacts 

New scientists will have dramatically different expectations about career mobility 

and the ability to pursue independent intellectual interests outside of employment 

contracts. They will have greater demand for continuing education and learning experiences, and will want work environments where they can maintain connections 

to their social networks and outside sources of knowledge. 

The role of social networks will be extended in other ways that impact econmic 

development. One of the most important assets being cultivated by large companies 

are their corporate alumni networks. As research parks and technology regions are 

increasingly selling community as a highly valuable aspect of location, creating 

membership-type organizations for ‘‘park alumni’’ might make sense. 

Research parks and regions have long marketed themselves as attractive places 

for companies. As Richard Florida argues, places now need to be attractive to workVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00053 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
50 

14 R. Florida. 2002. ‘‘The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community and Everyday Life’’ (Basic Books: New York) 

ers as well, if not primarily.14 However, in between these two layers, parks also 

need to think about how they appeal to small groups of new scientists—the clubs, 

mailing lists, and other rich networks that really connect and define innovative communities. 

Finally, many of the new scientists will not be professionals, but amateurs. Parks 

have historically done a terrible job connecting to educational institutions and 

youth, if they have bothered at all. Connecting to amateurs will entail some of the 

same challenges, but also reap potentially larger rewards. As volunteer champions 

of science, amateurs represent a vastly under-utilized resource for parks and their 

tenants. And the failure to engage them in real world R&D is a lost opportunity 

to upgrade the region’s human capital through experiential learning and training. 

Science Institutions Transformed 

Experiments with new organizational forms, incentive structures, and rewards 

will shake the foundations of centuries-old scientific institutions. Scientific publishing is already under full-scale attack, its economics and social conventions completely undermined by cheaper, faster, or more democratic online alternatives and 

by entirely new forms of publishing like video. Privately funded research centers 

like the Perimeter Institute, Kavli Institutes, and Jenalia Farms are experimenting 

new ways of funding and organizing research, and measuring the output of scientists. Scientific challenges like the X Prizes are coalescing into a parallel and competing incentive structure for innovation. Finally, the sheer complexity of the scientific challenges of the 21st century will require massive new global partnerships 

that cross political and organizational boundaries. 

Signals 

Prizes and challenges are emerging as a substantial incentive for innovation in 

sustainability and other global problems. (http://www.signtific.org/en/signals/technology-prizes-and-challenges-innovations-sustainability-and-global-problems, http:// 

www.signtific.org/en/signals/using-prizes-not-patents-support-drug-development-developing-world) 

Hedge funds are partnering with academic mathematicians and physicists to develop new tools of interest to financial engineering and science; others are supporting research in high-energy physics. (http://www.signtific.org/en/signals/ 

hedgefund-university-partnerships; http://www.signtific.org/en/signals/hedgefundsnew-cool-places-basic-science ; http://www.signtific.org/en/signals/private-fundinghigh-energy-physics) 

A wide range of institutions and entrepreneurs are developing alternatives to traditional scientific publishing, which has helped shape professional practices and rewards for decades. 

Impacts 

The growth of new kinds of scientific institutions may create new clients for research parks: private equity-funded laboratories, institutes created to solve specific 

high-profile problems. However, while some will be working at a scale and pace 

similar to companies and academic institutions, others may not, and may be designed to operate for only a few months or a year. 

Research parks need to be sites in which virtual networks can coalesce into 

meetups, conferences, etc. They also need to be places that can support virtual work 

and new forms of publication. Research parks might also attract new institutions 

by developing their own science or technology prizes, or partnering with organizations offering prizes. 

In some parks and regions, critical science institutions may need new sources of 

external support, or risk failing entirely. The crisis facing the newspaper industry 

today may be a particularly illustrative one. Once unthinkable, the failure of a crucial institution that could have massive impacts on local politics and economies, is 

now a reality in every city. Should parks and institutions struggle to save dying institutions, or help fledgling alternatives grow stronger to take their place? 

Models and Places for Research and Development 

The final set of trends looks at how organizational structures and business models 

for research and development are changing, and emerging ideas about how to configure these activities at various scales—the lab, the building, the campus, the region and the globe. 

Six trends are shaping the future of R&D: 

51 

15 J. Tang. 1997. ‘‘The Model Minority Thesis Revisited: (Counter)Evidence from the Science 

and Engineering Fields ‘‘The Journal of Applied Behavioral Science, Vol. 33, No. 3, 291–315 

A new global map of science is emerging, in which smaller countries are playing 

an increasingly important role, challenging the Western superpowers’ centuries-long 

dominance. 

New models of lightweight innovation seek to do more, faster with less, and cast 

a broader net for ideas. 

Universities will continue their transformation from ivory tower to economic engine 

and play a greatly expanded role in economic development—in time, it could become 

their primary function, trumping education. 

Economic development practice will shift from trying to copy the success of others 

to building sticky know-how—tacit knowledge that builds on local cultural and industrial resources, and isn’t mobile. 

Greater attention to the social life of small research spaces will create dynamic, 

transdisciplinary places that bring virtual networks to ground. 

Regional knowledge ecosystems will emerge as a new strategic frame, providing 

scale, efficiency and global platforms for economic development. 

New Global Map of Science 

If science in the 20th century was a pyramid, with the United States, the United 

Kingdom, Germany, Russia, and Japan at the apex, science in the 21st century will 

be more like a network, with multiple, linked centers of excellence. Successful countries and sub-national regions will pursue strategies to blend targeted investments 

in basic science with local industrial or cultural resources, to create unique and 

hard-to-reproduce centers of excellence. These centers will be designed to capture 

critical niches in complex global R&D ‘‘supply chains’’. Meanwhile, the shift from 

brain drain to brain circulation; the rising capability of moderate Islamic states to 

support scientific communities; and the growth of new ‘‘South-South’’ collaborative 

networks mean that these centers of global excellence can develop in a wider range 

of countries than in the 20th century. 

Signals 

Growth of South-South research cooperation [http://tr.im/la34] 

Chinese universities hiring top global talent [http://tr.im/la6S] 

R&D partnership between The Hamner Institutes for Health Sciences and China 

Medical City [http://tr.im/lLZd] 

Fewer doctoral students staying in the U.S. after graduation [http://tr.im/la6q] 

Globally mobile universities—NYU in Abu Dhabi, JHU in Nanjing, Georgetown 

in Qatar 

‘‘Bamboo ceiling’’ for Asians in U.S. firms 15

Impacts 

New research clusters in developing countries will capture an increasing share of 

global R&D investment, and increase the volume and value-added in technology innovations. Some of this will certainly come at the expense of existing industries in 

developed economies, through offshoring of ‘‘routine’’ R&D functions. 

Globally networked science will necessitate a shift from zero-sum competition and 

efforts to replicate Silicon Valley’s broad knowledge ecosystem, in favor of highly focused efforts to develop niches in global technology supply chains. This strategic 

shift will be pioneered by new clusters in emerging economies, seeking to be globally 

competitive at the cutting edge in narrow areas of opportunity. 

Global science also means greater mobility of talent. As wage differentials shrink, 

returning home will be more attractive to foreign students—developed countries will 

need to offer additional value, such as a better business environment or easier access to startup funding. U.S. universities are responding by exporting their ‘‘brands’’ 

to developed and less-developed countries. We will also see scientists with global 

mobility that is more complex than simply moving between two countries—they may 

migrate multiple times to emerging centers of excellence. 

Finally, global science will create more demand for ‘‘soft landing’’ zones for foreign 

companies expanding into new markets and joint ventures, which could provide an 

additional source of science park tenants, as ‘‘soft landing’’ companies outgrow their 

incubator space. Innovative regions will need to provide a broad variety of these 

spaces and market them through existing business networks. 

Lightweight Innovation 

Over the next decade, new economic realities will increase the pressure to innovate faster and cheaper. New ideas about how to organize the innovation process, 

combined with dramatically cheaper tools for invention that put advanced research 

52 

16The Future of the Research University: Meeting the Global Challenges of the 21st Century. 

2009. (Ewing Marion Kauffman Foundation: Kansas City, MO) 

technology in the hands of small firms, will enable new lightweight models fo r commercializing knowledge. More and more of new product and service development 

will happen outside of existing pipelines. Lightweight innovation will reinforce the 

strategic shift of innovation activities out of large firms into broadly defined ‘‘open 

innovation’’ networks. 

Signals 

Innovations in early-stage investment: BetaWorks,Y! Combinator and AngelSoft 

Falling costs of tools of invention—cloud computing, 3–D prototyping and desktop 

genomics 

Crowd-sourcing innovation: Kluster [http://www.kluster.com] 

Innovation clubs and Fab Labs in Kenya [http://www.fablab.co.ke/] 

Impacts 

Lightweight innovation points toward a growing role for startups in innovation 

systems at every scale—local, regional, national and by industry. Yet few research 

parks and economic development agencies are well-equipped to assess and address 

the needs of startups. 

The most important shortcoming is in the area of startup financing. A growing 

array of smaller startups will seriously challenge traditional venture investing models, which simply cannot produce a profit on small deals. In some areas like biotech, 

this early-stage funding gap is being filled by corporate strategic venture funds. 

There will be an increased need for deep local networks of angel investors and 

small-scale seed funds—but these need to be run by seasoned entrepreneurs. ‘‘Dumb 

money’’ from investors without expertise or connections, has far less value than 

‘‘smart money’’ that does. 

The growth of startups, especially very small ones will create a ‘‘long tail’’ market 

for R&D Space. Instead of a handful of anchor tenants, a long tail is a large collection of very small firms that add up to significant demand. Since existing parks are 

mostly designed long-term leasing to large companies, a mismatch may emerge. 

Incubation of lightweight startups will be a fundamentally new proposition. Just 

a few years ago, it took millions of dollars of venture capital, dozens of programmers, and a year or more to bring a new software product to market. Today, agile 

web startups move from idea to implementation without traditional incubation. 

Access to ‘‘heavy’’ R&D tools will never disappear completely, except in a very few 

areas of technology. Research parks can play an important role in aggregating demand and subsidizing costly equipment. Especially in the developing world, where 

access to equipment is often the greatest obstacle to innovation for micro-financed 

inventors, this will be critical. 

New innovation models are driving new approaches to intellectual property management, which will require managers of research spaces and communities to 

rethink how they support companies. The traditional focus on helping companies 

protect their IP, may need to shift to helping them open their IP to potential partners or new communities of innovation. 

Universities: From Ivory Tower to Economic Engine 

Several interacting forces will expand the modernization of universities’ role in 

the economy. First, increased public investment in basic research will raise public 

expectations about the social and economic impacts produced by universities. Second, companies will continue to outsource research to university partners, amplifying the need for efficient technology transfer. Third, global competition between 

universities will foster more entrepreneurial initiatives to secure talent and find 

new sources of financial support. Finally, developing countries will rely heavily upon 

universities to jump-start new technology-based clusters. 

There is a great degree of uncertainty about this shift. There is still considerable 

debate about whether ‘’universities should deliberately do more to encourage the development of products or companies.’’ 16 And while the .Edu Impact portal (http:// 

www.edu-impact.com/) has cataloged over 90 economic impact studies of universities in the U.S. and worldwide, this is largely a defensive exercise by universities 

seeking to avoid taxation by local authorities, not a demonstration of university vision or public policy. 

Signals 

Texas—state officials requested that the words ‘‘technology commercialization’’ 

and ‘‘economic development’’ be added to university and college mission statements. 

53 

17 ‘‘Peer pressure’’ SEED, April 2009, p. 20. 18For example, Alain Kaloyeros, who attracted more than $2.4 billion in Federal, state and 

corporate funding to make the University at Albany a center of nanotechnology and semiconductor research, was paid a salary of $696,000 in 2008. 19 R. E. Litan, L. Mitchell, and E. J. Reedy, ‘‘The University As Innovator: Bumps In The 

Road’’, Issues in Science and Technology, Summer 2007. 20Pisano G. 2006. ‘‘Can science be a business? Lessons from biotech’’ Harvard Business Review. 21 A. N. Link, J. T. Scott. ‘‘U.S. science parks: the diffusion of an innovation and its effects 

on the academic missions of universities’’ International Journal of Industrial Organization. 

UK 2015 Research Assessment Exercise will ‘‘for the first time examine factors 

like citation rates and the economic impacts of the research in question.’’ 17

The number of people employed in the technology transfer offices of U.S. universities more than doubled between 1998 and 2007. [signtific URL TBD] Harvard University’s Technology Accelerator Fund—$1.5m in annual grants for 

faculty to refine research to attract private capital. 

Growth of university-based angel networks in the United States, Canada and 

Spain. 

New technology transfer mechanisms like the Alfred E. Mann Institutes, ‘‘proof 

of concept centers’’ [http://tr.im/lZPB] 

Innovation zones, like the Greater Oakland Keystone Innovation Zone, a partnership of Carnegie-Mellon, the University of Pittsburgh, the stat e of Pennsylvania 

and several non-profit organizations. 

Impacts 

The most aggressive universities will completely transform their promotion systems, deeply integrating incentives for entrepreneurship. Some universities (such as 

the University of Iowa and Texas A&M) now identify patents, patent applications 

and involvement in tech transfer as evidence in tenure review. Some universities 

are even willing to reward faculty who have proven their effectiveness in economic 

development as highly as academic stars.18

As the share and volume of basic research done at universities rises, technology 

transfer will either exceed or fail to meet public and corporate expectations. Flaws 

in prevailing models for managing technology transfer will become more apparent, 

such as the preference for patents that produce short-term profits over more challenging longterm commercialization projects. The backlog of research generated by 

stimulus funding may skew incentives even further in the wrong direction, and 

leave many promising technologies languishing in the lab. 

On the other hand, greater competition between universities will encourage more 

experimentation by universities in technology transfer and IP management. More 

universities will develop strategies and resources for supporting other means of promoting commercialization and entrepreneurship than only patent licensing.19 Others will create internal competition—putting outside agents on equal footing to compete with their own technology licensing office. Still others will partner to create 

multi-university offices that can achieve a more efficient and effective scale. 

The role of research parks, incubators and other facilities for technology transfer 

will change rapidly. As expectations for technology transfer grow, universities will 

diversify their strategies for spin-off spaces. This will mean shifting from a single 

research park model to investing in entire ‘‘innovation zones’’. In this model, rather 

than merely developing an urban research campus, universities act as long-term 

participants in the ongoing revitalization of urban neighborhoods or districts. These 

districts are mixed-use, combining both academic and commercial research activities 

with residential, office, retail, and cultural uses. The goal is to create an en 

vironment that helps attract, nurture and retain talent, and to encourage innovation across a wide range of other enterprises as well. Extending this strategy, more 

incubation spaces may be inserted directly into campuses and university buildings. 

Entrepreneurial universities are not without their critics. Gary Pisano argues that 

aggressive commercialization of university bioscience research is actually limiting 

the industry’s development by reducing the pool of shared scientific knowledge. His 

solution: ‘‘[t]hey should focus primarily on maximizing their contributions to the scientific community, not maximizing their licensing revenues and equity returns.’’ 20

And there is a clear impact on the academic environment in entrepreneurial universities—when research parks are close by, the curriculum tends to shift from basic 

to applied research.21

Some universities will be unwilling or unable adopt a new model, and will produce 

limited economic benefits. We are also likely to see the emergence of new universities where economic development, not education, is the primary mission. Most will 

fall in the middle. As one study summarized the future: ‘‘In our view, universities 

54 

22 (Kauffman p. 124). 23Myerson J. 2006. Radical Office Design. (Abbeville: New York) 24Zook, M. A. 2005. The Geography of the Internet Industry: Venture Capital, Dot-coms and 

Local Knowledge. (Blackwell: New York) 25 Bathelt, H. and Schuldt, N. A. 2008. ‘‘Between Luminaires and Meat Grinders: International Trade Fairs as Temporary Clusters’’. Regional Studies. 42:853–868. 

. . . increasingly have no choice whether to be entrepreneurial, although like forprofit firms, they do have a choice about how they go about doing so.’’ 22

From Knowledge Diffusion to Sticky Know-How 

Advocates of innovation economies often see knowledge as both infinitely mobile 

and disconnected from its origins. Knowledge can be produced anywhere, this thinking goes, and high value-added, knowledge-intensive activities can be decoupled entirely from manufacturing. Both are wrong. 

Many bench scientists can’t take their work home, and some can’t work outside 

one-ofa-kind facilities. Innovation often has a geographical or social ‘‘stickiness’’ to 

it because it can draw on combinations of scientific knowledge, technical skill and 

tacit knowledge that are place-specific. Nor is innovation so easily distinguished 

from manufacturing: many high-tech innovations have emerged while solving manufacturing problems, and contrary to popular perception, making things—especially 

innovative new products—is a highly complex, creative activity. Indeed, future industries, like the translational research paradigm emerging in the biomedical world, 

are likely to place a higher value on the tacit knowledge required to move new scientific discoveries from the laboratory to store shelves, doctors’ offices, and living 

rooms. 

Signals 

Zaha Hadid’s Central Building for BM’s Leipzig plant deliberately seeks to mix 

white-collar and blue-collar workforce as a spur to innovation [http://tr.im/lZT5] 

Rise of ‘‘guild’’ workspaces, such as Pixar in Emeryville, Calif. where large freelance contractor work forces are co-located with corporate customers during production.23

Venture capitalists are being recognized as tacit knowledge brokers who acquire 

and create intelligence about industries, market conditions, entrepreneurs and companies through a constant process of interaction and observation. This knowledge 

is then used to select promising industries, find good firms, and assist portfolio companies.24

Venture capitalists’ are the center of a tacit knowledge exchange system that 

gives them lots of exclusive know-how. They are also able to speed this process to 

provide their portfolio companies an advantage. 

Trade fairs are ‘‘temporary clusters’’ that provide mechanisms to share tacit 

knowledge exchange over long distances.25

Intel ‘‘Copy Exactly’’ in which Intel copies successful factories, right dow n to the 

paint colors, on the theory that they don’t always know what makes a factory successful, so just copy everything. [http://tr.im/lZXh] 

Impacts 

Partnering or providing space for groups that have skills very different from conventional R&D, but can contribute to the development of innovative products or 

services—arts or cultural groups, human factors or ethnographic researchers, even 

financial engineering firms—may encourage unique cross-fertilizations that forms 

the basis of competitive advantage. 

Some research parks will be able to maintain their viability if they can both attract interesting people, and co-locate near useful industries or important markets. 

Boutique parks designed to bring together highly specialized clusters of existing 

tacit knowledge could incubate new technologies and innovations. For example, 

these could support creative work combining older industrial knowledge with new 

high-tech expertise. 

For innovations in ‘‘brownfield’’ industries, critical challenges aren’t just technological, but also regulatory, legal and financial. Research parks specializing in areas 

like cleantech, environmental remediation, alternative energy, and sustainable development would be smart to attract experts in finance, law, and technology policy. 

Manufacturers who want to move up the value chain could be a target for new 

R&D parks. 

55 

26The title of this section is a reference to Willam ‘‘Holly’’ White’s pioneering videographic 

studies of how people use public spaces, conducted in New York City in the late 1970s, and presented in a film and book titled The Social Life of Small Urban Spaces. [http://www.pps.org/ 

info/products/BookslVideos/socialllife] 27F. Duffy. 2009. Work and the City. (Black Dog: London) 

The Social Life of Small Research Spaces 26

Traditional business incubators will fade away, replaced by new kinds of spaces 

for entrepreneurship and collaborative research. Pop-up labs, co-working hubs, mobile incubators and disposable research parks will provide flexible physical spaces 

for R&D. Rather than warehousing workers, they will meet a need for communal 

collaborative meeting space in a world of increased mobility within and between 

workplaces. They will be neutral places where networks of investors, entrepreneurs, 

hackers and customers converge for collaborative knowledge creation and trustbuilding, cementing relationships initiated and cultivated online. Overlaid grids of 

social software will enhance serendipitous discovery inside these spaces and knit 

them together in local, regional and global networks of collaboration. 

Signals 

The rise of coworking and communal rent-a-desk and drop-in offices—[http:// 

tr.im/lkjQ] 

Kitchen Budapest, a ‘‘pop-up’’ media lab [http://www.kibu.hu/en] 

Angel network in residence at Cambridge Innovation Center [http://tr.im/lkke] 

Throw-away research parks—Phase Z.Ro in Singapore [http://tr.im/lkkt] 

Oklahoma City’s mobile biotech incubator—relocate the incubator instead of the 

growing company [http://tr.im/lklf] 

The Hub’s global network of social enterprise incubators [http://the-hub.net] 

Charge-by-the-hour incubator space [http://www.globaloasis.fi/] 

Impacts 

The collaborative magic of small research places depends heavily upon the ability 

of managers to ‘‘produce’’ and ‘‘direct’’ the space like a ‘‘show’’ on a daily basis. This 

involves coordinating events, both formal and informal, ensuring a steady flow of 

new people and ideas through the space, and making connections between participants. This is a very different set of skills than the typical research park manager 

or economic developer today. The shift from managing land use and real estate to 

managing activity (or both) will require a fundamental shift in perspective. 

Small research spaces are the physical side of lightweight innovation, allowing big 

companies and their smaller partners to come into direct contact. As architect Frank 

Duffy writes, ‘‘Conventional office developments exclude or marginalize workspace 

at lower rental levels and thus diminish the possibility of mutually beneficial interactions between large, mature businesses and smaller, growing enterprises.’’ Simply 

moving small bits of the company out of the main campus (like Corning, Yahoo! and 

Intel have done in recent years) will not be enough. Corporations and startups will 

need to co-locate within the same buildings, forming ‘‘coalitions of interest’’.27

Small research spaces, because they lack the scale of research parks, are heavily 

dependent upon social networks to extend their reach and connect to external resources. Social networks are the demand generators for these spaces, as online communities develop needs for ad hoc, temporary or on-demand meetings, these spaces 

will need to develop business models to meet those needs. 

The new leasing arrangements of small research spaces—monthly, weekly, daily, 

and even hourly rate structures—will overturn the supply chain for commercial real 

estate, which evolved around long-term leases of 10 years or more. As Duffy points 

out, conventional leases block feedback from users in the design and construction 

business. By providing direct daily feedback to property managers, research ‘‘hotels’’ 

might introduce end-user innovation to architecture for the first time in a century. 

Many of these small spaces are driven by more than just business objectives. A 

growing number seek to further social goals by incubating social ventures (Front 

Seat Software in Seattle, The Hub in London) or by gathering disparate firms and 

communities in just-emerging sectors like sustainable design (Treehouse Brooklyn). 

Finally, small research spaces present an opportunity to make R&D more transparent—engaging not only partners, customers and suppliers, but also a broader 

public as well. Already, we see many firms engaging lead users through beta tests 

and iterative design processes—it is only a matter of time before the physical organization of research adapts to support these activities. 

56 

28S. T. Ganyard. May 18, 2009. ‘‘All Disasters Are Local’’ New York Times. Opinion/editorial. 29M. Joroff, W. Porter, Feinberg, C. Kukla. Enabling Work Practice (Cambridge, MA. MIT 

School of Architecture and Planning, 2008) 30 Bathelt, H., Mamlberg, A. and Maskell, P. 2002. ‘‘Clusters and knowledge: Global buzz, local 

pipelines and the process of knowledge creation’’. [http://ideas.repec.org/p/aal/abbswp/02– 

12.html] 

From Research Parks to Regional Knowledge Ecosystems 

Translational research—science that transcends basic and applied research—and 

successful commercialization of the resulting technology, will grow increasingly complex. To succeed, these efforts will require coordinated investments at the regional 

level, because no single organization will have the capacity to perform all of many 

steps between lab and market. Because of this, we will see an expansion of new institutions and governance structures operating at the regional level whose goal will 

be to encourage knowledge creation at the cutting edge and develop the organizational, human and social capital at the scale needed to compete globally. These institutions will stretch far beyond the regional networks of today to include not just 

university and corporate leaders but also entrepreneurs, investors, professionals and 

amateurs. By their very nature, regional knowledge ecosystems will transcend traditional industry boundaries, seeking to create capacity to quickly re-invest resources 

and re-invent industries in response to global shifts. 

Signals 

East Bay Green Corridor in California—coordinated regional approach to growing 

and attracting cleantech industries. [http://tr.im/m250] 

North Carolina Research Parks Network pooling marketing and long-term strategic planning resources. 

;resund IT, a regional body in Denmark and Sweden, expansive mission includes 

identifying and initiating R&D projects. [http://www.oresundit.com/?id=41] 

World Bank infoDev project global incubator network [http://infodev.org/en/Publication.6.html] 

Impacts 

The risk-spreading logic behind a regional approach to technology-led development is parallel to the innovation zone strategy of universities. In their seminal 

study of U.S. research parks, Luger and Goldstein concluded ‘‘one of the few generalizations we can make about the net benefits of research parks is that they are 

far from certain.’’ By scattering investments across a number of real estate, infrastructure, venture and human capital investments regions have more chances of 

success, albeit on a smaller scale, than a single bet on a research park. 

Spreading risk may also improve resilience and agility in periods of economic turbulence or great technological change. The strength of regional knowledge ecosystems is that they can adapt faster than national systems, which are dictated by 

national politics, and they can scale up successful enterprises much more effectively 

that individual research parks or municipalities. In fact, one of the best models for 

future regional alliances may be the regional readiness partnerships pioneered by 

the disaster management community, which are wholly voluntary , but flexible and 

effective.28

For these reasons, it is likely that regions will become the new default starting 

point for formulating technology -based development strategies, with the pressure 

to do so coming both from the top-down and the bottom-up. National governments 

will increasingly delegate research funding decisions to regional networks, while a 

constellation of small, local players will require greater assistance in leveraging regional assets. Regional strategies that anticipate obsolescence and disruption will 

permit resources to support the continuous learning of the workforce and upgrading 

of research infrastructure.29

For firms, there are many potential gains from public stewardship at the regional 

level. The need to tap regional and global knowledge pools, research infrastructure 

and talent are at odds with economic development strategies that focus on particular parcels of land, campuses or local jurisdictions. Recent research on the dynamics of technology clusters points toward two important flows of knowledge that 

play different roles. ‘‘Local buzz’’ is the dialogue of rumors, knowledge and other information within a geographic cluster. ‘‘Global pipelines’’ are the flows of more codified kinds of knowledge that firms obtain through business relationships with distant firms. Regional knowledge ecosystems could become mechanisms that improve 

both functions—speeding the flow of knowledge in a regional cluster, but also making it easier for firms to import knowledge and amplify the spillover benefits to 

other firms in the region.30

57 

31 ‘‘The fading lustre of clusters’’. Oct. 1, 2007. The Economist. 

Regional approaches to technology-based economic development are not without 

their critics however. By spreading risk, regional approaches may spread government research support too thinly across many institutions, preventing the formation 

of a critical mass that can achieve breakthroughs. Some innovation economists also 

argue that regional approaches distract policymakers from the needs of firms—and 

that it is individual companies that are ‘‘competitive’’ not regions or clusters.31

As regional knowledge institutions develop, and innovation zones and small research spaces proliferate, it is entirely likely that the term ‘‘research park’’ or 

‘‘science park’’ will gradually fade from the vocabulary of economic development. For 

existing parks, the rise of regional ecosystems will require a major reinvention. It 

means expanding the range of workplaces they connect to and manage—in fact this 

will be a major value proposition for them. Park managers can play a role in helping 

tenants build bridges between core centrally owned space and non-core spaces like 

homes, cafes and airports—all the other places where people actually work. Buildings need to transform into platforms that are resilient enough to enable disruptive 

reconfiguration. 

Part III—Three Scenarios of the Future 

Trends are valuable for understanding directions of change in areas that will help 

shape the future. But the future is a complex and messy place, and will be shaped 

by many trends acting in combination. If we only look at individual trends in isolation, we will miss the big picture. 

Scenarios are a tool for thinking about the future in all its complexity. While it 

is highly unlikely that any scenario we envision in the present will come true in 

its entirety, parts of scenarios might, and the discipline of thinking systematically 

about the future allows us to prepare for better decision-making in the present and 

near future. Some places may confront one of these scenarios more than others. 

Some may confront all three and have to make choices about which direction they 

want to go. Others may find these irrelevant but the process of systematically thinking through how they would react to them develops future thinking literacy and 

skills. 

Four external trends were pivotal in shaping these scenarios, because of their 

broad importance in setting the background for technology-based economic development. They are also have a high degree of uncertainty, and may play out in a variety ways. These highly uncertain trends are: 

Universities. Some universities will embrace entrepreneurialism while others reject a larger role in the economy. But all will face challenges navigating the conflicting demands and increased strains of a shifting economic and intellectual role. 

(see ‘‘Universities: From Ivory Tower to Economic Engine’’, page 25). 

New science institutions. Professional societies, journals and other institutions 

that set the basic rules of who can call themselves a scientist, and how they should 

conduct research and share results, will come under tremendous strain. Something 

will replace these institutions, but how will it connect to existing and new places 

in the future? (see ‘‘Institutional Transformation’’, page 21) 

Sustainability. The cost of energy will drive business and policy decisions across 

the board. How will R&D ecosystems react to different energy frameworks, and the 

scientific and technological challenges of battling global warming? (see ‘‘Ecological 

Economics Comes of Age’’, page 13) 

The bio-industrial complex. Bioscience will supplant physics as the source of great 

breakthroughs, but will the fundamental flaws in systems for commercializing those 

discoveries be fixed, and what role will places play, if any? (see ‘‘Biology: Nature 

As Source and Code’’, page 15) 

By combining plausible hypotheses about how these factors might play out in combination, we developed three scenarios for the future of research parks set around 

the year 2025, that are intended not to be a prediction of what will happen, but 

what could happen, with the goal of provoking strategic thinking about what we can 

do today to get ready, build resilience, and develop the ability to think systematically about the future: 

Scenario 1—Science and Technology Parks 3.0 

Incremental Change Adds Up 

A time-traveler from 2009 would still recognize the research parks that are being 

built in this scenario, all over the world, at roughly the same level as today. But 

looking deeper inside them, he will see that these parks are upgraded versions of 

their predecessors—faster, more efficient and with more features. They are starting 

58 

32P. Mitchell. 2009. ‘‘Corporate venture funds chase early-stage deals’’. Nature Biotechnology. 

27(5):403–404 

to bring conventional tenants together with new kinds of collaborative networks, 

and leveraging the intellectual resources of universities more effectively than today. 

Put simply, they are doing some things right, but some opportunities have been 

passed over due to the risk involved. 

Parks have developed deeper formal ties to universities and companies alike, but 

technology transfer is still a long, inefficient and uncertain process, and parks still 

play a limited role. Regional partnerships are helping to pool marketing resources 

and create global brands, but are not actively managing ecosystems of knowledge, 

talent and investment. New science networks overlap and occasionally connect to 

parks and campuses, but they still form and grow mostly outside the sphere of 

parks’ influence. The most successful parks are almost exclusively housing or incubating biotechnology and biomedical R&D, and investing significant resources in 

bridging some of the industry’s structural obstacles to innovation—though progress 

is incremental. 

Universities as Catalysts 

Part of why parks haven’t changed much is because universities have changed a 

lot. Many of the commercial and entrepreneurial functions of parks are now 

seamlessly integrated into campuses and curricula. Both faculty and students are 

supported and rewarded for entrepreneurial activity. The humanities shrink in relation to business and professional training. There has been a lot of innovation in how 

universities manage intellectual property and technology transfer. With private research institutions stealing away the best faculty, they really had no choice. 

Parks as ‘‘Living Labs’’ for Sustainability 

One area that research parks have made a calculated gamble is in sustainability. 

The economy is still going through a managed transition new energy regime, but 

it has been expensive and difficult. Early on, research parks seized the opportunity 

to distinguish themselves as centers of experimentation in sensing, energy and resource management. A select group has pioneered its own performance standards 

that go far beyond LEED—they are carbon-negative and are now global centers for 

innovation in the booming business around managing carbon. 

Bringing Biotech and Big Pharma Closer Together 

The Bio Economy hasn’t truly blossomed yet, due to continuing structural deficiencies in the industry’s structure. But one outcome of the Great Recession of 2009 

was a vastly expanded role of big pharma’s strategic venture funds in financing 

early-stage startups.32 In this scenario, parks have positioned themselves as strategic sites for big pharma and biotech startups to co-locate. Parks provide flexible 

space for both short- and long-term collaborative research projects. Parks that accommodate a wider range of R&D and manufacturing are attractive to more 

vertically-integrated biocompanies. The most successful parks are positioned as key 

nodes for translation between biology lab and the marketplace (and back). They 

have also diversified connections between science parks and universities, so that life 

sciences are more strongly linked than today. 

A Spur on the Science 2.0 Highway 

New science networks and institutions are blossoming online, and research parks 

and their partners are listening to and participating in these activities. But parks 

are not the primary places where these networks are ‘‘coming in for a landing’’ in 

the real world but not leading. The main highways of Science 2.0 pass by parks, 

but not directly through them. The result is that its harder for tenants to really connect to these vital communities of innovation. 

Scenario 2—The Rise of Research Clouds 

Disruptive Competition from Outside 

On a sunny morning in 2015, ScienceSpaces.com went live. Targeted at everyone 

from angel investors to corporate real estate managers, ScienceSpaces provides a 

real-time global directory of available research space at small, independent incubators and pop-up labs around the world. These spaces are distributed, agile and lightweight. They pop—up overnight as needs change, and disappear when their usefulness has run out. Many are tenant-owned cooperatives. 

A year later, ScienceSpaces added a rich set of collaboration and innovation management tools, providing tenants with new ways to coordinate leasing and research 

projects across a ‘‘research cloud’’ of small facilities. This model combined the scale 

59 

efficiencies of traditional research parks with the diversity and dynamism of small, 

social collaborative research spaces. 

Research parks everywhere scrambled to respond to this new competitive threat. 

An Oort Cloud Around Universities 

Like the Oort cloud of comets that surrounds the solar system, invisible but carrying the chemical seeds of life, the research cloud is an almost invisible, but crucial 

mass orbiting research universities. Some universities find ways to leverage this, 

but many don’t. 

The universities that don’t get it fail to see that they are losing their dominance 

as hubs in regional knowledge ecosystems. Their stodgy IP frameworks and huge 

cost overhead make them very uncompetitive for anything other than teaching. 

Their research parks are trying to re-invent themselves into the cloud, and are disconnecting from the university partners that now present more of a liability than 

an asset. Academic institutions remain useful as sources of labor. 

Ironically, it is universities with the smallest endowments that embrace the cloud 

most tightly, as they are priced out of large-scale expansion. They are aggressively 

shifting away from the ‘‘research campus’’ model, and toward an ‘‘innovation zone’’ 

model. By engaging with cloud players, they can spread the risk of spin-off activities 

among multiple participants. Development is more incremental, with less master 

planning and more evolution. Extensive reuse of existing buildings will also reduce 

costs of housing the cloud. 

A Crucible for New Institutions and Networks 

The research cloud isn’t just a hub for new science and technology institutions— 

it is a platform for creating them. Since the cost of forming groups is basically zero, 

new groups are forming all the time around emerging fields of research, particularly 

challenging problems and new business models. 

In the beginning, because it was outside the traditional system, the cloud had to 

invent new structures on the fly, and developed new platforms for reputation and 

rewards. These workplaces ar e peppered with sensors that ‘‘mine reality’’, helping 

the inhabitants be more effective and engineering meaningful chance encounters. 

But the sensors also help record people’s contributions to the collaborative community. A sensor-rich environment could automagically note the 15 minutes you spent 

mentoring a young entrepreneur by the water cooler and credit your reputation account. 

A small but growing number of research parks are injecting pieces of the cloud 

into their campuses, sites and buildings. These spaces are playing the role of the 

coffee houses of the 17th century. They are a place of open discourse among people 

from business, academia, startups, craftsmen, policy people, users, amateurs, etc. 

Parks Hobbled High-energy Infrastructure Puts Parks at a Disadvantage 

Parks and universities are at a competitive disadvantage to clouds, because they 

have lots of legacy infrastructure, underused real estate, and are big targets for regulation and citizen watchdogs. Bioteaming becomes a popular approach for managing clouds. Research parks that are connected to manufacturing are quickly 

adopting industrial ecology strategies or facing public scorn. 

Lightweight Approaches Push Biotech R&D in Productive New Directions 

While many critics thought biotech needed vertical integration, fewer networks 

and longer investment horizons, research clouds are showing that going in the other 

direction, hard and fast, can actually produce new industry structures capable of 

major scientific and technical breakthroughs. 

Probably the biggest gain has come from the freedom clouds gain in how they 

manage intellectual property due to their lack of institutional legacy. Clouds make 

major contributions to knowledge commons like the Registry of Standard Biological 

Parts, and because so much of what they know is tacit, patents don’t really matter 

that much. When knowledge leaves the cloud, it still has to be translated into something consumable by more traditional partners, but within the cloud many of those 

bottlenecks to knowledge circulation, that serve as barriers to innovation elsewhere, 

are gone. 

Scenario 3—Dematerialized Innovation 

Research Parks in Decline 

In 2011, the number of research parks worldwide peaks and then begins to decline. The beginning of the end was the Great Recession of 2009, which devastated 

the commercial real estate industry and decimated university endowments, cutting 

off two of the main sources of funding for research parks. But what really spelled 

the end for capital-intensive parks was the Energy Shock of 2012, when a renewed 

60 

global economy picked up where it left off in terms of resource demand. Virtual 

R&D networks made big gains during these crises, allowing companies to maintain 

an innovation pipeline in times of austerity, while gaining greater flexibility and 

lower fixed costs. During each successive crisis, this beachhead of dematerialization 

has expanded, and today half of all innovations come from research teams that are 

highly virtualized—only in the last few steps of development does any real face-toface collaboration happen. 

There are many possible triggers acting alone or in concert—high energy costs, 

falling R&D productivity, or a protracted global recession. Since technology just isn’t 

solving economic, social and environmental problems, the few remaining productive 

research enterprises become highly virtualized to cut costs. Existing parks fail to 

provide value to virtual networks, and don’t create local and regional systems to create sticky know-how. Research parks are obsolete, mere office parks. 

Universities Retreat to the Ivory Tower 

Universities have become nothing more than very expensive coffee shops. Much 

of what they provide can be replicated in other places, or online through new platforms. Distance learning, which took off during the years after the recession, is now 

serving a large swath of the student population. DIY and peer-produced education 

is easy to assemble from vast learning resources online. People create and share 

curricula as pages of hyperlinks to archived lectures, documents and simulated 

learning environments. 

Parks as Event Spaces 

While demand for traditional, long-term leased private space is shrinking, the rise 

of distributed teams does not mean that teams never gather. On the contrary, there 

is a rapidly growing need for spaces that can house teams and other gatherings for 

a few hours, days or weeks. Some parks are reinventing themselves as event destinations, or extended-stay research ‘‘hotels’’. 

Costly Energy Pushes R&D into Cyberspace 

Among the many benefits of dematerialization is its much lower measureable sustainability impact. While some argue that virtualized research networks merely 

shift energy consumption from offices to home and from organizations to their employees, rather than reduce it, it’s very difficult to prove this. Parks are at a severe 

disadvantage, because they are geographically contained big targets for ecological 

audits. 

Biotechnology Stagnates 

Parks and universities were probably the best possible sites for housing the kind 

of translational bench-to-bedside research that was needed to prime the biomedical 

industry for rapid innovation-based growth. The failure of both to compete effectively head-on with virtual R&D models means that few places exist that are well 

suited for translational research. Virtual networks are more suited to incremental 

innovation upon existing technologies. Too much dependence on virtual networks 

has also stifled cross-disciplinary conversations as communities of interest wall 

themselves off online, like radical political groups. It turns out that too much of a 

good thing can stifle innovation. 

Part IV—Strategic Implications 

This forecast has sought to identify the trends that will shape the future for technology-based economic development generally, and research parks specifically. 

Throughout Part II we highlighted tactical impacts of each of fourteen emerging 

trends. 

In Part III, we brought these trends together to describe three scenarios for the 

future of research parks and technology regions. Here we highlight some broader 

strategic takeaways that arise from these scenarios. 

Building Biomedical Places: From Silicon Valley to Biopolis 

Too many assumptions about how technology-led development works are based on 

lessons learned from the Silicon Valley experience. However, these successes have 

not only proven incredibly difficult to duplicate but are unlikely to be a good model 

for successfully growing biomedical and biotechnology industries. 

More and more we are beginning to understand the fundamentally different nature of biomedical R&D, the current and optimal industry structure, and the needs 

of growing firms. While a place like Biopolis in Singapore has literally reframed our 

thinking about how to build a ‘‘city of biology’’, it has by no means perfected the 

model. Bio-industrial regions will cluster along very different rules than IT hardware and software did. We have identified several driving forces in this study, but 

61 

more focused research is needed to understand how location decisions happen in 

these future growth sectors. 

Building Responsive Universities 

As universities become bigger players in R&D and economic development, their 

relationship with research parks and regions needs to be carefully rethought. On 

some level, the very notion of a university as solely a center of research and teaching needs to be re-examined. 

In our scenarios, universities are among the least adaptive institutions. While 

universities do routinely respond to market and economic shifts, they do so over 

very long periods of time. Today, economic development often responds to the needs 

of universities. For regional knowledge ecosystems to become more resilient, they 

will need to encourage universities that are responsive to well-articulated regional 

needs. Structuring these engagements around mechanisms that produce tangible 

benefits for the universities will be crucial. 

Future Business Models: from Products to Services 

Each of our scenarios point toward a need to develop new business models for 

technology-led economic development efforts. The first-generation and second—generation models in use today are mainly driven by revenue from real estate development, sales and leasing and government subsidy. Potential new models are more 

likely to be built on venture investments, knowledge brokering and event management. The overall shift will continue to evolve rapidly from products (buildings, 

sites, infrastructure) to services (research ‘‘hotels’’, incubation, technology transfer, 

knowledge commons). 

Rewards for Grand Visions 

While the Great Recession may mean the end of big real estate projects, it does 

not mean the end of grand visions. In fact, it is during the downtime of a recession 

that the window for long-term strategic planning opens most widely. 

Conflicts in large-scale efforts almost always arise from a failure to reach consensus or develop a shared vision early on. So, as a point of beginning, regions need 

to frame and embed a grand strategy in their thinking. For example, Research Triangle Park served as a primary mechanism for sustaining a m uch broader grand 

vision of re-inventing North Carolina’s economy to stem the ‘‘brain drain’’ of young 

talent leaving for other parts of the country. The park’s business model, and the 

grand strategy of developing the Triangle region worked together over a period of 

several decades. 

Making Know-How Sticky 

That original grand strategy for the Research Triangle sought to address that 

generation’s challenge of a mobile work force—the ‘‘brain drain’’ migration of educated workers out of the South. But regions and places today face a different kind 

of mobility—of talent, but also of knowledge. 

Figuring out how to create and maintain ‘‘sticky know-how’’ as an immobile asset 

will be a central challenge for technology regions and research parks. The first step 

is simply to assess what your ‘‘know how’’ assets are? What tacit knowledge is 

locked up in local manufacturing firms? How can strategic discussions be focused 

around core competence that can be upgraded and transformed rather than replaced? 

Working at the Very Large and Very Small Scale Simultaneously 

As they develop grand visions, and align interests behind them, successful regions 

are going to need to work simultaneously at the very small scale—unlocking the secrets of small research spaces and finding new ways to scale them quickly and coherently. Understanding the research cloud requires understanding its overall mass 

and shape, but also the diversity of its many fine-grained parts. 

The first step in mapping this cloud will be engaging it. Identifying various elements and players in the cloud will be challenging, but we have identified many 

new players, groups and elements here—science bloggers, coworking spaces, angel 

investor networks. These can be the foundation upon which to begin discovery of 

the truly off-the-radar assets. The challenge will be creating venues and opportunities to bring the cloud out into the open so you can engage them. 

Cultivating a Regional Knowledge Ecosystem 

Beyond visioning, there are also several possible drivers of new institutions that 

take on the role of knowledge ecosystem managers at a regional level. As we discussed earlier, in highly successful regions, this role is played by venture capitalists—the ultimate brokers of tacit knowledge in technology-based economies. 

62 

In aspiring regions, future ecosystem managers might: 

—Support and coordinate research across a network of ‘‘boutique’’ research facilities 

—Coordinate research among universities across a region, acting as a broker for 

national research funding streams 

—Funding and making available major technology commercialization infrastructure (e.g., wind tunnels, supercomputing centers, etc) 

—Rather than operate venture funds, invest in capacity for entrepreneurship 

broadly to develop the talent and high-quality startups that will attract private 

capital as a natural development. 

Leadership for the ‘‘Long Now’’ 

Regions need a leadership structure that can prepare for the ‘‘long now’’—an extended view of how today’s actions connect to future outcomes. Just like the massive 

science projects it will support, building and supporting regional knowledge ecosystems will require sustained, coordinated effort over many years. This is not 

something that will be accomplished overnight or under the influence or control of 

any one leadership group. This structure will need to bring about trans-generational 

hand off of stewardship over the grand vision, to avoid the zigs and zags that kill 

most plans. It won’t happen accidentally, so it needs to be ‘‘designed in’’ from the 

beginning. 

From Managing Dirt to Managing Activity 

As research spaces become more collaborative, and the boundaries between firms, 

between institutions and between individuals will need to be re-designed. Places like 

the Network Oasis in Joensuu, Finland, are beginning to develop the tools and skills 

for ‘‘serendipity management’’. The notion of planning for chance encounters is 

counter intuitive, but that is exactly why it is important and why it works. Creating 

spaces where firms, individuals and small groups can develop new trusted relationships will be an enormous source of value creation. 

Re-assessing Assessment Tools 

There is a pressing need across all aspects of the economic development profession 

to develop better ways of measuring assets and outcomes, and re-thinking just what 

it is that needs to be measured. As we shift toward more open innovation networks 

and regional knowledge ecosystems, the most important things to understand will 

be what happens between institutions. But most assessment tools measure what 

happens inside institutions. In addition to understanding the scope of institutional 

activity, we need to map the pipelines of people, ideas and money moving through 

regions. The goal is to develop a vocabulary for talking about networks in detailed 

and specific ways, rather than the vague ways we do today. 

Developing Brands 

Because regional knowledge ecosystems will grow increasingly complex and multiinstitutional, brands will become more important, not only in marketing to outsiders 

but in describing just what people and organizations are doing and inspiring them 

to new achievements. 

Today, not many regions do a good job at brand management. In the future, building a brand as an identity that can describe and communicate the unique value of 

a knowledge ecosystem will require active cultivation on an ongoing basis. The 

‘‘grand strategy’’ discussed earlier can be a powerful tool in testing and maintaining 

consistent and effective brands. 

Brands will be crucially important in attracting globally mobile talent and earning reputation in new group economies. 

Senator PRYOR. Thank you, Dr. Townsend. 

Let me go ahead and dive into some questions, here. And then 

I’m going to try to keep my question period short, if I can, and let 

Senator Begich ask questions. And I may have a few follow-ups. 

But, Dr. Wessner, let me start with you. You’ve shown this 

graphic, up here, about the—China’s 54, I guess, state-level and 

technology parks and, you know, how they’ve been able to utilize 

those and help them invent, really, their industrial base in things 

like electronics, information technology, materials, biotechnology, et 

cetera, et cetera. You alluded to this in your opening statement, 

63 

but if you could tell the Committee here, really, how the United 

States compares with China when it comes to this type of innovation and this type of commitment to innovation. 

Dr. WESSNER. Well, thank you, Senator. And I can be very brief. 

We don’t compare, sir. We don’t compare at all. What we’re good 

at is—we’re very strong on the military side. We watch very carefully what goes on in the world. In the agricultural sector, we’re 

very strong. We know what’s happening in trade. But, if you’re 

looking at the level of investment in parks, I think my colleagues 

here would—at least most of them—would agree with me that we 

don’t begin to compare. We have small parks, some of which are 

highly effective, but we don’t have the type of industrial-scale 

parks that they have. 

And we—I think Brian Darmody made an important point. In 

our efforts to make sure that the public and private sectors retain 

their respective roles appropriately, we have sometimes passed conflict of interest—and this is a personal opinion, I would stress; I’m 

not speaking on behalf of National Academies—but, the Chinese 

excel in very close and seamless cooperation between their public 

institutions and the private sector. And I think we need to weigh 

how we approach these things more carefully. 

I mentioned a note of optimism. Since we’re being out-invested, 

the question is, What tools would be appropriate to invest? And I 

think what you’ve identified is part of the path. I don’t work on behalf of EDA. They do sponsor some of our work, along with about 

12 other government agencies. But, I would stress that their budget, in my view, needs to be very substantially increased, both for 

grants, but particularly where we can get massive leverage through 

loan guarantees. Other agencies may have to provide loans. 

I’d like to stress the point that was made about leveraging other 

agencies’ programs so that you get a more integrated approach. 

But, I would also caution that we not spend all our time trying 

to integrate everybody. You know, it’s easy to say we’re going to 

knock down the walls between agencies. Well, you and I are both 

old enough to remember how the Department of Energy smoothed 

out all the differences there, and, of course, Homeland Security’s 

been complete success. I think we have to be cautious about how 

much time we spend on that, and spend more time—one of your 

colleagues, Senator Begich here mentioned, I think importantly, 

speed. All of us—or, not all of us; some exceptions—are beginning 

to get a little gray hair. And if we’re going to give our children and 

grandchildren the type environment that they need to grow in and 

to prosper in, we need to move much more quickly than we have 

in the past. And we need to move on scale. 

I have a number of other points. The other point I’d just like— 

is tax tools that was mentioned; that’s exceedingly important. We 

act like we’re so good that the industry will just stay there, because 

there’s no place to go. Well, that might have been true in the 1950s 

and 1960s, but that is sure as certain not true now. And I think 

Craig Barrett, the former CEO of Intel, has spoken eloquently, you 

know, ‘‘How do I explain to my stockholders that I’m going to take 

a billion-dollar less—or, a billion dollars higher in taxes in order 

to invest in New Jersey rather than outside of Shanghai or outside 

of Dresden?’’ The equity investments made in Dresden for the AMD 

64 

facility, the loan guarantees, the loans put together a package of 

900 million Euros. And that’s why Jerry Sanders put AMD’s lab, 

Fab, there. 

Now, we just have to get in the game. And we also have to remember that our orthodox economists may have very good insights, 

certainly not in anticipating economic downturns or economic upturns. As John Kenneth Galbraith once said, ‘‘The main purpose of 

economic forecasting is to make astrology look good.’’ But, the issue 

is that the rest of the world is not playing by the same rules. 

They’re playing a different game. It’s not wrong, morally, it’s just 

the way they’re playing the game. And we need to have effective 

tools, and your bill is an important step forward. 

Senator PRYOR. Thank you. 

Senator Begich? 

Senator BEGICH. Thank you, Mr. Chairman. 

I do have a 4 o’clock, but I want to, if I can, just do a couple 

questions. But, your statements—and all four of you have—I appreciate. 

I’ve been in small business since the age of 16, so I have had 

those great successes, and also those great failures that go along 

with them. I’m my own incubator and risk-taker. 

[Laughter.]. 

Senator BEGICH. And my wife is an entrepreneur, owns four 

shops in Alaska, and a variety of businesses. And so, everything 

you’re talking about rings true to what I’m—what I’ve been around 

most of my life. 

But, the last comment was very interesting. And it goes to my 

point, when the Assistant Secretary was here. My biggest worry 

with some of the work we do here—and I 100-percent support what 

the Chairman is doing, because I think it is good to get some more 

tools out there, and I’m going to ask you a second question, in a 

second, on, collectively, something—an idea I have, sitting here. 

But, the Federal Government is so slow. And that’s why China is 

so successful. And I understood, when the Assistant Secretary 

made the comment that we’re not—we’re kind of falling a little bit, 

but not behind. And I—you know, I would disagree with that. I 

agree with your statement. We are behind. Energy technology is 

one area we’re falling quickly behind, because we spend more time 

talking about it—talking about percentages of what we should have 

for climate change, and all these other things, which I’m a big supporter of—but, we’re not doing anything. You know, there are little 

pockets, as mentioned in Senator Pryor’s home State, of the wind 

energy—wind—the company making turbines. You know, great. 

One. You know? I could talk about one in Seattle that’s doing some 

stuff, one in Michigan. But, it’s not a collective. And I think we 

lack, in some ways, the capacity, from a Federal Government 

standpoint, to say, ‘‘Get to it,’’ because the majority of the Federal 

Government are not entrepreneurs. They never walked on the edge 

and understood risk, and understood that you have to take a calculated risk that may not be as calculated as you like. But, it 

might jump off and end up in a great opportunity. That, to me, is 

the biggest systematic problem we have. 

I mean, I’m going to support this bill, because I think it’s the 

right thing to do. I like some of your ideas. I’m going to ask you, 

65 

collectively, to think about this. As we move forward—Senator 

Pryor, myself and others—as we move into January, we’re going to 

be very aggressive about more job opportunities in this country. 

More job opportunities. The largest and fastest growth area is 

small business. That’s where we can create some opportunity. 

I’m not sure we’re going to create the right tools, to be frank with 

you. We, marginally, did it in the stimulus bill. I say, ‘‘marginally,’’ 

with quotations around it. We have to be aggressive. 

And so, I would look to you on some ideas, especially as we move 

into the beginning of the first of the year, working, obviously, with 

the Chairman here—and I’d be happy to work with you on four or 

five very targeted collective ideas that we can do to help spur the 

entrepreneur capacity in this country. I just—— 

So, I look to that. Your questions and your statements made me 

really just want to make a comment, and I’m happy to have you 

respond. But, I think our biggest challenge is, you know, doing 

what we should be doing, and that’s leading, and not get in the 

way. We have a habit of leading and then getting in the way. And 

I can give you example after example, as you can with universities, 

where they are great incubators. You know, we have the Alaska 

Small Business Development Center. Fantastic. I just saw a letter 

from someone, that was given to me about a small business, who 

wants to start-up, but she’s struggling to figure out how to do that. 

And so, if you can give me just some quick commentary, then I— 

I apologize, I have to leave. But, I’d be very interested in the second half—and I’m assuming Senator Pryor would, too—and that is, 

help us, as we move forward as the U.S. Senate—after healthcare, 

we’re going to move forward on an America Works Project bill 

that’s going to be about creating new jobs and looking to the future. 

And some of these ideas, the bonding issue—I know exactly what 

you’re talking about. And I can list off some ideas there, and that’s 

why I was very intrigued. 

So, let me, first, just end there, see if there’s any commentary. 

My time is limited. But, please, anyone want to respond? 

Mr. SALLET. Could I offer one thought—— 

Senator BEGICH. Sure. 

Mr. SALLET.—Senator? 

It’s exactly right. The paradigm ought to be local leadership, 

businesses, educational institutions, governments, NGO’s, working 

together. So, it has a business focus and immediately reflects the 

insights of the local business sector. And then, the Federal Government needs to align itself in support of strategies that are created 

at the regional level. That would take a lot of doing. There are 

something like 200 Federal programs that have been identified. 

Senator BEGICH. Yes. 

Mr. SALLET. What they need to do is to think about themselves 

as supporting this kind of regionally-led strategies. Now, that will 

require coordination across agencies. It will require that some programs be changed some, in their emphasis, to make sure that they 

are always aligned tightly with regional economic strategies. But, 

if we do that, then we will know that the leadership is coming from 

where the leadership needs to come from, but that the support exists at the national level, because all of the Nation benefits from 

the total output of the regional economic strategies. 

66 

Mr. DARMODY. And, Senator, you know, earlier was mentioned 

Sandia Park, and Los Alamos, as well, in New Mexico. And those 

parks are Federal, but they’re managed by the private sector. And 

so, they have a lot more flexibility; government is not in the way 

as much as it is for other Federal labs that are government-owned 

and government-operated. And we’re not going to, you know, suddenly make all of our Federal labs privately managed. That, you 

know—— 

Senator BEGICH. Right. 

Mr. DARMODY.—that’s more complicated than the healthcare bill. 

[Laughter.]. 

Mr. DARMODY. But, you could take—you know, reduce the friction by doing what universities have done. They’ve created foundations and other organizations to help the business of tech commercialization. Take that piece. I mean, we’re investing $25 billion 

right now, every year, in Federal labs. And so, if you gave them 

more opportunities, through a sort of a foundation—I mean, the 

Henry Jackson Foundation that—Congress created that; that’s at 

the Uniform Health Services University—very effective in tech 

commercialization. But, it was a foundation created by Congress. 

But, it’s not governmentwide; it’s for one particular agency. 

So, some of those ideas—I think there are best practices out 

there. Making them more across the board for the Federal Government, as well as for universities—some of these ideas about, you 

know, helping build the commercialization funding strategy in our 

research and development funding programs, which currently 

doesn’t exist—I mean, we passed Bayh-Dole, but then we thought, 

you know, the royalty checks were going to roll in. It doesn’t happen that way. It’s a much more complicated commercialization 

process. And we need that—OMB and others to recognize that 

there’s cost in the initial stages of tech commercialization. 

So, there are a number of programs that could be done administratively, wouldn’t even necessarily need significant legislation. 

Senator BEGICH. Thank you. 

I hate to do this. My time was exceeded, so I don’t want to burn 

up the Chairman’s time. But, I thank you for that. I would—and 

I will probably follow up with some of you in regards to some ideas. 

But, I just—it’s frustrating. I set up a development corporation 

when I was a mayor, because I didn’t want us messing it up. And, 

to be honest with you—and we took a hazardous wastesite, as one 

example, and turned it into a $70-million development, using a 

BEDI grant and a few other pieces. But, the private sector did the 

show. And we used a development corporation to really be the instrument, and kept us out of it. I still have, I think, local city council members mad at me because I got—cut them out of the process. 

But, we got it done in 14 months. So, it’s all about how to do it, 

not just sit there and debate it all the time. 

But, again, thank you very much. 

Thank you, Mr. Chairman, for allowing me a little flexibility 

there. 

Senator PRYOR. Thank you. 

Dr. Townsend, let me, if I may, ask you a question. I believe you 

used the term ‘‘research clouds.’’ Tell me what that means. 

67 

Dr. TOWNSEND. Well, I just want to start out by reminding everyone this is a forecast and not a prediction. It’s sort of difficult to 

understand how many different trends that are shaping the future 

will intersect 10, 20 years out. But, I think what we see are a lot 

of signals in the marketplace that this traditional model of, kind 

of, drawing a line around a piece of land and saying, ‘‘Everyone 

that does science and technology, get inside that box,’’ is something 

that’s going by the wayside. 

What it is being replaced by are districts, zones, geographic clusters of facilities, labs, shared workspaces, university facilities, and 

private-sector speculative lab-space developments that are all tied 

together by the Internet, basically; by shared social networks, by 

Facebook, by scientific communities that form online. 

What we think is going to happen down the road is that someone 

is going to try to organize that and formalize that. And the way 

that might work out in the future is that, rather than going to a 

research park to get 10,000 square feet of space, a company might 

tap a network and say, ‘‘I need 10,000 square feet of space. I want 

some of it to be private, some collaborative, and I want it to be sort 

of in the same area.’’ And that can be provisioned very rapidly and 

very efficiently. 

This model would have lots of advantages. It would probably be 

more efficient, in its use of space. It would probably reduce the risk 

for everybody involved, because you’d go from long-term leases to 

temporary leases. And it would foster collaboration, because it 

would also include a lot more shared space. 

Now, this is something we see already happening, naturally, in 

places like the—part of Cambridge, Massachusetts, around MIT. 

It’s also something that’s starting to become part of university-driven economic development strategy. So, if you look at the greater 

Oakland Keystone Innovation zone, around Carnegie-Mellon in 

Pittsburgh, they’re not doing a single-park expansion of the campus. They’re scattering investments, engaging lots of partners, and 

doing things in a very organic, evolutionary fashion. 

And so, we think that’s a very compelling middle ground between 

the model, that we have continuing for 20 years, and research 

parks basically going into decline. 

Senator PRYOR. OK. 

Mr. Darmody, let me ask you. Apparently, the University of 

Maryland research park, M Square—— 

Mr. DARMODY. Yes. 

Senator PRYOR.—is that what they call it? 

Mr. DARMODY. Yes. 

Senator PRYOR. Could you tell us a little bit about that, and, 

kind of, what they’re doing there, and what makes them stand out? 

Mr. DARMODY. Well, because we’re located inside the Beltway, we 

have three focus areas, kind of building partnerships among the 

university, the Federal Government, and the private sector. And 

among the Federal Government—I mean, we’ve talked about stovepipes here. So, for example, in food safety and food security, we 

have the FDA, the food safety part of the FDA, headquartered in 

our park. We also do—we have part of USDA. So, you know, the 

way we regulate food safety in the United States, we have USDA, 

a piece of it; FDA, another piece of it. We’ve brought them together. 

68 

We’ve been the intermediary, as well as the university. And now 

we’re bringing in private-sector people. And we’re doing training, 

for example. So, you know, 40 percent of all of our food is imported, 

is now a commodity. So, if the food isn’t grown safely and tested 

in other countries, that’s an issue for the U.S. So, we are doing 

international training. We’re setting up both regulatory and toxicology training so that other countries are going to adopt U.S. 

standards in food safety and food security, and that will help us. 

It helps build better science, because, really, science parks and research parks need to be thought of a communities of innovation. 

And, given our location, we’ve leveraged a—Federal, private sector, 

and the academic sector for that. 

And we’re doing something similar with global climate change, 

where we have Department of Energy, NOAA, and NASA. We put 

them all together in the same place. Again, the Federal Government has some global climate change in each of those three departments. 

We’ve been the intermediary. And I think that’s a good model. 

And even the private sector is looking at that, because insurance 

companies are—you know, have risk related to global climate 

change. They want to know what the proper models are. 

So, that has been our experience. But, then other parks across 

the United States have had more of a small business—trying to 

build innovative companies out of—technologies out of universities. 

So, as the saying goes, ‘‘If you’ve seen one research park, you’ve 

seen one research park.’’ Because, frankly, they are very, very dissimilar, but they all add value and create new innovations for the 

country. 

Senator PRYOR. Right. Well, thank you. 

Mr. Sallet, let me ask you. In the bill, in the Building a Stronger 

America Act, it requires the planning grants to be awarded on a 

competitive basis and to consider geographic diversity. Are those 

the right two criteria? I mean, does that make sense to you? 

Mr. SALLET. It does. The—having a competitive process is very 

important, for two reasons. One, the nature of competition will create the right incentives for local places to create real strategies. 

Knowing that they will have to compete for the money, it will help 

bring businesses together with the other parts of the community, 

to have a really thought-through strategy. 

The second thing it will do is help to ensure the efficiency of Federal spending, which is very important, in times of necessary fiscal 

restraint, by putting money to where it will have the biggest impact while, frankly, giving people, even who don’t win a competition, the chance to learn from the experience and do a better job 

next time. 

At the—the provision on geographic dispersion is also very important. We have a tendency to think about clusters in innovation 

as if they’re urban phenomenon. They’re not. I mean, there’s a lot 

of manufacturing in rural America that people don’t take enough 

account of, for example. And we’ve seen, in the last year, a sharp 

decline in that kind of manufacturing employment. Automobiles, an 

obvious area. But, that’s not just big cities in the Midwest; it’s 

rural locations, as well. We’ve seen a decline in apparel, textiles, 

and paper products. 

69 

And so, it’s very important that we understand that the advantage of geographically concentrated innovation will work in rural 

America. And by emphasizing geographic dispersion in the bill, 

you’ve made people focus on that. 

Here’s one reason why rural America has advantages. We know 

that rural America, when it comes to converting patents of well-established technologies, is just as good at it, has just as many patents as urban America. We know there are advantages in costs. For 

example, in advanced manufacturing, these days, we used to think 

of manufacturing as something that can’t be done in the United 

States because wage costs are too high. But, as we get, particularly 

in the area of semi-conductors, in the world of advanced manufacturing, labor costs actually shrink. What companies need is to be 

in a nexus of innovation in places where community colleges are 

training workers for those kinds of advanced manufacturing. What 

rural economies have a good base for manufacturing—good wages 

that provide those kinds of opportunities. So, we need to keep our 

emphasis on rural America. 

Indeed, if I could just say, Mr. Chairman, I know that you’ve 

been very busy, of late. And the healthcare debate is a critical one. 

It—I think we’re all appreciative of the fact that you’ve taken a 

moment out of that healthcare debate to focus on this, because this 

isn’t the front-page story that healthcare was this morning, and 

will be tomorrow. But, actually, if we’re going to have the new 

building blocks of American competitiveness, it’s fundamentally important. And so, it’s—we’re all very appreciative that you’ve taken 

the time to focus on it. 

Senator PRYOR. Well, thank you. 

And thank you all for being here. And I really appreciate your 

participation today, and your very thoughtful comments. 

And I know that you’ve helped my staff, and other staff on the 

Committee and other member staffs, to help us make this Building 

a Stronger America Act even better. And we’re going to continue 

to improve it. So, if—we’re working with Senators on both sides of 

the isle, here, to try to really have a good piece of legislation that 

we can get very broad bipartisan support for, and your assistance 

on this has been invaluable. And I hope we’ll continue to discuss 

this as we go through the process. 

We’re going to leave the record open, here, for just a week, 

maybe 4 or 5—let’s say 5 business days. We’re going to possibly get 

some questions from some of the members who either had to leave 

early or who—not able to be here today. So, if you get questions 

from the Committee, please try to get those back ASAP. 

I really appreciate your thoughtfulness and your time in trying 

to help us do something good for this country, and help us get back 

in the innovation business in a way that our global economy wants 

us to do this right now. 

Thank you very much for being here. 

And the Committee is adjourned. 

[Whereupon, at 4:21 p.m., the hearing was adjourned.] 

(71) 

A P P E N D I X 

PREPARED STATEMENT OF HON. OLYMPIA J. SNOWE, U.S. SENATOR FROM MAINE

Thank you, Senator Pryor, for holding this hearing today on the crucial issue of 

strengthening America’s economic competitiveness by enhancing U.S.-based science 

research parks. Indeed, this hearing is truly timely as our Nation’s economy hints 

at a tenuous comeback. With a high, 10 percent, unemployment rate and millions 

of jobless Americans, it is imperative that we continue to focus our efforts on economic revitalization and job creation. It is therefore critical that we follow President 

Ronald Reagan’s inspirational message from his Second Inaugural address that, ‘‘We 

must think anew and move with a new boldness, so every American who seeks work 

can find work; so the least among us shall have an equal chance to achieve the 

greatest things. . . .’’ And, the best and most proven way to accomplish this mission 

is by investing in American innovation. 

In furtherance of that goal, we are here today to explore and recognize the nexus 

between science research parks, regional innovation clusters, business incubators, 

and the creation of jobs for the 21st century. Science parks promote an essential 

culture of innovation, collaboration and economic competitiveness among universities, research laboratories, and small businesses—working within close quarters or 

networking through ‘‘virtual’’ parks where technologies cluster—to move research 

from ‘‘mind to marketplace.’’ They are a vital part of our Nation’s economy, employing more than 300,000 scientists and engineers. Significantly, every single job in a 

research park generates 2.57 jobs outside the park. That is more than three quarters of a million (770,000) American jobs! 

To echo the message of President Obama at the recent jobs summit, we must take 

‘‘every responsible step to accelerate job creation’’ and get the ‘‘biggest bang for the 

buck.’’ Science parks can help us realize both of these goals. 

As Ranking Member of the Senate Committee on Small Business and Entrepreneurship and a senior member of the Senate Commerce Committee, I enthusiastically encourage increased investment in science parks and regional industry clusters. That is why Senator Pryor and I introduced the ‘‘Building a Stronger America 

Act’’ (S. 583), to provide grants and loan guarantees for the planning, development 

and construction of science parks throughout the United States. This bipartisan legislation would drive innovation and regional entrepreneurship by enabling existing 

parks to make needed renovations while also encouraging rural and urban states 

to undertake studies on developing their own successful regional science clusters. 

Our legislation would allow the Secretary of Commerce to guarantee up to 80 percent of loans exceeding $10 million for the construction of science parks. Additionally, the bill would provide grants for the development of feasibility studies and 

plans for the construction or expansion of science parks. Notably, our legislation exemplifies the need to think of science parks as more than just the traditional ‘‘mortar and bricks’’—and leverage the networks of people and knowledge and clusters— 

if we are going to meet the economic development needs of the 21st century. 

In my home state of Maine, traditional science parks currently do not exist; and, 

yet, Maine is a national leader in providing business ‘‘incubation’’ services. These 

incubators are critical to the success of new companies. To help start-up entrepreneurs in Maine, incubation centers around the state provide business support 

tailored to companies in their regional innovation clusters. The benefit of Maine’s 

seven technology incubator centers has been nothing short of monumental, as a remarkable 87 percent of all businesses graduating from these incubators are still in 

business and creating new jobs. Under the ‘‘Building a Stronger America Act,’’ business incubators as well as science parks will be eligible for vital assistance that will 

hopefully lead to similarly successful results in other states. 

More than simply stimulating job creation and strengthening U.S. competitiveness, this legislation can also help benefit military bases affected by the base realignment and closure (BRAC) rounds. Specifically, we can utilize this opportunity 

to help BRAC communities’ redevelopment efforts and stem enormous job losses. 

For instance, with the closure of Naval Air Station Brunswick (NASB) in my home 

72 

state of Maine, the Midcoast region is estimated to lose 6,500 jobs and $140 million 

in annual income. Sadly, the closing will also leave behind a complex of buildings, 

state-of-the-art facilities and idle real estate property. It is essential that we do everything in our purview to lessen these negative impacts. This is why I plan to work 

with you, Senator Pryor, and our colleagues to ensure that one factor to consider 

when awarding grants under S. 583 is whether the award would assist in the transformation of military bases shuttered by the BRAC rounds into vibrant science 

parks. 

By resourcefully and adequately investing in American science and technology, we 

expand opportunities and build on a foundation for a better tomorrow. We must continue to encourage all avenues for advancing science and technology if America is 

to remain at the forefront of scientific and technology development for decades to 

come. 

In conclusion, thank you again, Senator Pryor, for scheduling this vital hearing 

today and for your invaluable and longstanding leadership on behalf of advancing 

innovative technology in our economy. 

PREPARED STATEMENT OF HON. DAVID VITTER, U.S. SENATOR FROM LOUISIANA

I want to thank the Chairman for scheduling this important hearing. Discussing 

ways the United States can maintain its crucial leading edge in scientific research 

and technological development is obviously of the utmost importance. 

I certainly understand and agree with the great value scientific research parks 

and consortiums can have, both for achieving scientific breakthroughs and fostering 

economic development. In my home state of Louisiana, I helped form the StennisMichoud Aerospace Alliance to promote the growth of the aerospace industry in the 

region between NASA’s Stennis Space Center in Mississippi and Michoud Assembly 

Facility in New Orleans, as a means to both foster job creation as well as further 

scientific and technological breakthroughs in aerospace engineering and design. And 

in Shreveport, we have the burgeoning Intertech Science Park—home of the LSU 

Health Sciences Center, as well as private companies—dedicated to research in the 

biomedical field. 

More and more, we hear that America is falling behind—or the rest of the world 

catching up—in scientific research and development. As I noted, I have personally 

seen in my own state the immense value research parks and consortiums and cooperation and engagement between public educational institutions and private companies can have in terms of scientific research and job creation and economic 

growth. 

Research parks can be a useful tool for maintaining and improving America’s role 

as the world’s scientific and technological leader, as well as helping to grow local, 

state, and regional economies, and we should look for ways to encourage their development. 

I’d like to thank Dr. Wessner for his testimony and I look forward to continuing 

to discuss ways we can continue to foster scientific research and the job creation 

and economic growth that comes with it. 

PREPARED STATEMENT OF RUSS LORINCE, DIRECTOR, RESEARCH AND ECONOMIC

DEVELOPMENT OFFICE, WEST VIRGINIA UNIVERSITY

Science and Research Parks Promote Innovation 

The West Virginia University Research and Economic Development Office submits 

this testimony in support of S. 583 and the prospect of developing and constructing 

science and research parks to promote the Innovation Economy. Such facilities are 

essential to the United States’ ability to maintain its competitive edge in the global 

market place. 

Competing in an Innovative World 

For the United States to remain a world leader in innovation and to compete effectively in the global economy, it is critical that infrastructure be in place to advance science and engineering education, research, technology transfer and commercialization. In recent years, alarming statistics indicate that the U.S. is falling further behind competitors in terms of the number of students engaged in science and 

technology fields. While American universities retain their standing as the world’s 

leading institutions for post-graduate education, the trend is disturbing. 

The innovation continuum constructed around higher education has been a primary reason that the Nation has continued to move new discoveries and technologies to the market place and to realize the economic benefits of that work. That 

structure has provided a positive environment that has assured a competitive adVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00076 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
73 

vantage with the rest of the world and has brought top researchers from around 

the world to American campuses. The Bayh-Dole Act, SBIR/STTR grants, business 

incubators and accelerators, industry collaborations and commercialization programs are among the innovation elements which have allowed the U.S. to lead the 

world in productive use of intellectual property. 

Important Role of Science and Research Parks 

University research parks have earned their own status as vital components in 

advancing technology’s role in economic growth. Over the past 50 years, an increasing number of U.S. institutions of higher education have added research parks to 

the innovation continuum, often as the last needed piece of physical infrastructure. 

After talented faculty researchers, world class laboratories, research support, technology transfer and business incubators have been put in place, parks add another 

essential dimension. 

Though they are physical places, the value of research parks comes from the 

unique economic ecosystem they create. These facilities supply a fertile environment 

for higher education, government and industry to collaborate and partner in ways 

which have yielded great returns. All three parties realize benefits from the proximity and regular interactions which spring from parks, in part from good fortune 

and in part from careful planning and management. It is the real estate element 

of a park which is most visible, but the true value is derived from programming 

which drives opportunities for tenants and visitors to define common goals, explore 

partnership options and experience scientific and economic success. 

Support for Science Parks in Other Nations 

Recognizing the significant output from research parks in the U.S., competitors 

around the world have undertaken their own projects. Reflective of different economic systems, national governments elsewhere have been instrumental in building 

parks in and around their academic and scientific assets. 

European nations have longstanding parks which provide similar benefits to their 

U.S. counterparts. New facilities and expansions of existing parks are springing up 

across the continent. 

But it is in Asia where governments are investing huge sums in research parks 

with scale and scope which are difficult to grasp. In one extreme example, a single 

park in China contains 20,000 companies and 950,000 employees. Of course, the 

central government funds these projects in pursuit of economic growth and a greatly 

enhanced competitive position. 

In contrast, funding for research parks in the U.S. has come from the state and 

local level and through private partnership. 5583 provides a new avenue through 

which the Federal Government can partner to promote further prosperity and improve return on the public investment made in research. 

WVU Research Park 

The WVU Research Park was announced a decade ago and since that time Phase 

I has slowly been developed, now offering 24 acres served by roads and utilities and 

prepared for construction. One tenant has taken occupancy of a privately-finance 

building in the park, creating some activity and energy. Funding for the facility, 

which has come through the WVU Research Corporation, has been sporadic as the 

State of West Virginia and local governments have been limited partners. 

With the first tenant in place and important agreements and financing elements 

pending, the park is at a critical crossroads. The type of support which would be 

available through the programs in S. 583 could be crucial to advancing the project. 

Funding for planning grants, including a current and more useful version of a 2002 

consultant’s report, would reaffirm the concept of the park and its market potential 

and possibly attract corporate collaborators to create a public-private partnership. 

The prospect of loan guarantees could be of great importance in finalizing a financing plan for the construction of WVU’s first building in the park, which would serve 

as an Innovation Center to support entrepreneurs and start-up firms spun from the 

WVU research effort. 

While some states have been able to provide significant financial support for such 

projects, that hasn’t been the case at WVU. Lacking that backing, the opportunity 

to compete for Federal planning grants and loan guarantees would provide wonderful new opportunities to advance the WVU Research Park. 

Conclusion 

As the U.S. reassesses its competitive position in the global marketplace, it becomes clear that we must focus on sustaining and building the innovation infrastructure. Having the Federal Government partner with state and local investment 

74 

in constructing university research and science parks is a sound strategy to build 

economic strength and S583 provides a reasonable means to that end. 

Thank you for considering our testimony. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. MARK WARNER TO

HON. JOHN R. FERNANDEZ

Question 1. Infrastructure is obviously the first step in the development of a research park and is addressed in S. 583. However, early stage high-tech companies 

quickly hit a source of funds roadblock. What should the Federal Government’s role, 

if any, be in facilitating the flow of investment funds to emerging companies in research parks? 

Answer. EDA recognizes that the funding roadblocks are a major impediment to 

the full realization of the potential of the early stage companies that are an important source of employment growth. One study estimated that companies once backed 

by venture capitalists accounted for nearly 17 percent of America’s GDP and 9 percent of private-sector employment (Economist, March 2009). Venture capital is also 

known to be important to innovation more generally. Since $1 in venture capital 

yields as many patent applications as $3 in R&D, venture funding is critical to research park success (Kortum and Lerner, 1998). 

Venture capital investment in the U.S. is down 51 percent since last year (Economist, October 3, 2009). However, some industry commentators believe venture capital was too prevalent and should become smaller based on low average returns over 

the last decade and the risk inherent in normal venture projects (Kauffman Foundation, June 10, 2009). The Kauffman report concludes, ‘‘the venture business should 

shrink . . . possibly by as much as 50 percent’’. EDA believes that increased capitalization of its Revolving Loan Fund (‘‘RLF’’) program specifically targeted to supporting the commercialization of innovative new technologies particularly in markets that ‘‘will continue to grow . . . including clean technology’’ (Kauffman 2009) 

might be as useful as a recovery strategy and is currently attempting to estimate 

if an unmet need exists in this area. 

Question 2. Universities can play an enabling role in the creation of intellectual 

property that could form the foundation of companies that could benefit from a research park environment. How would you recommend that the universities, especially the land grants, become incentivized to be more engaged in economic development throughout the states—especially supporting research parks that might not be 

adjacent to them like at Virginia Tech? 

Answer. The land grant universities already possess the outreach tools, such as 

Extension Service Agents, that will support activities remote from the university 

campus. EDA is currently sharing its ‘‘Know Your Region’’ curriculum and webbased local decisionmaking support tools with our colleagues at USDA Rural Development, who will be adapting its regional innovation systems core to their environment. (For example, see EDA’s www.statsamerica.org/innovation). EDA is also collaborating with the Appalachian Regional Commission in a similar way to adapt 

these intellectual property transfer mechanisms to that region. These collaborations 

could be enhanced through closer coordination of EDA’s University Center program 

and programs of our sister agencies. Outreach programs, such as the University of 

Oregon’s Resource Assistance for Rural Environments (RARE), which provides students with practical work experience and partial support for their educational expenses if they work for rural governments and non-profits, could be supported via 

competitive University Center grants, and could significantly increase contact with 

appropriate tech-transfer and other science park services. Other models, such as the 

Idaho Virtual Incubator, have also shown successful results. Taken together, EDA 

believes that successful models and best practices, appropriately adapted to regional 

conditions, are a critical component of university enabled company formation and 

broad based benefits of intellectual property creation. 

Question 3. I understand that the President’s budget requested $50 million in 

EDA funds for regional innovation clusters, and that a recent EDA report on regional competitiveness also touted the benefits of thinking regionally when engaging 

in economic development. However, I’m curious how that will work when the ‘‘region’’ crosses state lines. As the former Governor of Virginia, I know how Governors 

compete with each other to attract projects and employers—including new science 

parks that are likely to create high-paying technology parks down the road—to their 

state. How can you create incentives for multi-state regions to cooperate when each 

state involved wants to know that they are getting a return for their share of the 

investment? 

75 

Answer. All of us who had the privilege of serving as elected officials understand 

the competition between political jurisdictions seeking to attract projects and employers to locate within their boundaries. We seek elected office to improve the lives 

of our constituents. This includes promoting their economic well-being and the tax 

base that allows us to provide the schools that educate their children, public safety 

programs that protect their lives and property, and the amenities that make their 

community or state a desirable place to live and work. 

These goals are not inconsistent with a regional approach to economic development that acknowledges the realities of economic interdependence and economic 

spillovers. EDA believes that the higher probability of improved economic outcomes 

that arises from a regional economic development approach is the best incentive, 

consistent with bottom-up economic development. 

The economic spillovers from the Virginia Tech Institute for Advanced Learning 

and Research are a prime example. Its location in Danville, Virginia is directly adjacent to several North Carolina communities. While EDA has not attempted to measure the spillovers, it is difficult to believe the benefits stop at a border that is only 

a few highway miles away. 

EDA encourages regional thinking because it produces better economic development outcomes. EDA has developed and deployed a ‘‘Know Your Region’’ economic 

development curriculum that embodies this thinking. EDA develops and deploys 

web-based analytical tools that support the regional approach. Both have been very 

well received. USDA Rural Development adopted the EDA ‘‘Know Your Region’’ curriculum and several other agencies are employing or evaluating our regional economic development analytical tools. 

EDA’s educational outreach and the demonstrated economic development benefits 

are among the factors driving jurisdictions to embrace regional economic development collaboration. EDA believes that the critical path lies in the bottom up approach informed by the best information we can provide to state and local economic 

development policymakers. EDA is beginning to receive more requests that are rooted in this regional approach. 

For instance, EDA is funding a 12-partner collaborative initiative that involves 

three universities, three technical (community) colleges, several nonprofit economic 

development organizations, and several government jurisdictions. The members of 

this collaborative come from six counties: four in Wisconsin and two in Illinois. 

EDA recently designated an Economic Development District that includes cities 

and counties in Oregon and Washington. The planning activities EDA is funding are 

targeted at developing economic opportunities for this multi-jurisdiction, two state 

region. 

Other examples exist, such as Mobilize Maine. At Governor Baldacci’s direction, 

the Economic Development Districts are collaborating with FairPoint Communications, the State of Maine, and collaborative investors to develop regional capacity 

throughout the State that will build a strong, growing and sustainable knowledgebased economy for all of Maine. 

EDA believes that focusing on the dissemination of information and best practices 

that inform state and local government economic development policymaking is the 

appropriate role for the Federal Government and supports improved bottom-up economic development decision-making. 

Question 4. How would the regional economic development model work within 

EDA’s current structure, for example with EDA-designated economic development 

districts? Would they have to be redrawn accordingly, or dispensed with all together? 

Answer. The regional economic development model is already successfully utilized 

in many parts of America. Some initiatives are driven by existing EDDs, while others arose from the work of local partners independent of any EDD involvement. 

EDA continues to support the EDDs as the fulcrum of its planning activities. They 

are, and should remain, locally determined. EDA, through its program of practitioner accessible research, web based data access and local decision-maker support 

tools, and ‘‘Know Your Region’’ training outreach continues to foster regional perspectives because the regional perspective increases the probability of better economic outcomes. Considerable progress is being made. For instance, EDA recently 

designated an EDD serving Portland, OR and Vancouver, WA that includes 5 adjoining counties on both sides of the state line. 

In another example, EDA recently funded a complex collaborative regional innovation cluster planning process involving three universities, a liberal arts college, 

three technical colleges (community colleges), and a number of not-for-profit economic development organizations. The members of this collaborative cluster cover 

six counties, four in Wisconsin and two in Illinois. What makes this an interesting 

76 

endeavor is the division of labor within a framework that crosses town, city, county 

and state lines. 

EDA does not know if local decisionmakers will formally ask to have EDD boundaries redrawn or otherwise re-structure themselves. What is clear is that the regional perspective and the importance of innovation and industry clusters to sustainable long-term economic growth is being understood and implemented across the 

Nation. EDA believes that its continued support of grassroots decisionmakers will 

continue this positive trend. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

HON. JOHN R. FERNANDEZ

Question 1. In order to reverse the present tide of economic stagnation, America 

must invest in the creation, development, and promotion of homegrown technologies. 

A 2007 National Academy of Sciences study found that science parks drive regional 

economic development and enhance American competiveness by promoting technology and innovation, pooling local talent, and encouraging the exchange of ideas. 

The ‘‘Building a Stronger America Act’’ (S. 583), which Senator Pryor and I introduced, will provide grants and loan guarantees for the planning, development and 

construction of science parks throughout the United States. This legislation will not 

only stimulate job creation and strengthen U.S. competitiveness; it can also help 

benefit military bases affected by base realignment and closure (BRAC) rounds. 

That is why I pledge to work with Senator Pryor to ensure that one factor to consider when selecting awards under S. 583 is whether the grant would help the 

transformation of military bases shuttered by the BRAC rounds into vibrant science 

parks. 

Your testimony mentions that EDA’s investments create conditions in which jobs 

are created, often in the midst of economic hardship or adjustment. What role could 

EDA play in assisting BRAC-affected communities under this legislation? 

Answer. EDA’s commitment to constructive reuse of BRAC facilities to transition 

the economies of affected communities and regions will not change under this legislation. EDA will continue to support local decisionmakers as they seek to exploit 

their region’s competitive advantages, including those offered by science parks, to 

create jobs for their citizens and a tax base that adequately supports local government services. 

EDA has a long and successful partnership with DoD’s Office of Economic Adjustment (OEA). The current OEA deputy director and a member of his staff are EDA 

alumni and continue to work closely with EDA to plan and implement BRAC recovery strategies. Typically, OEA focused on reuse planning, and EDA funded 

implemention activities, typically public works projects. The two agencies have always employed a regional approach to constructive reuse of BRAC facilities and, 

when appropriate assets are in place or can be developed, leverage regional competitive advantages to create science parks. 

The additional funding for BRAC communities and the science park focus can be 

expected to produce significant results as part of EDA’s regional innovation clusters 

approach to economic development. 

Question 2. A recent Brookings report, Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economies, co-authored by now Small Business 

Administrator Karen Mills, asserts that regional industry clusters—geographic concentrations of interconnected firms and supporting organizations—represent a potent source of productivity at a moment of national vulnerability to global economic 

competition. To compete in technology development, a region or state must differentiate itself and cultivate and sustain areas of expertise where it can be a world leader. As a result, it has become more common for science parks to focus on identified 

technology areas or industry clusters. However, the Brookings report also asserts 

that this Nation’s network of cluster initiatives remains thin and uneven. 

Given EDA’s longstanding tradition of supporting regional innovation clusters, 

what can be done to make U.S. industry clusters more competitive? What can be 

done to catalyze growth producing collaboration in key industry clusters and help 

them realize their full potential? 

Answer. EDA’s leading role in the implementation of the regional innovation clusters approach to economic development focuses on the competitiveness of U.S. industry clusters though its support of methodologically rigorous practitioner accessible 

research, web based decision support tools, practitioner training, and strategic planning and implementation investments. Many of EDA’s research reports, tools, and 

training products have been cited or adopted by other agencies. EDA believes these 

form a solid base upon which to build more competitive U.S. industry clusters and 

assist them to achieve their full potential. 

77 

While continuing to implement and update these activities, EDA’s policy recognizes the importance of the Brookings critique. EDA’s 2010 budget initiates a cluster identification and mapping project designed to strengthen the network of clusters, disseminate best practices, and integrate across the cluster spectrum from fostering network linkages beyond the direct supply chain partners to include cluster 

specialized banking, consulting, and legal services, universities, and community colleges. 

EDA’s 2010 budget includes funding for the initial steps toward a comprehensive 

cluster network mapping project that will extend beyond the European Clusters Observatory (ECO) model mentioned in the Brookings report. Based on the existing 

clusters definitions used by ECO and others, EDA’s multi-year project will incorporate workforce skill set layers, as identified by Labor’s Standard Occupation 

Codes (SOC), and important network relationships based on secondary and tertiary 

relationships. Phased project roll out will provide rapid access to initial cluster network information and support continuous, client informed, product improvement, so 

that the product evolves in the same manner as EDA’s tool and training curriculum 

projects. 

EDA’s partnerships with other agencies, including our Labor Department and Appalachian Regional Commission colleagues, are producing strong results and more 

needs to be done. EDA is collaborating with SBA, Education, Labor, USDA and 

other Federal partners to develop more coordinated regional investment strategies. 

Additionally, EDA recognizes the need to integrate private sector actors driving 

growing and emerging clusters more tightly into the planning and implementation 

processes. 

Question 3. Small businesses are the engines that drive job growth and they will 

lead us out of the current recession. I am deeply committed to ensuring that they 

succeed, not only because I am Ranking Member of the Small Business Committee, 

but because I truly believe in the power of small businesses to lift us out of our 

economic troubles. The ‘‘Building a Stronger America Act’’ (S. 583) is one of many 

efforts I have undertaken to encourage small business growth. Science parks provide 

small businesses numerous advantages, such as access to a range of management, 

marketing, and financial skills and services. At its heart, a science park provides 

an organized link to local research centers or universities, providing small firms 

with constant access to the expertise, knowledge, and technology they need to prosper. A recent Battelle report on science parks found that for each job in a science 

park, 2.57 additional jobs are created on average as a direct result. 

What do you foresee as the effects of the ‘‘Building a Stronger America Act’’ on 

job creation in the short- and long-term? How can investment in science park creation and redevelopment help lead us out this recession? 

Answer. EDA is not in a position to empirically estimate the effects of the pending 

legislation. EDA does note that studies by leading innovation policy authorities with 

whom it works closely, such as those at the National Academy of Sciences and 

OECD, repeatedly find countries around the world are adopting the parks model. 

The model is characterized by substantial public investments in infrastructure, new 

organizational approaches (e.g., Belgium’s IMEC semiconductor facility), and publicprivate research collaboration (e.g., France’s MINATEC). 

EDA’s direct experience is also telling, especially in the area of small business development and growth. For instance, EDA’s long-term partnership with state and 

local officials in the Fargo, ND area fostered the North Dakota State University Research and Technology Park, where many of the best practices, including co-location 

of private and public research teams, venture capital funding, and business advising 

services, continues to produce outstanding results. The Park’s services include the 

Entrepreneur Program, co-led by University business school faculty and successful 

entrepreneurs. The Park’s reach is extended through its Virtual Incubator program, 

which connects to even the most rural areas of North Dakota, and beyond. 

Question 4. In order to drive innovation, and encourage the clustering of advanced 

industries in specific areas, the ‘‘Building a Stronger America Act’’ (S. 583) that Senator Pryor and I have introduced provides grants and loan guarantees to promote 

the planning, development and construction of science, research, and technology 

parks. Science parks help drive innovation and regional entrepreneurship by promoting technology and innovation. In my home State of Maine, we presently do not 

have any traditional science parks. That said, Maine is a national leader in providing business ‘‘incubation’’ services that are tailored to companies in their region. 

Incubators, like science parks, nurture the development of entrepreneurial companies, providing business support and helping them survive and grow during the 

start-up period, when they are most vulnerable. The benefit of Maine’s seven technology incubator centers has been nothing short of monumental, as a remarkable 

78 

87 percent of all businesses graduating from these incubators are still in business 

and creating new jobs. Many other rural areas in Maine and throughout the Nation 

would benefit from this type of targeted economic development. Can you elaborate 

on the critical nature of encouraging innovation in rural areas where populations 

are not very dense while simultaneously encouraging the development of science 

parks in population centers? What more can we do to strengthen and grow business 

incubators? 

Answer. EDA’s regional innovation clusters approach is best understood as including rather than excluding. Innovation is too often defined in such a way that excludes rural areas and regions are often thought to require an urban center. EDA’s 

definitions, approach, and experience is not consistent with such exclusionary outcomes. Innovation, broadly considered, is not equivalent to ‘high tech’ or even ‘new 

products’. Innovation is the spirit of America. It is embodied in everything we are, 

an innovative society that experiments with new ideas. 

For instance, employing EDA’s regional innovation clusters approach, Minot State 

University’s Bottineau campus is addressing a unique situation in an incubator-like 

fashion. Small farmers, unable to earn sufficient income, were leaving the land, although they preferred to stay. EDA provided funding that created a low-tech approach to extending the vegetable growing season, which created market potential. 

However, the local groceries, fearful of being dropped by distributors, refused to buy 

the produce. 

The EDA grantee and local vegetable farmers organized to gain access to the supply chain via the distributors. As a result of assessing regional competitive advantages, being innovative both in growing and entering the distribution chain, the extremely rural area is fostering an emerging cluster focused on locally grown 

produce. 

Question 5. We live in an increasingly globalized world. Science parks reflect the 

needs of a high-tech, innovative, and global marketplace. Science parks have helped 

lead the technological revolution. Our Nation’s capacity to innovate is essential to 

ensure future economic growth. Ideas by innovative Americans in the private and 

public sector have paid enormous dividends, improving the lives of millions throughout the world. We must continue to encourage the advancement of this vital sector 

if America is to compete at the forefront of innovation. There was a lot of discussion 

at the hearing about the need to transform existing parks into more modern, collaborative environments primed for innovation in the 21st century. However, we 

cannot be blind to the technology challenges facing our Nation. For example, U.S. 

private corporate research centers are greatly downsized or, in some instances, no 

longer exist. Corporate and Federal support for R&D at universities is declining. 

And, science and technology are now global commodities. 

How can we better encourage the redevelopment of existing science parks in ways 

that will help them compete in a globalized economy? What specific measures can 

be taken to ensure that American science parks are evolving for the 21st century? 

How critical is it that a science park be physically located close to a university given 

that so much business is now done through networks and virtual environments? 

Answer. The National Academies of Science’s recent report ‘‘Understanding Research S&T Parks’’ identifies several conditions for creating successful 21st Century 

research parks. Perhaps one of the most important factors is the presence and involvement of a large research university or laboratory supporting a critical mass of 

knowledge workers. Also key is the availability of funding over a sustained period, 

and a strong and committed leadership guiding the development of the park’s physical infrastructure and quality-of-life amenities. Finally, and not least, a successful 

park needs skilled entrepreneurs and managers. Talented and motivated individuals 

and teams in the private sector are needed to commercialize the knowledge generated. The benefits of a successful park are realized over the long-term, but short 

term benefits, such as architecture/engineering jobs in the design phase, and construction jobs and associated purchases, should not be overlooked in any evaluation 

of the park investments. 

Question 6. One of the most beneficial incentives in the tax code is the Research 

and Development Tax Credit. This credit enables small businesses to develop new 

technologies and create additional jobs. Unfortunately, Congress is not allowing the 

R&D Credit to realize its full potential. According to the Organization of Economic 

Cooperation and Development (OECD), the U.S. ranked first in research and development tax generosity in 1990, but has fallen to 17th since then. This is unconscionable at a time when our economy has shed 7.3 million jobs since December 2007. 

First and foremost, we must make this credit permanent, as Senate Finance Committee Chairman Max Baucus and I have attempted to do in ‘‘Grow Research Opportunities with Taxcredits’ Help Act’’ (S. 1203). How can the research and developVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00082 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
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1 ‘‘Average North American Research Park’’ data are from ‘‘Characteristics and Trends in 

North American Research Parks: 21st Century Directions,’’ commissioned by AURP and prepared by Battelle, October 2007; ‘‘Average IASP Member Park’’ data are from the International 

Association of Science Parks annual survey, published in the 2005–2006 International Association of Science Parks directory. 

ment tax credit help science parks grow and generate innovation? How specifically 

would science parks and small businesses therein benefit and grow as a result of 

making this tax credit permanent? 

Answer. Small and large firms make up an important part of a park’s innovation 

ecosystem. Tax credits increase the R&D engagement at the firm level, leading to 

additional innovation output. Recent research shows that recipients of R&D tax 

credits show significantly better scores on most performance indicators. Especially 

at a time of slower economic growth and stagnant employment, it is important to 

renew the R&D tax credit. Moreover, making the tax credit permanent will reduce 

uncertainty and promote business growth in an otherwise challenging environment. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DAVID VITTER TO

DR. CHARLES WESSNER

Question 1. You said that the ‘‘potential of research parks appears to be less widely understood in the United States.’’ To what extent, in your estimation, has the 

U.S. fallen behind the curve the rest of the world is setting in developing and investing in science research parks? 

Answer. Success of U.S. Parks Has Led to Their Emulation Abroad. 

The United States created the idea of a science and technology park in the early 

1950s. The Silicon Valley clusters—sometimes described as a large park—and the 

successful Research Triangle Park in North Carolina have inspired many governments to believe that they can create growth and jobs through the geographic colocation of resources. 

As documented in a recent report by the National Academies, Understanding Research, Science, and Technology Parks: Global Best Practices, countries as diverse 

as China, Singapore, India, Mexico, and France arc among those undertaking substantial national efforts to develop research parks of significant scale and scientific 

and innovative potential. Foreign efforts to build research parks often involve integrating research institutes, large and small companies and, often, universities, with 

first-class infrastructure. These ingredients are often complemented by substantial 

tax advantages and other direct incentives. 

Comparative Scale of Foreign and U.S. Parks 

Currently, one can argue that U.S. parks, in comparison to its major competitors, 

lack scale, lack resources, and lack the infrastructure and facilities needed to compete in the global economy. 

On the issue of scale, Figure 1 below compares the size of the average North 

American Research Park (at 358 thousand acres) with that of the average Chinese 

research park (at over 10 million acres.) 

Figure 1: Research Parks in Comparative Perspective—an Issue of Scale 1


1209WESQ1.eps
80 

The Chinese parks are large, in some cases with numerous top-tier multinationals, and benefit from significant political authority. In short, our Chinese colleagues have taken the park concept and put it on steroids. 

The scale of China’s investments in research parks might well be compared to the 

massive efforts undertaken in the United States during the Cold War in building 

national laboratories. To the extent that these more commercially oriented investments are successful, they may give a significant boost the competitive position of 

Chinese industry. 

Singapore and France provide two additional points of comparison in terms of financial support for the development of research parks. Singapore, with population 

of 4.5 million, has allocated a 5-year budget of $10 billion over 5 years to strengthen 

its research and development base, especially in the area of biotechnology. Both the 

Biopolis and the Fusionopolis urban research parks arc key features of Singapore’s 

competitiveness strategy. These parks are well staffed, include international scholars, and benefit from the latest equipment and close proximity to major universities 

and the airport. France is reinventing its innovation system through the development of competitive clusters, called ‘‘poˆles de croissance,’’ with a budget of $2.2 billion for a country of 65 million, over 3 years. By comparison, S583 proposes $500 

million over 5 years for the United States, a country of over 300 million. 

What Will Be the Impact of the Growth of Parks Around the World? 

The substantial investments that the world’s leading nations are making to grow 

research parks reflect an appreciation of their capacity to spur knowledge-based 

growth and enhance technological competitiveness through innovations that are 

supported by government infrastructure, government research, government finance 

and, in some cases, assured national procurement markets. These research parks 

arc expected to generate very significant benefits to regional development and job 

creation. Indeed, to the extent that foreign research parks are effective, they have 

the potential to help shift the terms of global competition, not least in leading technological sectors. 

What must the United States Do? 

The acceleration in the pace of planning and development of research parks 

around the world shows that research parks are widely seen as a key tool to improve economic competitiveness through accelerating innovation. To stay in the 

game, the United States need to make commensurate investments basic and applied 

research, in growing research parks, and in creating other incentives to encourage 

the transition of research to the market. In addition, we need to learn from the experiences of others and adopt and adapt those lessons to U.S. circumstances just as 

other countries are adapting what they see as positive lessons from the U.S. experience. 

Good S&T research parks are not a panacea, but they are an effective tool to help 

U.S. firms and American citizens compete in the global economy. Currently, with 

regard to parks, we lack the enabling legislation and resources to compete effectively in the 21’’ Century. 

Question 2. You said that there are ‘‘challenges of getting these research parks 

off the ground and integrating them with their universities’ missions.’’ Can you provide examples of the specific challenges research parks face in their initial development that makes Federal financial support so important to their creation? In your 

opinion, is state funding simply not enough to foster their growth and help them 

clear these initial challenges? 

Answer. U.S. Research Parks Receive Most of Their Support from State and Local 

Governments. 

As noted above, science parks now exist in most parts of the world; they are seen 

as a proven policy tool to spur economic growth and enhance technological competitiveness. They benefit from significant financial and policy support from national 

and state governments. 

The United States remains an exception in this regard, where support for research parks is principally undertaken by state and local governments with only 

limited participation by the Federal Government. While some state governments are 

experimenting with technology zones to support research parks and technology incubators, and to increase technology-led economic development clusters, others have 

lagged behind. 

Challenges Facing State and Local Governments in Supporting Research 

Parks 

The National Academies report, Understanding Research, Silence, and Technology 

Parks: Global Best Practices, identifies the availability of significant levels of fundVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00084 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
81 

ing and policy support over a sustained period as key to the successful development 

of a research park. This requires a policy environment that is patient, adaptable 

and focused on commercialization. 

Some states like North Carolina have been able to provide the resources and farsighted leadership needed to grow a successful park. The state’s approach to the development of Research Triangle Park is particularly commendable in that it recognized the importance of ‘‘patient’’ support, especially through the first 10 years of 

its existence when the park made little tangible progress. 

Other states face balanced budget requirements and/or other fiscal and political 

exigencies that preclude the scale and consistency of support necessary for the development of successful parks. Many local governments lack the fiscal base to make 

the scale of investments necessary to support globally competitive research parks. 

The paradox is that the Federal and state governments make substantial investments in education and research, yet the early-stage investment to commercialize 

this research in not readily available. 

How Can the Federal Government Help? 

While recognizing the traditional role of state and local governments in local economic development, the Federal Government can play an important role in providing incentives for states and regions to undertake significant, long-term investments in research parks, and by supplementing these investments when merited. 

State and local governments can also take advantage of Federal programs, like 

the Small Business Innovation Research (SBIR) Program, to encourage the development of innovation networks between universities and small firms and to provide 

seed capital for small business entrepreneurship. Other partnership programs can 

help states and localities leverage the substantial investments the Federal Government is already making in universities, national laboratories, and other research facilities around the country. 

This can be a win-win proposition for the Federal and state governments, as the 

case of Sandia Park illustrates. Here, Sandia National Laboratories gains from the 

research park through the retention of the needed skills base near the Laboratory, 

while the community benefits from the commercialization of knowledge and the jobs 

and growth made possible by the Laboratory’s presence. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

BRIAN DARMODY

Question 1. Ever since the cluster concept was introduced, it has rapidly attracted 

attention as a means to enhance the capability for innovative conversion of science 

and technology into products, services, and new business growth. Nowadays, clusters of existing and emerging science-based activities have been shown to be crucial 

factors in shaping the economic winners and losers of the first half of the 21st century. What are some best practices and successful models of knowledge transfer in 

science based clusters? What are the necessary conditions for success and issues of 

sustainability of clusters? 

Answer. First, regional leadership and buy-in by local stakeholders in the business and academic communities are critical factors. Second, technologies do not 

know in which political jurisdiction they are being developed. Strategies to break 

down competing political jurisdictions’ natural inclination to control and instead 

allow initiatives to grow on a regional basis must be develop, such as establishing 

a regional authority. Finally, cluster development can help grow a region but unless 

there is some core technology base, declaring a region a cluster will not help regional technology led economic development. You need the core technology to grow 

the regional cluster. 

Question 2. In order to drive innovation, and encourage the clustering of advanced 

industries in specific areas, the ‘‘Building a Stronger America Act’’ (S. 583) that Senator Pryor and I have introduced provides grants and loan guarantees to promote 

the planning, development and construction of science, research, and technology 

parks. Science parks help drive innovation and regional entrepreneurship by promoting technology and innovation. In my home State of Maine, we presently do not 

have any traditional science parks. That said, Maine is a national leader in providing business ‘‘incubation’’ services that are tailored to companies in their region. 

Incubators, like science parks, nurture the development of entrepreneurial companies, providing business support and helping them survive and grow during the 

start-up period, when they are most vulnerable. The benefit of Maine’s seven technology incubator centers has been nothing short of monumental, as a remarkable 

87 percent of all businesses graduating from these incubators are still in business 

82 

and creating new jobs. Many other rural areas in Maine and throughout the Nation 

would benefit from this type of targeted economic development. Can you elaborate 

on the critical nature of encouraging innovation in rural areas where populations 

are not very dense while simultaneously encouraging the development of science 

parks in population centers? What more can we do to strengthen and grow business 

incubators? 

Answer. Technology incubators are a key element of any regional technology strategy. The ‘Building a Stronger America Act’ does recognize the role of technology incubators in growing small businesses in the United States, and includes startup incubators in the definition of ‘science parks.’ Many university research parks have 

an incubator in or (as in the case at the University of Maryland) on the campus 

that work together, and many startup companies are located in research parks. Indeed the Bayh-Dole Act is encouraging universities to create startup companies, and 

technology incubators are critical in filling this role. The Association of University 

Research Parks works very closely with the National Business Incubation Association (NBIA) on programs and legislative initiatives such as programs to support 

technology infrastructure and technology led economic development. 

Question 3. We live in an increasingly globalized world. Science parks reflect the 

needs of a high-tech, innovative, and global marketplace. Science parks have helped 

lead the technological revolution. Our Nation’s capacity to innovate is essential to 

ensure future economic growth. Ideas by innovative Americans in the private and 

public sector have paid enormous dividends, improving the lives of millions throughout the world. We must continue to encourage the advancement of this vital sector 

if America is to compete at the forefront of innovation. There was a lot of discussion 

at the hearing about the need to transform existing parks into more modern, collaborative environments primed for innovation in the 21st century. However, we 

cannot be blind to the technology challenges facing our Nation. For example, U.S., 

private corporate research centers are greatly downsized or no longer exist. Corporate and Federal support for R&D at universities is declining. And, science and 

technology are now global commodities. How can we better encourage the redevelopment of existing science parks in ways that will help them compete in a globalized 

economy? What specific measures can be taken to ensure that American science 

parks are evolving for the 21st century? How critical is it that a science park be 

physically located close to a university given that so much business is now done 

through networks and virtual environments? 

Answer. Providing infrastructure support, as provided in ‘Building A Stronger 

America Act’, is a necessary, but not sufficient response to encourage innovation and 

cluster development. My written testimony amplifies some other ideas and they are 

further explored in ‘The Power of Place, A National Strategy for Building America’s 

Communities of Innovation, http://aurp.net/meet/ThelPowerloflPlace.pdf. A 

number of Senators at the hearing asked about the role of Federal labs, and I have 

provided some policy ideas below related to Federal, private and academic sectors 

to encourage cluster development: 

Use Federal Labs and Lab Spin Outs as Anchors in Cluster Development: 

Over $25 billion a year in internal research and development spending (nearly as 

much as is spent at colleges and universities) and tens of thousands of brilliant researchers are employed at Federal labs, but much of the talent and technology remains inside, and the Federal labs are not often integrated into the community 

where they reside: 

• Create local technology companies from Federal intramural research: Create 

Congressionally-chartered Federal commercialization intermediary organization, 

based on best practices of technology commercialization intermediary models 

found at leading research universities (WARF at U. Wisconsin), in states 

(TEDCO in Maryland) and individual Federal labs (for example, the Congressionally-chartered Jackson Foundation at Uniform Health Science University), 

through expanding the funding, authority, venture staffing, and venture acceleration capacity of the Federal Lab Consortium established in 15 U.S.C. sec. 

3710. Just as when Congress wanted to improve Pennsylvania Avenue, it chartered the Penn Ave Development Authority to take on business of redevelopment, a Federal technology commercialization authority needs to be chartered 

by Congress to take on business of tech transfer and to create technology spin 

outs to locate near the Federal labs and improve the communities where Federal labs are located. 

• Connect Federal researchers with private companies: The Administration has 

called on Federal researchers to be more involved with private sector companies 

(See, e.g., August 4 2009 OMB/OSTP directive to heads of Executive Agencies). 

No comprehensive agency-wide program exists, however, to allow Federal reVerDate Nov 24 2008 06:56 Jul 29, 2010 Jkt 056410 PO 00000 Frm 00086 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\56410.TXT SCOM1 PsN: JACKIE
83 

search assignments with private sector companies. Issue a Presidential Executive Order on Federal lab technology commercialization and private sector partnerships (See, e.g., EO 12591) based on the NASA Innovation Ambassadors Program. www.nasa/gov/office/innovationlincubator/ 

• Connect fed labs to local communities: Embed regional economic development 

mission into all fed labs missions; currently Department of Energy labs have 

this mission; will help spur Administration’s regional cluster initiatives. 

• Create more private sector involvement near Federal labs in urban areas: Expand Enhanced Use Lease (EUL) authority (which allows leasing of fed land 

and equipment) to all Federal agencies, not just DOD agencies. See, 10 U.S.C. 

2667. 

• Create culture of Entrepreneurship: Create entrepreneurial leave programs to 

encourage Federal researchers to take temporary assignments with private sector technology firms, and protect their positions in the fed labs upon their return. Encourage ‘entrepreneur in residence’ (EIR) programs as all fed labs and 

create programs to encourage Federal researchers to create companies and mentor the process through the EIR program. 

• Create regional clusters: Issue GSA/Army Corps of Engineers policy encouraging fed labs to build and lease in area near innovation assets, such as research parks, health science centers, other fed labs, private research centers 

and colleges and universities. 

Research Universities and Commercialization 

Improve University Commercialization in the U.S. by imbedding commercialization in U.S. grant and contract funding model: The U.S. created the Bayh-Dole Act 

that spurred university technology commercialization around the world but now lags 

the UK in tech commercialization since Federal grant and contract policies provide 

no funding for tech transfer office or initial proof of concept funding to make them 

attractive for follow on investment. Reform OMB A–21 restrictions on overhead to 

increase by 1 percent overhead negotiated rates with cognizant Federal agency for 

cost reimbursement for patent expenses and seed commercialization fund at universities to bridge first ‘valley of death’ consistent with the Bayh-Dole Act to create 

more companies and jobs in U.S. This can be done without new Federal legislation, 

or Federal agency, and can be implemented quickly, without a new bureaucracy. 

Private Sector 

R and D Tax Credit: To keep more R and D at home, develop an enhanced corporate R and D tax credit for projects undertaken in partnership with college and 

universities. 

Keep more Corporate R and D in U.S.: Remove Federal IRS restrictions on private 

use in tax exempt research facilities by corporations sponsoring research by removing tests related to IP licensing. IRS Revenue Procedure 97–14 needs to be reformed 

to allow corporations to keep more of the IP they sponsor; otherwise they will continue to ship R and D to universities overseas. 

Education 

From ‘STEM’ to ‘ESTEEM’: Move from focus on ‘STEM’ (Science, Technology, Engineering and Math) issues to ‘ESTEEM’ (Encouraging Science, Technology, Engineering, Entrepreneurship, and Math) skills since job creation will be dependent on 

new startup companies. 

Entrepreneurship Programs at Department of Education and NSF: Develop new 

U.S. Department of Education program, joint with NSF, to encourage university 

based partnerships for innovation and dormitories for entrepreneurs and living 

learning centers to encourage study of entrepreneurships and new company formation as basis for economic growth in the U.S. 

Question 4. One of the most beneficial incentives in the tax code is the Research 

and Development Tax Credit. This credit enables small businesses to develop new 

technologies and create additional jobs. Unfortunately, Congress is not allowing the 

R&D Credit to realize its full potential. According to the Organization of Economic 

Cooperation and Development (OECD), the U.S. ranked first in research and development tax generosity in 1990, but has fallen to 17th since then. This is unconscionable at a time when our economy has shed 7.3 million jobs since December 2007. 

First and foremost, we must make this credit permanent. Senate Finance Committee Chairman Baucus introduced the ‘‘Grow research Opportunities with 

Taxcredits’ Help Act’’ (S. 1203), which I cosponsored, to make the credit permanent. 

How is a research and development tax credit essential for the growth of science 

parks and generating innovation? How specifically would science parks and small 

84 

businesses therein benefit and grow as a result of making this tax credit permanent? 

Answer. Many of the larger companies in university science parks avail themselves of the Federal tax credit and making the tax credit permanent and expanded 

would be of great help. A program to give an enhanced credit to corporations doing 

joint R and D with universities would help keep more R &D in the United States. 

Additionally, we need to focus on the needs of the smaller technology companies, 

many of whom may not qualify for the Federal R and D tax credit due to their size 

or their tax status. A Federal program to provide a tax credit to angel investors, 

who have invested in the startup company, would help spur more investment in 

smaller companies. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

JONATHAN SALLET

Question 1. You noted during the hearing that ‘‘some of our strongest international competitors, including Japan, South Korea, and many European countries, 

have invested in significant national cluster initiatives, directing great amounts of 

money and resources toward making innovation clusters the main focus of their economic and innovation policies.’’ And, you pointed out an irony that while foreign innovation policymakers have studied our successes and consulted with our experts, 

‘‘the United States has conspicuously failed to embrace cluster initiatives as an explicit part of its own innovation policy.’’ What are some of the crucial factors in 

shaping our Nation’s economic winners and losers? What are some best practices 

and successful models of knowledge transfer in science based clusters? What are the 

necessary conditions for success and issues of sustainability of clusters? 

Answer. In our paper from the Center for American Progress referenced in my 

testimony, we explain why the critical components of a national economy are strong 

regional economies. As we have looked at the lessons of successful regional economic 

strategies, we see key lessons that include: 

• Place Matters. Not every location can do everything. Boatbuilding is better suited for Maine than for states far from the coast, for example. So a key step is 

for a region to understand its real and prospective competitive advantages. Important in the success of a ‘‘place’’ is, of course, leadership from local educational institutions, a supply of capital, and well-trained workers. 

• Networks of Collaboration. A region will be successful because it is competitive 

and because it hosts businesses that are fiercely competitive, often with each 

other. But collaboration at the pre-competitive is very important as well. Consider, for example, information processing businesses that work together to 

incent local community colleges to offer education in their field, creating a supply of talented workers from which all can draw. 

• Local Leadership. Regional economies are built from the ground up. Our examination of successful clusters reveals a high sense of leadership, incorporating 

the private sector, universities, local government and civic organizations. And, 

equally importantly, that leadership inevitably needs to look beyond local political boundaries—often to regional economies that cross state lines. 

Question 2. In order to drive innovation, and encourage the clustering of advanced 

industries in specific areas, the ‘‘Building a Stronger America Act’’ (S. 583) that Senator Pryor and I have introduced provides grants and loan guarantees to promote 

the planning, development and construction of science, research, and technology 

parks. Science parks help drive innovation and regional entrepreneurship by promoting technology and innovation. In my home State of Maine, we presently do not 

have any traditional science parks. That said, Maine is a national leader in providing business ‘‘incubation’’ services that are tailored to companies in their region. 

Incubators, like science parks, nurture the development of entrepreneurial companies, providing business support and helping them survive and grow during the 

start-up period, when they are most vulnerable. The benefit of Maine’s seven technology incubator centers has been nothing short of monumental, as a remarkable 

87 percent of all businesses graduating from these incubators are still in business 

and creating new jobs. Many other rural areas in Maine and throughout the Nation 

would benefit from this type of targeted economic development. Can you elaborate 

on the critical nature of encouraging innovation in rural areas where populations 

are not very dense while simultaneously encouraging the development of science 

parks in population centers? What more can we do to strengthen and grow business 

incubators? 

85 

Answer. As a resident of the Eastern Shore of Maryland, which continues its agricultural base, I see this problem first hand. That’s why I believe that any Federal 

efforts should be sure to reach beyond metropolitan areas to include rural 

AmericAnswer. And why I believe that local economies should have flexibility to use 

Federal support in the ways that they believe will work for them. I have suggested, 

therefore, that the science parks initiative, very important on its own, would be 

even stronger if it were part of a larger effort that includes business incubators and 

other tools of growth. With the kind of record of success show in Maine, and experience around the nation, it is clear that business incubators are critical. 

Question 3. We live in an increasingly globalized world. Science parks reflect the 

needs of a high-tech, innovative, and global marketplace. Science parks have helped 

lead the technological revolution. Our Nation’s capacity to innovate is essential to 

ensure future economic growth. Ideas by innovative Americans in the private and 

public sector have paid enormous dividends, improving the lives of millions throughout the world. We must continue to encourage the advancement of this vital sector 

if America is to compete at the forefront of innovation. There was a lot of discussion 

at the hearing about the need to transform existing parks into more modern, collaborative environments primed for innovation in the 21st century. 

However, we cannot be blind to the technology challenges facing our Nation. For 

example, U.S., private corporate research centers are greatly downsized or no longer 

exist. Corporate and Federal support for R&D at universities is declining. And, 

science and technology are now global commodities. 

How can we better encourage the redevelopment of existing science parks in ways 

that will help them compete in a globalized economy? What specific measures can 

be taken to ensure that American science parks are evolving for the 21st century? 

How critical is it that a science park be physically located close to a university given 

that so much business is now done through networks and virtual environments? 

Answer. Collaboration with universities is very important. Although we may not 

want to enact a Federal requirement of particular geographic proximity, we certainly want to ensure that science parks, along with other tools of regional economic 

growth, are part of a well-considered, strategic plan for the region. Ensuring the 

presence of a strategic plan is a critical—perhaps the critical—step in ensuring that 

Federal monies are well-spent and that local efforts are really tied to areas of current or prospective economic advantage. And a critical part of any strategic plan is 

the inclusion of local institutions of higher learning. As we write in our CAP paper: 

Innovative companies were once innovative ideas, many of which came from the 

scientists, professors, and engineers that work at universities, corporate R&D facilities, and government laboratories. The ‘‘spillover’’ of ideas from these knowledge-creation institutions (and their intellectual property practices) to the local community 

and network of entrepreneurs is the central process that takes place in fertile innovation clusters. As more and more ideas move from labs to eager individuals and 

their business partners, scores of innovative businesses are started, feeding an auspicious cycle. 

Science parks would be a leading beneficiary of this approach. 

Question 4. One of the most beneficial incentives in the tax code is the Research 

and Development Tax Credit. This credit enables small businesses to develop new 

technologies and create additional jobs. Unfortunately, Congress is not allowing the 

R&D Credit to realize its full potential. According to the Organization of Economic 

Cooperation and Development (OECD), the U.S. ranked first in research and development tax generosity in 1990, but has fallen to 17th since then. This is unconscionable at a time when our economy has shed 7.3 million jobs since December 2007. 

First and foremost, we must make this credit permanent. Senate Finance Committee Chairman Baucus introduced the ‘‘Grow research Opportunities with 

Taxcredits’ Help Act’’ (S. 1203), which I cosponsored, to make the credit permanent. 

How is a research and development tax credit essential for the growth of science 

parks and generating innovation? How specifically would science parks and small 

businesses therein benefit and grow as a result of making this tax credit permanent? 

Answer. Business strategy and investment is always aided by certainty. The quest 

to make the R&D tax credit permanent has gone on for too long. Passage of your 

legislation is very important. 

86 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

DR. ANTHONY TOWNSEND

Question 1. What are the trends shaping the plausible future for science parks? 

What will happen if we maintain the status quo and who do you see as the early 

adopters and the resisters of these scenarios? 

Answer. The Institute for the Future identified fourteen external trends that will 

shape the future for science parks. Four of these will play a special role, as their 

future direction of change has a high degree of uncertainty, and may play out in 

a variety ways. These highly uncertain trends are: 

• The Economic Role of Universities—Some universities will embrace entrepreneurialism while others reject a larger role in the economy. But all will face 

challenges navigating the conflicting demands and increased strains of a shifting economic and intellectual role. As the major developer of science parks 

today, the future role of universities is a critical variable. Realizing the full potential of universities to drive growth will probably require a painful and extended overhaul of intellectual property management and technology transfer 

frameworks. 

• Growth of New Science Institutions—Scientific societies, journals and other institutions that set the basic rules of who can call themselves a scientist, and 

how they should conduct research and share results, will come under tremendous strain. New science networks are forming, organized via the Internet and 

social software, but their future role and their connection to centers of science 

could play out in many different ways. 

• Sustainability—The cost of energy will drive business and policy decisions 

across the board. How will R&D ecosystems react to different energy frameworks, and the scientific and technological challenges of battling global warming? We expect this will reinforce the desire to cluster some research and development activities in science parks, but also create forces that favor 

virtualization and dispersion. 

• The Bio-industrial Complex—Bioscience is supplanting physics as the source of 

great breakthroughs, but there are fundamental flaws in systems for commercializing those discoveries. It is unclear how to fix the many problems in the 

‘‘bio-industrial complex’’, the role of the public sector, and whether science parks 

will be able to create environments that address any of the structural challenges, and accelerate innovation and commercialization. 

Question 2. Can you elaborate on the critical nature of encouraging innovation in 

rural areas where populations are not very dense while simultaneously encouraging 

the development of science parks in population centers? What more can we do to 

strengthen and grow business incubators? 

Answer. New technologies for computing and communication, as well as changes 

in the nature of scientific collaboration are creating new opportunities to extend the 

science park model from its traditional base in population centers to rural areas. 

First, many of the tools and instruments of both basic science and technological development are now networked and can be accessed remotely. Cloud computing technologies allow anyone with an Internet connection to access almost infinite computing capacity on-demand for simulation, data analysis and visualization and modeling. Second, the practice science and technology are becoming more global and distributed, reducing the cultural, organizational and logistical obstacles to participation in collaborative R&D for researchers in rural locations. Third, we must note 

that many colleges and universities are indeed located in rural communities. As 

these institutions seek to play a more important role in economic development they 

are well-positioned to provide support for rural scientists and engineers to participate in global R&D networks. Finally, there are great opportunites to connect networks of metropolitan and rural science parks in mutually beneficial ways. For instance, the North Carolina Research Parks network combines the global brand and 

appeal of the Research Triangle Park with potentially lower cost alternatives of the 

state’s seven other science parks. The network can market a wide range of assets 

to potential tenants, that combine benefits of rural or more metropolitan locations. 

Question 3. How can we better encourage the redevelopment of existing science 

parks in ways that will help them compete in a globalized economy? What specific 

measures can be taken to ensure that American science parks are evolving for the 

21st century? How critical is it that a science park be physically located close to a 

university given that so much business is now done through networks and virtual 

environments? 

87 

Answer. The most important way to redevelop existing science parks is to recognize that their management needs to be upgraded for the 21st century. Managing 

science parks effectively over the coming decades will mean a greater focus on managing activity than managing buildings and land. This requires as different kind of 

manager and developer, different relationships with tenants, and different tenants 

themselves. While large companies will continue to be an important part of the tenant mix in science parks, small and medium-sized companies will play a growing 

role in driving technological innovation. Science parks will need to learn how to 

market to them, how to attract them, how to serve them and help them grow, and 

how to maximize their local economic impact. 

Specifically, I recommend that the Federal Government support upgrading and 

expanding the ‘‘software’’ of science parks at the same time it supports the ‘‘hardware’’ of science parks in S. 583. Science parks could use this funding to expand 

staff focused on social capital development—creating new business networks, engaging and cultivating venture investors and angels, and other kinds of activity that 

characterize successful technology clusters like Silicon Valley. 

Question 4. How is a research and development tax credit essential for the growth 

of science parks and generating innovation? How specifically would science parks 

and small businesses therein benefit and grow as a result of making this tax credit 

permanent? 

Answer. Making the R&D tax credit permanent would expand the market for 

science parks by expanding the overall expenditure on R&D in the U.S. economy. 

Creative science park managers and developers could package advisory services on 

the R&D tax credit with their leasing programs to help small and medium-sized 

companies plan for long-term growth and expansion. This would create a virtuous 

cycle of investment supporting the overall business model for new and expanded 

science parks. 

Æ