Since the creation of its Centers of Excellence (COE) program 20 years ago, the state of Utah has invested in aggregate $49.4 million, resulting in the development of 185 spin-off companies throughout the years, according to a recent review of the COE program, authored by the Bureau of Economic and Business Research at the University of Utah.
The COE program, established by the state legislature in 1986 with an initial budget of $3.4 million. provides funds to university-based research centers that are chosen on the basis of technical merit, the potential for job creation, and a secured level of matching funds from private and federal sources. Each center annually receives $100,000 to $200,000. Currently, there are 66 spin-off companies created from these centers which are still active, employing between 1,500 and 1,800 people.
The document tracks the COE program over time, noting that the rate of new firm creation has decreased in recent years. During the first decade of the program, an average of 14 companies was created each year, compared to four companies per year during the second decade. The authors contend that this decrease in spin-off activity is most correlated to falling levels of state funding for the program. In both real and inflation-adjusted dollars, the amount of funding each year from the Utah legislature has been less than the initial $3.4 million budget provided 20 years ago.
They also report total matching funds for the program from private and federal sources to be $407.2 million, producing an 8.7-to-1 ratio of outside funding to state funding. The technologies developed from the program have produced 170 patents and 204 licensing agreements.
The review of the Centers of Excellence Program, which includes the review's methodology and choice of metrics, can be found in the July/August 2006 issue of the Utah Economic and Business Review:
http://www-new.business.utah.edu/humis/docs/organization_936_1161186461.pdf
