A Quiet Crisis: Higher Education & Economic Development Transcript
MR. KIRWAN: Joe, could I comment on the legislative session which, of course, was a disappointment to everyone, and when I say “everyone,” I think the members of the general assembly, as well, and the governor, I think. Nobody felt good about the way things ended up. It’s sort of, looking back on it now, I think it’s sort of two silver linings, if you will. That might be too strong a word to use but two things I take heart from. One is I spent a lot of time walking the halls of the State house and talking to Sally and her colleagues and I think there was a genuine sense that, an understanding that something needs to be done for higher education and a real sense of regret that it ended up the way it did. So I think that’s something to build on going forward.
I think the other thing is, I just cannot say enough positive words about the Board of Regents and this Ohio Plan that they put together. This was a very well-thought through document that got a lot of input from our universities, from the private sector. The private sector embraced it. I know the Chamber of Commerce in Columbus endorsed it as did chambers across the State. The Ohio Business Roundtable was supportive of this document. It was very focused. It identified these three areas. It was not an entitlement where there was going to be a competition for funds to build real centers of excellence in our state and important areas of technology.
And I think we just cannot let this plan die, even though it wasn’t funded. There was a real desire within the legislature even today to try to do something about it and I’m hoping that the private sector and higher education, government, political leaders can rally around something like the Ohio Plan even next year in a supplemental budget and get it funded and get it helping to move the state forward.
MS. BROWN: That brings us, Brit, I think to exactly one of the important issues. I think we cannot, of course, afford to, for our citizens, for our state, for our quality of life, we can’t afford to drop our thinking long term. We have seen the state’s continual decline in the percentage of revenues that are allocated from the state budget to higher education.
We have heard Luis make the comment if we educated more citizens and they had the higher paying jobs we would like to attract here, we would in turn have billions of dollars more in tax revenues. This is a longer term look, but that is exactly what one must do. You must begin to plan and look for the future and the only way to do that is to educate people in our state, attract the high paying jobs, get those tax revenues and soon we will be out of this terrible spiral of never having enough money to move ahead and that’s where, again, if I may quote Peter Drucker, he always says, you learn from success, not failures. Don’t waste your time studying the failures. Study the successful entities.
So if you go around and you look at the North Carolinas or you look at the other states, Maryland has done a superb job of course of building biotechnology, so Maryland is number one in the nation, more NIH funding than any other, jobs have been created. You know, it’s a given fact that if you get technology transfer from universities into new businesses, you create new businesses, you create revenues and you create jobs.
Most of the growth in the ‘90s, according to Michael Porter’s, you know, wonderful report again, “U.S. Competitiveness 2001,” one-third of those jobs were from new firms, 5 million new firms that were started up, and this is… this is the result of the university research, the university professors, their inventions turning into innovations and on we go, so that’s exactly what we need and we have to begin to convince the legislators and that’s the whole issue. We need to engage that business community to be much stronger champions. I think they know we need an educated work force. They know they would like to attract critical masses of businesses and the clusters that, again, we hear about that are so important and our state has strengths in. It isn’t if we’re starting this from new.
MR. CHURCH: Part of the irony here is that 100 years ago, Ohio was a hotbed of innovation at the beginning of the Industrial Revolution. I mean, we had the mind-set in Ohio that we could do anything, that we could create jobs and companies in all kinds of new applications and new arenas, and so across our state we had people starting businesses in their garages and basements and second bedrooms and we saw an environment that supported that. The financial institutions were ready to provide the capital and the support.
You know, Jim used the language of risk aversion. Over that 100-year period, we have become somewhat complacent with the success of manufacturing and the notion that manufacturing will sustain the foundation of this economy, and consequently, we have focused more on people working for large manufacturing companies instead of working for themselves. We know that the job growth has come in small companies. We know that the innovation and the wealth creation has come from those small companies, and so what we have to do in shifting the mind-set of Ohio is to bring it full circle to where it was 100 years ago and to rekindle that spirit right here. And certainly universities and colleges have a great role to play.
You know, I’m excited about what I see in northeast Ohio with the Greater Cleveland Growth Association and its focus on its new strategic vision, the whole idea of trying to establish northeast Ohio as an innovation center and what are all of the factors that need to come to play to create that mind-set of the innovation to rekindle that entrepreneurial spirit. It certainly has something to do with the business support services that we have, the technology transfer, the capital availability and the governmental support.
But my sense, it almost requires the kind of community wide initiative that we saw happen in the United States after Sputnik took off and we saw an entire nation realize that it had to draw on all the possible resources, it had to refocus. Northeast Ohio, Ohio in general, has to refocus on innovation as the coin of the realm bringing together the benefits of education. Innovation and technology transfer all coming together to create those new jobs of the 21st century. We have to grow our way out of this descending spiral that Jenny has been talking about.
MS. KILBANE: People are aware and, you know, I think that’s true and this testimony uses the wonderful kind of metaphor of a frog in the boiling of the water. You know, it sits there and before it knows, it’s cooked because he’s not dropped in. It starts out slowly. But in a sense, I think that’s what part of this conversation does, but I am not certain that there is a widespread understanding of the problems that we face in the State of Ohio and northern Ohio, as well. I mean, I think we look at the full employment issue and there are plentiful jobs.
We are like the frog that is slowly boiling and before we know it, we’re cooked because we really are not aware of the issues. I think people that are involved in universities and in businesses and that are involved in some of these civic groups are very much aware of this issue, but I am not sure that it’s broadly shared. And I think even in terms of looking at it from the point of view of the legislature and the governor, that in a sense you need a broader, you need a fairly broad support base from people in your community that understand that Ohio faces some extremely difficult periods and the failure to say so I think is one of the things that makes people unaware of it.
You know, all of us as politicians want to go and spread the good news. That’s the nature of us, but I think we have to begin to say that, you know, if Ohio does not make these major investments that we have to make in our own young people, and I know there’s a debate, should you buy or should you make, you know, can you buy people, can you attract people from someplace else. But to me, I think we have a fundamental moral obligation to those people in our community, their children, those people that are making transitions to other careers to provide that here and I think it will be a great catastrophe if we don’t.
MR. WAGNER: I appreciate the way you concluded your remarks, but I must say the problem with the frog in the heating water, warming water, ultimately boiling water is that you want to make the frog aware of what its problems are and its pretty much in better shape if it jumps in any direction. That’s not really true here. It is important perhaps - it is important, forget the perhaps - in motivating to know that the temperature is rising in our pot. But as important, if not more important, is some leadership to help direct the frog of where to jump.
The Ohio Plan you mentioned is an example of that sort of thing and there are other examples at all different levels. I think we need to bring, you know, to Roy’s point, looking on history at a time when there seemed to be more eagerness to start new businesses and more investment. I also remember at the turn of the century our nation’s technical education was less than a half a century old, really most of it happening after, with a few exceptions, most of it happening after the Civil War. I think we should consider also as institutions of higher education what it is new that we want to bring and can bring to this.
Jenny mentioned, several have mentioned technology transfer and research universities. Understanding the technology transfer is an appropriate part of the continuum between fundamental research and service to society through commercialization of technology is an important mind-shift. It’s going to take a little help to make that happen. It is not that the research universities are talking about downplaying fundamental research in order that they can to tech transfer bit it’s a continuum. It’s an addition.
MS. BROWN: And Virginia has just made that part of the mission of its universities, its public universities, has required something in the mission statement about tech transfers.
MR. WAGNER: About transferring technology. That’s wonderful. Of course, we would look, we need to look to the private/public sectors to receive that technology, as well, again getting back to the partnership, the stick and stay component.
But also, and this may seem a little esoteric, re-appreciating the notion of the intrinsic value of education, period. Remember, we are focusing right now or we are focusing right now on technology and technology transfer and its opportunities for the State of Ohio and universities and higher education in general have to that. But remember, also, there are - higher education sort of has this responsibility for the political and social conscience, you know, raising that, haven’t impact on that. It has to be committed, as I said before, to educating an enabled populous, not just this training work force, and I think raising again the appreciation of education broadly is something that is a university responsibility or higher education responsibility we haven’t done especially well.
So my point is I think there is more, that there is much that the higher education sector can bring that’s new to the situation so that we’re not ever accused of saying help us do what we have done for 100 years.
MR. CHURCH: Part of the reason, though, Jim, that we haven’t been as successful in bringing those issues to the broader public as we could be is that we haven’t forged an effective partnership with the business community to recognize the common interest that business has with higher education and the importance of articulating the benefits for these communities and this state.
You know, one of the things we heard from Sally and her colleagues over and over during this legislative session is that we didn’t have the corporate community coming forward and lamenting the current financial conditions the legislature was dealing with, and the reality is the corporate community has perhaps the most to gain in the short term of any sector, and if we haven’t been able to forge a partnership with them where they’re willing to come off the sidelines and to work with us to articulate the legislature, we’re certainly not going to get to the broader public.
MR. KIRWAN: Roy has hit on a really important point, and I’m sure Sally can confirm this, if he and I or Luis and other university presidents come in and make our case, it’s not nearly as effective as if several people who seemingly are disinterested, CEOs of major corporations come in and say you’ve got to fund higher education better, it has a greater impact, does it not, and if anything, I think if we have not done all that we can, it is in the absence of these, this stronger alliance with the private sector, getting them to join us in expressing this need, I think it would have…
MS. BROWN: I think in every state where we’ve seen a turnaround, it was because of this strong coalition between business and higher education that actually accomplished it with the government then as an equal third party.
MR. KIRWAN: I was just rereading for maybe the third or fourth time the story of Austin Texas, 1985, it’s a sleepy town in Texas with sort of a stagnant economy and who came together, the university leaders, the corporate leaders and the government leaders to decide they were going to turn this around and they did. It can happen.
MS. BROWN: Can happen; right.
MR. KIRWAN: That’s the thing we have to keep focused on. If we do this right as a state, as universities, as the private sector, the government, I mean, we can make a transformation in Ohio, but it isn’t going to be easy and it isn’t going to happen unless we can bring people together and get behind a common agenda.
MR. FROLIK: Sally, we have talked a little about the term risk aversion that’s been tossed out on the table. The Ohio legislature, certainly the Republican caucus, has been tax aversive. A lot of the things again that we’re talking about is going to be costly and that may mean raising State revenues in the short term, if you look at it as an investment, as we’ve described it here.
Can the case be made to the majorities in the general assembly and to the governor that that’s a necessity to the State? Can they be sold on that idea?
MS. KILBANE: I think, in fact, that was the point I was trying to make before, I think before you can begin to change how your legislature perceives it, you have to have some broad political support and I think that is the point Brit is making and Jim is making. You know, you need the coalitions between businesses, but I think you need a broader public support, you know, a broader understanding in terms of the public that this is something that is to their general benefit so that, you know, if their legislator or if the governor comes back and begins to, you know, talk to people about would you support - you know, I had mentioned we had a, you know, like a $20 state tax credit that would raise $185 million annually. That’s $360 million. That goes to every single taxpayer in Ohio. you know, to go back and saw to your constituents, can you make this case, are you willing to invest $20 in our higher education that will benefit your children, our economy as a whole.
You know, I think the other thing from a policy point of view, and the point has been raised here a couple of times, the failure of Ohio to grow also means our tax base is not growing. You know, Case has done some wonderful work, the Regional Economic Institute, and they look back I think 20 years before 1994 in which they showed a loss in our gross state product of about $30 million which at that point was about 13 percent. Of that, state and local governments take about 10 percent of that. That’s $3 billion.
Now we’re looking at trying to fund K through 12, try to help people that are mentally ill and mentally retarded and do this so that I think even from a public policy point of view, Ohio will continue to limp along and grow but at a much slower rate and that means the tax revenues also and we will not be able to do those things that people expect us to do.
But I think in answer to your question, I think you have to have, I think you have to have people broadly understand on a much broader level, your constituents that you talk to every day, business leaders are extremely important but also the voters in your district are very important, you know, to say this is something that is going to benefit all of us in the State of Ohio, but particularly it might benefit your children, your grandchildren and are we willing to invest even if we took the simple tax credit, and I think politically to me that makes some sense because it’s a very small thing. You know, it’s probably $1.50 a month or something of that nature. It’s something you can put in simple terms to people, are we willing to make that kind of investment in our state, and to me that is something that, you know, we have to go back and talk to our constituents if we feel strongly about it.
On the other hand, if you can get people in districts to understand these problems and they can begin to come to their state legislature and say this is something I believe you should begin to address and we are willing to make these kinds of sacrifices that will benefit us all, and to me that’s - but it needs to be a broader conversation. All of you here understand this and there are lots of people in higher education - you know, the Cleveland Growth Association understands this, some of the local public officials understand it, but this conversation has to be much broader.
MR. PROENZA: Sally has now twice I think asked us to be honest with ourselves in defining the condition of our state because, indeed, as you have indicated, it’s not well enough recognized, and I think, Brit, as you talked about Austin and as many of you talked about other places, there have been two conditions that lead a state to turn around. One in a real perception of crisis. Clearly we’re still inching along, so nobody feels that boiling water.
MS. BROWN: The quiet crisis.
MR. PROENZA: The quiet crisis. The other condition has generally been indeed the civic entrepreneurship that was characteristic of George Kozmetsky in Austin or Zell Miller and others in Georgia or Governor Hunt and Bill Friday in North Carolina. Folks, you know, we have got some serious issues, you know, and to quote Derek Bach who used to quip, if you think education is expensive, try ignorance. I would suggest we have because over the last 30 years, this state has lost its focus.
Remember, Jenny, the 30 years ago the State Board of Regents together with Governor Hunt promised that no Ohio student would have to pay more than 30% of the cost of a public higher education. That was already above the national average. We have lost the focus. We have lost that renewal to really acknowledge what we are doing is dooming our state to a condition of self-imposed economic mediocrity, and I think we have to be willing to state it candidly and begin to turn those things around that we can.
MR. FROLIK: You mentioned mediocrity. One thing I have heard from parents of children who are college bound is a concern of quality of higher education in Ohio. You can quibble about “U.S. News and World Report’s” rankings but there’s not a public university in Ohio in the top 50. Jim’s Case Western is 38th. Ohio State is I believe 20th among the public universities.
Brit, what do we do - how important is it for a state to have a great public university and how do we both improve the quality and the perception of our major public universities in Ohio?
MR. KIRWAN: I think it’s terribly important. It’s always been obviously an asset to have a great university, a great public or private universities in your state, several of them if possible, but now it’s become an absolute necessity. It’s just hard to imagine a region’s or state’s being successful in a knowledge economy if there aren’t some great talent in a state generating new ideas and wonderful students, attracting students, great talent at our universities.
You know, I think the formula is not all that complicated but it takes a certain amount of will both on the part of the state and on the part of the universities. I think universities for their part have got to be willing to say, okay, we can’t be great in everything. You know, there are certain areas because for historical reasons we have a chance to really shine and state if you’re willing to make an investment, we’re willing to put the money there so we can build programs of true eminence and that will serve as a magnet to attract business and students and, you know, as a university begins to develop truly top ranked programs in certain areas, it has a halo effect.
I mean, there are all sorts of stories about Harvard being rated in the top five in areas where they don’t even have a degree program, so I think it’s a combination of the tough-mindedness of the university to do the planning and to make the commitments to use new funds very appropriately and in a very targeted way and then it does need those new funds, the investment from the state to make it happen.
MR. FROLIK: You had a very interesting scenario in terms of what the researcher can do. Tell us a little bit about the person you hired from Berkeley who started iMEDD.
MR. KIRWAN: In a way, if we could multiply this story over and over again around the state, we wouldn’t be sitting around this table having this conversation. But the gentleman you mentioned is named Mauro Ferrari who was a faculty member, a young professor at Berkeley working in one of the hottest new areas of science called nanotechnology which has been mentioned several times around the table where I think Ohio, if you want to pick an area where we have a chance to maybe make a move and get some fame, this seems to be a very appropriate area.
In any case, we recruited him to come to Ohio State and he right after he was recruited here, he won a prize, the Coulter prize, given annually for the best invention in biomedical engineering in the world. This was given to him. It’s a new prize given by Georgia Tech University. Well, we knew he was good when we recruited him. This sort of was a level of international recognition that was wonderful to hear, but he already had - there was a company in California that was using his patent to create implantable biomedical devices and the company’s name is iMEDD. And, well, Mauro moves to Columbus, iMEDD needs to be near Mauro, so iMEDD moves to Columbus, Ohio and they have set up their operation right there in Columbus.
So talk about a man-bites-dog story. We got a company moving from the Silicon Valley to Columbus, Ohio and the reason they did was very clear because of the talent of the faculty member that we recruited. Just the other day we noticed that NIH gave iMEDD, I think it was a $3 million award, to work on this technology, so here, you know, the recruitment of the faculty member led to a company coming here leads to a major investment from NIH. So, as I say, we need to replicate that story over and over and over again. Not just at Ohio State but at Case Western and Akron and universities around the State.
MS. BROWN: There’s a great story at Case Western and that’s, of course, you have many, many, but Hunt Wilbert coming in being an enthusiast, a company now who has 100 employees, is a driving force for the biomedical type cluster here and bringing in dollars, both NIA…
MR. WAGNER: Clark just came, as well. These are wonderful. I’m pleased to hear us talking about this. And, Luis, you helped us with the transition and Sally talking about understanding clearly what the problems we have and saying we lost focus.
Hearing now what sort of focus we could have or what - going beyond the troubles, I guess, is what I’m trying to get us to do as a community to say if we did have the $20 per taxpayer, what is it we would do, what are the measurables, what are the quid pro quos for that. I think there are many things. We have talked about new start-ups. We talked about how universities can respond by having greater out of state and national, international draw, about the greater amount of technology, transfer technology that’s licensed new company formations. I think there are some very specific things we could point to and we could offer the taxpayer and we should be asked to do this.
MS. KILBANE: Jim, it has to be strategic. The thing is we have to go back to the work that has been done at Case, the Regional Economic Institute has done some, I think, phenomenal things. You know, Mike Fogarty is the author of several of their studies has made the point that unless we invest strategically and unless we invest with the idea that it is going to benefit people in Ohio, although we can’t be essentially non-global or non-national because that’s an important part. We have to be able to draw on technology. But it has to be a strategic type of investment and we cannot, you know, just say that we’re going to invest in general in education. It has to have a focus, you know, in the types of things and the areas in which we think, as you point out, that Ohio, Brit, that has this potential to grow.
And so I think coming back to the legislature, again, I think, one, you have to convince people there’s a real issue and a problem here that we must address. And I think, two, when you come back and you begin to say, and there’s a general understanding of this, that how are we going to go about this, and I think it has to be done in a very strategic way in terms of it focuses on undergraduate and graduate…
MS. BROWN: Sally, I suggested that’s what the Ohio Plan was.
MS. KILBANE: And I talked the other day—let me just offer one thing about the Ohio Plan that I think might help in terms of the legislature. I had asked twice from the Board of Regents to get backup documents on the Ohio Plan, and to be perfectly blunt about it, I got about seven pages, one that was what was on the Web site, stuff that was—you know, there was no meat there. So I think when, you know, when you are looking at a strategic long-term plan in terms of how you can convince people to say this is an important thing for us, you have to have something extremely substantive here.
My concern in some ways is that, you know, when you are asking the taxpayers - and that’s what we’re asking - to place bets on their future, they have to have some reasonable probability that those bets are going to pay off. And there’s a lot of discussion today in terms of economics. You know, occasionally you get a statewide cluster, like in Ohio it’s been long known for automobiles with Jeep and GM and Honda and that sort of thing, but a lot of economic growth and development is really regional. You know, you look—and we have six major regions in Ohio.
And, you know, when you have a general state plan, my one concern is we have a general state plan and nanotechnology may very well benefit the Columbus region and I’m assuming it will done right, but I think our approach has to be a little more subtle and it has to have a bit of a regional focus and that also has political benefits in it. You can come back and you can say to people in the legislature and the constituents in the area, you know, this is an area of, like here in northern Ohio, the biomeds or some of the stuff that I don’t understand like the MEMS technology and all those rather sophisticated things, you know, you come back to the constituents and say, these are very specific things that we think we can do in this area with this additional help.
To me that’s much more appealing because then you can begin to say to workers in your area, parents in your area, you know, these are things that, you know, I think we’re going to make a sacrifice but in the long run it’s going to make your life better.
MR. FROLIK: We’re going to have to break here folks. We’re coming to the end of the tape. Let’s pick it up when we come back. We’ll talk about eminent scholars and that sort of stuff, very specific stuff.
(Thereupon, a recess was taken.)
MR. FROLIK: Roy, just before we broke we were talking about the Ohio plan, you were going interject about information technology.
MR. CHURCH: Well, I wanted to because I think it represents a way to connect the strength of Ohio’s traditional economy with the new an emerging economy. Information technology is really, obviously, started on the coasts and I call that the first wave. And we all know that with dot-coms blowing up in the last year-and-a-half here that there’s been a bit of a fizzle in peoples view of the impact of information technology, but the reality is the second wave of impact really ought to be in the Midwest because the Midwest is where we have strength in making things. And if we’re able to apply information technologies creatively and effectively, we ought to be able to improve productivity and to create wealth right here in the Midwest. So we really, I believe, we could be posed if we learned to utilize information technology as effectively to leap frog the competition in productivity gain and, therefore, wealth production because we have that strength in manufacturing.
I’ll give you an example in our county where through our Great Lakes Incubator, for developing enterprises, working with a company that creates software applications for circuit boards that are imbedded in manufacturing machines that allow each manufacturing machine that through the Internet, talk with other manufacturing machines or other parts of the production cycle in the continuum to enhance productivity. Wonderfully creative ways to buildup on a strength that we already have, but to move us forward. The other real benefit of that is, if you look at Ohio as six major regions, all of them have significant strength and manufacturing. Information technology is one part of the Ohio plan that is applicable to our entire state not localized to anyone of the six regions in general. So I think we didn’t good of job of articulating what the information technology component of the Ohio plan might do for the economic base that we might already have in place, but I think it has a significant potential that we need not under estimate and we need to build on as we go to the next cycle.
MR. FROLIK: Roy, there is one thing I’d like to pick up, also, go to you on. Sally was talking - perhaps one way come to the legislature is to show people very specific benefits in their communities as a way toperhaps to get by that tax aversion we talked about or to think perhaps in sort of different strategic ways. It seems to be back in 1995, in Lorain County, there was a lot of concern about the economy, perhaps strengthen the economy at that point. You managed to sell the voters on a tax increase for something for a university that might have been considered a gamble. Can you talk about that and how that fits into convincing the broader community the voters out there about the importance of higher education?
MR. CHURCH: Well, we really didn’t sell the voters on a new tax. What we sold them on was the importance and criticality of enhancing educational opportunities for Lorain County. You know we discovered in (the) 1990 census was (that) Lorain County had highest percentage of adults with Associate’s degrees of any other counties of Northeast Ohio but at the… level we were dead last and dead last by a lot. At the graduate and professional level we were dead last by more and so we started exploring what were some of the reasons for that and one of the conclusions was that Lorain County was the largest county in Ohio without a public university or public university branch, so certainly access was one of the issues.
We also were the county that had the most intense manufacturing base. 31% of the employment base in Lorain County employs employment directly in manufacturing - highest percentage in the state. We had a disproportionate of that mind set that said there were good jobs in assembly line manufacturing that didn’t require education beyond high school.
So we said how can we community college as way to bridge that gap. So we initiated conversation about this idea called the University Partnership Program, where we would partner with universities to bring programs into Lorain County and make them accessible to all those folks that already had Associate degrees and allowed them to go to the next level. We took that idea to the community in over 150 forums across the community and exposed people to the idea, Sally, the notion of giving people further information about opportunities and the people came back to us and said this is something our community needs. Come up with a plan and help us figure out how to do that.
So the community helped us develop the University Partnership Program concept and we explained that in fact to do that, we needed some infrastructure support and that would require a local tax commitment. So we brought that issue forward in November of ‘95 and the people in Lorain County taxed themselves with a new tax to support a new idea to provide new opportunity and has produced a wonderful result. We have 8 university partners, 17 Bachelor degree programs, 7 Master’s degrees and a Doctrine program delivered right there at Lorain Community College through the University Partners in our community and that’s the notion of trying to be responsive to the needs that people feel and try to translate those into definitive action. You know, it’s my sense that the support will come if people understand what the vision is, what the opportunity is, what the aspiration is and could see a way to get there.
MS. BROWN: Roy, I’m really compelled to give you a kudo because it was your work on the articulation committee that help to put in place the ability of universities to transfer credits almost seamlessly from one area of the state to another. The same kind of thing that distance learning will be doing and is doing on this, but Roy chaired the committee on articulation and this is a very important step in order to help this kind of development occur.
MR. CHURCH: You know, I really believe that we can partner along the institutions of higher education on the technology transfer and research agenda as well. One of the things that we know is that the largest amount of commercializable research that’s done in the United States today is done by corporations. Many of our research universities work very closely with those institutions. Now, Jim and I have had some discussions about working with corporations in Lorain County who have research agendas connecting those to some of the foundational research being done at the university as a way to stimulate the defusion and dispersion of that technology transfer across our state. The sense that I have that we need to be able to show citizens in all parts of our state the benefits that are accruing to them through this collective effort. And that’s why that notion of partnership is so critical. We don’t have the resources today for any of our institutions to be able to accomplish everything that needs to be done by and in themselves. We have to be able to create synergy among and between so that Ohio State, the University of Akron, Case Western is a private institution, Cuyahoga County Community College, all are working together to try to develop benefits for the larger whole.
MS. BROWN: Joe, may I?
MR. FROLIK: Sure.
MS. BROWN: I have a little antidote because it is so relevant to what you said and what Sally was asking about, specific examples of how elements of the Ohio plan might impact and areas the Board of Regents a few months ago was to visit Proctor and Gamble pharmaceutical locations outside of Cincinnati and Mark Kolar, the CEO there pointed out the reason why this $3 billion company was located there was not because P&G’s headquarters there at all, but it was because there was research on obesity, which is their main focus of research and product development. There is excellence in research at the University of Cincinnati. They went there because they needed the professors who were in that research institution as consultants and as continual idea generators for their research laboratory.
As we know, much of industries’ research that had been so strongly supported during the years right after the world, the second world war has transferred actually to university via contract researching because industry had to cutback they had to down size and they could not afford these giant research labs that were the standard during the years right after World War II. The Government… all cutback including my own, but we took advantage then of the Government labs like NASA and Roy Patterson and the universities that were around us to complement the work going on in our own activities or the areas of research that we wish to continue to expand in and so this is, I think, another example of the biotechnology aspect of the Ohio plan right there as an example in Cincinnati where there is already this cluster, if you want to again look at the clusters which is being generated because of that location.
MR. PROENZA: Of course, we see that very much in polymers.
MR. FROLIK: I was going to ask you about the polymers and that sort of relationship between the university, the research facilities university and the region, the industries that are there. You helped them, you’re very instrumental in the acronym in terms of making the transition from the rubber based economy to the polymer.
MR. PROENZA: It’s been a huge success story for Ohio. It makes Ohio number one typically in the world in polymers and that inter-relationship with the University of Akron, with Case which has a very strong program as well has been a constant give and take. At Akron we have about 40% of the research in polymers supported by industry which goes to your point of really engaging with industry. We are focusing on developing programs increasingly on what we refer to as a strategic partnership basis and in varying different disciplines, the science and engineering with the business entrepreneurship, global business, sales and marketing, law and intellectual property, that provides us a focus of being able to provide a very broad service indeed development, protection, marketing, management and commercialization of new technologies. We’ve held a series of forums on technology transfer and the role of science and technology in economic development and this fall we’ll be focusing on just that issue because indeed more research is still being done in industry then in universities and a great deal of that research never sees the light of day it’s parked in the warehouse and so we’re looking on how to “mine,” how to extract some of this intellectual property into our laboratories for further development or how to assist companies in taking this intellectual property off line and creating new opportunities for new business start ups or for themselves in other product lines. Some companies have gone into the point of providing some gifts of intellectual property. Your own company has done some of that. Eaton has done some of that and we are talking with Shell and several others about gifts that can then be brought forward. But there’s quite a bit. In a partnership with the Betel Memorial Institute, which I know working with you as well Brit, Betel is focused on innovative ways of getting technology commercialized and we’re going to continue that special focus that we have on polymers and help and work omit the further innovation of our industry because every industry evolves through innovation as Michael Porter has just told.
MR. KIRWAN: And Luis’ example triggered in my mind the relationship that Ohio State has with Honda. Honda you may know has the… is largest operation outside of Japan and in Marysville, Ohio and I don’t know how many of you had a chance to visit it, but it’s not like the automobile manufacturing plant that we remember from our youth. This is a really high-tech facility. They don’t hire production line employees because they don’t need them. It’s all done robotically - (they’ll) hire engineers and Ohio State is their number one source of workers and we just developed a wonderful relationship with them over the years and which is lead to research partnerships, gifts from Honda that have supported our college of engineering. We managed their transportation research center which is their track where they test cars and this is lead to an endowment of our college engineering of about $30 million which supports ongoing research, supports students and it’s these kinds of relationships the ones Luis was describing and the relationship we had with Honda an others that I really think are the future for our state and four our universities.
MS. KILBANE: Can I go back just a minute?
MR. FROLIK: Sure.
MS. KILBANE: I think Luis has described the perfect cluster development and how it occurred, but you look at liquid crystal display research that was done at Kent State and yet that technology has gone virtually every place else in the world but here. And then I think Jenny mentioned the idea of, you know, we found in Northern Ohio all these information technology companies.
You know, I think, again, that’s where the strategy comes in. It’s identifying where your strengths are. It’s looking how to incorporate that into your local businesses and you’re not going to capture all this technology and you’re hoping to capture somebody’s technology but that’s why I think the strategy is really important. You can have a wonderful thing turnout like this or you can have these wonderful relationships.
MR. PROENZA: Right.
MS. KILBANE: But unless there is some way in which we can identify our strengths whether they’re underground like the IT people in Cleveland or whether there at our universities that we just don’t notice. That’s why I think we need kind of a better way to look at some of these things than we have in the past.
MS. BROWN: I agree entirely and I would suggest here in Northeastern Ohio we have the opportunity sitting there with us right now to look at biotechnology in this area. How can we fail to do this with the 3 great institutions: Case Western, UH, the Cleveland Clinic, Metro General. There is an opportunity here with these wonderful facilities to do much more in the way of job generation and attracting businesses to the area that wish to be associated and generating jobs. And I think we’re seeing that initiative start we’re certainly seeing the Biopark which was funded by the state with a very nice grant matched by the technology action fund from the Governor. Not quite matched, in kind total dollars, but added to and it’s going to become reality very, very shortly.
MR. WAGNER: As an example - I’m sorry.
MS. BROWN: No. Go ahead.
MR. WAGNER: It’s an example of what’s just been said here, a partnership, coming in early. It’s coming in at the planning stage and presumably that it will grow when we get into the more commercialization stage as well. But it is something that’s going forward strategically. Trying to identify the region. What are the gaps? Why is it still the case that one plus one equals one, when it should be much higher and some of those gaps that have been identified have to do with the need for Incubator Appropriate… Incubator Space Appropriate in several dimensions and we don’t need to elaborate here, also specialized facilities and equipment that can be used to spawn and anchor. All sorts of businesses that would come out of this. So there’s been a very, you know, to your point, Sally, and there has been strategizing about how to make this go forward and Biopark is one. They’ll be other places and other ways to do this, but that is one example where that strategy has happened among the partners initially. I am very encouraged about the likelihood that we’re going to see continuing.
MR. KIRWAN: One problem that we continue to face here in Ohio and quite frankly in the Midwest is the absence of venture capital funds and early seed funding for new start-ups for innovations.
MS. BROWN: Particularly early seed.
MR. KIRWAN: Early seed.
MS. BROWN: Milkon pointed this out, Milkon study, that Ohio is dreadful. 45th or something like that out of the 50 States.
MR. KIRWAN: 45th. Who could feel good about that?
MR. WAGNER: And all that goes along with that, that is not just the initial funds for that, but also the initial business smarts we are a little short on CEOs.
MR. KIRWAN: And one of the things - a good step that the state took was create the technology action fund. Much of which has been used to help get some early seed funds started around the state and different regions around the state, but what happens this year, it gets cut. The technology action fund budget…
MS. BROWN: A money problem.
MR. KIRWAN: So the very thing we need at this moment, one of the many things we need, I guess, but one of the most important is this seed funding where we are clearly deficient and it is a place where the state can help in the future.
MR. FROLIK: You’re investing some university funds and I think you guys are as well?
MR. KIRWAN: Absolutely.
MR. FROLIK: When you got on track become university president. I’m not quite sure how it went.
MR. KIRWAN: What a mistake that was.
MR. FROLIK: Did you ever imagined that you’d be in the economic development business?
MR. KIRWAN: No. Absolutely not.
MR. FROLIK: You had these extensive relationships with local industry. You have a Tech campus. You’re the first piece of Biopark that’s going to be right adjacent to campus. You all have incubators on campus.
