Best Practices Analysis:

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written permission of New Economy Strategies, LLC.

Case Studies for

Best Practices Analysis:


Metro Denver WIRED


May 2007

2

Case Study Approach


Approach to the Regional Case Studies



Purpose:
The purpose of the regional benchmarking process is to identify innovation
best practices from around the world and apply those that are relevant to the
Metro Denver WIRED Region


Selection process:
New Economy Strategies identified Best Practices in other
regional economies that apply to each of the four targeted industry clusters of the
Metro Denver WIRED region:


Software / Information Technology


Austin


India


Energy


Houston


California (renewables)


Biosciences


Minneapolis
-
St. Paul


Aerospace


Los Angeles


3

Overview of Austin’s Information Technology Cluster

Basic Statistics


Population: $1.4 million in
MSA


Total Business
Establishments: 34,818


Employment by Firm: Dell
>6,000, IBM >6,000, AT&T
>2,000, National
Instruments >2,000,
Freescale Semiconductor
>2,000, Cisco Systems >
1,000, Samsung >1,000,
Intel >1,000

Key Factors

Global Recognition:
Wireless Technology, Semiconductors, Electronics & Digital Media comprise a
booming information technology sector. Design capabilities have led to Austin becoming a global leader
for wireless computer platform technology and the emergence in digital media.
The Wi
-
Fi Alliance

is

based in Austin. It is a nonprofit organization formed in 1999 to develop and then certify universal
specifications for a worldwide accepted standard for high
-
speed wireless local a
rea networking.


Industry Base:
Intel, ATDF, Microsoft, IBM, Northrop Grumman, Samsung, Cisco Systems, Motorola,
Qualcomm, Freescale, Zilker Labs, Dell

Workforce:
Young and productive workforce; 4 years younger than the national median for Metropolitan
areas. College graduates make up over 40 percent of the adult population compared to 27 percent
nationally. The University of Texas is one of the nation’s largest universities, a world
-
class research
institution, and one of the largest sites of graduate and undergraduate talent in technology fields.

Economic Development Strategies / Programs

Capital:

Silicon Hills Summit:
This conference links the venture and
investment community with innovation in the semiconductor and
software industry in Austin and throughout Central Texas.

Commercialization:

IC2 Institute
, the technology commercialization center at UT
-
Austin
offers several programs for research and consulting on
commercialization efforts including visiting scholars programs and a
masters degree in Science & Technology Commercialization .

Workforce Development:

Skillpoint Alliance
is a successful workforce intermediary linking
business with educators and training programs in Austin increase
qualified workers for local businesses

Nanolelectronic Workforce Development Initiative
: This is an
internship programs for college students interested in software and
nanotechnology. It is made possible through a partnership between
ATDF, the nanoelectronics R&D foundry, and the Austin Community
College District. The program provides training to 160 students at
ATDF’s leading facility through a grant funded by the State of Texas.

Infrastructure for Innovation


University of Texas
-
Austin Electrical & Computer
Engineering Department

is a key driver of research with centers
and labs focusing on several leading and convergent areas of
software / computer development including graphic processing
units, wireless, high speed storage devices, and semiconductors.

Texas Advanced Computing Center

at the
University of Texas
-
Austin
supports one of the highest performing computing systems
providing unprecedented computational power. A large number of
cutting
-
edge research and development projects are supported by
the Center.

Austin Technology Incubator

provides turnkey infrastructure,
consulting, finance referrals, and advice from business leaders for
early
-
stage technology ventures. Its affiliation with the University
of Texas leverages expertise from the academic community

SEMATECH
was initially a government
-
industry partnership and
best practice to minimize risk in the semiconductor industry but
has transformed into a global research consortium for the industry
that leverages the most sophisticated human capital from around
the world.

Texas Wireless Summit
is a leading trade show and technology
showcase for the Wireless industry.

Challenger Region


Austin, TX

4

Meeting the Regional Demand for Talent:
UT
-
Austin is a significant
supplier for Austin’s Information Technology industries. As can be seen in
the chart, the more than 500 CIS graduates per year have strong likelihood
for retention by the region. St. Edward’s University & Austin Community
College District also offer programs to fill the demand for IT workers.

Degrees Awarded in Select Science Fields, Austin Metro Area Institutions,
2005 (Source: Greater Austin Chamber)

Best Practice Case Study


University
-
Industry R&D Partnership


Wireless Networking and Communications Group (WNCG)

is a center within the Electrical and Computer Engineering Dept. of The
University of Texas at Austin. It currently has 14 ECE and computer science faculty. The program has generated over $8.9 M
in
research funds
and averages over 80 graduate students per year. WNCG’s budget comes from a combination of corporate sponsors, state and fed
era
l
government funding, and subcontracts from other universities. The focus on corporate support reflects a commitment to collabo
rat
ive research
and to technology transfer enabling innovative ideas WNCG has developed to find their way to the market, and the work to have

th
e highest
possible impact on current and future technologies. Industrial Affiliates serve as a strong catalyst by bringing operational
and

technological
experience, and by providing sponsorship, collaboration and leadership in leveraging WNCG’s intellectual capital and resource
s.
Industrial
affiliates include AT&T, Dell, Ericsson, Nortel, Samsung, Texas Instruments, and others. Intellectual property from research
spo
nsored by one
of the industry partners will be jointly owned by UT and the sponsor.


Benefits for Industry Affiliates


Early access to high
-
quality, well
-
trained students for internships and new hires


First view of research, reports, inventions, and dissertations


Business opportunities for joint research projects


Interactions and partnerships with other sponsoring companies


Bachelor’s

Master’s

Doctoral

Computer &
Information Systems

416

102

13

Engineering

917

454

145

Physical Sciences

187

56

70

Total

1,520

612

228

Challenger Region


Austin, TX

VC Investments in Austin MSA, $8.003 billion
(1997-2006)
Computer
Software and
Services
27%
Internet
Specific
25%
All Other
11%
Computer
Hardware
4%
Semiconductor /
Electronics
25%
Comm. &
Media
19%
Austin Information Technology Continued

5


Basic Statistics


Population: 1.1 Billion
(2005)


Unemployment Rate:
generously estimated to be
between 8
-
10%


Primary Business Locations:
Mumbai, Chennai, Bangalore,
Delhi

Key Factors

Global Recognition:
Over the last decade India has developed a strong reputation as a location
for research and development and the provision of services for western firms, particularly in
software development.

Industry Base:
Industry clusters displaying economic growth in India include IT and
Telecommunications

Workforce:
Large group of young, increasingly skilled workers, many of whom are proficient in
English. Strong efforts are being made to increase the skill sets, especially in engineering and
science held by the workforce.

Infrastructure for Innovation :

Since the liberalization of the economy in the early
1990s, India has developed its innovation capacity in IT
-
software and consulting services. Efforts are being made
to link information technology to other sectors of the
economy, including manufacturing and financial services
for the purposes of productivity and innovation.

The
Indian Institutes of Technology

is a network of
independent universities primarily focused on
engineering education and located in Bombay, Madras,
Guwahati, Delhi, Roorkee, Kangpur, Kharagpur. The IITs
were established between 1951 and 2001 with the
express goal of contributing to the social development of
India through technology. Extensive government
programs are directed by the Ministry of Science &
Technology.

Ministry of Information and Communication
Technology


Emerging Areas and Coordination
Division:
The main objective of the program is to
enhance research competencies in emerging areas of
Information Technologies by supporting research and
development in the country. This division also
coordinates projects and programs in the area of High
performance and Grid Computing, including the technical
programs of Centre for Development of Advanced
Computing.

Example Economic Development Strategies / Programs

The Science and Engineering Research Council (SERC)

is the state body
that promotes research & development in India, housed within the Ministry of
Science and Technology. It is composed of leading academic and industrial
researchers, engineers and scientists. The SERC has developed several
programs since its inception in 1974 that have been directed to increase the
innovation capacity of the country.


Bioinformatics Initiative
in the Department of Information Technology under
the R & D in Information Technology Group has been set up with the objectives
of deepening India's potential as a global player in Bioinformatics by leveraging
India 's IT advantage


Since 1991,
Software Technology Parks India

(STPI) has worked as a service
provider that could be leveraged by software companies. It has assisted SMEs
grow through consulting on the new business models in IT and supplying
Internet infrastructure and facilities. A government run entity, STPI assists in
establishing and managing infrastructure resources such as data communication
facilities and core computer facilities. STPI’s further mission is to promote the
development and export of software services through technology assessments,
market analyses, market segmentation and marketing support and to train
professionals and to encourage design and development in the field of software
technology and software engineering.


The Fund for Improvement of S&T Infrastructure in Higher Educational
Institutions (FIST)

was

launched in 2000 to provide better IT infrastructure
for emerging industries.



Global Hub
-

India

Overview of India’s Information Technology Cluster

6

Venture Capital

India has developed a strong venture capital community that has helped
finance much of the growth of the Information Technology and
Telecommunications Sectors. While the total value of VC investment is hard
to track, total VC in India has grown from less than $20 million in 1996 to
over $2 billion in 2004 and 2005.

Best Practice Case Study

Information Technology Development



The IT industry in India primarily focuses on software and consulting services. This is often referred to as Information Tec
hn
ology Enabled
Services
-

Business Process Outsourcing (ITES
-
BPO) This sector has experienced dramatic growth over the last decade. Market leade
rs such
as Infosys Technologies and Satyam Computer Services each have revenue of over $1B USD and display quarterly revenue growth o
f o
ver
25%. While Infosys and Satyam are both listed on US exchanges, their competitors Tata Consultancies and Wipro Technologies ar
e n
ot
publicly traded. It has been cited that over half of Fortune 500 companies outsource some of their software from India. Despi
te
this, the IT
services sector in India is young and only has a workforce estimated to be one million.


The success of the Indian IT consulting sectors is attributed primarily to a few factors


A large pool of increasingly skilled English
-
Speaking workers


Low business and labor costs


A network of educational institutions that continue to develop a pipeline of engineers and computer scientists


Government policies supportive of the sector, including the launching of the Software Technology Park Scheme in 1991


Role played in Y2K readiness efforts

Sources: IVCA, Evalueserve

Indian Venture Capital
0
500
1000
1500
1996
1997
1998
1999
2000
2001
2002
2003
2004
Year
USD millions
Global Hub
-

India

Positioning of India’s Software Industries


India currently exports software to around 95 countries
around the globe


Of Fortune 500 companies, 220 outsource software
operations from India


Software and services exports reached US $ 12.2 billion
in 2003
-
04 increasing by 30.5 % from 2002
-
03. India
has an aggressive software export target of US $60
billion by 2008.


India's IT workforce is 650,000. This is projected to reach
2 million in the next ten years.


Custom application development and maintenance and
applications outsourcing accounted for nearly 88% of
total software exports in 2003
-
04


Growing segments of the IT clusters are high
-
end
services such as equity research support, insurance
claims processing, offshore contact centers, and
technology research and development

India Information Technology Continued

7

Basic Statistics

Population: 5.5 Million in
metro


Firms: ~3,600 energy
firms


Employment: 28.4% of
the nation’s jobs in oil
and gas extraction


Production: 4.1 million
barrels of refined
petroleum products
produced per day

Key Factors

Global Recognition:
Houston is known as the Energy Capital of the World. The primary business is oil &
gas exploration and production, which contains all facets of pipeline transportation and manufacturing to
support the industry. Offshore drilling technologies lead the industry’s research efforts, but the large
energy companies are also engaged in the research and development of the emerging renewable energy
industry, including solar, wind, biomass, and geothermal energy sources.

Industry Base:
Chevron, Shell, Marathon Oil Corporation, ConocoPhillips, Exxon Mobil, The Houston
Exploration Company, Dow Chemical, Houston Biodiesel, Galveston Bay Biodiesel, American Electric Power

Workforce:

It is reported that 2 out of 5 Houstonians work in the energy industry or a supportive sector to
it. However, by the end of the current decade, there will be a 38 percent shortage of engineers and
geoscientists and a 28 percent shortage of instrumentation and electrical workers. Asked to name the
biggest skill gaps, executives of 22 leading energy companies named petroleum engineering (77 percent),
and geology, geophysics and engineering analysis (73 percent each).

Example Economic Development Strategies / Programs


Energy Venture Forum at Rice University

introduces energy related
technology companies to VCs.
Offshore Technology Conference

is
the energy industry’s premier conference focused on deepwater
offshore technology.


Workforce:

Global Energy Management Institute

at the Bauer College of
Business at the University of Houston, The Energy Business School,
prepares the energy industry manager of today while exploring critical
issues affecting the energy industry’s future. The Institute uses a multi
-
disciplinary approach to address the comprehensive needs of the
energy industry, from risk and project management to accounting and
systems development.

UH
-
GEMI boasts a world
-
recognized faculty of
scholars and industry executives who effectively combine leading edge
research and real
-
world industry experience at the undergraduate,
graduate and executive levels.



Schlumberger
Corporation has a strong global corporate recruitment
programs for scientists and engineers that economic developers could
assist companies in replicating. It is advantageous to remain globally
competitive for talent as a region.

Infrastructure for Innovation:


Rice University’s Energy & Environmental Systems Institute

conducts research in convergent areas of energy resources and the
environment funded by the Shell Oil Company.

University of Houston’s
Energy Research Allied Geophysics Lab is
a national resource dedicated toward developing new technologies
that provide higher resolution of earth substructure for oil and gas
exploration and geothermal sources. The Lab has a research
consortia agreement with every major energy company and DOE
funding to develop and calibrate 3d imaging technology of
subsurface structures. Other research performed through consortia
agreements with the major energy companies has produced the
best technology for the industry for drilling in deep off
-
shore waters
of the Gulf of Mexico.

Chevron Technology Ventures

is an industrial laboratory and
technology accelerator for the development of both fossil and
renewable energy applications.

Houston Technology Center

is Houston’s largest technology
incubator is designed to offer assistance and guidance to new
upstart firms, including those in energy related fields. Services
include intensive mentoring and access to angel capital, key
business networks, and service providers.


Global Hub


Houston, TX

Overview of Houston’s Energy Cluster

8

Alternative Energy Activity in Houston


Houston’s energy sector has traditionally been tied directly
to demand for crude oil which has caused radical booms
and busts in the economy. Naturally numerous energy
industry leaders have initiated efforts to capture the
growing market of alternative energy.

Best Practice Case Study


Regional STEM Initiative


The Houston Urban Network for Science, Technology, Engineering, and Mathematics (HUNSTEM)
promotes a range of
STEM programs from early childhood education to elementary school through secondary education. HUNSTEM’s overall mission
is to provide superior instruction for science and mathematics in mobilizing Houston’s workforce of tomorrow with the types o
f
skills and competencies needed for high
-
tech industries of the future. HUNSTEM is unique in its approach because it concentrates

on community, not just providing STEM curricula, and because it fosters collaboration between all facets of the learning
community rather that just acting as a liaison. Houston is a pioneer of this community
-
based movement and hopes to be a best
practice for other regions in the country. HUNSTEM is partially funded through the Office of the Department of Defense Resea
rch

& Engineering division, but leverages resources from the University Houston system. This does not mention the great human
resources linked through the initiative, which gives the program its greatest value.




Global Hub


Houston, TX

Wind

Texas is the top wind producer in the US

Biodiesel

TexCom is converting virgin soybean oil to
biodiesel at 30 million gallons per year

Ethanol

NASA’s Johnson Space Center is the fifth NASA
Center to add ethanol fuel capabilities in its
vehicles

Hydrogen
Fuel Cells

Woodlands
-
based Center for Fuel Research is a
research consortium focused on moving fuel
cells from lab to market

The emergence of new alternative energy firms like Galveston Bay
Biodiesel has led to a resurgence in venture capital investments in
Houston’s energy sector. (Source: Thomson Financial)



Energy Industry VC Investments
Houston MSA
0
20
40
60
80
100
2000
2001
2002
2003
2004
2005
2006
millions ($000)
Houston Energy Continued

9

Overview of California’s Renewable Energy Cluster

Basic Statistics


Population: $36.4
million


Start
-
up Firms
: 45 in
energy technology
sectors reported from
2001 to 2005.


Primary Business
Locations:

Sacramento, San Jose,
Berkeley, & Pasadena

Key Factors

Global Recognition:
California has a vibrant and experienced entrepreneurial community, pro
-
active
environmental public policy, high quality university systems, the presence of other successful high
-
tech
companies (with subsequent spin
-
outs and management talent), availability of capital, and large local
markets for renewable energy products.

Sample Industry Base:
Silicon Valley Solar, Open Energy Corp., PowerLight Corp., Sharp Solar, Pacific
Ethanol, Valence Technology, Inc., Akeena Solar, Nanosolar, Energy Innovations, Inc.

Workforce:
The first hundred employees in most renewable energy startups are likely to be primarily
engineers, physicists, chemists, biologists, programmers, and designers. As this technology develops, so
will the demand for knowledge workers. California has some of the largest concentrations of knowledge
workers in the country around its numerous metropolitan areas.


Example Economic Development Strategies / Programs

Workforce Development:

Sonoma State University Energy Management and Design
Program

offers a curriculum that is a synthesis of architecture,
engineering, computer science, and energy policy

Capital:

The Green Wave Initiative

involves the two major California pension
funds (CalPERS and CalSTERS). In 2004, they combined to allocated
$450 million dollars to private equity firms for investment in renewable
energy companies. Both funds are expected to have all of this capital
invested by the end of 2006. The sheer magnitude of this commitment
will provide a significant boost to the renewable energy sector.

Technology Transfer :

Most technology at national labs and universities are very early
-
stage
not yet prepared for the marketplace. Lawrence Berkeley National Labs
has developed a strategy to allow new companies to form with LBNL
taking small equity stake in the company

rather than being paid at the
outset.

Regional Renewable Energy Strategy
:

Sacramento is coordinating a Clean Energy Corridor by aligning public
policy and community organizing into an overall economic development
strategy through called the Partnership for Prosperity in the six
-
county
region. This leverages growing R&D at the UC Davis Energy Efficiency
Center and the support of the McClellan Technology Incubator now
focusing on cleantech.


Infrastructure for Innovation:

Lawrence Berkeley National Laboratory

(LBNL)

has a number of
research divisions focused on renewable energy including the Environmental
Energy Technologies Division, Nuclear Sciences Division, and National
Energy Research Scientific Computing Center. Research is conducted on
batteries, fuel cells, cleaner combustion, carbon management and
environmental remediation.

University of California

Berkeley’s Renewable and Appropriate
Energy Laboratory

(RAEL) is a unique research, development, and project
implementation program in the University’s Energy Resources Group and
the Department of Nuclear Engineering. RAEL is studying current energy
infrastructure through analysis of fossil fuel systems and biomass energy
and combination of energy efficiency and renewable.

UC Davis

is a leader in promoting public
-
private partnerships geared for
renewable energy research and development. They include the

Energy
Efficiency Center, Institute for Transportation Studies, Biomass
Collaborative, Wind Collaborative, and the California Lighting Technology
Center.

Electric Power Research Institute

sponsors collaborative R&D required
to achieve EPRI's science and technology objectives. Current work focuses
on dynamic, integrated systems for permanent energy savings.
Collaborates with Stanford University’s Energy Efficiency Institute on new
regulatory policies and business models.

Argonne National Laboratory’s
transportation division is enhancing
propulsion technologies for plug
-
in and fuel cell cars. The lab’s Chemical
and Biological Technology is researching ways to generate natural gas by
injecting methane
-
producting microbes in coal mines in Montana.

Challenger Region


California

10

Renewable Energy Incentive Programs

Public Interest Energy Research (PIER)
Program, managed by
the California Energy Commission, supports energy research and
development through issuing up to $62 million dollars in awards
annually. PIER partners with San Diego State University to issue
awards to promising proof
-
of
-
concept energy research.

Renewable Resource Trust Fund

is funded with $135 million
annually from the three California investor
-
owned utilities via a
public goods surcharge on electricity use. This money is distributed
through a cents
-
per
-
kilowatt
-
hour incentive to a variety of Existing,
New, and Emerging renewable generation technologies including:
biomass; waste tire; wind; geothermal; small hydro; digester gas;
landfill gas; municipal solid waste; PV and thermal solar; fuel cells;
inverters; and other qualifying technologies. The Fund also
supports a consumer education campaign to inform the public
about the benefits and available choices of renewable energy
technologies.


Best Practice Case Study

The Impact of Public Policy on Developing Renewable Energy Industries

California’s Renewable Portfolio Standard (RPS
)
was passed into law in 2002 requiring the state's investor
-
owned utilities to buy or
produce 20 percent of their power from renewable sources by 2010. The law requires utilities to increase the renewable portio
n o
f their
portfolios by 1% annually until each utility meets the 20% standard. There are goals to expand this number to achieve 33 perc
ent

renewable by
2020 for both investor
-
owned utilities and municipal utilities.” As of 2002, 12% of the electricity consumed in California came

from renewable
sources.


Solar Photovoltaic Initiatives
:

Both the California Energy Commission (CEC) and California Public Utilities Commission (PUC) have offered
“buy down” programs that reimburse purchasers of solar systems for up to 50% of their project cost. California also offers a
pha
sed Solar
Income Tax Credit (15% of the capital investment for the first two years, 7.5% for the remaining two years) for residential a
nd
commercial
customers purchasing onsite PV systems up to 200 KW in size. Finally, net
-
metering credits reimburse solar system owners for ene
rgy they
produce but do not use. Individual municipalities and utilities also offer substantial rebates to customers installing PV equ
ipm
ent.


California Solar Initiative (CSI):

In January 2006 the California Public Utilities Commission approved the California Solar Initiative (CSI),
committing $2.9 billion over the next ten years to help homeowners, businesses, farmers, and government install 3000 MW of ne
w s
olar
capacity on 1 million rooftops in California. It is estimated that the initiative will help dramatically lower the cost of so
lar

cells and create 15,000
jobs over the coming decade.

Challenger Region


California

Recent spikes in investments indicate that renewable technologies have
become more market
-
ready in the past year. (Source: Thomson
Financial)

Energy Industry VC Investments
State of California
0
200
400
600
800
1000
2000
2001
2002
2003
2004
2005
2006
millions ($000)
California Renewable Energy Continued

11

Overview of Minneapolis
-
St. Paul’s Biosciences Cluster

Basic Statistics


Population: 3.1
million


Niche Areas
: Medical
Devices and
Equipment, Medical
Instruments,
Bioinformatics, &
Biotechnology

Key Factors

Global Recognition in Medical Devices:
Greater Minneapolis has the highest concentration of employees
working in medical device manufacturing in the US, making the industry cluster the most definable in the
entire state.

Sample Industry Base:
Medtronic, 3M, Boston Scientific, Guidant Corp., St. Jude Medical, Inc. Research &
Diagnostic Systems, Protein Design Labs, Viromed Laboratories

First to Market Products:
Regional companies and research institutions have been first to develop many
important medical devices including implantable cardiac pacemakers, artificial heart valves, implantable
drug transfusion pumps, anesthesia monitors, and wireless cardiac monitoring systems.


Example Economic Development Strategies / Programs

Workforce Development:

Biotechnology Training Program

brings together graduate students
and trainers from multiple disciplines to conduct innovative research in
biotechnology. The program sponsors 16 top students each year
through a NIH grant.

University of Minnesota Center for the Development of
Technological Leadership
offers coursework in intellectual property
management, corporate entrepreneurship, and has strong interface
with high
-
tech companies in Minneapolis to prepare the technology
managers of the future in the region and state.

UM Microbial Engineering Masters Program

provides students with
a combination of biological knowledge with engineering skills. Students
can either choose a research or industry intensive path serving as a
turnkey solution for the modern biotech industry.

Commercialization:

University Enterprise Laboratory

is a collaborative research center
providing lab and office space and commercialization assistance to
early stage bioscience companies.

Regional Economic Development Strategy
:

Medical Alley

is a 350 mile long corridor that runs through the Twin
Cities and is home to over 8,000 healthcare companies. Medical Alley
is also a trade association with over 350 member organizations. Its
membership includes medical device manufacturers, health plans,
bioscience and pharmaceutical firms, academic and research
organizations, and healthcare service providers.


Infrastructure for Innovation :


University of Minnesota
has a strong concentration of biomedical
research through the U of M medical school with areas of research
excellence in neuroscience, cardiovascular and pulmonary research
and care, emerging infectious diseases, diabetes and cancer. U of
M medical school also has the nation’s first Stem Cell Institute.


Biomedical Engineering Institute
focuses on innovative
endeavors that match advanced technology with specific areas of
biomedical research. Advanced technology areas include
biomaterials, device design, drug delivery, modeling, and
nanotechnology.


Minnesota Partnership for Biotechnology and Medical
Genomics
is a partnership between the University of Minnesota in
Minneapolis and the Mayo Clinic located in nearby Rochester,
Minnesota. The partnership was founded on the basis of
collaborative multidisciplinary science. A major target of the
partnership is the growing area of genomics research. The
Partnership has attracted state funding in the form of general
obligation bonds to the tune of $20 million for additional innovative
laboratory space for Partnership research. The State of Minnesota
has also chipped in to assist in financing research projects ($3
million for first 4 projects), which expect to yield major future
returns in NIH dollars.

Challenger Region


Minneapolis
-
St.
Paul

12

Commercialization of Intellectual Property

The region has strong advantages from the transfer of technology
from the University of Minnesota.
Successful companies formed out
of University intellectual property include Medtronic, Rosemount
(Emerson), and St. Jude Medical, Inc.

UM ranked fifth nationally in the royalty stream from technology
transfer according to AUTM’s 2003 survey.

Best Practice Case Study

Successful Intellectual Property, Tech Transfer, and Commercialization Strategies at the University of Minnesota

With dwindling federal expenditures for research, universities are dependent on revenue streams from the commercialization of

in
tellectual
property to support the research mission. The mission of UM’s Office of Business Development is to increase the number of su
cce
ssful start
-
up
companies founded from university research. In continuing to support commercialization through nurturing new projects and fo
rmi
ng capital
around them, five major Innovations in technology commercialization have been implemented at the University of Minnesota.

Technology Transfer Liaisons
:
Liaisons assist university faculty with technology transfer by identifying opportunities for commercialization in
the university as well as assisting and educating faculty about the commercialization process.

Multiple Entrepreneur Advisory Boards:
Made up of UM faculty and external advisors, the Advisory Boards assess business and market
potential for start
-
ups. They also oversee the distribution of Innovation grants and Ignition Funds.

Innovation Grants & Ignition Funds:
Innovation grants are R&D grants provided to university innovators to help move technology closer to
the patenting and licensing stage. Ignition investments are made to UM’s early stage start
-
up companies to help enable a success
ful launch out
of the university.

Licensing Center:

This is an externally focused component of the commercialization process that actively seeks commercial partners to license
technologies with high potential.

Venture Center:
The Venture Center collaborates with early stage venture capital investors, business founders, and university innovators to
identify, launch, and fund university start
-
ups. It plays a critical role in structuring and negotiating the terms of funding an
d monitoring the
start
-
ups until a liquidity event such as an Initial Public Offering or the sale of the company to a larger firm.

Nearly forty percent of VC investments over the recent 10 year period
have been in Medical/Health or Biotechnology. (Source: Thomson
Financial)

Minneapolis
-
St. Paul’s Biosciences Continued

Challenger Region


Minneapolis
-
St.
Paul

VC Investments in Minneapolis-St. Paul MSA
$4.107 billion, (1997-2006)
Biotechnology
11%
Computer
Software &
Services
11%
Internet
Specific
26%
All Other
21%
Medical/Health
28%
Other
Products
3%
1

Columbia University

2

New York University

3

University of California System

4

Stanford University

5

University of Minnesota

13

Overview of Los Angeles’ Aerospace Cluster

Basic Statistics


Population:13.1 million
(L.A.
-
Long Beach
-
Santa
Ana MSA)



Primary Business
Locations: El Segundo/
Redondo Beach/ LAX
area, Long Beach,
Pasadena, Palmdale &
Edwards Air Force Base

Key Factors

Global Recognition:
Los Angeles has been the undisputed capital of aerospace industrial design, and has
been largely driven by federal military and aerospace contracts. It is involved in many major aerospace
projects including Joint Tactical Radio Systems, Gold Hawk UAV, and a missile defense system.

Sample Industry Base:
Boeing (Space Systems), Northrop Grumman (headquarters in L.A. and Integrated
Systems facility in El Segundo), Lockheed Martin Aeronautics (hosts Advanced Development
Program/”Skunk Works”), Honeywell Aerospace (Advanced Technology plant).

Workforce:
Los Angles is the largest manufacturing center in the U.S, with nearly 470,000 employed in Los
Angeles county alone. 41,500 people are employed in aerospace and an additional 59,200 in computer and
electronic part manufacturing. The region also contains a strong higher education network. There are 198
college and university campuses in the area, ranging from universities to specialized training institutions.


Example Economic Development Strategies / Programs

Workforce Development:

Aerospace Education Research & Operations (AERO) Institute
is
a consortium of governments, local companies, and non
-
profits to
produce the aerospace technical workforce of the future. It collaborates
with university partners to provide technical, undergraduate, and
graduate education. It also facilitates joint research and operation
programs and promotes industry partnerships.

Antelope Valley College

provides training for the future of the
aerospace industry including CAD/CAM operators, programmers,
composite material engineers, operating technicians,

California Space Grant Foundation
facilitates and manages learning
opportunities for K
-
12, college, and continuing education students. This
includes a mentor program for students and research professionals as
well as numerous scholarship and fellowship opportunities for
Aerospace field work.

Loyola Marymount University’s Systems Engineering Graduate
Program

is a strong feeder program for Northrop Grumman. It also
participates in a partnership program with BAE Systems, allowing
employees at BAE to apply courses from their in
-
house training toward
a Masters in Systems Engineering.

Graduate Aeronautical Laboratories (California Institute of
Technology)

offers graduate programs for Aeronautics and Aerospace
Engineering. The program provides access to leading experimental
facilities and it maintains close ties with industry and government.

Infrastructure for Innovation:

Jet Propulsion Laboratory (JPL) at the California Institute of
Technology
was established in the 1930s and was the creator of
America’s first satellite, Explorer 1, and the first robotic craft sent
to the moon. As the manager of NASA’s Deep Space Network, JPL
designed, developed, and maintained spacecrafts and instruments
that have visited all known planets with the exception of Pluto.

University of California

Los Angeles Aerospace Robotics and
Embedded Systems Laboratory
is involved in a variety of
research projects such as the development of high
-
confidence
software for aerospace
-
embedded systems. It is supported by a
strong Aerospace Engineering program at the university.

Lockheed Martin Advanced Development Program (“Skunk
Works”)

is a leading research and development unit for the
Lockheed Martin Aeronautics division. Located in Palmdale, CA. it is
responsible for a number of famous aircraft designs including the F
-
104 Starfighter, the U
-
2 Reconnaissance Aircraft (the highest flying
single engine aircraft), and the world’s first operational stealth
fighter, the F
-
117 Nighthawk.

Hughes Research Laboratories
is a renowned contract research
organization that drives aerospace innovation in the Los Angeles
area. Technology areas include electronics, information & systems
sciences, materials, sensors, and photonics. Applications include

satellites and fighter jets, enable radars, provide communication
protocols, and support the vehicles and systems of the future.


Leading Region


Los Angeles, CA

14

Technology Transfer :

NASA Commercialization Center (NCC)

assists emerging
companies in commercializing NASA technology. Run by AccelTech,
the NCC provides personal assistance with technology road
mapping, workshops on intellectual property and operating space
for product development. AccelTech also facilitates partnerships
between start
-
ups at the NCC and Cal Poly Pomona researchers.


Regional Strategy
:

California Space Authority

is a nonprofit corporation that
represents the commercial, civil, and national defense/homeland
security interests of California’s diverse Aerospace community,
which includes government, industry, academia, and workforce.
CSA has launched a variety of programs in conjunction with the
2004 California Space Enterprise Strategic Program including
programs to support Aerospace
-
related infrastructure and
manufacturing as well as initiatives supporting research,
technology development and innovation.



Best Practice Case Study

Use of a strong R&D framework supported by a multitude of education and training programs



R&D:

Los Angeles has a diverse spread of R&D activity across industry, universities, and research institutions. Industry leaders
conducting R&D in the region include Lockheed Martin, Northrop Grumman, and Boeing. Top universities in aerospace
-
related
research include the California Institute of Technology, UCLA, and California State Polytechnic University. The abundance of
research institutions include university
-
affiliated institutions such as the Jet Propulsion Laboratory as well as government
-
affiliated research institutions such as NASA’s Dryden Flight Research Center.


Government and Military Support:

Los Angeles also has two military installations with major research facilities. The Edwards
Air Force Base is a research and manufacturing facility that specializes in military aircraft and airborne weaponry and works

closely with government contractors located in the area such as Boeing, Lockheed Martin and Northrop Grumman. The Los
Angeles Air Force Base is home to the Space and Missile Systems Center, the Air Force’s premier space acquisition center.


Education and Training:

There is a variety of strong aerospace engineering programs throughout the region that provide
undergraduate, graduate, and continuing education opportunities. In addition, technical education in aerospace and aviation i
s
offered at many colleges. Programs range from more general programs such as the Mt. San Antonio College’s associates degree
in Commercial Flight and Aviation Science to specific certification program such as the Airframe and Power plant Technician
program at the Westwood College of Aviation Technology.

Leading Region


Los Angeles, CA

Los Angeles Aerospace Continued

Biotech
4%
Medical/
Health
3%
Industrial/
Energy
4%
Computer
Software
and Services
8%
Semicond/
Other Elect.
9%
Computer
Hardware
2%
Internet
Specific
41%
Consumer
Related
10%
Commun. &
Media
10%
Other
Products
9%
Venture Capital in Los Angeles, 1997
-
2006

During this ten year
period, over $12 billion
in venture capital was
invested in Los Angeles.
Other than sectors
pertaining to the area’s
media industry, several
Aerospace
-
related
sectors had strong
representation including
Semiconductors/Other
Electrical Equipment,
Computer Software, and
Industrial.