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Making Change: Technology Grants

Friday, July 25, 2003 at 2:28 PM

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Northeast Ohio pulled in a hefty chunk of change this month from Governor Taft's Third Frontier project-a plan to invest a total of 1-point-6 billion dollars in biotech and high-tech research over the next decade. Seventy four-million dollars was available for this year's grants... and Northeast Ohio got more than half. The goal of pouring all this money into research is to create high-paying jobs and to leverage the grants to bring in more money from other sources. As part of Making Change: Reinventing Our Economy, ideastream's Shula Neuman looks at what these grants are promising.

"GEORGE W. BUSH (from State of the Union address) ...Tonight I’m proposing $1.2 billion in research funding so that America can lead the world in developing clean, hydrogen-powered automobiles.”

Ever since President Bush’s State of the Union address this year there’s been a race in this country to make hydrogen powered cars a reality. The president’s push for clean-burning fuels means that fuel cell research suddenly has new cache. The Case Advanced Power Institute, housed at Case Western Reserve University, now has a leg up on that race. The institute, also known as CAPI, is the lead organization of the Power Partnership for Ohio, 25 universities and private companies statewide that won 18-million dollars in Third Frontier funds. The money couldn’t have come at a better time, says operations director Katrina Fritz.

FRITZ: This is incredibly competitive, it’s moving along very quickly and the Power Partnership is very important because it’s emphasizing collaboration. We don’t want to compete in the state because it’s such a competitively tight race that collaboration is the only way we’re going to be competing with the other states and their investments.

Like all Third Frontier grants, CAPI’s 18-million dollars should help attract federal and private grants to the project. The really good news, says CAPI director Tom Zawodzinski, is that ultimately the money multiplies and spreads out to benefit a variety of industries.

TOM ZAWODZINSKI: The people who do electronics and controls are involved; people who do materials are involved. The people who do polymers will become involved… and there’s also polymer seals with be involved and so on and we’ve been communicating with Ohio industry for over a year about this whole value chain. It’s much more than one piece. Our partnership is constructed to take advantage of the whole system.

Other Northeast Ohio groups to benefit from this year’s 43-million dollar allocation of Third Frontier funds include bio-tech teams working on projects, like stem cell research. In all, the governor says his Third Frontier program is expected to create 5000 new jobs. It’s supposed to work like this: the money goes into research. The research spawns products. Partnership companies will add staff to make the products. And new companies - needing new employees - will start up. It means, Governor Taft says, that our children will have jobs in Northeast Ohio. But it also means selling the voters on a 500-million dollar bond issue this November to ensure the program continues to be funded…

Bob Taft: Well, it’s a challenge to convince voters because this is an investment in the economy of Ohio. But it boils down to economic survival. We know that people out there are very concerned about the loss of manufacturing jobs and they understand that a lot of those jobs will not be returning. They understand that advanced manufacturing is important. They want some kind of a solution that will provide hope for Ohians for the future.

ZACH SCHILLER: In making investments in Economic Development, we shouldn’t be unrealistic in our expectations. And to me it’s unrealistic in our expectations if we think that we’re going to replace those jobs and certainly high paying manufacturing jobs directly with these specific investments

Zach Schiller, director of research at Cleveland-based Policy Matters Ohio, says over the past two years, 49-thousand jobs were lost in Cuyahoga County and 200-thousand in the state of Ohio.

In better economic times, Schiller says, Third Frontier investments might be the best use of the funds… but that’s not so clear now. Schiller says given today’s lackluster economy, the funds would be better spent on projects that have a more direct return on the investment.

ZS: So it makes it that much harder to be sure that your investment is well directed. It’s even more of a leap of faith.

Faith that has to last 20 to 30 years says David Deeds, director of the Bioscience Entrepreneurship Program at Case Weatherhead School of Management. Deeds says since most biotech research takes at least that long to come to market, it could make it that much harder for the state to justify funding the Third Frontier for the next ten years.

DAVID DEEDS: Politically, these are not the kinds of bets that people frequently make. The fact that the governor pushed this through… he won’t see the fruits of it. That’s a good thing.

Northeast Ohioans won’t be seeing the fruits of Third Frontier investments any time soon either, Deeds says. But that doesn’t mean investing in biotech and hi-tech is a bad strategy altogether.

DD: We need research engines in this state. We need research engines in this area. And we need to produce world-class students. In order to do that, we have to have world-class research coming in. And the state’s just going to have to make that commitment. We can’t continue to be a steel town. Sorry, it’s not going to grow. Either we invest and try and grow in this area or we make plans to be a smaller area.

Deeds says there are probably 50 other metropolitan regions investing at least as much - if not more - money into similar projects. The worst that could happen, Deeds says, is the Third Frontier funds would generate brilliant research that gets bought up by out of state companies. But even that is better than the alternative: do nothing and see no results.

In Cleveland, Shula Neuman, 90.3.

Additional Information

The Ohio Third Frontier Project
The state's web site about the Third Frontier Project, Ohio's largest-ever commitment to expanding Ohio's high-tech research capabilities and promoting start-up companies to build high-paying jobs for generations to come.

State of the Union Address (2003)
From the White House web site, a complete text of President Bush's State of the Union address.

Tags

Making Change, Regional Economy/Business - Analysis and Trends, Regional Economy/Business - News

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