Tech program called a bargain for Utahns
BYLINE: Nicole Stricker, The Salt Lake Tribune
Nov. 7--Utahns are getting their money's worth from the state's Centers of Excellence Program, a new review has found.
The program, which helps move new technology from the ivory tower to the marketplace, has created new companies and jobs for a minimal investment. Yet languishing funding over its 20-year life span has stunted success stories.
"This is a program with a history of producing companies and having an important impact on the state's economy," said Jan E. Crispin, who wrote the review for the University of Utah's Bureau of Economic and Business Research. "And yet the state continues to fund it on, what I think, are these low levels."
The Legislature created the Centers of Excellence Program in 1986 and awarded it $3.4 million for 1987. Funding has remained essentially flat ever since, with the program receiving $3 million for 2006.
The money helps university researchers develop their discoveries into something suitable for store shelves. This year, 16 centers and two spinoff companies won funding, according to the program Web site.
Since the program's inception, the state has spent $49.4 million to start 110 centers. Those centers spawned 170 patents, 204 licensing agreements and 185 spinoff companies, 66 of which are still operating today and employ nearly 2,000 people.
Scientists and engineers who think they may have a commercially viable discovery can submit a proposal to start a Center of Excellence on their campus. If funded, the center explores whether a market for the technology exists and is economically viable.
"There're a lot of good things that are developed in universities that are not attractive to investors," said Bill Tew, chief executive of Glycosan Biosystems, a spinoff company that develops products for cell culture research. "A lot of them wither on the vine in the absence of not millions of dollars, but hundreds of thousands of dollars."
But thanks to Utah's Centers of Excellence program, he and center director Glenn Prestwich were able to start a company relatively quickly. Without the program, Tew would have had to "go on the dog and pony show to the various angel investing groups to find someone interested in investing in this technology," he said.
But the program isn't a free piggy bank. Each center must raise at least $2 from federal or private entities for every dollar it gets from the state; most raise much more, the review found. And centers can receive state money for up to five years, which is typically enough time to spin off a new company, the review said.
Two of those spinoffs -- Myriad Genetics and Watson Labs/Theratech -- employ a combined 875 people. Another created the recently unveiled LouseBuster, a new technology for removing head lice.
Overall, the program's centers encompass aerospace; defense and homeland security; energy and natural resources; financial services; software development and information technology; and life sciences fields.
Over the past 10 years, only about four companies per year have spun out from the centers, compared with about 14 annual spinoffs during the first 10 years. Gov. Jon Huntsman Jr. has not said how much he'll allocate for the program in his budget request this year, but the program has a plan for improving its funding trend.
A strategy launched last year teams seasoned business professionals with professors heading the campus Centers of Excellence. The pairing should help researchers translate their "lump of technology" into a viable product with a sound business model, said Nicole Toomey Davis, the program's director.
"That's the place the Centers of Excellence Program sits," she said, "bridging that gap between a lump of technology and something customers and investors care about."
ON THE WEB:
--See the full review in the latest edition of the Utah Economic and Business Review at http://www.business.utah.edu/bebr.
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