Despite progress, Arizona falling behind other states in technology, report says

Posted By Mike Padgett

Feb. 25, 2009

PHOENIX, Ariz. – Arizona is advancing in the technology arena, but it is unable to keep pace with greater achievements in other states, according to a new report from a leading international research organization.

The analysis, released today by Battelle, shows that Arizona employment in technology-based industries is declining faster than the national average. The report card points out that patent growth in Arizona is falling below national growth rates. It also shows Arizona ranking lowest among all benchmark states with post-secondary degrees in science, technology, mathematics and engineering.

The report reviewed Arizona’s progress over the past two years. It was released at a press conference at the Arizona Mining Museum, 1502 W. Washington St. The findings were offered by William Harris, president and CEO of Science Foundation Arizona (SFAz); Donald Budinger, SFAz board chairman; and Mitch Horowitz, vice president and managing director of Battelle’s Technology Partnership Practice.

On the plus side, the report shows that Science Foundation Arizona funding is outperforming the average output of Arizona research-performing enterprises in technology development. The research indicates that one patent is generated for every $2.6 million of SFAz funds, compared with average university-wide performance in Arizona of one patent for every $27 million in research funding.

“SFAz’s support for university-industry partnerships is making a difference in advancing technology development with its unique focus on advancing research activities ripe for industry new product development and forming of new technology firms,” Horowitz said in prepared comments released before the press conference. “Arizona faces particular challenges in talent generation and raising the overall level of its technology competitiveness, which require sustained investments to make a difference.  Neglecting these key issues puts Arizona’s economy at a disadvantage and threatens the state’s economic recovery.”

The Battelle report finds that Arizona is a substantial technology state with a technology-industry base of 162,000 jobs and a university research base of $783 million, according to 2007 numbers. However, the state’s recent performance, weighed against the national average and eight benchmark states, indicates a competitive decline for Arizona in many areas. For example:

• Employment in the technology-based industries declined 2.1 percent from 2006 to 2007, compared to 1 percent nationally.

• Patent growth in Arizona grew. 0.6 percent for 2008, compared with 9.7 percent nationally.

• University research in Arizona grew 2.1 percent in 2007, compared with 3.5 percent nationally.

• Arizona ranks lowest among all benchmark states with post-secondary degrees in science, technology, mathematics and engineering fields. Only 11.2 percent of degrees awarded in Arizona colleges and universities were in these fields, compared with 15.1 percent nationally.

“Battelle’s research findings make clear the necessity for bold and innovative investments for the viability of Arizona’s economic future,” Harris said. “Bringing together university and industry partnerships today will create high-paying jobs, attract investors and diversify Arizona’s economy for the future.” 

The report points out that for each $1 invested by SFAz, its efforts attracted an additional $1.18 in combined awards from industry participants, venture capital, federal grant awards and nonprofit funding.

This is in addition to the dollar-for-dollar match from private and philanthropic sources for the public funds from the state’s 21st Century Fund, which is a commitment of $135 million over five years. 

The new report from Battelle was commissioned by SFAz and paid for with private funds.

SFAz is a 501(c)(3) nonprofit organization initiated in 2006 by the Greater Phoenix Leadership Inc., Southern Arizona Leadership Council and the Flagstaff Forty. Its goal is to build and strengthen scientific, engineering and medical research programs and infrastructure to help increase Arizona’s competitiveness in the global economy. SFAz is investing in partnerships between nonprofit research institutions and industry; other science, engineering and mathematics programs; and in the education system.

In June 2006, the state appropriated the first $35 million through the Arizona 21st Century Competitive Initiative Fund, which was contracted in November 2006 to SFAz from the Arizona Department of Commerce. The 59 grants made through year-one, leveraged $43.8 million, of which $15 million was from federal grants. Founding executive leadership groups are funding operating costs for SFAz through 2012, enabling public and philanthropic funds to be directly applied to foundation initiatives.

Battelle, with headquarters in Columbus, Ohio, is the world’s largest non-profit independent research and development organization. Battelle provides innovative solutions to critical international issues through its four global businesses: Laboratory Management, National Security, Energy Technology, and Health and Life Sciences. Battelle advances scientific discovery and application by conducting $4.6 billion in global research and development annually through contract research, laboratory management and technology commercialization.

Battelle has 20,400 employees in more than 130 locations worldwide. Battelle also is one of the nation’s leading charitable trusts focusing on societal and economic impact and actively supporting and promoting science and mathematics education.

The Technology Partnership Practice focuses Battelle’s broad experience to develop strategic solutions for economic development organizations, universities, industry associations, and non-profit organizations across the United States.

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Feb 25th, 2009

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