Return to Nicholas Johnson's Main Web Site

Return to Nicholas Johnson's Iowa Rain Forest ("Earthpark") Web Site

Return to Nicholas Johnson's Blog, FromDC2Iowa

High-tech tug of war

Joe Gardyasz

Des Moines Business Record Online

November 26, 2006

[Note: This material is copyright by The Des Moines Business Record Online, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of The Des Moines Business Record.]

As a vice president at Monsanto Co., Ted Crosbie knows a lot about how chemistry and the corporate world work. This past year, as Iowa's chief technology officer, he has learned a lot about politics as well.

Crosbie was appointed by Gov. Tom Vilsack a year ago to oversee a plan to develop three high-growth industries - biosciences, advanced manufacturing and information technology - as part of an economic development strategy outlined for the state by the Battelle Memorial Institute.

"It's been a learning experience for those of us who don't deal in the political arena very much," said Crosbie. He said he and other scientists who were asked to serve on committees for the state feel they are now largely shut out of the decision-making process because a significant change made by the Legislature earlier this year has shifted control of much of the funding for these targeted cluster projects to the Iowa Board of Regents.

"There's a real question on the part of industry: Whether and how do you want our participation?" Crosbie said. "Right now, it's totally at the regents' discretion how they solicit views from industry."

Crosbie said legislators were lobbied heavily by the regents so that funding would be provided directly to the regents rather than going through the committee recommendation process and then on to the Iowa Department of Economic Development.

"The regents were very insistent on that point," he said. "[Regents President] Michael Gartner was very persuasive that the money should go through the regents directly and not through the IDED board."

Iowa's three-part economic development road map was developed by Battelle in three separate reports provided to state officials in 2004 and 2005. The reports each recommended that the state establish mechanisms for companies within these industries and the state's universities to collaborate in more quickly commercializing cutting-edge research. Among the goals was to make Iowa a more attractive destination for businesses by creating clusters of high-tech companies in the state.

The funding and approval mechanisms for projects related to the Battelle recommendations have taken three separate roads, Crosbie said.

- Road One: In 2005, the Legislature agreed to appropriate $5 million per year for 10 years in Grow Iowa Values Fund grants to the state's three Regents universities, with approximately $2 million each allocated to Iowa State University and the University of Iowa and $1 million to the University of Northern Iowa annually. Each university has the discretion to seek advice from industry representatives.   -   - Road Two: $2 million was made available to the Biosciences Alliance of Iowa, a non-profit group organized in 2005 to fund projects from the Values Fund. That group, along with the advanced manufacturing and information technology groups, was put under Crosbie's leadership by the Iowa Department of Economic Development to make recommendations to the IDED board of directors for Values Fund funding.  -   - Road Three: The Legislature created an eight-member panel, the Technology Commercialization Resource Organization, to recommend projects to the Board of Regents, and set aside approximately $20 million for projects and infrastructure improvements tied to the Battelle recommendations. The panel is made up of four regents, Crosbie and the heads of the three cluster committees.   -    "Essentially, the Legislature was going down one strategic road and then decided to take a different one," said Crosbie, who said the members of the larger committees felt "whiplashed" by the change in direction. "So a fairly significant question the industry has for the Legislature: What is the future of BAI and the other groups here, if the money is simply going to go to the regents? Four people know what their roles are; the other 100 people want to know what their role is."

Ruth Harkin, the regent who heads the commercialization committee, could not be immediately reached for comment.

Regent Bob Downer, a member of the Biosciences Alliance who formerly headed that group's economic development and technology committee, said he was not aware of the concerns Crosbie expressed.

"I will certainly talk with Ted and find out what kinks there are in the process from his standpoint," said Downer, who now serves on the Bioscience Alliance's marketing and communications committee. Downer said business leaders initially expressed concern that without adequate business involvement, research might be pursued that isn't commercially viable.

"I know it wasn't an easy process getting [the legislation creating the commercialization committee] structured, but since it was approved, I wasn't aware there were problems," he said. "I would think if we had good communication and people sincerely looked at other viewpoints, that these things can be resolved."

Despite the difference in approaches, each process seems to be working as it was intended to, Crosbie said. He said he has been invited to participate in the review of projects by ISU, where "I think the quality of projects has been excellent," he said. "I think Iowa State has done an admirable job in using the money consistent with the intent of the Legislature."

As a member of the Board of Regents' commercialization committee, however, Crosbie said he disagreed with the committee on some of the projects chosen because they were too far away from commercial viability.

"I would say a third of the projects funded by the regents were basic research projects, but high-quality projects," he said.

IDED Deputy Director Tina Hoffman said the input from the bioscience, advanced manufacturing and information technology committees has proved to be invaluable to her department.

"The experience provided in those committees has really impacted how we go after prospects, how we identify gaps, how we make connections," she said. "They have spent a significant amount of time and effort in coming together, and even making the Battelle reports possible. We are really indebted to them for their efforts."

From Iowa State's perspective, the Battelle recommendations and the advisory committees that review projects have provided an opportunity to increase communication among the universities, state agencies and the private sector, "and I think that's been a good thing," said Steve Carter, president of the Iowa State University Research Park Corp. and director of the ISU Pappajohn Center for Entrepreneurship.

In November 2005, the university announced how it plans to use its 10-year Values Fund allocation, which amounts to $1.925 million per year. ISU allocated $500,000 to six Iowa technology companies with projects that were considered to be within one year of being ready to market. The university also established a competitive grant program that in February made its first awards of nearly $789,000 to nine research projects. ISU also designated a total of $600,000 per year to existing technology-transfer programs within the university, including the Pappajohn Center, the ISU Research Park, the Vice Provost for Research office and the Institute for Physical Research and Technology.

"Those organizations had received sizable budget cuts several years," Carter said. "So we made up part of that."

From the Regents' appropriation earlier this year (the "Road Three" money), ISU received $3.69 million for project funding, $2.72 million for additional technology infrastructure, and an additional $2 million for endowed chair positions related to the cluster areas.

Just over $1 million of that funding went to advanced food projects such as research on processing technologies for corn starch for use in healthier foods. Other projects funded included research on new fuels, lubricants and other biorenewable materials made from Iowa crops.

Among the 10 projects funded at ISU through the Regents' appropriation in 2006, "three to five of them have either a start-up involved, or we're in the process of analyzing the potential for a startup company," Carter said.

"It's proving to be a valuable tool," he said. "It's supporting research at the universities and it's resulting in some exciting projects which can result in new commercial activity."

Another portion of the funds, $650,000, will be used to create an Information Science Technology Institute to develop collaborative projects with private industry.

"The bulk of that [funding] is really trying to develop priorities and areas of focus within those platforms that were not as detailed as those within the biosciences area," Carter said. The information sciences institute, for instance, will bring a number of research centers at the university under one umbrella to work with industry in Iowa. A committee made up of both industry and ISU representatives met earlier this month to outline the organization's priorities, he said.

Having approximately $1.3 million available annually for research grants gives the university an ability to provide additional assistance to companies, Carter said.

"We're able to talk to companies that may have a particular need," he said. "We can say to them, 'If you're willing to invest X [dollars], that can leverage Y [dollars], and these funds will help extend your research efforts.

"Also, [it could be used] if a faculty member has something they've discovered that could be a base for a business," he said. "Historically, scientists are able to access federal dollars for research, and state money is available for companies. But to move research into applied uses, there's very little funding. These Values Funds dollars have been very effective in filling that gap."