Oklahoma's EDGE: Economic Development Generating Excellence: EDGE Action Plan

TRANSFORM OKLAHOMA INTO THE RESEARCH CAPITAL OF THE PLAINS

Action: Create an EDGE Endowment of $1 billion to support research and the transfer of innovation and technology to the private sector. This strategic investment will transform Oklahoma into the “Research Capital of the Plains.” Research results supported by the EDGE Endowment will be directed toward innovation that will strengthen current Oklahoma businesses and create businesses that are likely to remain in the state.

The EDGE Endowment will transform Oklahoma into the “Research Capital of the Plains.” Investments from the $1 billion endowment will fund all the key actions that will allow Oklahoma to become a center of powerful research that will support a vigorous economy—this is the single most important action that Oklahoma can take to thrust itself into a business leadership position. When fully funded, an endowment of $1 billion could generate $35 million to $40 million per year. With that, Oklahoma will be able to:

Commit significant matching funds to compete successfully for federally funded “centers of excellence” that produce jobs and create new businesses.
Purchase equipment that provides researchers with the necessary competitive advantage to secure high-profile research projects that lead to commercially viable products.
Build public and private sector facilities that provide researchers with the optimal environment in which to develop technological breakthroughs and to attract additional funding and other outstanding researchers.
Create “centers of innovation” in our state, for example, agriculture product processing or energy extraction or sensor technology, to benefit Oklahoma industries.
Invest capital to move innovations and inventions from the prototype stage to the level of maturity that will attract venture capitalists.
Implement and manage sophisticated information services networks to give small and rural businesses access to the latest research results, technologies and market opportunities.
Invest in start-up money to attract outstanding researchers to Oklahoma's public colleges and universities and to public and private laboratories.
Signal to the business world that Oklahoma understands the importance of research, innovation and technology transfer and is committed to transforming Oklahoma into a national leader.

The EDGE Endowment will achieve its full potential for increasing the state's economy as Oklahoma's public colleges and universities:

Streamline and standardize the process of transferring technology, making it easier for private businesses of all sizes to capitalize on innovations and inventions produced by faculty, staff and students.
Actively seek opportunities to collaborate for the specific purpose of producing innovations of benefit to the state.
Work with their communities and the private sector to provide or facilitate capitalization, incubation and business support to nurture small local companies.
Focus significant portions of their research programs and faculty hiring decisions on areas that will benefit Oklahoma's economy.
Recognize that producing commercially important products and creating new businesses are legitimate and important roles.

Ideas, inventions and innovation create new businesses and increase the productivity of current businesses. Throughout the world, the strongest economies are driven by the research that generates innovation, which in turn is transferred to business and industry. These innovations create many new jobs in small businesses and in the service and technology sectors. This is particularly important in Oklahoma since 49 percent of the state's workforce is employed in small businesses, generating $18.4 billion in income (Source: U.S. Small Business Administration).

Businesses that are not innovative and productive fail in the global economy, leaving workers without jobs. To ensure that jobs—especially higher-paying ones—are available to Oklahomans, we must produce and have first-hand access to research results that create this innovation.

Over the past decade, Oklahoma has made important progress in strengthening its research capability. The Presbyterian Research Foundation in Oklahoma City, with its connection to health and biotechnology, the National Weather Center in Norman, and the OSU Center for Sensors and Sensor Technologies are a few examples of how locally produced innovation can result in high-paying jobs.

With available matching funds leveraged by the endowment, further progress can be made throughout the state, including enhanced university-sponsored research in Tulsa in a variety of fields, including telecommunications, biomedicine and engineering.

Federal dollars to Oklahoma from such major funding sources as the National Institutes of Health and National Science Foundation have increased in recent years, but the state still ranks far too low in federally funded research and development. While the state has enormous potential in this area—particularly in the technology sectors, which are the source of most new jobs—it must take radical action to become a national leader in the kind of research that drives economic growth.

Economists routinely estimate that private laboratory and university research investments are returned three to 10 times, and the annual returns on research and development range from 5 percent to 40 percent. But the advantages to investing in research do not end there:

New and expanding businesses are attracted to places with strong research communities because they have access to new ideas, innovative technologies and an environment that fosters creativity and entrepreneurial activity.
Young professionals are attracted by colleagues in their own and related fields. Skilled workers find opportunities to work in jobs that make use of their knowledge, resulting in higher pay.
Industry clusters, such as aerospace, agriculture, biotechnology and biomedicine, construction, energy, manufacturing, telecommunications and nanotechnology, all benefit from innovations in products and services and from the sharing of knowledge.
Angel and venture capitalists focus on regions with strong research because they are likely to find investment opportunities that lead to new products and businesses. Indeed, it is not happenstance that virtually all regions of the United States with strong economies are associated with strong research universities.

The heritage industries of agriculture and energy remain the bedrock of our economy, while manufacturing, construction and military-related businesses provide thousands of jobs throughout the state. An emphasis on research does not diminish these important sectors. In fact, improvements in research will have significant positive impact on all parts of the economy, particularly the small businesses that will continue to play a vital part in our state's future in both rural and urban areas.

Establishing the $1 billion EDGE endowment will be the largest and most ambitious project ever accomplished by the state of Oklahoma. Strong leadership from throughout the state will be required and multiple and innovative funding strategies must be exploited. The Governor and the Legislature, working with the private sector, should identify and implement the funding mechanisms. By December 31, 2004, the EDGE endowment should be designed and ready to implement. Complete implementation should include the schedule for achieving the $1 billion investment, the description of who has oversight responsibilities, and the measures by which the citizens of Oklahoma will be able to judge its success.