Seeds of prosperity: public investment in science and technology research : a study of the economic potential of Proposition 301 at Arizona State University and a new model for assessing its long-term value

              SEEDS OF PROSPERITY

P U B L I C INVESTMENT IN SCIENCE AND TECHNOLOGY RESEARCH

A S t u d y o f t h e E c o n o m i c Po t e n t i a l o f P r o p o s i t i o n 3 0 1 a t A r i z o n a S t a t e U n i v e r s i t y A n d a N e w M o d e l f o r A s s e s s i n g i t s L o n g - T e r m Va l u e



S C H O O L OF PUBLIC AFFAIRS / COLLEGE OF PUBLIC PROGRAMS



IN NOVEMBER 2000, ARIZONA VOTERS SAID "YES" T O NEW INVESTMENTS IN UNIVERSITY SCIENCE AND TECHNOLOGY RESEARCH WHEN THEY A P P R O V E D PROPOSITION 301. P R O P O S I T I O N 301 MONIES OFFER THE STATE AN EXTRAORDINARY OPPORTUNITY TO STRIDE AHEAD IN THE INTERNATIONAL RACE FOR BRAINPOWER, INNOVATION, AND COMPETITIVENESS.



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P U B L I C INVESTMENT IN SCIENCE AND TECHNOLOGY



T H E ECONOMIC CONTEXT



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SEEDS OF PROSPERITY

PUBLIC INVESTMENT IN SCIENCE AND TECHNOLOGY RESEARCH

A Study of the Economic Potential of Proposition 301 at Arizona State Universit y A n d a N e w M o d e l f o r A s s e s s i n g i t s L o n g - T e r m Va l u e P A G E 17 >

A S U ' S TECHNOLOGY AND RESEARCH INITIATIVES



CO N N E C T I O N S , AT T E N T I O N AND TALENT



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P A G E 37 >



H E A D I N G INTO THE FUTURE



By Rob M elnick, R ick Heffernon, Nanc y Welch, M orrison Institute for Public Polic y

1 C o p y r i g h t ?2003 by the Arizona Board of Regents for and on behalf of Arizona State University and its Morrison Institute for Public Policy.



T H E MEASURE OF SUCCESS



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S E E D S OF PROSPERITY : P U B L I C INVESTMENT IN SCIENCE AND TECHNOLOGY RESEARCH

R e t u r n on investm e n t in science a n d technology r e s e a r c h will depend on Arizona b e c o m i n g more c o m p e t i t i v e in d e v e l o p i n g and commercializing research, more r e c o g n i z e d for i n n ova t i o n , a n d m o r e attractive t o knowledge wo r ke r s.



E X E C U T I V E SUMMARY

N a n o te c h n o l o g y, m i c ro s c a l e medicine, v i r t u a l manufacturing -- these ra p idly expanding frontiers are proof positive that Arizona is competing in an era in which great wealth comes to those who innovate, especially in science and technology. Arizona's "traditional" industries -- tourism, construction, and growth -- will certainly continue to matter to the state's economy, but if we want to win our fair share of "new economy" prosperity and high-wage jobs, our economic portfolio must be reconfigured. It needs to feature brave new knowledge industries. This reconfiguration will require substantial public and private investment policies to seed new industries, as well as the patience to allow them to mature.



A N INVESTMENT IN SCIENCE AND TECHNOLOGY R E S E A R C H AT ARIZONA STATE UNIVERSITY

A p p r o va l of Proposition 301 by Arizona voters in November 2000 represented a significant step toward a new foundation for the state's economic future by providing a long-term funding stream for science and technology investments. This new sales tax enabled Arizona t o create an economic development strategy appropriate for the knowledge economy. Fo r Fiscal Year 2002, A r i zo n a State University used its "301" p o r t i o n to complement the university's existing research base by conducting projec ts in six science and technology areas: biosciences/biotechnology, i n fo r m a t i o n science, a d va n ce d materials, m a n u f a c t u r i n g, a c ce s s and wo r k fo rce development, a n d technology transfer. E a c h area is linked to important knowledge economy industries and trends. These projects, h o w e v e r, r e p r e s e n t only the startup phase of ASU's 301 research. Cu r r e n t l y, t h e university has entered a consolidation phase that will i n t e g r a t e first-year research into interdisciplinary "mega-projects." Early results from ASU's $15 million worth of projects have been positive. However, despite immediate benefits from knowledge gains, investment i n scientific research typically takes decades to yield the full potential o f its economic return. T h u s , A r i z o n a business, e d u c a t i o n , e c o n o m i c d e v e l o p m e n t , a n d government leaders who were i n t e r v i e we d for this analysis requested a creative set of metrics to gauge the lasting value of public investment in science and technology research.



T H E KNOWLEDGE ECONOMY : N O T BUSINESS AS USUAL

Economic development, now and in the future, will be anything but business as usual. To become more competitive and stay at the top of the knowledge economy game, Arizona must learn a new set of rules: ? Advances in science and technology will create enormous wealth, as they have done for the last half century, but changes will happen faster and faster. ? Innovation has joined natural resources, money, and people as the fourth critical ingredient for economic growth. ? K nowledge businesses will rely on universities to prepare, attrac t, and retain innovators and to develop new scientific products for commercialization; hence, a region's economic competitiveness increasingly will depend on the research strength and quality of its universities.



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CONNECTIONS, ATTENTION, AND TALENT TO ENHANCE ARIZONA'S COMPETITIVENESS

Seeds of Prosperity p r e s e n t s a new way of assessing the long-term economic impact of science and technology research as a supplement to the traditional annual measures the Arizona Board of Regents will track. This new paradigm -- called the CAT measures -- keeps "score" on science and technology research by means of: ? CO N N E C T I O N S developed between university researchers and businesses that commercialize research. ? AT T E N T I O N generated by university research, both locally and nationally, that helps attract investment and talent to the state. ? TA L E N T that Arizona recruits, retains, and develops because of its research, thereby providing the state with innovators and workers fit for the knowledge economy.



For the future, Proposition 301 research activities will likely converge in even larger, more interdisciplinary collaborations that draw together research teams from many science and engineering fields. Such teams are now considered essential for producing the next generations of science and technology innovation.



T H E MEASURE OF SUCCESS

E ven a few years ago, Arizona's current commitment to university science and technology research could only be imagined. But Arizona is not alone in this type of investment. As every state moves aggressively to reap the rewards of the knowledge economy, Arizona leaders must remember: ? Public investment in science and technology research is a marathon, not a sprint. ? Arizona cannot rest on its laurels or claim economic victory after a few early successes in the knowledge economy -- competition from other states will only increase over time. ? R e t u r n on investment in science and technology research will be a function of whether or not Arizona becomes more competitive in the development and commercialization of research, m o r e recognized as a spawning ground for innovation, and more attractive to knowledge workers.



A CROSS-DISCIPLINARY FUTURE

ASU's first-year Proposition 301-funded projects provided numerous illustrations of how the CAT measures can be applied in the future to analyze the value of science and technology research. Some examples: ASU involvement in Project FORCE connected Arizona to 11 universities worldwide and to major businesses such as Advanced Microelectronics, Te x a s Instruments, a n d National Semiconductor. Th e Consortium for Embedded and Inter-Networking Technologies -- which includes Intel, M o t o r o l a , a n d ASU -- attracted the attention of the National Science Fo u n d a t i o n . A n d ASU's Women's Health Research Forum attracted n a t i o n a l attention to metro Phoenix's medical research, c o n n e c t e d academics and businesspeople, and helped develop the state's research t a l e n t in this field.



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Attention generated by science and technology research in Arizona will help attract investment and talent to the state.



P U B L I C INVESTMENT IN SCIENCE AND TECHNOLOGY RESEARCH : P R O P O S I T I O N 301'S PROMISE FOR THE KNOWLEDGE ECONOMY

In November 2000, Arizona voters said "Yes" to new investments in university s c i e n ce and technology research when they approved Proposition 301, a 0.6 percent increase in state sales tax earmarked primarily for K-12 education and university research. In doing so, they demonstrated an understanding of the two most important fundamentals of today's knowledge economy: ? Research and innovation will drive Arizona's economy and prosperity. ? The ideas that lead to inventive companies and high-paying jobs come from creative people. S i n ce Proposition 301 went into effect, t h e tenets and realities of the k nowledge economy have been confirmed time and again by examples b o t h in Arizona and around the globe. I n n ova t i o n has joined natural resources, people, and money as the fourth critical ingredient for economic growth. Therefore, the products and services that are likely to generate the greatest new wealth and high-wage jobs for our region and state will arise from advances in, and the convergence of, science and technology. Arizona, however, will not be able to keep pace with national and global competition if it merely rests on its past economic laurels. Certainly tourism, construction, sunshine, and growth will remain important drivers of the state's economy for the near term. But to ensure long-term opportunity and prosperity, Arizona's portfolio must be reconfigured to feature knowledge industries. A rizona's Technology and Research Initiative Fund Pr o p o s i t i o n 301's approval set in motion the most substantial public i nv e s t m e n t in Arizona's economic future since the Central Arizona Project brought water to the state. For the next 20 years, this measure will p rov i d e the state's three major universities approximately $45 million a n n u a l l y. Th a t funding will be dedicated to expanding cutting-edge r e s e a r c h and e d u c a t i o n in science and technology as a means to foster s u s t a i n e d economic growth in Arizona. Leve r a g e d with other public and private funding sources, Proposition 301 monies offer the state an ex traordinar y opportunity to stride ahead in the international race for b r a i n p owe r, i n n ova t i o n , a n d competitiveness. Pa s s a g e of Proposition 301 led to the creation of the Technology and Research Initiative Fund (TRIF) as the repository for Proposition 301 sales taxes designated for universities. This fund is administered by the Arizona Board of Regents (ABOR) for the purpose of supporting university science and technology research that will nurture knowledge industries in the state. Work ing in conjunction with ABOR, each of the state's three public u n i v e r s i t i e s -- Arizona State University, U n i v e r s i t y of Arizona, a n d N o r t h e r n Arizona University -- selected specific research areas and support functions for its share of 301 funding. Not Business as Usual The strategy of using university research as an economic development tool constitutes a dramatic departure from "business as usual" in Arizona. In the past, a university's economic contributions have been measured in terms of local expenditures on goods and services, and student "output" -- the number and, to a lesser extent, the quality of its graduates. At the s a m e time, p u b l i c sector economic development has focused on tax incentives and the recruitment of companies, not on research investments. Proposition 301 enhances those other economic development models with a strategy that is in tune with the basics of the knowledge economy. This new model recognizes that: ? Universities are knowledge factories. No other organization or i n s t i t u t i o n in the state exists specifically to generate, t e a c h , a n d transfer new knowledge.



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? Arizona's knowledge businesses depend on the state's universities for their future leaders and inventors. Most graduates remain in Arizona, mak ing state universities the primary source of the state's future knowledge workers. ? T h e quality and the competitiveness of metropolitan regions i n c r e a s i n g l y stem from new economy activities at their universities. S c h o l a r s from across the country including Richard Fl o r i d a , M i c h a e l Porter, a n d Mary Walshok have shown that highly e d u c a t e d, i n n ova t i ve workers are attracted to regions that have excellence in higher education, reputations for abundant commercial oppor tunities, and people like themselves -- a community of likeminded "knowledge entrepreneurs." T h e promise of "301" f o r the state is powerful, a n d the first-year accomplishments have been notable as will be shown in the pages that follow. However, Arizona's leaders and voters cannot simply take on faith t h a t the myriad of research and related activities supported by these d o l l a r s will automatically result in the desired economic impacts. Th e projec ts and initiatives must be monitored and evaluated in light of the way that economic development occurs in the knowledge economy. A rizona State University and Proposition 301 This report covers the startup phase for ASU's 301-funded endeavors (Fiscal Year 2001-2002). Currently, ASU has entered a consolidation phase in which the university is integrating first-year efforts into large-scale interdisciplinar y "mega-projects." (For more on this consolidation, see "Heading Into the Future" on page 37.) To complement its existing expertise in scientific research, ASU proposed to apply first-year monies from the Technology and Research Initiative Fund to initiate or strengthen programs in six major areas: ? B i o s c i e n ce s / B i o te c h n o l o g y

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? Advanced Materials ? Manufac turing ? Access and Workforce Development ? Technology Transfer These initiatives were allocated $15.6 million in FY 2002. The primary purpose of this report is to put the economic contributions of Arizona State University's TRIF research into context. It does not cover other uses of Proposition 301 monies at ASU -- such as funds allocated for capital projects at ASU East and West -- nor does it provide a cost-benefit analysis of all 301 dollars allocated to ASU. Instead, this report provides data on FY 2002 results for the first-year initiatives and presents a blueprint for long-term evaluation that augments the Arizona Board of Regents' oversight process. From the outset, the Arizona Board of Regents recognized the need to hold universities accountable for expenditures and results. Before it could receive T R I F monies, e a c h university had to present a set of goals and output measures for the activities it wanted to fund. Results for these "deliverables" will be collected and reviewed annually by ABOR to track progress. Some of the ABOR-approved measures describe important aspects of economic impact, such as grants and patents. For example, if a TRIF activity enables a university to win a federal grant, that money will most likely be spent in Arizona. This is a classic example of "importing" wealth or "exporting" product, and is certainly a desirable way to grow the state's economy. Likewise, the patenting or licensing of a new product or process that results from a 301 research project can also produce an economic development impact. However, the ABOR measures do not tell the whole story. They primarily count things rather than assess their value. And, as annual "snapshots," they are not designed to capture the nuances of the knowledge economy or the long view. But leading economic development practitioners and s c h o l a r s caution us that creation of wealth in the 21st century will



? Information Science



depend on taking this long view, p r i m a r i l y because prosperity will be based on sustained investment in developing talent, g e n e r a t i n g k nowledge, and commercializing research. M oreover, exper ts emphasize that these factors must "work" and "think" together if they are going to profoundly affect local and regional economies. C l e a r l y then, t h e returns from TRIF activities cannot be analyzed as one would judge the effects of other public spending for economic development. To measure the value of a tourism promotion, for example, i t would be appropriate to count how many people visited Arizona in a year as a result of a certain advertising campaign, and how much they spent. But this type of counting would not adequately measure the value provided by scientific research in Arizona. Discoveries made today m a y not reach commercial application for years to come, y e t their implications could resonate for decades. The complexity of analyzing the full economic impact of Proposition 301 research is clear to many of the state's leaders. People interviewed for this evaluation -- leading Arizona policymakers, CEOs, media executives, and university officials -- acknowledged the need to track ABOR's accountability measures, but they also emphasized the importance of supplementing these conventional measures with new types of assessment tools. What this means is that evaluating 301-driven economic impacts over the next two decades will require fresh thinking. The impact of research on the state's pool of knowledge workers cannot be determined simply by tracking university graduation rates. Nor can the value of research be judged by the number of patents filed every year -- commercial adoption of newly patented products and processes depends on their appeal to e n t r e p r e n e u r s and venture capitalists. Th u s, t h e economic impact of Arizona's 301 investments will have to be assessed in relation to a variety of interrelated factors. A s San Diego expert Mary Walshok says, " Eco n o m i c development in knowledge-driven economies arises out of a confluence of technical,



sociological, economic, and political forces."1 The report that follows takes all of those forces into account to help Arizona's leaders and voters understand the nature and potential economic impact of ASU's six TRIF initiatives. Guide for a New Journey A u t h o r Douglas Adams' i m a g i n a r y Hitchhiker's Guide to the Galaxy s t e e r e d countless readers through extraordinary worlds and unusual situations. B e c a u s e ASU's real-life, r i g h t - n ow TRIF activities may seem as incredible as science fiction to many readers, t h i s report provides a guide to the research and ideas at the heart of the six initiatives. Th e report's next section presents the economic context for each of A S U's research initiatives, e x p l a i n i n g in lay terms what this science and te c h n o l o g y is about and providing examples of potential commercial applications. The third section describes each of the six initiatives and their goals, and reassembles the ABOR data in new categories, displaying the initiatives side-by-side for better comparison. The report's fourth section presents another way of thinking about, and ultimately measuring, the economic value of TRIF research in consideration of how the knowledge e co n o my works. I t also provides several examples from ASU to help illustrate how research creates products, a f fe c t s people, a n d relates to t h e world beyond the university. A n d the fifth section of the repor t plots the "trajectory" of ASU's six initiatives to let Arizonans know how each research area is expected to develop over time. I t may seem extravagant to refer to the Proposition 301 initiatives as a journey into new worlds, but it is accurate. By providing an opportunity f o r the state's best scientists and students to work together on tomorrow's products -- and supplying them with new resources, clear direc tives, and enlightened oversight -- Arizona is on a path that a few years ago could only be imagined. From such a path, the next transforming t e c h n o l o g y or visionary business leader could emerge in Arizona. W i t h that prospect a real possibility, n o journey is likely to be more i m p o r t a n t for this state.



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Electrical engineering professor Michael Kozicki and research scientist Maria Mitkova show a new chip invented at ASU and commercialized by Axon Technologies. T h i s low-power, h i g h - c a p a c i t y memory chip has the potential to improve cell p h o n e s , d i g i t a l cameras, a n d other portable electronics.



T H E ECONOMIC CONTEXT: ASU'S RESEARCH IN PERSPECTIVE

ASU's six TRIF initiatives do not stand alone. Fo u r of the initiatives -- Biosciences/Biotechnology, Information Science, Advanced Materials, and Manufacturing -- carve out promising niches in much larger research and development ventures. Two others -- Access and Workforce Development, a n d Technology Transfer -- provide support functions for science and t e c h n o l o g y research. To put each of the projects in perspective, t h e following six accounts briefly describe t h e economic context for P r o p o s i t i o n 301-sponsored activities in bioindustry, i n f o r m a t i o n t e c h n o l o g y, n a n o t e c h n o l o g y, m o d e r n manufacturing, w o r k f o r c e d e v e l o p m e n t , a n d university technology transfer. ? Diagnostics, such as genetic coding, that will customize cancer treatments for individual patients. ? Drugs and vaccines to treat infectious diseases such as AIDS, hepatitis, anthrax, and cholera. ? G enetically altered plants and animals that can grow faster, resist diseases, provide more nutrition, or produce drugs and vaccines to treat human maladies. ? E n z y m e s, b i o l o g i c a l agents, a n d cultured microorganisms that neutralize hazardous waste, manufac ture pharmaceuticals, or refine valuable minerals from low-grade ores and waste materials. ? Tissues that can be grown to create replacement blood vessels, bones, ner ve cells, sk in, and other organs. Typ es of Medical Devices and Advanced Biotech-Related Equipment M e d i c a l devices include instruments, m a c h i n e s, i m p l a n t s, a n d other equipment used to diagnose or treat disease, loss of function, and other conditions. Advanced biotech-related equipment consists primarily of co m p u t e r i ze d laboratory devices used by biotech researchers. A m o n g t h e many devices and equipment in use or under development are: ? Implantable devices such as cardiac pacemakers, mechanical hearts, and cochlear or ocular implants. ? M icroscale diagnostic devices and probes that can run multiple tests from a pinprick of blood. ? Implantable sensors and telemetry, such as nanoscale "labs on a chip" or pill-sized video cameras that can be swallowed, implanted, or injected into the blood stream for minimally invasive monitoring of chronic conditions such as heart disease, epilepsy, and diabetes. ? Programmable devices on or in the body that can respond to biosensors o r other commands to deliver precise amounts of drugs, s t i m u l a t e o p t i c or auditory nerves, o r control muscles and artificial limbs. ? Laborator y apparatus such as automated DNA sequencers, cell sor ters, and molecule synthesizers.

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B I O I N D U S T R Y : P R O D U C T S AND POTENTIAL

The companies that comprise bioindustry utilize breakthroughs from bioscience research and transform them into commercially viable products, such as cancer fighting drugs, oil-devouring microbes, or brain-scanning imagers. Often referred to as biotech, life sciences, or simply "bio," this industry encompasses a broad array of disciplines that increasingly have become interrelated. For example, it includes aspects of biology, chemistry, medicine, and agriculture, among others. Definitions of the current categories and terms used to describe bio activities remain elastic as the industry continues to expand at a brisk pace, but most research and product development occur within two main arenas: 1) biotechnology and life sciences, and 2) medical devices and other biotech-related advanced equipment. Produc ts of Biotechnology and Life Sciences Research in biotechnology and life sciences focuses on using biological molecules, genetic material, and manipulated cells to produce new types o f products for medicine, a g r i c u l t u r e , a n d an expanding number of d i v e r s e industries such as forensics, e n v i r o n m e n t a l remediation, a n d biomanufac turing. Some examples of the many products in use or under development include:



The Potential of Bioindustry The United States is considered a world leader in bioscience products and, accordingly, its bioindustry cluster has grown rapidly. Recent reports have concluded that the U.S. biotechnology sector alone more than doubled in size from 1993 to 1999. As of 2001, the industry consisted of nearly 2,000 companies that produced $39 billion in revenues and directly employed 157,000 people. The momentum of bioindustry is clearly building. Biomedical research investment has increased sevenfold since 1985 and patents have increased tenfold. With a strong aging trend evident among t h e U.S. p o p u l a t i o n , a n d a concomitant increase in demand for health care and related products, the industry's growth is likely to continue for the foreseeable future. Research and development has always been key to driving innovation in bioindustry due to the unusually close linkages that exist between universit y-based research and private sector commercialization of new produc ts. By far the greatest amount of funding for bioresearch comes from federal government sources -- particularly the National Institutes of Health (NIH), which has been slated to receive $27 billion for FY 2003, a 15.7 percent increase over FY 2002. A m o n g the areas targeted for i n c r e a s e s in NIH research funding are bioterrorism, c a n c e r, d i a b e t e s, a l l e r g y and infectious diseases, m i n o r i t y health, Pa r k i n s o n's disease, a n d Alzheimer's disease. Fe d e ra l research funding typically flows to regions that already boast strong research talent, infrastructure, and facilities. Higher local investment, therefore, tends to lead to higher growth in federal funding. Historically, the Greater Phoenix area has made a large investment in clinical facilities r e l a t e d to health care, b u t a relatively small investment in the type of r e s e a r c h facilities that attract federal grants. Co n s e q u e n t l y, t h e Greater Phoenix area receives a much lower level of federal research funding for bio than would be expected for its size -- considerably less, for example, than metropolitan Boston or Minneapolis. 



I N F O R M A T I O N TECHNOLOGY : S I G N I F I C A N C E TO THE NEW ECONOMY

O v e r the last decade, t h e U.S. e c o n o my has experienced a profound transformation in the way business is transacted -- moving, for example, f r o m handwritten factory orders to intelligent digital supply networks. At the heart of this transformation has been the explosive growth of i n fo r m a t i o n technology (IT ) , w h i c h has permeated almost every facet of daily life. Th e rise of IT has changed how people communicate with each other, conduc t research, design new products, engage in commerce, and teach the next generation. In coming decades, information technology is likely to produce an even greater impact on the economy as advances and new discoveries continue to accelerate change. IT Products and Processes Information technology encompasses the development and management o f computer hardware, co m p u t e r software, a n d related services. Th e primary purpose of IT is to turn massive volumes of data into useful, a c ce s s i b l e information. To d ay, I T is most prominently embodied by the nearly ubiquitous personal computers found in homes, offices, and shirt p o c k e t s across the country, a s well as by the application software that allows computer users to create and work with word processing documents, spreadsheets, and graphics files. I n fo r m a t i o n technology, h o w e v e r, a l s o includes other fields. N o t a b l e a m o n g these is embedded technology, t h e design of tiny, l o w - p o w e r c o m p u t e r s - o n - a - c h i p that, a l o n g with their dedicated software, m a k e just about every new appliance and electronic device "smart." Embedded computers now run cellular telephones, refrigerators, digital cameras, toasters, GPS units, and air conditioners, to name a few. New automobiles contain up to 35 embedded computers. Bioinformatics forms yet another branch of information technology. I t h a s d e v e l o p e d at the nexus of computer science and biology. T h i s r a p i d l y growing field is the result of recent trends in biotechnology -- s u c h as the study of the human genome -- that are beginning to g e n e r a t e vast amounts of data for describing complex organisms and



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their processes. Th e purpose of bioinformatics is to develop the new t o o l s necessary for archiving and annotating this data so that it can be accessible and meaningful to scientists. Due to the effects of "digital convergence," information technology has also become increasingly linked with telecommunications. One example of digital convergence is the routine use of telecom networks -- for example, cable, telephone, and wireless -- to connect IT products such as personal computers and servers via the Internet. This cross of different technologies has recently become one of the main consumer interests driving sales for both sectors. I t is leading to a new generation of handheld devices with multiple functions built in that will seamlessly bridge the divide between IT and telecom by placing telephone calls, sur fing the Internet, fixing a GPS reading, recording digital images, sending e-mail, and maintaining a personal calendar. The result is that recent economic descriptions have begun to refer to IT and telecom as the "information and communications technology" industr y, or ICT. Economic Impacts Whether categorized as IT or ICT, this industry plays a major role in both the world and domestic economy. The U.S. currently ranks first in the world fo r producing information and communications technology products a n d services, a n d is also one of the world leaders for spending on ICT w i t h a total of approximately $762 billion in 1999 -- about 35 percent of the global market. Among all industry sectors, financial services is the largest consumer of information technology ($70 billion in 1999) followed by communications services, manufac turing, wholesale, and business ser vices. IT also ranks as the largest export sector in the U.S., with a 29 percent share of the market. IT has had a powerful impact on U.S. job and economic growth in the last decade. While comprising only 8 percent of the total economy, the IT sector accounted for almost 30 percent of real growth in the country's GDP from 1994 to 2000. Fur thermore, several studies show that IT was responsible for half to three-quarters of the acceleration in productivity growth between t h e early 1990s and the late 1990s. A l l told, a p p r ox i m a t e l y 10 million p e o p l e in the U.S. a r e employed in IT jobs, m a ny of them working for



companies engaged in business outside the IT industry, such as financial ser vices and manufacturing. In Arizona, IT accounted for approximately 4,000 business establishments in 1999 that directly employed over 100,000 workers. Adding in all IT-related jobs at non-IT businesses, the number of Arizona IT workers would easily exceed 150,000. 



A D V A N C E D MATERIALS : T H E PROMISE OF NANOTECHNOLOGY

The latest big trend in materials research is to think small -- very, very small. In this tiny world, red blood cells loom as large as stadiums and individual c a r b o n atoms seem to be the size of baseballs. T h a t is the realm of nanotechnology, a world where things are measured in billionths of a meter -- a nanometer -- and where the main building blocks of advanced materials are small collections of atoms. This will be the future: a world of "small tech." Work ing directly with individual atoms is a relatively new skill for humans, but it is an age-old "technology" for nature. O ver billions of years, nature has employed enzymes and catalysts to organize different kinds of atoms into organic molecules and other complex microscopic structures that make life possible. These natural products can have impressive capabilities, s u c h as the power to harvest solar energy, co nve r t minerals and water i n t o living cells, a n d store massive amounts of memory in both nerve ce l l s and DNA proteins. Scientists, however, have only recently devised tools that allow them to see the surfaces of atoms and manipulate them directly. This has occurred due to significant advances in electron microscopy and scanning probes over the last two decades. As nanotech tools become ever more precise a n d powerful in the future, s c i e n t i s t s expect to develop atomic-level processes that will fundamentally change the way advanced materials are created, affec ting everything from medicine to aerospace to computing. Already, a nanoscale "molecular" computer circuit has been demonstrated that is two or three orders of magnitude smaller than the most sophisticated c o m p u t e r chips currently in production. A n d while this chip remains i nv i s i b l e to the naked eye, i t nevertheless was hailed as the biggest b r e a k t h r o u g h of the year for 2001 by the prestigious journal Science.



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Why Nanotechnology? Using the processes of nanotechnology, basic industrial production is expec ted to veer dramatically from the course of the past. R aw materials will come from the atoms of abundant substances such as carbon, hydrogen, or silicon. These atoms will be manipulated into precise configurations to create new materials that exhibit exactly the right properties for each application. Carbon atoms, for example, could be bonded in a number of different geometries that create a fiber, a tube, a molecular coating, or a wire, all with the superior strength-to-weight ratio of diamonds. Moreover, t h i s material processing will not require smokestacks, p o w e r - h u n g r y i n d u s t r i a l machinery, o r intensive human labor, b u t instead may be accomplished either by "growing" new structures through some combination o f chemical catalysts and synthetic enzymes, o r by building them through new techniques based on self-assembly of nanoscale materials into useful predetermined designs. In theory, nanotechnology will allow p e o p l e to fabricate almost any type of material or product allowable u n d e r the laws of physics. Produc ts Now and for the Future T h e potential impact of nanotechnology processes and products is expected to be far-reaching, affecting nearly every conceivable electronic c o m p o n e n t , e n e r g y source, a g r i c u l t u r a l product, m e d i c a l device, pharmaceutical, and material used in manufacturing. Already, a number of nanomaterial-enhanced products are on the market and growing in use. Nanomaterials woven into fabrics give clothing resistance to stains. N a n o p o w d e r s of titanium dioxide help sunscreens invisibly reflect ultraviolet light. Nanocr ystals of silver embedded in bandages kill bacteria and prevent infection. Nanoparticles of clay added to plastic make it possible for brewing companies to bottle beer in plastic containers. And nanopigments used in computer printers produce brighter images on paper. In addition to existing products, scientists envision a vast number of world-changing devices and materials for the future. Among them: ? M i c r o s co p i c machines that can be implanted in the body to r e s t o r e sight, h u n t down cancer cells, o r release drugs to treat life-threatening diseases.



? Catalytic filtration systems that will remove and neutralize any toxins contaminating water and air. ? Solar cells as cheap as wrapping paper that will reduce our dependency on fossil fuels. ? Super-conducting cables that will transmit energy with near-zero losses. ? M i c ro s co p i c memory storage devices that can store millions of gigabytes of data. ? D i a m o n d - f i b e r airplane hulls impregnated with nano-sensors and micro-actuators that will make it possible to produce a Boeing 747-size airplane at one-fiftieth the weight and with features such as the ability to maneuver without flaps, and the capacity to detec t, repor t, and even "heal" struc tural defects. Economic Prospects M any public and private entities see vast potential in the enterprises that could spin off from nanotechnology research. Japan and Europe h ave been investing heavily in nanotech and its potential applications in microscale systems for several years in order to position themselves for the global economy of the 21st century. In the U.S., federal funding for nanotech research has been rising of late, from $116 million in 1997 to over $600 million in 2002 -- a fivefold increase. M ost of the research ac tivit y typically clusters around strong research institutions and the region's related private sector companies. Small Times magazine recently r a n k e d the top six regions for nanotech and microtech R&D as Silicon Va l l e y, S o u t h e r n California, B o s t o n , N e w York-New Jersey area, D a l l a s H o u s t o n - Au s t i n , a n d Chicago. O t h e r places to watch according to the m a g a z i n e were Albuquerque, M i c h i g a n , N e w York state, O h i o, N o r t h Ca ro l i n a , a n d Washington. Cu r r e n t l y, n a n o t e c h businesses produce an estimated $45.5 billion in a n n u a l sales, a c co r d i n g to an industry group. Th i s group also predicts sales to reach $700 billion by 2008. A National Science Foundation study, meanwhile, forecasts the nanotech market to reach $1 trillion by 2015. 



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MODERN MANUFACTURING : I M P A C T ON U.S. ECONOMIC GROWTH

During the 1990s, the U.S. enjoyed unprecedented economic growth and prosperity. A primary force behind that growth was America's retooled and technology-wise manufacturing industry, which grew rapidly during that period. O verall, manufac turing accounted for the largest portion of GDP growth from 1992 to 1997 -- contributing a 29 percent share compared to 19 percent and 16 percent respectively for services and retail, the next closest sectors. M anufac turing also posted substantial productivity gains during the late 1990s -- more than twice the gains for all other nonfarm industries. In addition, manufac turing continues to rank as one of the countr y 's largest employers and producers, with 20 million workers and a total contribution of $1.5 trillion annually to GDP. Components of Manufacturing M anufac turing is a broadly diversified industry comprised of two main categories: 1) "durable goods," such as lumber products, elec tronic equipment, and motor vehicles, and 2) "nondurable goods," such as food products, textiles, and chemicals. While the majority of businesses involved in manufacturing appear to be "old economy" in nature, manufac turers as a group actually spend more on cutting-edge information technology and Internet capabilities than any other industry sector. This technology bent has allowed them in recent years to become more productive and competitive in the global market. One measure of manufacturing's technology emphasis is its commitment to research and development (R&D). Currently, manufac turing supplies more than 70 percent of all private R&D dollars in the country, and more than half of all R&D spending inclusive of government sources. The fruits of that research often spill over into other areas of the economy, such that manufac turing acts as the de facto provider of new technology for many sec tors, par ticularly retail, ser vices, government, and finance. For example, the technology behind banking's ATM machines was originally developed fo r use in equipment on the factory floor. I n addition, m a n u f a c t u r i n g's c r e a t i o n of new materials, c h e m i c a l s, a n d electronic sensors often



t r a n s lates into new products and applications for health care facilities, public utilities, motion picture producers, government offices, and many others, including private households. Fur thermore, American high tech manufac turers -- such as Intel, M otorola, and IBM -- directly produce the multitude of advanced tools and products that are currently fueling the information age and driving continued long-term economic growth. Trends in Modern Manufacturing The look of a modern manufacturing firm has changed radically in the last decade. On the leading edge of this corporate makeover are companies lik e Cisco Systems, the top manufacturer of components and systems for the Internet. With a relatively small employee base and no factories in its inventor y, Cisco relies on a "virtual" manufacturing division of independent, Internet-connec ted partners -- a total of 37 different entities in 2000. These strategic partners coordinate with Cisco to make all of the company's components and also to complete the majority of final assembly work. The result is that more than half of Cisco's product line ships directly to the customer having never been touched or inspected by a Cisco employee. Even major old economy manufacturers have taken up new strategies s i m i l a r to Cisco's. I n c r e a s i n g l y, t h e y are employing a network of "horizontally integrated" s u p p l i e r s (i.e., i n d e p e n d e n t manufacturing partners) rather than maintaining a "vertically integrated" supply chain co n s i s t i n g only of wholly-owned subsidiaries. Th e difference is that horizontal integration promises to reduce risk and streamline employment for the lead manufacturer, while allowing each partner in the supply chain to concentrate on its core competencies. All this can save money. But hidden "interoperability costs" -- the price in time and money for figuring o u t how to securely transmit design specifications, i nve n to r y data, a n d o t h e r essential information across a multitude of proprietary computer systems at independent supply partners -- can take a big bite out of this savings. A 1999 study, for example, calculated interoperability costs in the U.S. auto industry to be in excess of $1 billion annually. Because of the cross-cutting nature of this problem, many analysts argue that a single, standardized technology infrastructure is needed that can securely transmit s e n s i t i ve data at all levels of the supply chain across all industries.



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Factor y and supply network management has changed dramatically in the information age. Advances in telecommunications and networking now allow corporate executives sitting at their computers at corporate headquar ters to look at the real-time flow of raw materials and rate of factory produc tion occurring at any number of subsidiary or partner installations half a world away. With good information and the right tools for decisionm a k i n g, t h e s e executives should be able to fine tune manufacturing supplies and outputs to closely match incoming orders. In this way they co u l d achieve "just in time" d e l i ve r y of products to customers, t h e re by eliminating inventory costs and reducing risk that products will become obsolete before they are sold. This is a major consideration. If such strategies had been perfected in 2001, the semiconductor industry might not have had to write off an estimated $18 billion in unwanted inventory. 



b e t we e n 2000 and 2010, w h i l e professional occupations overall are expec ted to add the most new jobs to the economy -- about 7 million. In Arizona, a similar trend is anticipated. Among those occupations forecast to experience rapid growth for the period 1998 to 2008, the top four are c o m p u t e r - r e l a t e d : co m p u t e r scientists, co m p u t e r support specialists, c o m p u t e r engineers, a n d systems analysts. M o r e o v e r, t h e top paying occupations in Arizona -- such as physicians, law yers, engineers, and top executives -- all increasingly need IT skills to perform their functions. IT Skills Required Throughout the Economy H i g h tech firms currently have the greatest concentration of formally trained IT personnel (e.g., computer scientists and systems analysts). The highest overall demand for these workers, however, comes from non-IT firms with fewer than 100 employees -- the same small firms that also repor t the most difficulty in finding qualified, sk illed candidates to fill their positions. According to employers of IT workers, the three most impor tant skills they look for in new employees are knowledge relevant to the position, hands-on experience, and good nontechnical sk ills such as communication, problem-solving, analysis, and the ability to learn quick ly. In many cases, a strong business background is as important as strong technical skill. Lo o k i n g forward, m o s t observers agree that solid IT literacy will be a re qui re m e n t for almost every profession. Al re a d y this is coming true: most office workers and professionals interact with computers on a daily basis, police officers routinely carry laptop computers and other digital equipment in their patrol vehicles, medical technicians work with sophisticated computer imaging systems and other computer-based diagnostics, warehouse workers keep detailed digital databases on computer to track s u p p l i e s and shipments, a n d many factory workers operate digitally c o n t r o l l e d tools and testing equipment. T h e s e are just to name a few. Moreover, not all IT jobs -- such as help desk positions and web site maintenance -- are currently filled by workers who have formal IT education. In many companies it is common for these positions to be handled by secretaries and clerical staff who have shown an aptitude



W O R K F O R C E : T R E N D S FOR THE NEW ECONOMY

The nature of work in America has undergone a dramatic change in the last two decades. With both the Internet and information technology (IT) driving global business, firms across the spectrum have turned to innovative uses of digital technology to stay competitive. In this economic climate, most of industry's better-paid workers are now assumed to be computer l i t e r a t e , w h e t h e r they are engaged in traditional high tech jobs in engineering, s c i e n c e , o r computers, o r whether they are involved in non-IT fields such as law, education, or health care. In the future, nearly all college graduates will need to possess some IT skills in order to function in their chosen careers. M ak ing sure that current and future workers are up-to-date on their skills is one of the missions of public universities. Forecasts for Growth The U.S. civilian labor force is projected to grow by 17 million jobs in the first decade of the 21st century, reaching a total of 158 million in 2010. While certain low-skill, low-pay sectors are expected to hold large shares of overall employment, the fastest growing occupations will be those that demand greater skills and education -- and also tend to be among the most high-paying. Job categories that usually involve a college degree, for example, are projected to account for 42 percent of new job growth



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for computers or application software and have demonstrated good communication skills. Even in most person-to-person "helping" professions -- such as health care, s o c i a l work, a n d counseling -- computers and the Internet are frequently employed to document case work, research problems and treatment, and communicate with colleagues. Thus, the technical sophistication of the American workforce is an economy-wide competitiveness issue. I t is also a career-long issue. Most workers of the future will need to retrain and reposition themselves for new career tracks several times during their lives. To accomplish this they will need access to a variety of college degree and non-degree programs that feature cutting-edge information, convenient modes of delivery, and expedient time to completion of coursework. 



Currently, most federal research dollars for universities flow through such agencies as the Department of Defense, the National Institutes of Health, NASA, the Department of Energy, the National Science Foundation, and the Department of Agriculture. O ther sources of sponsored university research include state and local governments, private industry, nonprofit organizations, and individuals. For FY 2000, more than $25 billion were allocated to sponsored research at U.S. universities, according to the Association of University Technology Managers (AUTM). Tech Transfer Activity More than 200 universities in the United States currently engage in the fo r m a l promotion of technology transfer. Th e y do so for a number of r e a sons, including to: ? Expedite development of new innovations for the public good ? Reward, retain, and recruit faculty ? D evelop closer ties with industry ? G enerate income for the university ? Promote economic growth Te c h n o l o g y transfer activity and revenues tend to rise as the level of s p o n s o r e d research rises. Ac c o r d i n g to recent surveys, t h e range of s p o n s o r e d research funding varies widely across the U.S., f r o m $2.1 billion for the combined University of California system down to $1.8 m i l l i o n for the University of Northern Iowa. Fo r 2000, A r i zo n a State U n i ve r s i t y received $67 million in sponsored research funding, w h i c h r a n k e d it 96th out of 142 reporting universities. One of the main goals of tech transfer offices at public universities is to link technology transfer activities with local and state economic development effor ts. O verall, technology transfer annually accounts for more than $40 billion in economic activity that supports an estimated 280,000 jobs in the U.S. and Canada. One university alone -- MIT -- holds more than 1,000 U.S. patents, which generated over $30 million in licensing revenues for FY 2000. MIT also spun off 31 new startup companies in FY 2000. 



T E C H N O L O G Y TRANSFER : T H E VALUE OF UNIVERSITY RESEARCH

World War II's Manhattan Project demonstrated the national importance of universities in providing science and engineering expertise. Since that time, federal funding has played an integral role in supporting basic research at many of the country's top universities. This funding has spawned many new innovations and scholarly papers through the years, but until the 1980s relatively few research results were developed commercially. Two main reasons account for this lack of technology transfer. First, businesses viewed the discoveries from basic research as too "early stage" and risky to develop on their own; second, research universities were discouraged from developing these discoveries themselves because existing federal and state laws prevented them from profiting on new inventions that evolved out of federally funded research. Passage of the Bayh-Dole Act in 1980 eliminated major federal impediments to technology transfer. It allowed universities to file and retain patent rights to their inventions, enter into exclusive licensing agreements with businesses, and collaborate with industry to promote commercialization of university innovations. As a result, patents issued to U.S. universities jumped from fewer than 250 per year prior to Bayh-Dole to more than 3,200 in FY 2000.



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ASU student Minerva Romero is a senior studying biology and physiology. S h e expects to pursue a career as a doctor after graduation.



A S U ' S TECHNOLOGY AND RESEARCH INITIATIVES : S T A R T I N G POINTS AND STEPS AHEAD

The Arizona Board of Regents approved six distinct initiatives for Arizona State University -- Biosciences/Biotechnology, I n f o r m a t i o n S c i e n c e , A d v a n c e d Materials, M a n u f a c t u r i n g, A c c e s s and Workforce D e v e l o p m e n t , a n d Technology Transfer. T h e s e six comprise the vast majorit y of Proposition 301 funding for the university, and they are the sole subject of this analysis. Each initiative was launched during FY 2002, which began July 1, 2001 a n d ended June 30, 2 0 0 2 . Tw o sets of tables on the following pages d e s c r i b e the initiatives and their results during FY 2002: ? Star ting Points presents the description, goals, and monetary allocation for each initiative. These starting points are particularly impor tant because they were used to track whether the ABORapproved first-year outcomes were achieved, and also to develop an evaluation framework for future years. ? Steps Ahead shows the major results and accomplishments during the first year of the two-decade-long journey. These are summarized u n d e r five headings: n e w hires, n e w money, n e w ventures, n e w programs, and new skills.



A S U 's six major program a r e a s under P r o p o s i t i o n 301: Biosciences/ Biotechnology Information Science Ad va n ce d Materials Manufacturing Access & Wo r k f o r c e D e ve l o p m e n t Te c h n o l o g y Tr a n s f e r



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S T A R T I N G POINTS

Each initiative embarked with specific goals and objectives that guided their activities, results, and accomplishments. D escriptions of each initiative and their starting points are summarized in the following two tables.



2 0 0 2 DESCRIPTION

BIOSCIENCES/ B I O T E C H N O LO G Y Allocated FY02: $6,876,400 Spent FY02: $3,406,400* ASU will expand its interests in integrative biomedical research with basic and applied research in five thematic areas: medical bioengineering, pharmaceuticals and nutraceuticals, stress and disease prevention, genomics and genomic medicine, and health policy and public health. Th i s initiative will link 301-funded projects and other research to develop a biomedical research program with the Arizona Biomedical Institute (AzBio) as its centerpiece. AzBio expects to help make m e t ro p o l i t a n Phoenix competitive in the biotechnology industry. INFORMATION SCIENCE Allocated FY02: $4,031,500 Spent FY02: $1,487,600* ASU will use basic, interdisciplinary, and applied research as well as workforce development to connect with the public and private sectors for advances in embedded and networked systems, knowledge systems, w i re l e s s technologies, a n d multimedia systems. Th i s initiative also will support the information technology needs of other ASU initiatives. Fundamental knowledge in information technology and leading-edge "embedded" systems and microcomputers will make many types of devices "smarter." Research on knowledge networks, wireless connectivity, multimedia, and bioinformatics will result in new products and stimulate formation of new companies, attrac t new industries, and retain and expand established firms. ADVANCED MATERIALS Allocated FY02: $1,512,900 Spent FY02: $1,242,300* ASU will extend its participation in nanotechnology research for advances in microscale and nanoscale systems by integrating physical, molecular, materials, and biological sciences with engineering. Interdisciplinar y research will produce revolutionary nanoengineered devices including many types of sensors, semiconduc tors, and memory devices. Linkages will be made with private firms for research and, ultimately, commercialization of new applications in industries such as health care, threat d e te c t i o n , t ra n s p o r t at i o n , processing, and manufacturing. MANUFACTURING Allocated FY02: $479,200 Spent FY02: $133,200* ASU will enhance its capacity for manufacturing research in the semiconductor field and other industries by working with academic and industry partners to develop a research agenda for high tech manufacturing supply networks. Research on supply networks will enhance the efficiency and effectiveness of Arizona's many existing high technology manufacturers, especially in semiconductors and related components. Improvements are anticipated in capacity, produc tion speed, and profitability of private sector manufacturers and their supply networks. ACCESS & WORKFORCE D E V E LO P M E N T Allocated FY02: $2,200,000 Spent FY02: $1,050,200* ASU will help ensure that its students and all Arizonans have skills to prosper in and enhance the state's knowledge economy. Access and Workforce Development seeks to extend tech skills among students in all disciplines, increase the number of teachers and learners in math, science, and technology fields, and raise retention and graduation rates. Projec ts include infusing technology across the curriculum, enhancing ASU's e-learning and distance education programs, e x t e n d i n g pre-service and in-service work with secondary m at h and science teachers, supporting an applied computing d e g re e, a n d partnering with private sector firms to develop a microelectronics "teaching factory." TECHNOLOGY TRANSFER Allocated FY02: $500,000 Spent FY02: $335,700* ASU will further its tech transfer program through technology m a r k e t i n g, l i c e n s i n g, a n d business development and planning. Th i s initiative will integrate technology transfer with local economic d e ve l o p m e nt . The initiative will increase the s p e e d with which ASU can market new developments in science and technology, including 301-funded research a n d other research from t h ro u g h o u t the university. Activities cover patent licensing, l i a i s o n to entrepreneurs, b u s i n e s s development, a n d integration of tech transfer with the full range of public economic development efforts.



Source: Morrison Institute for Public Policy, 2003. 18 Data: Arizona State University report: Prop 301/Technology & Research Initiative Fund ? FY 2002 Results, July 2002. * Due to the startup status of the six initiatives, not all allocated funding was spent by the end of FY 2002. The residual remained as a carry-forward, consistent with ABOR policy.



2 0 0 2 MAJOR GOALS

BIOSCIENCES/ B I O T E C H N O LO G Y

Advance breakthroughs in biomedicine and target high priority biomedical specialties with significant promise for future development. Strengthen the Arizona bio industry. Focus research in areas with long-term collaborative potential in current and emerging priority areas for the National Institutes of Health, N at i o n a l Science Foundation, other federal agencies, and possible research partners. Combine research efforts between departments and colleges at ASU and the outside medical community. Establish and strengthen partnerships with institutions in the Phoenix area through shared facilities and joint faculty appointments. D e ve l o p state-of-the-art laboratory facilities through new equipment and multidisciplinary c o re facilities. Identify and develop technology t r a n s f e r opportunities for all major biosciences/ biotechnology p ro g r a m s . Recruit and hire faculty in areas targeted by AzBio.



I N F O R M AT I O N SCIENCE



A D VA N C E D MATERIALS



M A N U FA C T U R I N G



ACC E S S & WORKFORCE D E V E LO P M E N T

Strengthen technology support for undergraduate and graduate instruc tion. Conduct faculty and support staff searches. Fund classrooms and laboratories to support technology-enhanced instruc tion. Identify new e-learning programs to be developed. Develop strategies for improved recruitment, training, and retention of secondary school math and science teachers. Host a conference for college and university faculty responsible for science, math, engineering, and technology disciplines. S u p p o r t development of an applied computing B.S. program at ASU West. Par tner with Intel and Motorola on a microelectronics teaching factory at ASU East.



T E C H N O LO G Y TRANSFER



Eq u i p ASU to partner with technology users in Arizona, including the computer hardware, software, and IT industries. Establish ASU as a partner in leading-edge research by creating collaborative partnerships with technology companies. Expand the supply of graduates qualified to work in Arizona's computing industries by providing o p p o r t u n i t i e s for students to i n te r a c t with employers and engage in research and leadership development activities. Enhance the value of undergraduate and graduate programs for the software, information science, k n o w l e d g e systems, a n d e-commerce industries. Provide internationally recognized re s e a rc h to attract a larger proportion of computer hardware, software, and network technology R & D to Arizona. Attract nationally competitive research faculty for embedded systems, bioinformatics, and knowledge systems. Establish interdisciplinary faculty re s e a rc h teams where ASU s t re n g t h s align with national n e e d s and research agendas. Attract $2 million in external funding. Establish 20 student internships in embedded tech and software. Develop and pilot a high school software engineering course with at least 25 students.



E x p a n d external funding in nanotechnology and wide b a n d g a p semiconductors. D e ve l o p new nanosystems for high value-added applications and transfer to the commercial sector. Engage science and engineering students in nanotechnology and materials research. P rov i d e state-of-the-art equipment and upgrades for i n t e rd i s c i p l i n a r y use. Acquire staff for joint use facilities. Attract $3 million in external funds for specific initiative areas. Bring in 10 new graduate students. Provide 12 undergraduates with research experience. Develop 3 new external partnerships. Hire at least 1 interdisciplinary faculty member. E n h a n c e interdisciplinary collaborative research between depar tments and across colleges.



Submit major proposal to the National Science Foundation for research in semiconductor manufacturing operations. Create research agenda for high technology manufacturing supply networks. Identify and generate external research funds. Assess needs in the manufacturing c u r r i c u l a for undergraduates and graduates. Establish 10 undergraduate student internships in high technology firms. E s t a b l i s h a test bed for a laboratory in high technology manufacturing supply research.



Encourage more invention disclosures among ASU researchers. Increase evaluation of discoveries f o r technical viability and commercial potential. Invest in selected inventions with commercial potential. Assist ASU start-up companies with business plans. Increase awareness among Arizona's private sector of investment and technology transfer opportunities at ASU. Create a campus environment that fosters entrepreneurship. Employ a team of consultants to evaluate and assess ASU technologies and help take them to market. Fund "proof of concept"grants and develop early-stage university technologies. Promote technology marketing effor ts through an "electronic forum." Increase business development ser vices to ASU inventors. Increase outreach to the business a n d economic development communities.



Source: Morrison Institute for Public Policy, 2003. Data: Arizona State University report: Prop 301/Technology & Research Initiative Fund ? FY 2002 Results, July 2002.



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S T E P S AHEAD : O V E R V I E W OF FY 2002 RESULTS AND ACCOMPLISHMENTS

A journey of a thousand miles begins with a single step. From hiring faculty members and research staff to updating equipment and sponsoring conferences to conducting research and winning grants, t h e six TRIF initiatives achieved most of their objectives and took many steps toward building the foundation on which future research and economic development will be based. New Hires -- Initiative leaders searched for and selected the faculty, researchers, and support staff needed to carry out their projects. These people a l s o collaborated with professionals in the community and at ASU, p r o m p t e d future developments, a n d supervised or supported graduate and undergraduate students.



N E W HIRES

BIOSCIENCES/ B I O T E C H N O LO G Y 1 faculty in bioengineering. 2 faculty in nutraceuticals and pharmaceuticals. I N F O R M AT I O N SCIENCE 2 faculty in computer science/embedded systems. 1 faculty in information systems/knowledge systems. 1 faculty in bioinformatics. A D VA N C E D MATERIALS 1 faculty in computational mate rials. 2 process engineers for Center for Solid State Electronics Research. 1 support staff for Center for Solid State Science. M A N U FA C T U R I N G 1 senior research associate for research support. ACC E S S & WORKFORCE D E V E LO P M E N T 6 faculty in nursing, education, law, engineering/fine arts, English, and languages and literature to further teaching tech skills in all disciplines. 1 director of training operations for ASU East microelectronics teaching factory. 2 info-tech specialists in instructional support. 2 info-tech specialists in extended education. 1 info-tech specialist in data analysis. 1 info-tech specialist in Center for Learning and Te a c h i n g Excellence.

Source: Morrison Institute for Public Policy, 2003. Data: Arizona State University report: Prop 301/Technology & Research Initiative Fund ? FY 2002 Results, July 2002.



T E C H N O LO G Y TRANSFER N/A



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New Money -- TRIF dollars attracted new funds to ASU and sharpened the focus of some ongoing efforts. For example, some initiatives leveraged T R I F money, a d d i n g more "external" d o l l a r s to university research efforts. O t h e r s redirected existing funds to initiative research. T h i s category presents the total money generated by each initiative and provides examples of the new funds' s o u r c e s and purposes.



N E W MONEY

BIOSCIENCES/ B I O T E C H N O LO G Y $4.7 million received in new federal and industry awards, contracts, and donations. 56% increase shown in total value of ASU grant proposals written in biosciences -- to $78 million. I N F O R M AT I O N SCIENCE $2.1 million received, including $ 1 million from Motorola and Intel for Consortium for Embedded and Inter-Networking Te c h n o l o g i e s ; $ 7 1 5 , 0 0 0 in NSF funds to match ASU research seed funds, curriculum development, and internships; $300,000 industry funding for Connection One; $63,000 from Intel for Center for Advancing Business Through Information Technology. A D VA N C E D MATERIALS $7.26 million received in federal and industry awards, including workforce development and NSF Integrative Graduate Education and Research Traineeship. M A N U FA C T U R I N G Over $550,000 awarded in new external funds, including $150,000 from Intel, $108,000 from Semiconductor Research Corporation, and $300,000 from National Science Foundation for studies of semiconductor supply networks. ACC E S S & WORKFORCE D E V E LO P M E N T N/A T E C H N O LO G Y TRANSFER $472,000 generated for ASU from value of all products and star tups campus-wide.



Source: Morrison Institute for Public Policy, 2003. Data: Arizona State University report: Prop 301/Technology & Research Initiative Fund ? FY 2002 Results, July 2002.



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New Ventures -- New partnerships among ASU departments and between ASU and public and private sector entities began in the past year. Various research consortia, businesses, and alliances also resulted from the initiatives' ac tivities.



N E W VENTURES

BIOSCIENCES/ B I O T E C H N O LO G Y Established partnership with U.S. Veterans Administration and National Institute of Diabetes and Digestive and Kidney Diseases for new research. Established partnerships for collaborative research with M ayo Clinic, S u n h e a l t h , Barrow Neurological Institute, S c o t t s d a l e Healthcare, Bannerhealth, Arizona Health S c i e n c e s Dental School, Advanced Bionics, Medtronics, CreaAgri, and Intel. Helped establish consortium that attracted TGen to Phoenix. S i g n e d agreements for joint p ro j e c t s with other TRIF initiatives, including Information Science and Advanced Materials. I N F O R M AT I O N SCIENCE Developed College of Business Center for Advancing Business through Information Technology. E s t a b l i s h e d Consortium for Embedded and Internetworking Technologies with Motorola and Intel. Developed Connection One, a consortium of 6 firms and ASU for wireless technologies re s e a rc h . A D VA N C E D MATERIALS Signed agreement with Sandia National Labs for participation in 3 interdisciplinary grants, 2 graduate fellowships, and 6 research projects. D eveloped National Science Foundation Industrial Par tnership with Motorola. Subcontrac ted with Lockheed Mar tin on grant from Defense Advanced Research Project Agenc y. Formed SJT Micropower, Inc. , a new startup. M A N U FA C T U R I N G Expanded projects to model semiconductor manufacturing supply networks. ACC E S S & WORKFORCE D E V E LO P M E N T N/A T E C H N O LO G Y TRANSFER** 5 new products entered market. 3 startup companies formed. 97 inventions disclosed. 108 patent applications made. 11 patents acquired. 9 licenses or options for industry adoption signed. Contracted for tech commercialization assistance. Contracted with High Tech MBA Partnership with W. P. Carey School of Business. Contracted with Master's Consulting Group. Fo r m e d alliances with The Indus Entrepreneur and Arizona Ve nt u re Capital Conference. Joined International Innovation I n i t i at i ve, a n academic consortium to bundle related technologies for marketplace. Contrac ted with Patent and Licensing Exchange for online marketing and licensing services.

Source: Morrison Institute for Public Policy, 2003. 22 Data: Arizona State University report: Prop 301/Technology & Research Initiative Fund ? FY 2002 Results, July 2002. ** Invention disclosures, patent applications, patents, and startup companies for all initiatives are reported under Technology Transfer.



New Programs -- Many activities for ASU students, facult y, or others in the community related to TRIF goals. This category also includes equipment and software purchased for specific research areas and throughout ASU, as well as awards and notable publicity received relative to the initiative.



N E W PROGRAMS

BIOSCIENCES/ B I O T E C H N O LO G Y Upgraded lab facilities for the Health Assessment Core Fa c i l i t y to provide more research options and improve competitiveness for national grants. I N F O R M AT I O N SCIENCE Tested software engineering curriculum in 4 Phoenix-area high schools with 88 students. E s t a b l i s h e d ASU Software Factory to provide professional s o f t wa re development for students and sponsored projects. Consor tium for Embedded and Inter-Networking Technologies covered by Electronic Times and American Society for Engineering Education. 6 courses introduced or revised. A S U Information Systems graduate program ranked 10th nationally by U.S. News and World Report. A D VA N C E D MATERIALS Wo n 5-year National Science Fo u n d at i o n Integrative G r a d u at e Education and Research Traineeship grant for workforce development. Upgraded nanoscience joint use f a c i l i t i e s with electron beam l i t h o g r a p hy system. Upgraded advanced materials/ microsystems joint use facilities with two new high density plasma deep etch systems. M A N U FA C T U R I N G Purchased test bed equipment f o r high technology manufacturing supply network research. Developed agenda for new research in high technology manufacturing supply network. ACC E S S & WORKFORCE D E V E LO P M E N T U p g r a d e d technology in 8 classrooms and labs in College of Engineering and Applied Sciences, a n d B i o l o g y Department. Purchased server equipment a n d developed a portable module to provide technology s u p p o r t for classrooms campus-wide. Cu s t o m i ze d retention and graduation tracking software. Fu n d e d e-learning program d e ve l o p m e n t in technical communication, semiconductor manufacturing, fire service m a n a g e m e n t, s e c u r i t y engineering technology, e nv i ro n m e n t a l technology management, special ed, and Co n n e c t - M B A . Suppor ted activities in applied computing at ASU West. Offered 72 new distance and online courses and 1 new online degree program. Established microelectronics teaching factory at ASU East. Developed "Intro to Information Technology" course for all students.

Source: Morrison Institute for Public Policy, 2003. Data: Arizona State University report: Prop 301/Technology & Research Initiative Fund ? FY 2002 Results, July 2002. 23



T E C H N O LO G Y TRANSFER Provided business development ser vices to ASU entrepreneurs.



New Skills -- The initiatives worked to enhance skills among ASU graduate and undergraduate students, facult y and professionals, and others in the communit y. This was accomplished through 301-inspired projects, internship programs, seminars, workshops, and new curricula. M any meetings and conferences were also held to further understanding of ASU research and private sector business opportunities.



N E W SKILLS

BIOSCIENCES/ B I O T E C H N O LO G Y 16 graduate/postdoctorate students enrolled in 301-related programs. 11 undergraduates were given research experience on 301 projects. 5 interdisciplinary research workshops in neuroscience, environment and ecology of human and animal populations, musculoskeletal disease, immunology, and stress research. Hosted Women's Health Forum for ASU researchers and local health leaders. I N F O R M AT I O N SCIENCE 32 internships gave students work experience in industry or ASU Software Factory. Hosted workshops, web sites, a n d meetings to develop interdisciplinary research and performance measures. A D VA N C E D MATERIALS 13 new graduate students e n ro l l e d in 301-related research programs. 2 8 undergraduates were g i ve n research experience on 301 projects. M A N U FA C T U R I N G 1 postdoctorate student gained work experience in re s e a rc h support role. 8 research assistantships provided experience on 301 projects. ACC E S S & WORKFORCE D E V E LO P M E N T H o s t e d Technology and V i s u a l i z a t i o n in the College C l a s s ro o m f o r ASU faculty, c o m m u n i t y college faculty, a n d K-12 teachers. 9 6 faculty trained in technology course design. T E C H N O LO G Y TRANSFER Hosted individual and group co n f e re n ce s among ASU re s e a rc h e r s and investors. Fa c i l i t at e d mentoring relationships between re s e a rc h e r s and investors. H e l d joint activities with ASU entrepreneurial student o rg a n i z at i o n s . H o s t e d more than 150 meetings and conferences on technology, re s e a rc h , a n d e c o n o m i c development. H o s t e d entrepreneurial education workshops with The Indus Entrepreneur and A r i zo n a Venture Capital Conference for ASU constituents.



Source: Morrison Institute for Public Policy, 2003. Data: Arizona State University report: Prop 301/Technology & Research Initiative Fund ? FY 2002 Results, July 2002.



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A JOURNEY OF A THOUSAND MILES BEGINS WITH A SINGLE STEP.

FROM HIRING FACULTY MEMBERS AND RESEARCH STAFF TO UPDATING EQUIPMENT AND SPONSORING CONFERENCES TO CONDUCTING RESEARCH AND WINNING GRANTS, THE SIX TRIF INITIATIVES ACHIEVED MOST OF THEIR OBJECTIVES AND TOOK MANY STEPS TOWARD BUILDING THE FOUNDATION ON WHICH FUTURE RESEARCH AND ECONOMIC DEVELOPMENT WILL BE BASED.



Technology at ASU allows students to stay connected to their p r o f e s s o r s, t h e i r classmates, a n d the world. T h i s access helps provide ASU graduates with the skills and experience necessary f o r success in the knowledge economy.



W H A T ' S THE VALUE-ADDED? S A M P L E CAT INDICATORS



C O N N E C T I O N S , ATTENTION, AND TALENT : A NEW FRAMEWORK FOR MEASURING T H E LASTING VALUE OF SCIENCE AND TECHNOLOGY RESEARCH

The Steps Ahead tables presented in the previous section help to answer many traditional auditing questions necessary for tracking public programs. These tables reveal that a large number of constructive activities took place within ASU's 301-funded initiatives during FY 2002. But just as there is a qualitative difference between the person who possesses a lot of fac ts and the person who can organize such facts into problem-solving information or innovative products, the TRIF initiatives should add up to something more than just a tally of grants, ac tivities, and personnel. To help define what that "something more" should be for these diverse fields, Morrison Institute for Public Policy conducted a series of interviews with Arizona business, political, civic, and media leaders. What emerged from these conversations was a remarkable consensus and confidence that 301-funded research would result in the development of exciting new products and processes. More importantly, these leaders also felt t h a t , a s necessary as the ABOR-approved measures are for tracking how Proposition 301's TRIF monies are spent, these measures must be complemented by additional criteria that gauge the lasting value of TRIF spending for Arizona's economy. More than anything else, these leaders said they wanted to know: ? Did ASU and the business community become more closely tied because of TRIF spending, and are their fortunes now more mutually dependent? ? Did ASU's 301 projects bring acclaim to the state from those who can influence or contribute to Arizona's prosperity? ? Did the ASU initiatives help keep our state's best and brightest minds here and attract more like them? Such questions, w h e n considered in light of the best thinking about economic development and the new economy, s t r o n g l y suggest that Arizona should develop an additional yardstick for measuring the value of its investment in university research -- one that goes beyond simple auditing. Therefore, this section presents a new set of criteria to frame such an analysis. Research projects expected to add value to the state's economy should be evaluated on the extent to which they: M a k e CONNECTIONS a m o n g ASU researchers and external communities, especially individuals and businesses that could partner with ASU to commercialize its research At t r a c t ATTENTION t o ASU's research, p a r t i c u l a r l y at the n a t i o n a l level and from people and organizations that can e n h a n c e Arizona's economy R e c r u i t , r e t a i n , a n d develop TALENT w h o will provide A r i z o n a with the innovations, w o r k f o r c e , e n t r e p r e n e u r s h i p, n e t w o r k s , a n d distinction it needs to compete These new criteria -- henceforth called the CAT measures -- represent a means of "keeping score" on ASU's 301-related activities and outcomes. G r ow i n g evidence suggests that measuring up on these would place A r i zo n a in a favorable position to compete in the new economy. Success according to the CAT measures should enable the state to become a leader in creating and applying the knowledge that will produce a substantial economic impact. In short, the CAT measures provide Arizona with a truly original way to evaluate the long-term economic development c o n t r i b u t i o n of public investment in university research.



CO N N E C T I O N S University researchers on boards of companies Private sector participation in university lab work and events Joint presentations by university and private sector Licenses and joint ventures inspired by research Interactions and personal relationships between university researchers and peers ATTENTION University exposure in national, state, and local media Presentations by university researchers Research information disseminated by the university Hits on university research web sites Industry recruitment of science and technology students TA L E N T Successful hiring and retention of top research faculty Science and technology grad students attracted and retained Private sector individuals trained through research projects "Visitors-in-residence" associated with university research projects K-12 outreach by university research projects

Source: Morrison Institute for Public Policy, 2003.



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M E A S U R I N G CONNECTIONS

For purposes of analyzing ASU's Proposition 301 projects, the concept of "connections" focuses on research activities and interactions that link 301-funded research and researchers with individuals and organizations that can enhance, publicize, or commercialize this work. T h u s, m e a s u r i n g Proposition 301-inspired connections is one way of d e t e r m i n i n g if ASU's research in science and technology is sufficiently network ed to move it from the campus to the business community -- in other words, from basic research to commercial product. Some indicators of connection include: ? ASU 301 researchers on boards of companies ? Private sector participants in 301-related lab work, discussions, and special events ? Joint presentations by 301 researchers and private sector ? Licenses and joint ventures inspired by 301 research ? Interac tions and personal relationships between 301 researchers and peers at ASU and other universities



f i r s t blush, t h i s may sound like a boondoggle, b u t actually it is a smart m o v e. A f t e r years of hard work, t h e San Diego region -- particularly U C S D -- has established itself as a leader in science and technology research, and earned an international reputation that draws venture capitalists and entrepreneurs. This success in new economy businesses is now widely acknowledged both in the press and by word-of-mouth, hence others, lik e the University of Wisconsin, have a legitimate reason for wanting to get in on the action. When it comes to attracting attention, more is usually better. Therefore "getting the word out" on what 301 researchers are working on and the produc ts they intend to create will increase the TRIF investment's e c o n o m i c potential. M e a s u r e s of a t t e n t i o n include: ? Exposure of ASU's 301 research or researchers in national, state, and local media ? Presentations by ASU 301 researchers, especially to large groups that include the private sector ? Information distributed by ASU 301 projects ? Hits on 301 research project web sites ? Targeted recruiting of ASU science and technology students



M E A S U R I N G ATTENTION

Th e National Governors Association has stated, "A l t h o u g h knowledge c re a t i o n is a critical first step in the wealth-creation process, k n ow l e d g e creates no wealth unless it is used."1 In other words, good research, in isolation, is not enough to create long-term economic impact -- someone o u t s i d e the university must be aware of ASU's research breakthroughs for them to take effect. This is an obvious, yet easily overlooked, fac tor in analyzing the likelihood that a research investment will yield a return.

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M E A S U R I N G TALENT

Attention and connections indicators are inextricably linked to the final CAT measure, talent -- the pool of educated, creative, motivated workers in the state. In order for economic development to occur, university-based science and technology talent not only must be connected to external co m m u n i t i e s, b u t also must be recognized by the rest of the country. According to Bill Breen, writing in the magazine Fast Company, " Top talent is n't just found at Berkeley, M I T, a n d Stanford. Th e re are plenty of great p e o p l e hidden away." 2 One of economic development's challenges is to b r i n g these people to light.



The power of this "attention factor" is illustrated by the recent opening of a University of Wisconsin technology transfer office...in San Diego. At



Not long ago, t h e keys for a region to attract business location and expansion decisions were low taxes, limited government regulation, and proximity to markets. Now, the main ingredient for attracting and retaining b u s i n e s s e s has become talent. T h e National Governors Association, w o r k i n g with Harvard University's Michael Porter and the Council on Competitiveness, determined that an abundant, creative, scientifically literate work force will likely make the difference between winners and losers in the new economy. According to the NGA, "CEOs report that the availabilit y of technically trained talent is their top priority -- one that of ten determines where they locate high-value investments."3 Consequently, the degree to which ASU's 301 projects enhance Arizona's talent pool in science and technology represents an important measure of their contribution to the state's economy. Arizona, however, is not known as a state that attracts business development on the quality of its talent. Quite the contrary, Arizona is better known for its low standardized test scores among K-12 students and its relatively unremarkable percentage of residents with college degrees, especially among younger workers. This helps explain why a recent national study conducted by the Greater Phoenix Economic Council shows that business site selection consultants, national business writers, and top-level executives primarily identify the s t a t e with tourism and retirement industries. W h i l e these industries remain valuable assets, they must be complemented by a workforce that is scientifically and technically capable if the state is to benefit from the power ful wealth creation forces such people can unleash. For now, Arizona does not trade on the attractiveness of its talent pool. Over time, the TRIF-sponsored initiatives could help change that. To gauge their success, they should be measured on the degree to which they help attrac t, develop, and retain the kind of talented labor pool that economic development professionals use to "sell" a state nowadays. Such talent in Arizona could produce a major downstream impact on the economy if it were to influence local business startups or add value to existing firms.



Ways to measure 301's contributions to the state's talent pool include: ? Successful recruitment and retention of top faculty and staff researchers for 301 research ? Science and technology graduate students attracted and retained by 301 research projects ? Private sector individuals trained through ASU 301 projects ? " V isitors-in-residence" from universities and businesses working with ASU 301 projects ? K-12 outreach by ASU 301 projects



A N A L Y S I S OF VALUE-ADDED AT ASU

The CAT measures were developed to complement, not replace, outcome m e a s u r e s approved by ABOR. T h e y are both a framework for thinking about long-term, big-pic ture economic development issues, and a set of i n d i c a t o r s that, t h r o u g h systematic analysis, c a n be used to measure p r o g r e s s and tangible contributions to the state's economy. ASU's six TRIF initiatives made accomplishments that fit the CAT paradigm during year one of the 20-year research program. But in fairness to the initiatives' first year -- during which a great deal of time must be spent on organizing and staffing -- and in recognition of the many activities that took place before this model was established, no attempt was made to compile a full accounting for FY 2002 using CAT indicators. Future a n a l y s i s of 301 projects, h o w e v e r, a s well as public investments in universit y research in the larger sense, should -- and will -- make this approach a useful yardstick for determining value-added. As noted earlier, many Proposition 301-inspired activities at ASU have already helped Arizona establish new connections, gain attention, and begin to attract or develop new talent. Six examples are presented on the following pages to provide anecdotal evidence of how such indicators of success can be identified and how they can contribute economic value.



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F O R C E PROJECT CONNECTS ASU RESEARCH TO INDUSTRY AND UNIVERSITIES

The Factory Operations Research Center (FORCe) is a program s p o n sored jointly by the Semiconductor Research Corporation (SRC) and International SEMATECH, two research consortia of semiconductor m a n u f a c t u r e r s. S R C and SEMATECH represent most of the major semiconductor companies operating in the world today. A S U is a m a j o r participant in the FORCe program. FORCe coordinates five individual research projects for the two consortia. Each of these projects is aimed at a different strategy for improving the efficiency of wafer fabrication. In the semiconductor industr y, wafer fabrication is the most costly manufacturing step, Through FORCe and its research projects, ASU has established formal research connections with 11 universities around the country and the world, including Cornell University, Universit y of California ? Berkeley, Universit y of Arkansas, Fraunhofer Institute (Germany), and National Taiwan University. In addition, ASU faculty and students have been connec ted with many of the world's semiconductor giants, including The goal of the FORCe program is to develop software tools and techniques that will allow consortium members to complete the fabrication process faster and cheaper with the same level of quality. A S U professor John Fowler serves as the center director of FORCe. Two of the five research projects are also led by ASU faculty -- each p ro j e c t involving collaboration with researchers at other universities. I n addition, Fow l e r and the ASU team leaders serve on FORCe's "Core Te a m" m a d e up of high-level representatives of selected consortium co m p a n i e s. Th e Core Team meets regularly to provide direction to t h e projects. Fur thermore, the FORCe projects continue to create new connections for ASU. For example, the ongoing FORCe research enabled ASU to win a prestigious NSF grant for the purpose of investigating related a s p e c t s of manufacturing modeling. Th i s effort, l e d by ASU's Gerald M ackulak, is a joint project with researchers at Northwestern Universit y, thereby connecting another institution to its network of universities interested in manufacturing systems research. Advanced Micro Devices, IBM, Infineon Technologies, Intel, M otorola, ST Microelectronics, National Semiconductor, and Texas Instruments. both in terms of dollars -- a new fabrication factory, or "fab," costs $3 billion to build -- and in terms of time -- it often takes two months to complete the fabrication process, compared to only two weeks for all other manufacturing operations. Proposition 301 funds help support several aspects of this research, including faculty salaries and graduate student stipends. Approximately s e ve n ASU industrial engineering students are funded to work on high tech factory modeling. Upon completion of their degrees, these s t u d e n t s are likely to be hired by sponsoring companies, t h e r e by t r a n s fe r r i n g university technology directly to the manufacturers. Faculty, also, are expected to interact with manufacturers and suppliers by visiting fabs and taking sabbaticals at member company plants.



Building Capacity for Connections Innovation takes place in trust networks that link university researchers, entrepreneurs, financiers, lawyers, and accountants to markets. The unit of innovation has become the n e t wo r k .

-- Doug Henton C o l l a b o r a t i o n and I n n o v a t i o n : t h e State of American Regions 30



I - C U B E D CONNECTS UNIVERSITIES THROUGH TECHNOLOGY TRANSFER

The International Innovation Initiative (I-cubed) provides a platform for connecting the technology transfer efforts of member universities t h r o u g h o u t the world. I n i t i a t e d under the leadership of Columbia Universit y, I-cubed membership includes institutions from the United States, Canada, Great Britain, Sweden, and Taiwan. Tsong's contribution to this collaboration is the development of a new substrate material that allows wide bandgap semiconductors such as gallium nitride to bond to silicon wafers, and may enable LED fabrication at substantially lower cost than alternative approaches. This research has been supported by Proposition 301 funds. K han's contribution is to use the substrate provided by Tsong and coworkers at ASU to create The purpose of I-cubed is to bundle related research discoveries from member universities so that their combined technologies become more m a r k e t a b l e. To accomplish this task, te c h n o l o g y transfer offices at member institutions exchange patent lists and engage in presentations a n d analyses of their research technologies to identify areas that might form the basis for synergistic collaborations. I f the collaboration between Tsong and Khan is successful, it will not o n l y demonstrate the viability of Tsong's new substrate, b u t also co u l d make a significant impact on the development of LED light sources for consumer applications, such as high-efficiency home lighting. T h u s, a cross-university connection fostered by I-cubed will greatly Arizona State University's first I-cubed collaboration matched Ig Tsong at ASU and Asif Khan at the University of South Carolina. The goal of these two research scientists is to build an economical light-emitting diode (LED) based on wide bandgap materials integrated onto a silicon wafer. Wide bandgap materials are characterized by their ability to operate at high temperature and emit light at the blue and ultraviolet end of the spectrum. i n c r e a s e the likelihood that these two researchers can speed their t e c h n i c a l breakthroughs to the market and also attract licensing revenue for their work. a new LED device.



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W O M E N ' S HEALTH RESEARCH DRAWS A T T E N T I O N OF KEY AGENCIES AND SCIENTISTS

The primary goal of AZBio is to foster interdisciplinary collaborative health research in the Phoenix metro area. Collaborative-minded health researchers, however, of ten have trouble finding one another in Arizona's largest metropolis. While the region is home to plenty of bioscience expertise, the talent pool is fragmented due to a decentralized system of independent hospitals, universit y science depar tments, private biotech firms, and other health care businesses and government agencies. This system tends to isolate people by distance, securit y issues, and in many cases, mark et competition. A zBio's Kathy Matt, therefore, came up with a strategy to overcome some of the effects of this isolation. In May 2002, she teamed AzBio up with the governor's office to host the "Women's Health Research Fo r u m . " Th e idea was to pull together the region's best women's health researchers in a non-competitive setting at ASU so they could d e ve l o p new cooperative research relationships. Th e forum was back ed by ASU's Proposition 301 monies. The day-long format of the forum was straightforward. A number of top women's health researchers made presentations describing their fields of work. Where interests overlapped, presenters and other participants had the opportunity to meet and discuss possible collaborations. In addition, numerous radio and newspaper outlets publicized the O n e of the morning sessions featured a hospital oncologist who repor ted on her clinical work involving breast cancer. Later, A zBio's M att explained her research on the effects of stress on the body.

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Something clicked for the oncologist -- she told Matt that her patients frequently wanted to know how stress affects both their cancer and their treatment. The two researchers quickly joined forces to tackle this question, and they subsequently developed an interdisciplinary collaborative research proposal that has been submitted to NIH for funding. T h e forum, h o w e v e r, d i d not only inspire new interdisciplinary collaborations; it also attracted significant attention on three levels: l o c a l , s t a t e, a n d national. Fi r s t , i n the regional domain of health research, it established ASU as a neutral venue for open discussion of bioscience research ideas -- something not always available in the competitive, of ten secretive, atmosphere of the private sector. S econd, it briefed representatives of state agencies on the value of ongoing research in the region, as well as the opportunities that may lie ahead. This bolsters policy arguments for expanding such research both for i t s medical and its economic potential. T h i r d, t h e forum raised the P h o e n i x metro area's national profile in bioscience research by d e m o n s t r a t i n g to keynote speaker Dr. Wa n d a Jones -- assistant deput y director of the Office of Women's Health, U.S. O ffice of Health and Human Services -- that the region has a critical mass of research talent that should be further supported and funded. She has since "talk ed up" ASU to other women's health researchers in the country.



forum, and a prominent news personality moderated the culminating lec ture and discussion. In all, about 100 researchers, agenc y representatives, and policymakers attended the forum's events.



E M B E D D E D SYSTEMS WORK ATTRACTS ATTENTION OF INDUSTRY AND NSF

Building Capacity

Th e Consortium for Embedded and Inter-Networking Technologies ( C E I N T ) was founded by ASU, I n t e l Corporation, a n d Motorola. Th e i n t e n t of the consortium is to increase knowledge and markets in the area of embedded technology -- the tiny computer chips and their software that make modern appliances, n e t wo r k s, a n d other e q u i p m e n t appear to be "smart." Proposition 301 funding pays for ASU's membership in the consortium, and also supports two faculty hired especially to augment embedded research and applications at the university. A major goal of the consortium is to develop and strengthen ASU's curriculum in embedded technology so graduates are better prepared to work in this emerging field. To date the consortium has made direct awards of over $1million for research and curriculum development. This investment will eventually save the industry substantial time and money that would otherwise go to training new employees. A s s o c i a t e d with the curriculum thrust is an internship program in which graduate and undergraduate students work on facultys u p e r vised embedded technology projects at sponsoring companies. The internships give students real-world job experience while earning them course credits toward their degrees. A n o t h e r major goal of the consortium is to attract significant a t t e n t i o n to both the university and the region as a global center f o r cutting-edge embedded systems research and manufacturing. A s a side benefit of the growing "buzz" s u r r o u n d i n g consortium activities, ASU's Computer Science and Engineering (CSE) department h a s been able to attract highly regarded young talent in its latest faculty searches. A l t o g e t h e r, C S E has successfully filled five new positions in this competitive field in the past year.

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The consortium has managed to gain some important notice during i t s first year. Fo r example: ? News articles on the consortium have appeared in local and national news media, as well as in national trade journals. ? Consor tium members made presentations at national conferences, i n c l u d i n g an entire session on "embedded ecosystems" a t the a n n u a l International Phoenix Conference on Computers and Communications (IPC3), and poster sessions on ASU's embedded technology curriculum at the annual conference of the American Societ y of Engineering Educators (ASEE). ? M otorola named ASU one of only five universities in the nation to receive targeted recruitment of its computer science and engineering graduates. O ther targeted universities include MIT, G eorgia Tech, and University of California, Berk eley. In addition, the National Science Foundation saw enough promise in ASU's embedded technology curriculum project to award two major grants totaling $780,000 to support and expand curriculum development. At the same time, the consortium has been working ac tively to expand its base of industry and university members.



for Attention Promoting and marketing a region's industrial and research results serve to link the region's intellectual power to practical applications... the process attracts investments, venture capital, and talented workers.

-- Ross Devol A m e r i c a 's High Tech Economy : Growth, D e v e l o p m e n t and Risks f o r Metropolitan Areas, M i l k e n Institute



B I O - N A N O CURRICULUM CREATES I N T E R D I S C I P L I N A R Y TALENT

A S U 's biomolecular nanotechnology graduate program links eight d i v e r s e research disciplines in engineering and the physical and life s c i e n c e s through a Ph.D. p r o g r a m that promotes interdisciplinary teamwork. Among the research disciplines are chemical and materials engineering, molecular and cellular biology, physics, and plant biology. T h e goal of the program is to develop collaborative-minded researchers who can work effectively with their counterparts in other fields. Such teams are needed to perform cutting-edge research in many high tech companies. The IGERT grant will support up to 10 new Ph.D. students each year -- Motorola, for example, is currently interested in developing molecular elec tronics. Lock heed/M ar tin is looking into ways to create living biosensors. And Kodak is investigating organic molecules that respond to and communicate with light. These types of research require the co m b i n e d talents of scientists and engineers who understand the m o s t advanced aspects of biotechnology, n a n o f a b r i c a t i o n , m a te r i a l s science, nanoelectronics, biochemistr y, and biophysics. To be successful, t h e s e researchers must also understand how to work together. For ASU's bio-nano graduate students, the first research task has been to pool their individual talents to develop a nanoscale chemical delivery s y s te m . Th e finished device will employ a molecular motor that can "drive" to a specific position, burst open, and deposit the chemical on its intended target. To accomplish their task, the bio-nano graduate students have had to learn chip fabrication techniques in a joint-use "clean room" facilit y I f past experience holds true, most of these students will be hired by local companies and remain in the state after graduation. These new leaders of science and engineering research will then provide the

-- A Governor's Guide to Building State Science and Technology Capacity, National Governors As s o c i a t i o n



located at ASU's Center for Solid State Electronics Research (CSSER). In this clean room, the students work under the guidance of a process technician funded by Proposition 301 monies. Additional support for the CSSER clean room has come from Intel, which donated the tools, a n d Motorola, w h i c h provided the installation expertise. B a s e d on this support, plus the talent-building promise of the interdisciplinary curriculum, the bio-nano program won a prestigious IGERT (Integrative Graduate Education and Research Traineeship) grant from NSF in 2001.



Building Capacity for Talent The sine qua non of a modern economy is a well-educated, versatile work force able to conduct R&D and to convert its results into innovative products, processes, and services.



for a total of about 40 funded students in the program after four years. The IGERT students will also be eligible for internships at Arizona high tech companies to acquire work experience and become acquainted with potential employers. The benefits of ASU's bio-nano program may reverberate in Arizona for years to come. Large high tech companies like Intel and Motorola o f t e n report that one of their most critical workforce challenges is f i n d i n g the talent for interdisciplinary teams involved in advanced r e s e a r c h projects. N o w, h o w e v e r, t h e bio-nano program is training j u s t such talent.



basis for attracting and mentoring the next generations of talented researchers for Arizona.



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T E C H - O R I E N T E D FACULTY AND COURSES S T R E N G T H E N FUTURE WORKFORCE TALENT

Technological advances have altered the landscape of the American work place and changed the way basic research is conducted in nearly ever y academic discipline. But while most students enter college with basic computer skills, they have not yet learned to apply these skills to their chosen fields. Therefore, I n f o r m a t i o n Technology Across the C u r r i c u l u m (ITATC) was conceived to better integrate technological c h a n g e s into ASU's educational program. I TATC provides a campus-wide approach for upgrading the technology skills of all ASU students so they are better equipped to contribute to their professions upon graduation. T h e main thrust of ITATC is to hire technology-oriented faculty in nontechnical academic departments across campus. ITATC facilitates t h e s e new hires by funding approximately half of their salary costs. T h e new faculty under ITATC are then held to the same disciplines p e c i f i c standards as other members of their departments but, i n addition, they are expected to model the use of their technology skills in the design and delivery of their classes. Their presence is intended to jump-start or accelerate the pace of technological change within their depar tments. The ITATC hires are also expected to assist colleagues in utilizing technology for their classrooms and research. I n its first year, I TATC helped fund six new faculty appointments involving seven disciplines: nursing, education, law, English, engineering/ fine arts (a joint hire), and languages and literatures. M ore ITATC hires a r e anticipated for the future, i n c l u d i n g one each for psychology, political science, and justice studies. Proposition 301 monies support

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I TATC by providing the funds for shared salary costs of new tech-oriented faculty. L a n g u a g e s and literatures professor Dan Gilfillan is one of the new faculty appointments resulting from an ITATC search conducted in FY 2002. Fo r his spring 2003 course -- "Digital Texts and Print Experiments" -- students will examine the recent transition from print to digital technology and the impacts this transition has had on publishing, l i t e r a r y content, i n t e l l e c t u a l property rights, a n d the author-reader relationship. A s part of their studies, t h e students will learn how to use the Internet to conduct research, a n d how to create electronic publications stemming from the results of their investigations. N e w ITATC faculty, s u c h as Gilfillan, w i l l also assist in developing an interdisciplinar y IT program for nontechnical majors. The introductory courses in this program are intended to provide a core competency in I T skills; h owe ve r, e a c h course will also be tailored to an individual academic discipline so it is relevant to a student's major. Subsequent c o u r s e s will offer greater depth in computing and IT within the framework of nontechnical disciplines, leading to a total of six courses that can be taken as electives or as a minor in IT. With greater technical skills, ASU graduates will be able to contribute t o their employers more quickly in their new careers. T h i s should s t r e n g t h e n Arizona's workforce and support continued economic d e v e l o p m e n t in the state.



ASU research specialist Jeffrey Thresher assists with studies of p e p t i d e s and proteins in the Department of Kinesiology. T h e e q u i p m e n t he is using measures and analyzes how muscles relax, p r ov i d i n g knowledge that may help treat heart disease in humans.



H E A D I N G INTO THE FUTURE : N E W FOCUS FOR PROPOSITION 301-FUNDED RESEARCH

When ASU's TRIF projects were first conceived, they were structured as six discrete initiatives consisting of multiple individual components. This structure served as the setting for FY 2002 activities of the Proposition 301 i n i t i a t i ve s and represents the startup phase of ASU's 301 research. Fo r FY 2003 and beyond, A S U 's 301 research has entered a consolidation phase in which the nature of ASU's TRIF investments will be substantially r e s h a p e d. Co m p o n e n t s from different initiatives will be combined into one or more major integrated projects in order to foster large-scale i n t e r d i s c i p l i n a r y collaboration, a strategy considered necessary f o r conducting the next generations of science and technology research. At the same time, s o m e investments will be redirected to other areas or to new projects altogether. W i t h this reshaping, b o u n d a r i e s between initiatives will tend to disappear, and focused, interdisciplinar y "mega-projects" will dominate the research agenda. These mega-projects will align research efforts a c r o s s a number of fields, s p a w n i n g new research centers to draw together the best and most ambitious research faculty already at ASU. Areas of need will be shored up through recruitment of strategic new h i r e s and graduate students. As before, Proposition 301 investment dollars are expected to be leveraged by attracting grants and funding from corporations, co n s o r t i a , fe d e r a l a g e n c i e s , a n d other institutions. T h e integrated nature of the megap r o j e c t s should provide additional opportunities for funding and c o l l a b o r a t i v e relationships with such entities. A S U 's mega-projects a r e also expected to increase the potential for research discoveries t h a t create significant economic impact.



F I R S T MEGA-PROJECT : A R I Z O N A BIODESIGN INSTITUTE

The first mega-project is an expansion of the biosciences initiative. This i s signaled by a name change from the Arizona Biomedical I n s t i t u t e to t h e Arizona Biodesign I n s t i t u t e (AzBio). U n d e r this reorganization, t h e s co p e of AzBio will be broadened considerably to include not only the b i o s c i e n c e s , b u t also key aspects of materials science, i n f o r m a t i o n t e c h n o l o g y, a n d possibly manufacturing. A z B i o will also be supported b y targeted Proposition 301 investments in other areas, p a r t i c u l a r l y w o r k f o r c e development and technology transfer. The primary goal of AzBio will be to conduct research that can directly advance biomedicine, thereby bringing recognition to the Phoenix metro area as a biotech hub. A zBio will focus on two main areas: 1) Biologics and Therapeutics by Design will investigate vaccine production, n e w classes of pharmaceuticals from proteins and peptides, a n d rehabilitation engineering based on interfacing m i c r o e l e c t r o n i c systems with the central nervous system. 2 ) Nano-Bio Systems by Design will concentrate on ways to manipulate living systems at the molecular level to create nanoscale bio-optical (light activated) technologies, flexible microneural probes, " lab on a chip" biosystems, and other new sensing, analytical, or treatment technologies for human health. Cross-cutting research on genomics and informatics will bridge these two areas. In addition, A zBio will house on-site technology transfer staff who will assist research teams in connecting their research discoveries to commercial enterprises.



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To accommodate AzBio, a new 170,000-square-foot research facility has b e e n approved for ASU's main campus. Co n s t r u c t i o n is scheduled to begin in early 2003, with completion anticipated for 2004. This building will consist primarily of state-of-the-art laboratory and office space for b i o s c i e n ce and bioengineering, n a n o t e c h n o l o g y, a n d informatics. I t will be designed to facilitate interactions and collaborations among r e s e a r c h e r s, a n d to have flexible space that can easily be reorganized to accommodate new research thrusts in coming years. A portion of the new AzBio facility will be made available to other bioscience research organizations. Carl Hayden Veterans Administration M e d i c a l Center, fo r example, p l a n s to lease space in the building to a c c o m m o d a t e the hiring of at least a dozen new biomedical and bioengineering researchers. These researchers are expected to receive joint appointments at ASU. As more or different space is needed -- possibly in three to five years -- a second AzBio building is envisioned. B eyond that, a total of four AzBio facilities could eventually stand on the site.



Information Science T h e Consortium for Embedded and Inter-Networking Technologies ( C E I N T ) is a research partnership with Intel and Motorola, c r e a t e d to increase knowledge and markets in the area of embedded technology. CEINT has already attracted substantial NSF funding and is working to enlist additional partners for its continued research. Co n n e c t i o n One (C-1) is a consortium comprised of ASU and six high tech companies, plus the National Science Foundation. The purpose is to conduc t research on mixed-signal processing and wireless technologies. C-1 is actively recruiting new partners to expand its research. Th e Center for Advancing Business through Information Technology (CABIT ) conducts research on the implications of information technology fo r business. C A B I T has formed a research relationship with Intel to conduct a number of projects, a n d it is currently developing new r e s e a r c h relationships with public and private sector organizations. Advanced Materials Two related centers operate in conjunction with the Advanced Materials initiative. The Center for Solid State Science (CSSS) provides support for interdisciplinar y research in solid state physics and chemistry, ear th and p l a n e t a r y sciences, a n d materials research. T h e Center for Solid State E l e c t r o n i c s Research (CSSER) provides support facilities for solid state electronics research across a wide range of disciplines including electrical, chemical, mechanical, and industrial engineering; materials science; and bioengineering. Both centers attract industry partnerships and federal grants. An NSF-funded IGERT program in biomolecular photonics makes use of CSSER facilities. Fo r 2003 and beyond, t h e two centers intend to provide staff support a n d equipment upgrades for cleanroom and other joint-use facilities. The IGERT program in biomolecular photonics will also continue, and will ser ve as a model for other new interdisciplinary graduate-level programs.



C O N T I N U I N G INVESTMENTS : I N D I V I D U A L PROJECTS

S everal current research activities outside AzBio will continue to receive 3 0 1 funding. S o m e of these may, a t some future date, b e wrapped together in another mega-project. One proposal under consideration is for a large interdisciplinary project focusing on "cognitive ubiquitous computing" (CubiC) for improved human performance applications. This p r o j e c t would incorporate research on wireless nanotechnology for advanced-generation communication devices, interactive guidance systems for the blind and blind-deaf, network ed sensors for environmental and security applications, a n d intelligent information fusion. A m o n g

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t h e continuing projects and their parent initiatives are the following:



Manufacturing T h i s initiative will continue to focus on basic research related to manufacturing supply networks, w i t h an emphasis on semiconductor manufac turing operations. Proposition 301 funding will support ongoing p ro j e c t s that involve partnership with Intel, t wo major semiconductor research consortia, and other universities both in the U.S. and abroad. In addition, the initiative intends to create new curricula and graduate programs to support the manufacturing industry's workforce, and also to form a nationwide university research consortium that includes MIT, Stanford, and University of Pennsylvania. Workforce Information Technology Across the Curriculum (ITATC) will continue its program for upgrading student IT skills campus-wide by helping to hire tech-oriented faculty in nontechnical majors. For 2003, ITATC intends to conduc t 10 new searches for tenure-track faculty in liberal arts, justice s t u d i e s, a n d other areas to be determined by a competitive process. Th e s e 10 new hires, w h e n made, w i l l fulfill ITATC's goal of helping fund a total of 16 new tech-oriented faculty by 2004. T h e activities of AzBio will also be supported by investments of Pr o p o s i t i o n 301 funds in targeted workforce development strategies. Th e s e will take place in three areas: ? A proposed School of Life Sciences at ASU will offer interdisciplinary life science curricula for undergraduate students. The goal is to prepare s t u d e n t s to engage in the type of graduate programs that are the b a s i s for research at AzBio and other advanced research facilities. ? T h e Center for Research on Education in Science, M a t h e m a t i c s , E n g i n e e r i n g, a n d Technology (CRESMET ) -- a n alliance of ASU colleges of Education, E n g i n e e r i n g and Applied Sciences, a n d L i b e r a l Arts and Sciences--is intended to improve education for



s t u d e n t s in the areas of math, s c i e n ce, e n g i n e e r i n g, a n d technology. Pr o p o s i t i o n 301 funds will help expand the program to provide o u t re a c h to K-12 schools, w i t h one of the goals of this outreach to e s t a b l i s h a link with AzBio that will bring new research knowledge d i re c t l y to the classroom ? T h e math and science honors program of the Institute for Strengthening Understanding of Math and Science (SUMS) currently w o r k s with gifted, d i s a d va n t a g e d K-12 students who might be interested in careers that require math and science. Proposition 301 f u n d i n g will expand its focus to include both undergraduate and graduate students. Technology Transfer Technology Transfer staff will provide on-site support for AzBio, and will also continue to work with interested faculty to patent and license t h e i r research discoveries. I n addition, A S U plans to introduce a comprehensive "technology venturing" program that will work directly w i t h researchers, e n t r e p r e n e u r s , i n d u s t r y associations, e c o n o m i c development professionals, a n d service providers to build an "entrepreneurial infrastructure" that will help speed commercialization of new ASU technologies. The technology venturing program is expected to guide researchers and entrepreneurs from research discovery to startup c o m p a n y or business alliance, a n d will offer business development assistance that includes business plan writing, introduc tions to advisors and investors, and the services of a technology commercialization firm to assess the potential of new ASU technologies. The chart on the following page summarizes continuing and anticipated ac tivities for all six initiatives.

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L O O K I N G BEYOND : W H E R E THE INITIATIVES ARE HEADED

BIOSCIENCES/ B I O T E C H N O LO G Y AZBio has been renamed the Arizona Biodesign Institute and has been broadened considerably to include aspects of materials science, information technology, and manufacturing. The initiative will concentrate on "Biologics and Therapeutics by Design," and "Nano-Bio Systems by Design." I N F O R M AT I O N SCIENCE The Consortium for Embedded and Inter-Networking Technologies is working to attract new funding and enlist new partners for its research. Connec tion One is expected to add new partners for further capacity in mixed signal processing and wireless technologies. The Center for Advancing Business Through Information Technology is partnering with Intel on research projects and developing new research relationships with public and private sector entities.

Source: Morrison Institute for Public Policy, 2003. Data: Arizona State University report: Prop 301/Technology & Research Initiative Fund ? FY 2002 Results, July 2002; Draf t Arizona Biodesign 301 Business Plan; Inter views conducted as of December 2002 with ASU administrators and principal investigators for TRIF initiatives.



A D VA N C E D MATERIALS Upgrades and staff support will continue for the Center for Solid State Science and the Center for Solid State Electronics Research cleanroom facilities. Th e Integrative Graduate Ed u c at i o n and Research Traineeship curriculum in biomolecular photonics will serve as a model for other interdisciplinary graduate programs.



M A N U FA C T U R I N G R e s e a rc h partnerships with Intel and two major semiconductor consortia will continue to focus on manufacturing supply networks. New curricula and graduate programs will target industry workforce needs. A university research consortium is planned with p a r t n e r s nationwide.



ACC E S S & WORKFORCE D E V E LO P M E N T Wo r k f o rc e activities will support AzBio in the following a re a s : d e ve l o p m e n t of a School of Life Sciences; f u n d i n g for the Center for R e s e a rc h on Education in S c i e n c e, M a t h e m a t i c s , Engineering and Technology and funding for the SUMS Math and Science Honors program. IT Across The Curriculum w i l l p a r t i c i p at e in hiring 10 addit i o n a l tech-oriented faculty for non-technical academic departments.



T E C H N O LO G Y TRANSFER This initiative will provide on-site tech transfer staff at the new AzBio facility, and will continue to work with faculty to patent and license their discoveries. A planned technology venturing program will build an "entrepreneurial infrastructure" to guide new ASU technologies through startup or business alliance, and will offer business d e ve l o p m e n t assistance to ASU entrepreneurs.



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T H E MEASURE OF SUCCESS

Today's especially difficult economic times have been severely c h a l l e n g i n g for Arizona businesses and governments. H o w e v e r, t h e long-term economic investment represented by Proposition 301's Technology and Research Initiative Fund offers new opportunities and hope for Arizona's economic future. T h i s report presents a broad first look at the accomplishments and potential economic impact of Arizona's 20-year TRIF investment in ASU research. The first-year activities that were documented for the Arizona Board of Regents indicate that ASU's six initiatives engaged in numerous impor tant research projects and support activities, and seem to have accomplished a great deal. One notable achievement is that ASU's six initiatives attracted over $14 m i l l i o n in external financing through grants and partnerships in FY 2002. This amount is almost double their TRIF spending for the fiscal y e a r, a n d nearly matches their total allocation. S u c h leveraging of Proposition 301 dollars implies that, as individual projects move forward and their joint ventures and partnerships mature, many have the potential to become self-supporting. Consequently, future TRIF financing could then be reinvested in other promising new endeavors in line with ABOR's goals. U l t i m a t e l y, h o w e v e r, t h e measure of economic success for the Te c h n o l o g y and Research Initiative will be the degree to which it contributes to Arizona's competitiveness in science and technology. I n the knowledge economy, s t a t e s with superior capacity to conduct and commercialize science and technology research will become the big we a l t h creators. Th e activities of a state's universities are an essential e l e m e n t for developing such capacity, a n d ASU has been engaged in t h i s type of research for many years. Th i s report establishes a new framework for tracking the long-term, value-added contributions to the state from ASU's TRIF research projects. This framework goes beyond the traditional listing of activities and money generated. Instead, it describes new criteria called "CAT" measures (Connec tions, Attention and Talent) for determining the extent to which the TRIF projects yield lasting, produc tive economic connections for ASU, draw decision makers' attention to the state, and develop the creative talent and opportunities needed to make Arizona a competitive player in the knowledge economy. In combination, the traditional measures and CAT measures are a powerful means of analyzing both the annual and longer-term economic value of the TRIF investment. At this very early stage, i t appears that ASU's six initiatives are in a position to per f o r m favorably under the new, v a l u e - a d d e d CAT framework. In fact, this report describes several ASU TRIF activities that i l l u s t r a t e important first-year accomplishments in line with the new m e a s u r e s. Ye t these illustrations are anecdotal, n o t comprehensive evidence that ASU's projects will have the desired economic impact over the long haul. Th o s e who judge the worth of 301's university investments must remember that TRIF is a marathon, n o t a sprint. To determine whether the state's 301/TRIF research investment strategy i s an economic development success, t h e initiatives will need to be regularly and systematically measured in terms of the research products they develop, the external funding they generate, and the connections, a t t e n t i o n , a n d talent they produce for the university and the state. Co l l e c t i v e l y, t h e s e measures will enable Arizona to assess whether TRIF is a worthy investment of its public funds.



I n the knowledge e c o n o m y, s t a t e s w i t h superior c a p a c i t y to conduct and commercialize s c i e n c e and technology r e s e a r c h will b e c o m e the big w e a l t h creators.



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SOURCES, NOTES, AND PHOTO CREDITS

SOURCES

Amato, I van. 1999. Nanotechnology : Shaping the World Atom by Atom. National Science and Technology Council. Ansley, M ik e. 2000. " V ir tual Manufacturing: The Internet is Bringing on a Pivotal Change in Manufacturing Economics," CMA Management, Februar y. Arizona Bioindustry Cluster. 2001. O ver view. Available online at www.azbiocluster.org/overview.html Arizona Department of Economic Security, Research Administration. 2001. A rizona Occupational Forecasts, 1998-2008. August. Arizona Department of Economic Security, Research Administration. 2001. "Slowdown Deepens for Arizona in the Third Quarter of 2001," A rizona Quarterly Review, November 29. Association of University Technology Managers. 2001. AUTM Licensing Survey; FY 2000 Survey Summary. Biotechnology Industry Organization. 2002. S ome Facts About Biotechnology. Available online at www.bio.org/er/statistics.asp Bureau of Economic Analysis. 2001. Industr y Accounts Data: Gross Domestic Product by Industry. BEA, U.S. D epar tment of Commerce. Burrill & Company. Biotech 2002, The 16th Annual Report on the Industry, Burrill & Company LLC, San Francisco, April, 2002. Brunnermeier, Smita B., and Sheila A. M ar tin. 1999. Interoperabilit y Cost Analysis of the U.S. Automotive Supply Chain. Research Triangle Institute, Research Triangle Park, Nor th Carolina. Collaborative Economics. 1999. The Changing Face of the Software Cluster in A rizona. Arizona Department of Commerce, Phoenix, Arizona. Committee on Information Technology Research in a Competitive World, National Research Council. 2000. Mak ing IT Better. National Academy Press, Washington, D.C. Committee on Workforce Needs in Information Technology, National Research Council. 2001. Building a Workforce for the Information Economy. National Academy Press, Washington, D.C. D evol, Ross. 2002. The State Technology and Science Index, M ilk en Institute. D evol, Ross. 1999. America's High Tech Economy: Growth, Development and Risks for Metropolitan Areas, M ilk en Institute. Ernst & Young. 2000. The Economic Contributions of the Biotechnology Industry t