Tech funding reaps record returns; $11.9M investment garners $509.74M for state

BYLINE: Jim Stafford, Business Writer

Investment of state dollars into technology-based research and development yielded historic high returns in fiscal 2006, the director of the state's technology-based economic development agency said Tuesday.

Both annual and cumulative numbers hit record high "leverage" totals last year, said Michael Carolina, executive director of the Oklahoma Center for the Advancement of Science and Technology.

In its annual impact report that will be published by the end of January, OCAST reports that the investment of $11.9 million of state tax dollars into its programs last year returned $509.74 million to Oklahoma through federal grants and private investment in the research projects funded by the agency. That's a 42.73 to 1 return on investment.

"It was a great year," Carolina said. "It shows that the state is in a good position in terms of its focus and commitment to research and development.

"OCAST, along with the promise of the Gov.'s EDGE fund, (has) positioned the state to compete in a global economy; in a knowledge intensive economy."

Over the history of OCAST, it has invested $138.6 million into technology-based research and commercialization efforts and realized a return of $2.413 billion. That's 17.41 to 1 return on investment, up 16 percent from a year ago, Carolina said.

For the year, OCAST awarded $3.45 million in its Oklahoma Health Research program and documented a return of $16.3 million. For its Oklahoma Applied Research program, the return was even greater with $143 million returned in federal grants and investment for the $4.2 million that OCAST invested.

OCAST has invested $47.9 million into the health research program over its history and returned $226.8 million. The applied research program has returned $842 million for the $56 million invested into the program.

OCAST documents the returns its awards attract using a method outlined by the Stanford Research Institute, Carolina said. The record return on investment validates the budget increase of $10 million allocated for the agency in the last Legislature, Carolina said. That increased the agency's annual budget to a record $22.4 million.

But more is needed, Carolina said. Worthy research projects submitted to OCAST's awards process -- about half of the applied research projects and a third of the health research projects -- are going unfunded, he said.

"We're actually leaving money on the table," Carolina said. "I'm thinking we ought to be a $50 million agency over the next two or three years."

OCAST is asking the Legislature to increase its budget by $10.4 million again this year.

Not only does the agency want to fund more research projects, it has added programs that include a $5 million seed fund, a plant science research program and a nanotechnology program, Carolina said.

The agency's effect can be seen across the state, said Tom Kupiec, chief executive officer of Oklahoma City-based DNA Solutions and Analytical Research Laboratories.

Kupiec's growing companies have benefited from the OCAST awards process, as have myriad others involved in technologies that extend far beyond life sciences, he said.

Kupiec called the agency one of the "greatest returns on investment that the state can make" to move research toward commercialization.

"I'm a strong supporter of OCAST because I can see that result as a company owner," he said. "They are a good model for helping a company reach its commercialization potential whether they are producing a product or a service in the knowledge-based arena."

Other programs through which OCAST dollars flow include the Oklahoma Manufacturing Alliance, which it funded with $1.28 million and realized a whopping return of $291.2 million. The nonprofit alliance provides technical advice and business services to small and medium state-based manufacturers.

The Manufacturing Alliance has returned $722.2 million to the state over its history from an OCAST investment of $9.64 million.

OCAST also funded the Technology Commercialization Center, which is managed by the nonprofit corporation i2E. The agency invested $1.76 million in the commercialization center last year and realized a return of $15.8 million. Over the life of the program, the technology commercialization center has returned $299.8 million on an investment of $14.29 million.

Also funded through OCAST is the Technology Business Finance program, which returned $39.3 million last year on an investment of $961,476. Over its life, the program has returned $160.6 million on a total investment of $6.09 million.

"Our plan is to show here's the value that OCAST has been able to achieve over a 20-year period," Carolina said. "It's wise strategic investment in science and technology, it's the use of outside peer review to determine scientific merit, it's the use of our pipeline to move ideas from the laboratory to commercialization. It's focusing on the right technologies."