As States Invest in Innovation, New Report Highlights R&D Strategies That Work

Contact: Jessica Riordan, 215.575.4886

Washington, DC - 07/24/2007 - Investing in Innovation, a new report from the Pew Center on the States and the National Governors Association (NGA), shows that with the federal government’s share of research and development (R&D) funding on the decline, states are stepping in by placing pools of money in R&D funds to stir innovation and create new jobs. The report is the first to catalog the breadth of activity in the states, and to offer guidelines for governors on how to ensure that public resources are well spent.

“Governors realize that investments in research and development can spur not only new ideas, new products and new technologies, but can increase a state’s talent pool, economic bottom line and its success in national and global markets,” said Mary Jo Waits, center director, Pew Center on the States.“Innovation can’t be left to chance—every state needs a clear strategy for success that applies lessons learned from their peers and from abroad.”

As the U.S. economy increasingly grows dependent on innovation, staying ahead of the curve is one of the biggest challenges facing industry. To help develop new markets, compete globally and attract and retain jobs, states are investing billions of dollars in R&D—to draw talented scientists and engineers, build new facilities, and support cutting-edge research. Investing in Innovation finds that states often rely on two core assets—their universities and their proximity to industries—when making decisions about where and how to invest.

Investing billions of dollars in everything from nanotechnology to health care and agricultural science R&D funds are being used by states as diverse as New York, Minnesota, Florida, Pennsylvania, Connecticut, Georgia and Arizona. California alone has committed $3 billion to a 10-year investment in stem-cell research.

States with a track record of investment are seeing results. Arizona uses a combination of strategies to drive innovation, including a public-private partnership, Science Foundation Arizona.

“Science Foundation Arizona has focused a bright spotlight on innovation, bringing together the best and brightest from the public and private sector to design a long-term strategy that works for Arizona,” explains Arizona Gov. Janet Napolitano, co-chair of the NGA Innovation America Task Force. “The research we commissioned through the Innovation America initiative demonstrates that governors can make an enormous difference by bringing together industry and universities to develop innovations that improve public quality of life.”

The new report, built on more than 150 interviews and analysis of more than 25 state-funded R&D projects, provides clear guidance on how to design R&D investments that work—offering six specific guidelines. Each guideline is supported by case studies.

According to the report, states are quickly learning a lesson about innovation-based R&D that can also be applied to the private sector—it is less important how much you spend, and far more important how smartly you spend. Among the steps governors need to take to enhance their R&D investments:

• Develop a strategy that leverages the assets of two key sectors— industries and universities— and encourage, or even mandate, collaboration among them.
• Build on the unique character of a state’s economy and needs—not every state can be a bioscience hub, so find the strengths and fund them.
• Let experience, not political connections, guide staffing for R&D funds—find the best and brightest – even if they come from other states, the federal government, or even overseas.
• Make every award through a competitive process that prizes excellence above all else.
• Consider creating a public-private organization that fosters innovation by cutting through red tape, engaging industry and raising the profile of state-funded efforts.
• Develop a clear method of measuring impact and hold recipients of public dollars accountable for promised results.

“By taking a hard look at what states are doing in the innovation field we can better understand the steps that lead to success and those that are a road to nowhere,” said Susan Urahn, managing director, Pew Center on the States.

Investing in Innovation

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