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The Economic Value of Academic Research and Development in Wisconsin

September 2004© Wisconsin Technology Council

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Executive Summary

Academic R&D The Value of Academic Research in Wisconsin What Is a Research University or Institution? The Bayh-Dole Act and Expansion of Economic R&D Measuring the Economic Impact of Academic R&D How Does Wisconsinʼs Academic R&D Compare to Other States? What Are Other States Doing to Support Technology and Academic R&D? Public Support for the UW System Compared to Other States Conclusions and Recommendations

State-by-State Overview

Stem Cell Research: A Case Study What are Stem Cells and Why Are They Important? Pros and Cons of Human Embryonic Stem Cell Research What is the Extent of Stem Cell Research in Wisconsin? Whatʼs Happening in Other States and Nations? Summary

TABLE OF CONTENTS

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358

1018222526

29

414244464850

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EXECUTIVE SUMMARY

Without a vibrant foundation in academic research and development, Wisconsin will find it difficult, if not impossible, to grow a high-tech, “knowledge-based” economy in the 21st century. Thanks to decades of investment in people and facilities, Wisconsin has a strong base for academic R&D today. However, there are forces at work that could quickly erode Wisconsinʼs academic research advantage – and threaten the stateʼs ability to pro-duce high-wage, private-sector jobs.

Prominent among those corrosive forces is the 25-year trend toward weaker public support for higher education in Wisconsin. The stateʼs higher education “effort,” as measured by per capita public spending, has declined faster than the U.S. average and more sharply than all but one of the eight Big Ten Conference states.

Wisconsin has reduced its higher education effort by 47.8 percent since 1978. That is 40th among the 50 states – with 50th representing the weak-est effort. That state is Colorado, which passed a Taxpayer Bill of Rights amendment to its state constitution.

The decline in public support is chipping away at the infrastructure that supports academic research in Wisconsin. For example, the UW-Madison is now experiencing actual reductions in the number of faculty, academic staff, course sections, group instruction sections, lecture sections and labora-tory sessions. This is happening at a time when the

UW-Madison is growing in terms of the number of students, and when demand for access to the university remains high.

It is also happening at a time when Wisconsin is striving to produce globally competitive goods and services, and to attract and retain knowledge-based workers.

If the slide in higher education funding effort con-tinues, the academic R&D infrastructure in Wis-consin could deteriorate – and that would mean less ability to compete for merit-based federal research grants. Such grants typically go to states with state-of-the-art laboratories, well-compen-sated researchers and a healthy environment for scientific research.

In this study, the Wisconsin Technology Council has examined the extent of academic R&D in Wisconsin, how much is being spent on such re-search, the sources of the funds, and the effect of academic R&D spending on the general economy. Some highlights:

n Academic and other research institutions in Wisconsin spent about $883 million on direct research activities in the latest fiscal year for which complete records are available. That spending translated to 31,788 jobs, using generally accept-ed multiplier estimates of the U.S. Department of Commerce, Bureau of Economic Analysis (36 jobs for every $1 million in R&D spending).

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n If the jobs created by academic research spend-ing in Wisconsin were reported as a separate category within the labor market statistics of the state Department of Workforce Development, it would represent a significant sector in its own right. For example, paper manufacturing employs 39,100 people in Wisconsin, printing 34,700, plastics and rubber products 34,600, and construction of build-ings 31,600.

n Wisconsin ranks 15th among the 50 states with total academic R&D spending of $805.8 million from federal, state and private sources, according to the State Science and Technology Institute (SSTI). Those figures include $696.1 mil-lion in R&D spending by all UW System campuses in the 2002 fiscal year. Most of the UW-related R&D spending ($662.1 million) took place on the UW-Madison campus. The stateʼs per capita spending on academic R&D was $148.14, or well above the U.S. average of $126.17.

n The $805.8 million total also includes $109 million in research spending by private institutions, such as the Medical College of Wisconsin, the Milwaukee School of Engineering and Marquette University.

n The SSTI figures do not include research spend-ing by the private Marshfield Clinic Research Foun-dation (about $75 million) or the research budgets of the two Veterans Administration hospitals in Wisconsin ($2.5 million). Those budgets deserve including in the state total of $883 million, however, because research at those institutions is conducted in close association with other institutions and/or private industry.

n Wisconsin fell just outside the top 20 states (22nd overall) with total R&D expenditures of $2.7 billion. This was primarily because Wisconsin lags the nation in state-based and industrial R&D (40th per capita). If not for Wisconsinʼs relatively high ranking in academic R&D, the state would slip out of the top half of all U.S. states in overall research and development spending. It is important to note that the nationʼs fastest-growing states also rank among the highest in overall R&D spending.

The study recommends that the governor and Leg-islature continue to invest in capital improvement programs such as BioStar and HealthStar, which leverage the assets of the UW-Madison and help to create spinout companies and jobs. The study also calls for reversing the long slide in public support for the UW System, beginning in the 2005-2007 state budget bill.

The study also urges that the UW-Madison, the Medical College of Wisconsin and the Marshfield Clinic re-examine an already strong collaborative research relationship to look for more opportuni-ties to jointly attract research funding and conduct science. Incentives to conduct inter-institution and interdisciplinary research should be established. This is similar to an approach being followed in Minnesota, where the University of Minnesota and the Mayo Clinic are working more closely together.

The study also urges the governor and the Leg-islature to establish a commission, similar to the Michigan Commission on Higher Education and Economic Growth, to explore other options and to more deliberately track “best practices” in other states.

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Academic research institutions in Wisconsin spent $883 million on direct research activities in the fiscal year ending June 30, 2002, according to the latest reported figures. That spending translated to 31,788 jobs, using generally accepted estimates of the U.S. Department of Commerce, Bureau of Economic Analysis (36 jobs for every $1 million in R&D spending).

If the jobs created by academic research spending in Wisconsin were reported as a separate cat-egory within the labor market statistics of the state Department of Workforce Development, it would represent a significant sector in its own right. By way of comparison, paper manufacturing employs 39,100 people in Wisconsin, printing 34,700, plas-tics and rubber products 34,600, construction of buildings 31,600; the federal government 29,400; real estate and rentals 28,700, and wood product manufacturing 25,800.

Within a total non-farm workforce of 2,798,300 (average monthly 2004), Wisconsinʼs academic research sector represents a little more than 1

percent of the stateʼs total workforce. Put another way, academic research accounted for more jobs than existed in total in Columbia County (28,128), the city of La Crosse (28,718) or the city of She-boygan (27,913) in July 2004. Moreover, jobs cre-ated through academic research pay substantially more, on average, than the Wisconsin per capita wage of $30,898 per year.

In an age when innovation is king and “knowledge-based” solutions are being pursued for Wiscon-sinʼs economic growth, it is essential that support for research and development conducted through various Wisconsin research institutions remain high.

Universities and other research institutions with an academic bent are the engines of discovery and innovation in science and engineering, thus fueling advances in agriculture, manufacturing, services and other sectors of the economy. The return on investment in academic research is high; the return on disinvestment could undermine Wisconsinʼs competitiveness.

ACADEMIC R&D THE VALUE OF ACADEMIC RESEARCH IN WISCONSIN

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Academic R&D jobs compared to other employment sectors*in 1000ʼs of people

Paper Manufacturing

Printing Plastic andRubber Products

Constructionof Buildings

FederalGovernment

Real Estateand Rentals

Wood ProductManufacturing

R&D Jobs

40

35

30

25

20

15

10

5

0

39,100

34,700 34,600

31,60029,400 28,700

25,800

31,788

*Estimates based on U.S. Commerce Department multiplier of 36 jobs created for every $1 million in academic R&D spending.

Academic research accounted for more jobs than existed in total in Columbia County (28,128), the city of La Crosse (28,718) or the city of Sheboygan (27,913) in July 2004.

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In essence, a research institution emphasizes as its primary mission the conduct of research, the training of graduate students in how to conduct research, and, over the past 25 years, the trans-fer of knowledge acquired through research to the marketplace.

The idea of a research university was born in Germany in places such as the University of Gottingen (founded in 1737) and the University of Berlin (established in 1810). In the United States, universities began to fulfill that vital research and development function in the late 1800s. The idea spread from Johns Hopkins University (which be-gan in 1876) and Clark University (in 1890), and then to Stanford University (in 1891) and the Uni-versity of Chicago (in 1892). Research has been conducted on the University of Wisconsin-Madi-son campus since the late 1800s. The University of Wisconsin was one of 14 founding members of

the Association of American Universities in 1900. Today, only 60 research universities qualify for membership in that organization.

The United States has long enjoyed the tradition of great public universities offering professional and classical education. But the concept of also offering agricultural and technical education is somewhat newer. In 1863, President Lincoln signed the Morrill Act creating a land grant sys-tem of universities to provide practical education in agriculture and engineering. The Hatch Act of 1887 established a network of federally funded agricultural experiment stations. Passage of the Smith-Lever Act in 1914 created the Cooperative Extension Service to work in partnership with uni-versities. The “Extension,” as it became known in Wisconsin and elsewhere, transferred knowledge from the laboratories of the university to the farm fields of America.

WHAT IS A RESEARCH UNIVERSITYOR INSTITUTION?

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“... innovation is king and “knowledge-based” solutions are being pursued for Wisconsinʼs economic growth ...” - Wisconsin Technology Council

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Today, about 250 U.S. universities consider them-selves research universities, although the leading 100 research institutions account for about 70 percent of the research space and 80 percent of total research expenditures. The top 20 research universities – a category that includes the UW-Madison – accounts for about one-third of total academic research expenditures in the United States.

About 660 U.S. academic institutions perform basic and applied research and development, and that number is increasing. There are good rea-sons for the phenomenon.

In our knowledge-based society, universities have a growing role to play in creating, nurturing and deploying intellectual capital. The term “university technology transfer” applies to the commercializa-tion of university discoveries and innovations. In the past quarter-century, such transfer has taken on increasing importance to the U.S. and Wisconsin economies.

Three factors have contributed to the recent rise of university tech transfer activity:n The enactment of the federal Bayh-Dole Act in 1980 gave universities the right to claim title

to inventions made during federally sponsored research. Before 1980, fewer than 250 patents were issued each year to universities. In 2002, that number had swelled to 3,673 patents issued to 219 reporting institutions, according to the Asso-ciation of University Technology Managers. In the same year, those universities filed 7,741 patents and reported 15,573 invention disclosures.

n The rise of biotechnology R&D and, more gen-erally, of research in the life sciences, since the early 1980s also boosted the number of research universities with offices of technology licensing. Today, at least 70 percent of all license income earned by universities comes from the life sci-ences, with the remainder mainly from the physi-cal sciences, including engineering. In Wisconsin, research involving human embryonic stem cells provides an interesting case study. (Please see page 41 in this report.)

n State governments have joined the federal gov-ernment and private industry in supporting R&D, increasingly providing financial support that can be used for capital investments, hiring “star” faculty, or engaging in partnerships with private institutions that might otherwise not be possible.

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THE BAYH-DOLE ACT AND THE EXPANSION OF ACADEMIC R&D

Federal government agencies provided more than $21.8 billion in FY 2001 to university and other academic researchers to conduct scientific research, according to figures from the State Sci-ence and Technology Institute. The Association of University Technology Managers put that figure at more than $22.2 billion in FY 2002. That continu-ing investment expands human knowledge and helps educate the next generation of science and technology leaders, a process that is essential to the long-term economic and physical security of the United States. New discoveries from university research also form the basis for many new prod-ucts and processes that benefit the nation and its citizens. In fact, studies surveyed by the Associa-tion of American Universities (AAU) showed that technological innovation and the scientific research on which it is based are responsible for more than half of the nationʼs productivity growth in the past 50 years.

However, as the AAU was quick to add in its June 2003 report, “new products and processes do not spring fully formed from the basic research per-formed at universities.” Patents, licenses, devel-opment, capital, marketing and manufacturing capacity are all required. Collectively, thatʼs called technology transfer.

Under federal law, as provided by the Bayh-Dole Act of 1980, non-profit organizations – including universities – may patent and retain title to inven-tions created from research funding by the govern-ment. In general, the university must disclose each new invention to the federal funding agency within two months of the inventor disclosing it to the uni-versity, decide whether or not to retain title to the invention, and then file a patent application within one year of electing to seek title.

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THE BAYH-DOLE ACT AND THE EXPANSION OF ACADEMIC R&D

Universities must license the rights to innovations to industry for commercial development; small businesses receive preference. The federal gov-ernment also receives a non-exclusive, irrevo-cable license to the invention. Universities must share with the inventor any income eventually de-rived from the patent. Any remaining income, after technology management expenses, must support scientific research or education. A principal value of having universities retain control of patent rights is that it ensures that research findings remain available for further use in the classroom and laboratory.

Why does the government allow universities or their patent and license agencies to keep control of government-funded inventions? Doing so gives people and companies incentives to commercial-ize technology, which sparks innovation and yields other benefits for society.

In the 1960s and 70s, the pace of innovation was slow. Very little federally funded research was leading to commercial applications, mainly because there were no incentives for universities or researchers to find partners to do so. Mainly, there were penalties. Tight restrictions on licens-ing, varying patenting policies among federal agencies, and the lack of exclusive manufacturing rights for government-owned patents made most companies shy away. By 1980, only 5 percent of government-owned patents resulted in new or improved products.

Bayh-Dole was passed to break the logjam. With the help of policies and procedures pioneered by the Wisconsin Alumni Research Foundation (WARF), the act created a uniform government patent policy and allowed universities and other non-profit organizations (such as WARF) to maintain title to federally-funded inventions and to work with companies on bringing them to market. A cycle of research, tech transfer and profit – which enabled additional investment in research – was created.

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MEASURING THE ECONOMIC IMPACT OF ACADEMIC R&D

Spurred on by Bayh-Dole and other trends, aca-demic R&D has altered the landscape of the U.S. economy. But how can we measure the economic effects of academic R&D?

Since it was launched a decade ago, the annual Licensing Survey of the Association of University Technology Managers (AUTM) has become a val-ued source for data on the transfer of academic re-search for commercial application. The 2003 AUTM Licensing Survey included 222 U.S. and Canadian respondents, the largest number ever, and showed the following U.S.-only results for FY 2002:

n Total sponsored research expenditures were $34.967 billion.n Sponsored academic research expenditures from federal sources totaled $22.213 billion.n Sponsored academic research expenditures from industry sources totaled $2.715 billion.n Sponsored academic research expenditures from all other sources, including foundations and state governments, totaled $10.039 billion.

The following reported figures included U.S. and Canadian universities and research institutions:

n 15,573 invention disclosures were reported, up 14.8 percent over FY 2001.n 7,741 patent applications were filed, up 13.6 percent of FY 2001.n 3,673 patents were issued, down 1.3 percent from FY 2001. In calendar year 2003, the University of Wisconsin ranked sixth among all U.S

universities in receiving patents (84 for the year) from the U.S. Patent and Trademarks Office.n 569 new commercial products were launched.n 450 new companies were established, for a total of 4,320 since 1980 and 1,398 in the last three years. Nearly 2,750 of those start-ups since 1980 are still operating, and many of those that have ceased to exist were acquired by other companies.n Running royalties on product sales were $1.005 billion, an 18.9 percent increase over FY 2001.

“The conclusions of the 2002 AUTM Licensing Survey show that the academic technology transfer field is an integral part of the innovation economy,” noted Ashley Stevens, survey editor and chairman of the AUTM Survey, Statistics and Metrics Com-mittee.

“This persistent growth in a sluggish economy shows the vital role of academic technology trans-fer in fostering the development of new products that improve our quality of life, providing new streams of income to further academic research and education, and creating new jobs,” added AUTM President Patricia Harsche Weeks.

An unanswered question from the 2002 AUTM Licensing Survey is how many jobs are created by academic research. In 1998, AUTM estimated $33.5 billion in economic activity and 280,000 directly supported jobs. In 1999, AUTM pegged economic activity at $40 billion and directly sup-ported jobs at 270,000. The creation of indirect jobs was not calculated by AUTM.

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MEASURING THE ECONOMIC IMPACT OF ACADEMIC R&D

In 2000, a study by the Association of American Universities (AAU) concluded that academic R&D expenditures by doctorate-granting institu-tions created about 1.08 million jobs in the United States, directly and indirectly. Using a rule of thumb for Wisconsinʼs share (2 percent) of the total national employment, that would indicate a minimum of 21,600 jobs in Wisconsin. But the rule of thumb doesnʼt work in this example because of Wisconsinʼs above-average performance in academic R&D spending.

Here is an excerpt from the AAU report: “The AAU is often asked about the number of jobs supported by academic R&D funding in the United States. There is no definitive answer to this question because it has never been addressed in any pub-lished studies. Furthermore, academic R&D is not, and has never been, intended or presented as a jobs-creating mechanism. In the last analysis, academic R&D makes a much more vital contri-bution to the nationʼs well-being-economic and otherwise-by advancing the frontiers of knowl-edge, by finding new cures and treatments for diseases, by helping to develop new technologies, and by training future generations of researchers and teachers.”

However, AAU continued, it is possible to “achieve a rough, conservative approximation of the im-mediate employment impacts of academic R&D” by using multipliers developed by the U.S. Com-merce Departmentʼs Bureau of Economic Analysis. This multiplier is (36 jobs for every $1 million in academic R&D spending) is frequently used in the development of studies of the economic impacts of individual universities and colleges.

The AAUʼs estimate of 1.08 million jobs created in 2000 came from the following breakdown, which examined various sources of funding for academic R&D:n National Institutes of Health extramural grants (total $10.785 billion) 384,123 jobs n National Science Foundation academic R&D grants (total $2.824 billion) 102,601 jobs n Department of Defense academic research grants (total $2.007 billion) 72,047 jobs n NASA academic R&D grants (total $1.016 bil-lion) 37,904 jobs n Department of Energy academic R&D grants (total $696.2 million) 25,230 jobs n All federal R&D grants to universities and col-leges (total $19.879 billion) 717,243 jobs n All other R&D expenditures by doctorate-grant-ing institutions (these institutions account for virtually all academic R&D; total $29.597 billion includes R&D supported by nonfederal sources) 458,095 jobs

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8481

139 127

96

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Top Ten U.S. Universities Receiving Patents (2003)

*University of California

System

CaliforniaInstitute

of Technology

University of Texas

University of Wisconsin

University of Michigan

500

250

100

90

80

70

60

50

0

439

������������������������������������������������������������������������������������������������������

59 59

6361

MassachusettsInstitute of Technology

Stanford University

Johns Hopkins University

Columbia University

Cornell University

University of Florida

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������������������������������������������������������������������������������������������in 1000ʼs of jobs

Other FederalR&D Grants

to Universities

National Institutes of Health

Extramural Grants

National ScienceFoundation Academic

R&D Grants

Dept of DefenseAcademic Research

Grants

NASA AcademicR&D Grants

Dept of EnergyAcademic R&D

Grants

500

400

300

200

100

50

0

458,095

384,123

102,601

72,047

37,90425,230

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“The more skilled the workforce the better that workforce is able to absorb, implement and adapt ideas that come from the R&D sector.” - Researcher Steve Dowrick

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These jobs figures include both full- and part-time jobs. They also include jobs supported directly on campuses and jobs supported indirectly outside campuses as institutional expenditures ripple through local and state economies. To put these jobs figures in some perspective, the Commerce Department at the time reported the following numbers of persons were directly employed in the following manufacturing sectors: tires, 73,300; logging, 78,220; communications equipment, 284,500; newspaper printing and publishing, 444,310; aircraft and related parts, 466,640; basic textiles, 516,380; motor vehicles and equipment, 1,012,990.

Other available metrics worth considering:n An economic impact study by Cleveland State University in 1992 used an employment multiplier of 40 external jobs created for every $1 million spent in the local economy.n The University of Montana estimated in 1992 that 45 jobs are created for every $1 million spent in the local economy.n A 2000 study by the Gatton College of Business

and Economics concluded that $105.2 million in external funding for R&D at the University of Ken-tucky produced 4,509 jobs, contributed $274.6 mil-lion to the Kentucky economy, and raised personal income by $84.5 million. That is a ratio of 42.8 jobs per $1 million in R&D.n A 2004 study by the Huron Consulting Group and the Washington Advisory Group calculated that research funding at the University of North Carolina and North Carolina State University sup-ported 22,000 jobs statewide. For every dollar the faculty at those two schools attract in research funding, $1.70 in spending occurs in North Caro-lina.n Economists have consistently agreed that the rate of return on R&D spending is high. In a 2003 report for the National Bureau of Economic Research in Cambridge, Mass., researcher Steve Dowrick surveyed existing studies and determined that U.S. and multinational rates of return (private and social) ranged from 10 to 63 percent, with 25 to 30 percent being the norm for private rates of return.

A word about methodology

The economic multiplier of 36 jobs per $1 million spent on academic R&D was developed by the Association of American Universities using methods established 30 years ago by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA). In the 1970s, BEA developed the Regional Input-Output Modeling Sys-tem, which was most recently updated in 1997. To learn more, go to www.bea.gov/regional/rims/brfdesc.cfm.

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Dowrick noted that academic R&D is a part of the “new growth theory” that came into prominence in the late 1980s and early 1990s: “The neo-classical growth model, formalized three decades earlier, had focused on the accumulation of machinery and equipment and emphasized the feature of dimin-ishing returns – which implied that such investment would not be able to drive long-run growth. The new generation of studies switched attention to the accumulation of human capital and the possibility that returns to investment in education, training and research may not suffer from diminishing re-turns… The most extensively documented feature of embodied human capital is the relationship between education and wages. Studies of earnings in advanced capitalist economies typically find that each extra year of schooling raises earnings by 5 to 10 percent.”

The more skilled the workforce, Dowrick continued, the better that workforce is able to absorb, imple-ment and adapt ideas that come from the R&D sector.

“The driving force of economic growth is invest-ment in human capital – skills and ideas – rather than investment in machines and buildings,” he wrote.

More often that not, the engines behind those driving forces are located on the campuses of academic R&D centers. In 2003, when Duke University examined its economic impact on the Durham, N.C., region, the conclusion was that

Duke generated $2.6 billion in activity during the 2002-2003 fiscal year. Using the AAU formula, Dukeʼs sponsored research of $365 million generated 13,140 jobs.

“Like other major research universities, Duke is an economic engine whose activities and health have a dramatic effect on the local economy,” wrote President Nannerl Keohane. “Nationally, it is clear that research universities such as Duke are increasingly important to the evolving economy. In-creasingly, industries and firms that are successful competitors here and abroad for business and jobs are knowledge-based, high-tech, and engaged in cutting-edge research.”

In a paper prepared for the 2002 Wisconsin Eco-nomic Summit, William R. Rayburn, dean of the graduate school at UW-Milwaukee, summarized the value of academic R&D in this way: “University and industry relationships benefit both parties. Universities receive support for research, improve-ments in facilities, and learning opportunities for students. Companies receive useful research results that advance their research and develop-ment objectives. The commercialization of univer-sity technologies derived from federal and industry sponsorship of research serves the public interest. To be most effective, Wisconsinʼs academic institu-tions need policies, practices and infrastructure that promote an entrepreneurial environment…”

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“The driving force of economic growth is investment in human capital – skills and ideas – rather than investment in machines and buildings.” - Researcher Steve Dowrick

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If not for Wisconsinʼs relatively high ranking in academic R&D, the state would slip out of the top half of all U.S. states in overall research and de-velopment spending. It is vital that academic R&D in Wisconsin continue to be supported, or the state risks becoming an “also-ran” in the 21st century, knowledge-based economy.

Research and development expenditures by industry, government sources, foundations and academic institutions vary widely by state. The 10 highest ranking states accounted for 66 percent of total U.S. R&D expenditures in 2000. Those states were: California, Michigan, New York, New Jersey, Massachusetts, Illinois, Texas, Washington, Penn-sylvania and Maryland. The top 20 states account-ed for 87 percent of the U.S. total of $247 billion; California alone accounted for more than one-fifth of the total at $55 billion. The bottom 20 states ac-counted for just 4 percent of all R&D spending.

Wisconsin fell just outside the top 20 states (22nd overall) with total R&D expenditures of $2.7 billion. This was primarily because Wisconsin lags the nation in state-based and industrial R&D (40th per capita). If not for Wisconsinʼs relatively high ranking in academic R&D, the state would slip out of the top half of all U.S. states in overall research and development spending. It is important to note that the nationʼs fastest-growing states also rank among the highest in overall R&D spending. Wisconsin ranks 15th among the 50 states with total academic R&D spending of $805.8 million

from federal, state and private sources, accord-ing to the State Science and Technology Institute (SSTI). Those figures include $696.1 million in R&D spending by all UW System campuses in the 2002 fiscal year. Most of the UW-related R&D spending ($662.1 million) took place on the UW-Madison campus. The stateʼs per capita spending on academic R&D was $148.14, or well above the U.S average of $126.17.

Those figures include $696.1 in R&D spending by UW System campuses, with the bulk of that spending ($662.1 million) taking place at UW-Madison. UW-Milwaukee spent $24.9 million on research.

The $805.8 million total also includes $109 million in research spending by private institutions, such as Marquette University, the Medical College of Wisconsin and the Milwaukee School of Engineer-ing. The private school figures are stripped of dollars spent in research collaborations with other institutions.

The SSTI figures do not include research spend-ing by the private Marshfield Clinic Research Foundation (about $75 million) or the research budgets of the two Veterans Administration hos-pitals in Wisconsin ($2.5 million). Those budgets deserve including in the state total, however, be-cause research at those institutions is conducted in close association with other institutions and/or private industry.

HOW DOES WISCONSINʼS ACADEMIC R&D COMPARE TO OTHER STATES?

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HOW DOES WISCONSINʼS ACADEMIC R&D COMPARE TO OTHER STATES?

The SSTI breakdown of the funding sources for Wisconsinʼs academic R&D revealed the state ranked 19th in federal funding, 20th in state and local funding, and 40th in industrial support.Wisconsin cannot compete with a California in size or economic might – or even a Pennsylvania, some might argue. Is there a way to measure Wisconsinʼs total R&D effort that might reflect the intensity of the stateʼs effort?

Yes. One way of controlling for the size of each stateʼs economy is to measure each stateʼs R&D level as a percentage of its gross state product. That percentage is referred to as R&D intensity or concentration.

Overall, the nationʼs ratio of total R&D to gross do-mestic product was 2.69 percent in 2000. The top 10 rankings for state R&D intensity in 2000 were, in descending order, Michigan (5.81 percent), New Mexico, Washington, Maryland, Massachusetts, Delaware, Rhode Island, California, Idaho, and the District of Columbia (3.87 percent). Each of the 10 states with the highest R&D intensity levels in 2000 was also among the top 10 states in R&D intensity in 1998 and 1999.

Wisconsinʼs intensity level was 1.55 percent – good for only 29th on the 50-state list, according to the Alliance for Science and Technology Re-search in America. It was also well below the U.S. average of 2.69 percent.

Wisconsinʼs relatively weak R&D effort is important because of the correlation between the intensity of a stateʼs effort and its economic growth. Ac-cording to the U.S. Bureau of Economic Analysis, real gross state product for the nation grew at an annual rate of 4.5 percent from 1999 to 2000. Six of the 10 states with the fastest growth in real GSP from 1999 to 2000 also rank among the top 10 in either total R&D performance (California, New York, Massachusetts, and New Jersey) or R&D intensity (Massachusetts, Rhode Island, California, and Idaho) for 2000.

If not for academic R&D in Wisconsin and the ability of academic institutions to attract federal research dollars for that purpose, the state would find itself in the bottom half of the states in an important “New Economy” indicator. And yet, state support for academic R&D has been threatened by budget cuts affecting the University of Wiscon-sin System. These budget cuts have taken place at a time when most states are investing more in academic R&D and their overall infrastructure for technology development.

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Sources of Academic R&D Spending in Wisconsinin millions of dollars

UW-Madison RemainingUW System

Private Collegesand Institutions

Marshfield Clinic VeteransAdministration

Hospitals

$700

$650

$600

$550

$500

$450

$400

$350

$300

$250

$200

$150

$100

$50

$0

662,100,000

34,000,000

109,000,000

75,000,000

2,500,000

Total: $882.6 million. Note: Private colleges and institution estimates may be low due to efforts to eliminate double-counting

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21

Ten states account for two-thirds of all R&D spending in the United States

TOP 10 STATESCaliforniaMichiganNew YorkNew JerseyMassachusettsIllinoisTexasWashingtonPennsylvaniaMaryland

Remaining 39 States

Wisconsin1.1%

21

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The pivotal role of state governments in expand-ing regional economic growth through science and technology development is a widely recognized, albeit relatively recent, phenomenon. Practically all states have established lead science and technology offices, most of whose existence can be traced back only to the mid- to late-1980s. The independent, non-profit Wisconsin Technology Council is the lead agency for Wisconsin, and was created by an act of the Legislature in 1999.

During the 1990s, states increasingly included a science and technology component in their economic development plans. Between 1991 and 1995, no fewer than 13 states adopted statewide S&T strategic plans of varying levels of sophis-tication and complexity; that number climbed to 40 by 2003. A review of State of State speeches, inaugural addresses and budget messages that were delivered by most governors in the early part of 2004 indicates a continuing high level of inter-est in science- and technology-based economic development.

At the 2004 international conference of the Bio-technology Industry Organization, a report by the Batelle Memorial Institute showed:n Forty states specifically target the biosciences for development and all 50 states have economic

development initiatives available to assist biosci-ence companies. State investments have grown and the variety of approaches used to stimulate growth of the bioscience sectors have increased significantly. n More than 885,000 people in the U.S. are em-ployed in the biosciences. The largest segment of this group is working in the areas of medical devices and equipment, which accounts for 37 percent of bioscience employment. n In 2003, bioscience workers on average were paid at least $26,600 more than the overall na-tional average private sector annual wage.

Overall, state efforts tend to focus on the creation of high technology firms and the use of advanced technologies in the traditional manufacturing and service sectors. Common to these plans is the acknowledged importance of:n Maintaining and strengthening the research and development (R&D) capacity of the statesʼ col-leges and universities;n Encouraging “home grown” businesses by pro-viding support to entrepreneurs and small tech-nology-based firms rather than seeking to recruit technology firms to locate within the state; andn Facilitating the incorporation of new technology into processes and products.

WHAT ARE OTHER STATES DOING TO SUPPORT TECHNOLOGY AND ACADEMIC R&D?

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States have become particularly adept at leverag-ing funds and fostering university-industry part-nerships. In 1998, the Battelle Memorial Institute and the State Science and Technology Institute surveyed more than 1,000 state agencies and universities and learned that states spent $3.009 billion on R&D activities and supporting facilities in 1995. These totals include (1) expenditures for R&D performed by or in support of state govern-ment agencies regardless of sources of funds, and (2) R&D funding provided by state governments to external parties, including most notably direct R&D appropriations to academic institutions through state budget processes.

State government sources (including general revenue funds, lottery proceeds, revenue bonds, and specially designated tax funds) accounted for 87.4 percent ($2.431 billion) of total state spending on R&D activities in 1995. Federal dollars passing through state agencies accounted for 9.3 percent ($0.258 billion) of the state-directed R&D total, and leveraged funding from industry and other non-government sources for 3.3 percent ($0.092 billion). Academic institutions performed 73.2 percent ($2.036 billion) of all state government R&D spending reported in this survey. State agen-cies performed 14.7 percent ($0.408 billion) of the R&D total, and the rest ($0.336 billion) was split

between industry, non-profit organizations, local governments, and individual performers.

Organizations such as the National Governors As-sociation have adopted strategies that encourage states to invest in science and technology, with academic R&D being a cornerstone. In the NGAʼs annual meeting in 2003, the governors resolved:“Fundamental research and technological innova-tion provides the means for long-term economic growth, for a better standard of living and quality of life for all citizens, and for all branches and levels of government to better serve their citizens by reducing costs and enhancing service quality. As both investors in and users of science and technol-ogy, states have a critical role in creating an envi-ronment that promotes and supports research and technology. Such an environment fosters economic development, commercialization, and innovation.”

The governors specifically recognized the role of federal research, the Bayh-Dole Act, and the lever-aging power of state investments:“Federal funding for basic research has significant implications for federal-state relations. The federal government has become the principal source of funding for basic and applied research in fields such as health and life sciences, defense tech-nologies, homeland security, energy conservation

WHAT ARE OTHER STATES DOING TO SUPPORT TECHNOLOGY AND ACADEMIC R&D?

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and alternative fuels development, environmental protection, space exploration, land management, and education. The governors support continued federal investments in such research and develop-ment.

“States also have played an important role in research and development initiatives, particularly through their research universities. Governors strongly support a stateʼs right under the U.S. Constitution to the protections of sovereign im-munity and oppose any effort to threaten that right with a loss of the protections of federal intellectual property laws to any entity of the state, including their research universities.

“Governors also recognize the key role played by the passage of the Bayh-Dole Act in improving the transfer of discoveries and technologies supported with federal funding from university laboratories to commercial applications, and support its continu-ation.”

In a 2000 report to the NGA, Dr. Louis D. Tor-natzky of the Batelle Memorial Institute concluded that states can directly influence the growth of new economy research and development within their borders. In his report, “Building State Economies

by Promoting University-Industry Tech Transfer,” Tornatzky emphasized the importance of state support for academic research and development:

“University-industry tech transfer – formal and informal – is important in building high-skills, high-wage economies. Technology drives the new economy, and universities provide critical feed-stock in terms of talented people, new knowledge and innovative technology. For states, universities can be major assets in economic development…”

Specifically, he urged governors to encourage uni-versity-industry technology partnerships; to invest in entrepreneurial mechanisms, such as business incubators tied to university campuses; to remove legal barriers to university-industry technology transfer; to underwrite capital improvements to keep laboratories and other facilities competitive; and to champion the role of research universities in speeches and other public communications.

Of late, however, governors across the United States have found it more difficult to support research universities – and higher education in general – because of declining revenues and cor-responding budget cuts. What follows is a review of how Wisconsin has fared in that environment.

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At a time when states face budget troubles, analysts are closely monitoring the debates and decisions about spending for higher education occurring in state capitals across the country – including Madi-son. In early 2004, The Chronicle of Higher Edu-cation reported that aggregate appropriations for higher education in the United States fell for the first time in 11 years.

For fiscal year 2004, states appropriated $60.3 bil-lion for the operations of higher education in their states, according to Grapevine, a respected statisti-cal tracking project at Illinois State University. This was down from $61.5 billion in fiscal 2004, and down further from $62.8 billion in fiscal 2002. In 44 years of reported data, this was the first time year-to-year state tax fund appropriations for higher education declined two years in a row.

The Grapevine has also tracked state-by-state high-er education spending as a function of per capita income and $1,000 of personal income. Almost all states show a diminished spending “effort” since 1978. But a few states stand out – Wisconsin among them.

One state, Colorado, has reduced its state invest-ment effort in higher education by more than two-thirds since 1978 (67.5 percent) due to a spending limit called the Taxpayer Bill of Rights. Seven states have joined the “50-percent off” club by reducing their higher education effort by more than half: Ari-zona, South Carolina, Washington, Oregon, Mas-sachusetts and New Hampshire. Four more states are poised to join the club: Minnesota, Rhode Island, Vermont and Wisconsin.

Wisconsin has reduced its higher education spending effort by 47.6 percent since 1978, ac-cording to Grapevine. That is 40th among the 50 states (with 50th representing the weakest effort by Colorado) and seventh lowest of the eight Big Ten Conference states. Those states are Iowa, Il-linois, Indiana, Ohio, Michigan, Minnesota, Penn-sylvania and Wisconsin.

Wisconsin is 27th nationally in appropriations of state tax funds for operating expenses of higher education per $1,000 of personal income, or fifth lowest among the eight Big Ten states.

Wisconsin is 36th nationally in the change in state tax fund appropriations per $1,000 of state per-sonal income between fiscal 2001 and fiscal 2004, and sixth among the eight Big Ten states.

Based on the current trends, Wisconsin would stop spending state dollars on higher education in the year 2040, which is the 16th fastest rate among the 50 states.

In 1995, according to the Midwestern Higher Education Compact, Wisconsin ranked 3rd highest among 12 Midwestern states in total funding for higher education. By 2002, it had fallen to sixth.

Between 1994 and 2004, Wisconsin ranked 46th out of 50 states in the percentage change in state tax-funded spending on higher education. That was the lowest ranking among the eight Big Ten states.

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The evidence is mounting that the UW System and UW-Madison, in particular, are providing less access to higher education at a time when there is more demand. Reductions in state support in 2003-2004 had the following effects in the aca-demic year that began in the fall of 2004.

n The number of faculty funded from the general purpose revenues/fees instructional budget de-clined from 1,368 FTE in 2002-03 to 1,342 FTE in 2003-04. This was a decline of 1.9 percent.

n The number of non tenure-track academic staff funded from the GPR/Fees instructional budget declined from 892 FTE in fall 2002 to 843 FTE in fall 2003, a decline of 5.4 percent.

n The total number of course sections taught declined from 12,102 in fall 2002 to 11,922 in fall 2003. This was a decline of 1.5 percent.

n The total number of group instruction sections (lecture, laboratory, discussion and field) declined from 7,831 in fall 2002 to 7,683 in fall 2003. This was a decline of 1.9 percent.

n The number of lecture sections taught in under-graduate courses declined from 2,525 in fall 2002 to 2,448 in fall 2003. This was a decline of 3.1 percent. As a consequence, the average size of undergraduate lecture sections increased by 1.6 percent.

n The number of laboratory sections taught in undergraduate courses declined from 1,389 in fall 2002 to 1,319 in fall 2003. This was a decline of 5.0 percent. As a consequence, the average size of undergraduate laboratory sections increased by 2.6 percent.

As a point of context, this decline took place at a time when the number of full-time equivalent students at the UW-Madison increased by one-half of 1 percent.

When overall state support for higher education declines, so does state support for academic research and development as a segment of that budget. If the slide in higher education funding effort continues, the academic R&D infrastructure in Wisconsin could deteriorate – and that would mean less ability to compete for merit-based fed-eral research grants. Such grants typically go to states with state-of-the-art laboratories, well-com-pensated researchers and a healthy environment for scientific research.

CONCLUSIONS AND RECOMMENDATIONS

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Specific recommendations:

n The governor and Legislature should continue to invest in capital improvement programs such as BioStar and HealthStar, which leverage the as-sets of the UW-Madison and help to create spinout companies and jobs. Of particular interest is the Interdisciplinary Research Center at the UW-Madison Medical School, which will require public support in order to attract private donations. As has been demonstrated nationwide, state support for capital improvements makes it possible to attract federal, industry and private foundation dollars for research. General obligation bonding should be considered as a funding source, given the long-term return on the investment.

n The governor and Legislature should begin, in the 2005-2007 state budget, the process of re-storing state support for UW System operations. Although many states have experienced similar budget difficulties, the erosion in the UW budget has been relatively steady for years and cannot continue if the state wants to protect its investment.

n The governor and Legislature should create a Wisconsin Innovation and Research Fund to help secure federal and corporate grants by providing small matching grants to UW system and private college faculty who collaborate with business on R&D.

n The UW-Madison, the Medical College of Wis-consin and the Marshfield Clinic should re-examine and already strong collaborative research relation-ship to look for more opportunities to jointly attract research funding and conduct science. Incentives to conduct inter-institution and interdisciplinary re-search should be established. This is similar to an approach being followed in Minnesota, where the University of Minnesota and the Mayo Clinic have recently announced joint initiatives.

n The governor and the Legislature should estab-lish a commission, similar to the Michigan Commis-sion on Higher Education and Economic Growth, to explore other options and to more deliberately track “best practices” in other states.

Wisconsin has invested heavily over nearly 100 years in its academic research and development infrastructure. In the UW-Madison alone, the state has an asset that most states can only covet. For far less money than some states are belatedly investing in academic research and development, Wisconsin state government can protect its historic public investment and reap the benefits associated with the transformation to a high-tech economy.

CONCLUSIONS AND RECOMMENDATIONS

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“If the slide in higher education funding effort continues, the academic R&D infrastructure in Wisconsin could deteriorate.” - Wisconsin Technology Council

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STATE-BY-STATE OVERVIEW

IllinoisAcademic research per capita ranking (fiscal 2001): 27 out of 51State spending on higher education per $1,000 of

personal income (2004): 33rd of 50

State efforts to bolster academic R&D in Illinois have included funding for a post-genomics institute at the University of Illinois, a new chemical sci-ences building at UIʼs Chicago campus, a cancer research center at Southern Illinois University in Springfield, and a new facility for the treatment of juvenile diabetes at the University of Chicago. Also, there is continued support for a new biomedi-cal research building and a nanotechnology center for Northwestern University. Illinois has also established a Technology Development Fund. The initial amount invested will be $50 million. The cap on any investing is 1 percent of the money under the state treasurerʼs control and the total is $8 billion. Participating venture funds must be either based in Illinois or have a significant presence in the state. All of the funds that receive money will

be expected to invest in Illinois firms, but will not be required to. It is understood by venture firms that theyʼll be expected to invest in the state, and their prior investments to the state may help their chances of receiving the money. The $50 million invested to the Technology Development Fund will probably be invested in four or five venture funds. There is a rule that no more than 10 percent of a fun can be constituted by this state money.

An additional $17 million in state funds is pro-posed to leverage $126 million in federal money over the next five years to complete the Center for Nanoscale Materials at Argonne National Labora-tory. One of only five in the country, the facility is expected to initially attract about $200 million in nanoscience and nanotechnology research. In addition to the Argonne National Laboratory, 26 academic institutions in Illinois receive federal R&D dollars.

Here are examples of what selected states are doing to foster job growth and technology development through academic research initiatives and related investments in higher education.

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IndianaAcademic research per capita ranking (fiscal 2001): 33 out of 51State spending on higher education per $1,000 of

personal income (2004): 20th of 50

Indiana is building on the stateʼs promising aca-demic and commercial assets to give Indiana a competitive edge in technology and job creation. Seventeen public-private partnerships in Indiana have been approved to receive a total of $22 million in awards from the Indiana 21st Century Research and Technology Fund, as of August, 2004. The fund, created by the Indiana General Assembly in 1999, has awarded more than $132 million in grants to 102 projects since its inception. Gov. Joe Kernan has said he believes that provid-ing awards to public-private partnerships early in the development phase helps the projects get off the ground, and ultimately creates companies that contribute to Indianaʼs economy. The fund is aimed at supporting Indiana ventures focused on the commercialization of advanced technolo-gies. The fund makes awards in two categories: Science and Technology Commercialization and Centers of Excellence. Projects that have re-ceived funding include: (1) The creation of new

capabilities in medical informatics, supporting the linkage of basic medical and clinical research in Indianaʼs growing life science sector; (2) Support for advances in materials science and engineer-ing, particularly new carbon-carbon composites of importance to the aerospace and automotive industries; (3) Development of new materials for joint implants; (4) Novel applications of engineer-ing concepts involve the application of non-linear acoustic theory to provide accurate information concerning critical blast furnace wear and erosion characteristics.

In 2003, Kernan launched Energize Indiana, a $1.25 billion plan, to stimulate research, pro-vide venture capital for entrepreneurs, and build university research facilities. The plan will not be funded by taxes, and will create high-paying jobs in advanced manufacturing, life sciences, 21st century logistics, high-tech distribution and information technology. Energize Indiana hopes to create 200,000 new high-wage, high-skill jobs over the next 10 years, and enroll 200,000 addi-tional students in higher education and credential programs. This will help spur the stateʼs per capita income faster than the national average.

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IowaAcademic research per capita ranking (fiscal 2001): 7 out of 51State spending on higher education per $1,000 of

personal income (2004): 15 of 50

Iowa will continue to invest in the biosciences with a 10-year, $302 million plan, Bioscience Pathway for Development, to grow the industry and cre-ate new job opportunities for the state. The plan is based on three solid aspects of Iowaʼs biosci-ence background: (1) Strong bioscience research capacity at several of the stateʼs universities; (2) Core bio-industrial competencies in sectors such as biomass conversion, traditional biotechnology, pharmaceuticals and medical devices; (3) A signifi-cant workforce base already employed in biosci-ence related jobs. Iowaʼs per capita employment in the bioscience industry is 24 percent higher than the national average, with jobs paying $12,000

more than the stateʼs average income. The plan calls for encouragement and facilitation of biosci-ence research and development, while supporting the business climate and sustaining Iowaʼs firms. Action steps ranging from developing bioscience educational programs to creating and funding an economic development director position on the Iowa Board of Regents within the first 12 months of strategy implementation.

Bioscience Pathway for Development will be funded over 10 years, with $170 million from the sale of bonds and about $132 million from direct state appropriations. Each state dollar invested is expected to be leveraged 5 to 1, with an estimated $1.5 billion coming from federal, industry and other private sources. The total projected economic impact is 16,050 new bioscience jobs by the year 2015.

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KentuckyAcademic research per capita ranking (fiscal 2001): 42 out of 51State spending on higher education per $1,000 of

personal income (2004): 8th of 50

Kentucky has developed a strategic plan for the new economy based on the stateʼs core strengths. In efforts to advance its innovation-based infrastruc-ture, the New Economy strategic plan will develop globally competitive research at Kentuckyʼs universi-ties. Having limited R&D infrastructure, Kentucky will focus on five research priority focus areas, which provide the most promising opportunity for Kentucky to build centers of research excellence.

The following programs advance the development of the universitiesʼ basic research capacity: (1) The Experimental Program to Stimulate Competitive Research, which builds basic research capacity in science and engineering with the goal of achieving nationally competitive levels; (2) Bucks for Brains, which combines public monies and private donations to encourage research at the University of Kentucky,

University of Louisville and the comprehensive institutions, as well as helps universities com-pete for federally funded research; (3) Kentucky Science and Engineering Foundation, which positions Kentucky researchers to secure more federal grants by giving them an opportunity to investigate untested research hypotheses. Programs designed to foster product develop-ment in fledgling Kentucky technology-based firms are: (1) The Commercialization Fund, which enables university faculty to translate their research into marketable products. Maximum grant is $225,000 over three years with a $75,000 annual limit; (2) The Rural Innovation Fund, which enables small, rural-based Kentucky firms to undertake research and development work. Maximum grant is $50,000 over two years with a $25,000 annual limit; (3) The R&D Voucher Fund, which enables small and medium-sized Ken-tucky-based firms to undertake research and de-velopment in partnership with Kentucky university researchers. Maximum grant is $200,000 over two years with a $100,000 annual limit.

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MichiganAcademic research per capita ranking (fiscal 2001): 25 out of 51State spending on higher education per $1,000 of

personal income (2004): 26th of 50

Michigan is among the nationʼs leading states in research and development intensity, meaning the amount of dollars invested per capita. Academic R&D is only a part of that commitment, with private industry leading the way. Through a series of $50 million appropriations, Michigan intends to invest $1 billion over 20 years in life sciences research, development and commercialization. The fund-ing comes from Michiganʼs tobacco settlement. Other public and private sources are expected to match much of the stateʼs investment over the two decades. In 1999, then-Gov. John Engler signed a bill creating a “life sciences corridor,” an effort to make four Michigan research institutions -- the University of Michigan, Michigan State Univer-sity, Wayne State University, and the Van Andel Institute -- among the nationʼs most important for biotechnology applications.

The funding will be concentrated in three pro-gram areas: (1) 40 percent will support a Basic Research Fund, to be distributed to projects from

the four institutions on a competitive basis; (2) 50 percent will go to a Collaborative Research and Development Fund, with emphasis on testing or developing emerging discoveries in partnership with biotech firms; and, (3) 10 percent will go to a Commercialization Development Fund to invest in start-up biotechnology-related companies in Michi-gan. The Michigan Economic Development Corpo-ration (MEDC) anticipates taking equity positions in supported new businesses. Life Sciences was one of three industries targeted in “Smart State: Michigan,” a report released in 1999. The other two were information technology and advanced manufacturing.

Most recently in Michigan, Gov. Jennifer Granholm announced the state cannot compete for jobs with-out more people earning college degrees. Of 6.4 million Michigan residents over age 25, 1.4 million -- or about 22 percent -- have earned at least a bachelorʼs degree, according to Census 2000 fig-ures. That compares with 26.7 percent nationally. Granholm would like to double the stateʼs percent-age of people holding degrees to 45 percent over the next 10 years. The Michigan Commission on Higher Education and Economic Growth is expected to report its findings by Jan. 1, 2005.

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MinnesotaAcademic research per capita ranking (fiscal 2001): 34 out of 51State spending on higher education per $1,000

of personal income (2004): 21st of 50

According to the 1999 National Science Foun-dation statistics, Minnesota was the 15th best state for R&D spending per capita at $808, and the 16th best state for overall R&D spending at $3.8 billion. Minnesota Technology Inc., (MTI) commissioned a study, Future Technologies Life Sciences 2003 Delphi Study, which identifies new technologies emerging from research laboratories to become products or services that can be sold in the marketplace. MTI recognizes the conver-sion of technology into the marketplace through R&D helps companies find a competitive niche in todayʼs evolving economy. Annual reports from Minnesota-based Medtronic and 3M illustrate the importance of R&D, as they continually reap the benefits of those investments. Medtronicʼs 2003 annual report states that “approximately two-thirds of current revenues were generated from products introduced within the past two years.” 3M strongly advocates future R&D efforts as they state their 2002 research and development related expenses were close to $1.1 billion. MTI and Bemidji State University conducted this study to point out that Minnesotaʼs R&D infrastructure can capitalize on life sciences technology, converge the technology into the marketplace and ultimately benefit the region.

Gov. Tim Pawlenty has made bioscience research and development a cornerstone of his economic development efforts. Pawlenty said bioscience advances represent “the next frontier” and that they will “revolutionize big parts of our economy within the next two decades.” He indicated re-search and new industries are integrating knowl-edge and ideas from molecular biology, genom-ics, materials science, electrical engineering, optics, bioinformatics, and agricultural processing to create scientific advances and practical prod-ucts that can be used to save lives, make a better fabric, create clean energy sources, and almost limitless other applications.

Pawlentyʼs proposals include: (1) Development of a Bioscience Park. Similar to one of the Gover-norʼs proposed JOB Zones, this Bioscience Park would be a private-public partnership designed to attract cutting edge bioscience companies to Min-nesota. (2) Create Major Partnership in Genom-ics and Biotechnology. Bringing together two of the nationʼs top biotech and genomics research assets, the University of Minnesota and the Mayo Clinic, the state will lead efforts to create a new partnership and joint ventures between those two institutions as well as Minnesotaʼs bioscience, medical device, and value-added agriculture companies. (3) Stimulate Investment in Min-nesota Bioscience Projects. Citing the example of the State of Wisconsin Investment Board, the

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Minnesota State Board of Investment would be encouraged to seek out and support Minnesota-based bioscience businesses. (4) Tax Incen-tives for Bioscience Development. After the state budget deficit is resolved and economic times improve, tax incentives would be provided to spur both research and development and investment in bioscience projects and companies. (5) Fund the Universityʼs Translational Research Facility. This important new facility will not only lead to further bioscience discoveries, but it will be geared towards transferring and applying those discover-ies in Minnesotaʼs economy. (6) Funding for Re-search. The Governor repeated his commitment to maintain funding for the University of Minnesotaʼs Academic Health Centers and academic health re-search. His budget preserves and protects recent new funding streams for those purposes.

MissouriAcademic research per capita ranking (fiscal 2001): 23 out of 51State spending on higher education per $1,000 of

personal income (2004): 43rd of 50

Policymakers in Missouri have reaffirmed that edu-cation will serve as the foundation for that stateʼs ʻknowledge-basedʼ economy of the future. In his 2003 State of the State Address, Governor Bob Holden called for two action plans to strengthen the link between Missouri businesses and higher

education: (1) Appointment of a Commission on the Future of Higher Education – to recommend ways to improve higher education, and identify new funding sources for colleges and universities; (2) Creation of the Research Alliance of Missouri, an alliance between businesses and universities, which will coordinate research and provide more access to technology for Missouri businesses. “By these two steps, we can better direct and connect higher education and the economy. We must make our colleges, universities, and techni-cal schools the engines that fuel our economy and the future,” Holden declared.

Missouri has created a student loan forgiveness program aimed at keeping the stateʼs best and brightest math and science students in Missouri following graduation. The Missouri Advantage Repayment Incentive Option (MARIO) provides up to $10,000 in student loan forgiveness for college students who graduate with a math or science degree and go to work for a Missouri life science related company. This is the first step in Holdenʼs Jobs Now plan, which calls for stronger ties between business and research institutions to ensure that new technologies are brought to market and lead to additional jobs.

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New YorkAcademic research per capita ranking (fiscal 2001): 17 out of 51State spending on higher education per $1,000 of

personal income (2004): 41st of 50

New York Centers of Excellence – a network of high-tech research and economic development from Buffalo to Brookhaven -- creates an Empire State High Tech Corridor that connects the high-tech industry with the universities. Additional Cen-ters of Excellence such as New York Presbyterian Hospital, Cornell and Columbia universities, New York Medical College and companies focused on biotech, along with Sloan-Kettering Cancer Center, NYU and other medical institutions, are expanding the Empire State High Tech Corridor. They are all building on the biotech industry and their academic strengths. In order to create a new economy in New York, the state must also build on the other high-tech and biotech investments in their STAR Centers, Advanced Research Centers and Centers for Advanced Technology.

North DakotaAcademic research per capita ranking (fiscal 2001): 6 out of 51State spending on higher education per $1,000

of personal income (2004): 4th of 50

The National Institutes of Health recently an-nounced a five-year, $16.3 million grant to promote biomedical research in North Dakota. The NIH Funding is the second phase of a previ-ous grant designed to increase competitiveness for federal research money by smaller states. Grants were given to North Dakota, along with 22 other states and Puerto Rico, which combined were receiving only 5 percent of NIH funding. The grants will help spur research initiatives and help build state research infrastructure networks. Sen. Byron Dorgan, D-N.D., said heʼs worked to spread money in developing research zones, such as that between UND in Grand Forks and North Dakota State in Fargo. This area is the cornerstone of his Red River Valley Research Corridor concept, with uses the stateʼs two larg-est universities to attract more research funding and enhance the stateʼs economic development. The University of North Dakota will administer the grant in collaboration with North Dakota State University; Mayville State, Belcourt, Valley City, Minot and Dickinson are also involved. The grant will provide $1.2 million for science education at four North Dakota tribal colleges as well.

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Gov. John Hoeven has asked for $50 million to support the creation of new Centers of Excel-lence on each of the state college campuses to accelerate the growth of targeted industries in all regions of North Dakota. The centers would use the funds to leverage federal dollars, private sec-tor support and philanthropy to generate another $100 million. Potential projects for the campuses include expansion of technology parks and exist-ing centers and the creation of new centers in numerous areas: biometrics and the life sciences; rural technology, distance learning and computer networking; oil and gas training and technology; renewable energy; bio-security; advanced manu-facturing; audiology; rural law enforcement; and tourism.

OhioAcademic research per capita ranking (fiscal 2001): 36 out of 51State spending on higher education per $1,000 of personal income (2004): 35th of 50

Ohio supports biomedical research and tech-nology development, passing three bills com-mitting state legislature to an additional $103 million for its Third Frontier Project for the fis-cal year, beginning July 1, 2004. The stateʼs Third Frontier portfolio includes the Biomedical

Research and Technology Transfer (BRTT), the Wright Centers of Innovation, Wright Projects and the Third Frontier Action Fund. Since 2002, the BRTT has distributed nearly $80 million to sev-eral multi-million-dollar collaborative biomedical and biotechnology research projects that could lead to commercialization. The Wright Centers of Innovation, supporting large-scale research and tech-development platforms, are to be col-laborations among Ohio higher education institu-tions, nonprofit research organizations, and Ohio companies in the areas of advanced materials, bioscience, power and propulsion, information technology and instruments, controls and electron-ics. Wright Projects require major capital acquisi-tions and improvements at Ohio higher education institutions and nonprofit research organizations and must be near-term commercialization proj-ects. Funds for the Third Frontier Action Fund will be distributed across various action programs: (1) Validation/Seed Capital Funds to enhance early-stage Ohio technology companies; (2) collabora-tive R&D grants through Ohioʼs Fuel Cell Initiative; (3) Product Development Pilot Program, providing development assistance to small and medium-sized Ohio manufactures; (4) company recruitment and attraction.

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Pennsylvania ranks 4th in the nation in terms of the number of research and development facilities, and 4th in the nation in terms of doctoral scientists and engineers. There are nearly 40 Nobel Prize Winners at research institutions in the Philadelphia region alone.

South DakotaAcademic research per capita ranking (fiscal 2001): 51 out of 51State spending on higher education per $1,000 of personal income (2004): 22nd of 50

South Dakota has invested an additional $2.8 mil-lion in its public universitiesʼ potential to grow the stateʼs economy through research investments. This funding comes from economic development legislation, passed in 2004, that approved creation of four new specialized research centers to be completed by 2010. The research centers were selected by a research and commercialization council, after reviewing 11 proposals submitted by faculty at South Dakota public universities. The four research centers are: (1) Center for Infec-tious Disease Research and Vaccinology, South Dakota State University, $780,000. This center will foster research leading to the development of novel therapeutic and diagnostic technologies and products for infectious diseases in humans

PennsylvaniaAcademic research per capita ranking (fiscal 2001): 10 out of 51State spending on higher education per $1,000 of

personal income (2004): 46th of 50

Pennsylvania supports technology development and utilization through: (1) The Ben Franklin Part-nership Program – allowing state government to support small technology start-ups and facilitate the cooperation between industries and universi-ties to help solve firmsʼ problems. The program will provide financial support for early-stage, high-tech venture companies and R&D activi-ties, and will encourage the commercialization of research: (2) The Industrial Resource Center Program – founded in 1988 to help companies to adopt proven technologies to increase their com-petitiveness; (3) R&D Tax Incentives – providing tax benefits for the high-tech industry, to stimulate R&D activities and technological innovations. The state offers employers a 10 percent tax credit for new R&D investments and provides a $1,000 tax credit per newly created jobs for companies that focus on the development of technology; (3) The Technology 21 Initiative Report – initiative devel-oped to seek industry input regarding the role of state government in helping Pennsylvania high-tech businesses remain competitive. One of the major report recommendations is to establish a research and technology network among research institutions, universities and industries.

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and domestic animals; (2) South Dakota Signal Transduction Center, University of South Dakota, $900,000. This center will examine the pathways that regulate cell growth and differentiation, cell death, response to stress and the maintenance of constant physiological conditions, with a goal of reducing cardiovascular disease and cancer; (3) Center for Accelerated Applications at the Nanoscale, South Dakota School of Mines and Technology, $585,000. This center will focus on research in the areas of nanoparticles and associ-ated nanosensors, with emphasis on South Dakota mineral development; (4) Center for Research and Development of Light-Activated Materials, Univer-sity of South Dakota, $503,741. This center will perform both basic and developmental research on materials with light-activated properties. The research is important to medical applications such as human tissue bonding, drug delivery, and anti-tumor agents, and is important to developing phos-phors for sensors, new laser materials, and thin films that impart special properties and characteris-tics to the materials they coat. Within the first two years of the initiative, seven new senior scientists, eight postdoctoral students, seven Ph.D. students, eight graduate associates, and 11 technicians will be brought into the state university system. Also associated with the project will be another 24 uni-versity scientists, whose salary is associated with their respective institutions.

TexasAcademic research per capita ranking (fiscal 2001): 26 out of 51State spending on higher education per $1,000 of

personal income (2004): 19th of 50

The Texas Enterprise Fund was proposed in 2003 to help grow the stateʼs economy by invest-ing in technology, biotechnology and university research. Thirty percent of the revenue projected for the stateʼs Economic Stability Fund – roughly $390 million – will make up the Enterprise Fund. Along with investing in tech fields and research, a portion of the money will be used to retain compa-nies, such as Sematech, that can attract related businesses to the area. There is also a Science Initiative dedicated to improving pay for science teachers and providing students with the neces-sary tools for technology jobs.

WashingtonAcademic research per capita ranking (fiscal 2001): 24 out of 51State spending on higher education per $1,000 of

personal income (2004): 29th of 50

In 2003, Washington Governor Gary Locke proposed $20 million in higher education funding to expand enrollments at their colleges and uni-versities by more than 1,500 students. The funds will be dedicated exclusively to high-demand fields such as engineering, computer science and health care. This will help the state create high-paying jobs by supporting industries such as biotechnology and software.

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“Few states have the infrastructure, the prestige and the talent to support stem cell research over the long run. Wisconsin is one such state.” - Wisconsin Technology Council

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STEM CELL RESEARCH: A CASE STUDY

Few examples of academic research and develop-ment in Wisconsin are more illustrative of R&Dʼs potential economic value than current research into human embryonic stem cells. If Wisconsin fails to secure its world-class “head start” in such research, however, the state could forfeit hundreds of millions of dollars in opportunities and hundreds, if not thousands, of high-wage jobs.

Using donated, surplus embryos produced by in vitro fertilization, a group of UW-Madison develop-mental biologists led by James Thomson estab-lished five independent stem cell lines in Novem-ber 1998. This was the first time human embryonic stem cells had been successfully isolated and cultured, and the discovery took the scientific world by storm. Thomsonʼs face graced the cover of Time magazine (August 20, 2001) and millions of hopeful people began talking about the promise of stem cell research.

“Just as the names Watson and Crick will always be related to DNA, (Thomson) … will forever be linked with stem cells,” noted a 2004 publication by UW-Madison.

Since 1998, scientists across the United States and Canada and in dozens of foreign lands have engaged in the race for stem cell breakthroughs. Wisconsin is still among the worldʼs leaders, but that advantage could be lost – and with it, a valu-able economic growth opportunity – unless Wis-consin resists attempts to curtail such research and instead invests in its future. Few states have the infrastructure, the prestige and the talent to support stem cell research over the long run. Wisconsin is one such state.

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Embryonic stem cells are the bodyʼs core cells. They are “undifferentiated,” which means they have yet to change into a specific cell type. Be-cause they have the ability to form any adult cell and can proliferate indefinitely in culture, stem cells could potentially provide an unlimited source of specific, clinically important adult cells such as bone, muscle, liver, blood, neural and pancreatic cells.

For that reason, scientists believe stem cells may unlock treatments or cures for people suffering from spinal cord injuries, diabetes, Parkinsonʼs, heart disease, Lou Gehrigʼs, Alzheimerʼs or other diseases and conditions. And yet, todayʼs most promising paths have turn into blind alleys; yet-to-be-explored corridors may lead to success. That uncertainty is typical of such research and development, and precisely why a longer view is needed.

At the UW-Madison, research using humanembryonic stem cells has revolved around pro-ducing cells for bone marrow, insulin-producing pancreatic islet cells, neural tissue, heart tissue and muscle.

Embyronic stem cell technology, combined with recent “mapping” of the human genome system, also has the potential to speed up the often-la-borious process of drug discovery. If drugs are produced more quickly, they will cost less and accelerate treatments and cures. Embryonic stem cell technology also offers a fascinating glimpse into the earliest stages of human development, which may lead to discoveries surrounding birth defects and infertility.

In addition to embryonic stem cell research, researchers are trying to unlock the potential of adult stem cells.

Adult stem cells are thought to exist in at least 13 of 220 body tissues. Adult stem cells constantly produce new skin, intestinal lining, red blood cells and more. They are remarkably versatile: adult stem cells in bone marrow, for instance, can be channeled to become fat cells, cartilage-forming cells or bone-forming cells.

Still, they are difficult to work with from a research perspective.

WHAT ARE STEM CELLS AND WHY ARE THEY IMPORTANT?

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“One of the problems of working with adult stem cells is that they are very rare and difficult to isolate,” reported the Massachusetts Institute of Technology news office on Nov. 20, 2003. “Re-searchers who attempt to grow adult stem cells in the laboratory find that they cannot increase the number of stem cells in culture, because when adult stem cells divide, they produce both new replacement stem cells and regular cells, which quickly proliferate and vastly outnumber the stem cells. Adult stem cells divide to replace them-selves and create daughter cells, which either differentiate immediately or divide exponentially to produce expanded lineages of differentiating cells.”

In late 2003, researcher James Sherley of MIT may have found a way around that problem. Shir-ley fortified adult rat liver stem cells with a me-tabolite that allowed them to multiply like embry-onic stem cells. In the absence of the metabolite,

the cells revert to acting like normal adult stem cells, which produce differentiating cells without increasing their own numbers.

However, other scientists continue to believe human adult stem cells have serious disadvan-tages in research applications. They are scarce and have not been found in all tissues or organs. They do not live as long in culture. Despite the MIT breakthrough, human adult stem cells have shown no ability to proliferate into quantities that can be effectively used in research or therapy. They can be dangerous to extract from some organs, such as the brain, and as humans age – when such cells are needed the most – they become even rarer. Adult stem cells may also exhibit genetic defects from exposure to toxins and sunlight. And, perhaps most importantly, the targeted disease for stem cell therapy may already be lurking in the adult stem cells.

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For all its promise, embryonic stem cell research is controversial because extracting the cells re-quires the destruction of very small days-old em-bryos, called blastocysts. Those embryos come from fertilized eggs that would otherwise be dis-carded by fertility clinics, where childless couples undergo in vitro fertilization. Unless those eggs are implanted in the womb of a woman, however, they cannot grow to become a human being.

Here is the protocol at UW Healthʼs Infertility Clinic, where in vitro fertilization has taken place for more than two decades:

n Before undergoing treatment at the clinic, couples are advised that surplus embryos will almost certainly be produced. The couple is counseled that any surplus embryos – unless stored at the coupleʼs expense, donated to other infertile couples or donated for research – will be discarded.n Research protocols for the UW-Madison, as well as the consent process for stem cell research, were reviewed and approved by an internal Insti-tutional Review Board. That interdisciplinary board includes scientists, medical ethicists and attorneys who oversee such work.

It is estimated that 400,000 in vitro fertilization embryos are frozen nationwide and will likely be destroyed if not donated, with informed consent of the couples, for research.

Opponents of human embryonic stem cell re-search say it isnʼt right to destroy one human life, even if itʼs a blastocyst, to possibly save others. They also oppose spending federal dollars on research that some taxpayers find objectionable.

“If this controversial research has all the promise its supporters claim, let the private sector fund it, because taxpayers shouldnʼt have to pay for what many think is unethical research,” said U.S. Rep. David Joseph Weldon, R-Fla., a physician.

Opponents also object to the use of cloning techniques to produce more stem cells. They say that is tantamount to creating a human life in order to take it. Finally, opponents say they prefer research be limited to adult stem cells.

In August 2001, after listening to pro and con arguments, President Bush said federal dollars could only be used to conduct research on 78 ex-isting stem cell lines. It has since turned out that

THE PROS AND CONS OF EMBRYONIC STEM CELL RESEARCH

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most of those lines are unavailable or unfit for laboratory work, and the race is on to grow new lines that can be used by scientists.

The Bush decision hasnʼt eliminated federal funding for embryonic stem cell research (in fact, $24.8 million was spent in fiscal year 2003). However, critics of the Bush policy argue that less is being spent today on embryonic stem cell research than what might have been spent if pre-Bush policies remained in place. Still others say rules developed in the Clinton era were fatally flawed, and that Bush did stem cell research a favor in the long-term by adopting rules that could be supported by a broader cross-section of scientists.

Health and Human Secretary Tommy Thompson, the former Wisconsin governor, has quietly but persistently tested the limits of the Bush order by allowing the National Institutes of Health to begin work on a National Embryonic Stem Cell Bank as well as three Centers for Excellence for Translational Stem Cell Research. Still, far more federal dollars are being invested in adult stem cell research ($190.7 million by the NIH in fiscal 2003) than embryonic stem cell research.

Supporters of embryonic stem cell research remain unhappy with Bushʼs decision, including some who would otherwise describe themselves as pro-life. They argue there are important ethical distinctions between aborting a baby and extract-ing a cell from a fertilized embryo that cannot live and will otherwise be tossed away. They reject the notion that therapeutic cloning is the same as cloning to produce a human baby, an act which all but a tiny minority of people find repugnant. They want the nationʼs research efforts into killer diseases to be robust, not handcuffed.

They also reject the idea that using donated, surplus embryos is immoral. For 25 years, they argue, fertility clinics have served a broadly ac-cepted societal good by helping people have babies. And, for 25 years, the vast majority of the unused eggs have been thrown away. If the donors agree, advocates say, it only makes sense to use those surplus eggs for research.

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There are currently 68 scientists engaged in stem cell experiments on the campus of the UW-Madi-son, according to a count made in June 2004 by the Wisconsin Alumni Research Foundation (WARF). “That corps of researchers swells to at least 150 when counting assistants and other staff,” reported the Milwaukee Journal-Sentinel (Feb. 15, 2004).

More than $27 million in federal and private grants were received for stem cell research in the 2003 fiscal year, and 44 scientific publications have been authored by UW stem cell scientists.

The patents that govern the technology and use of existing stem cell lines are held by WARF, the private, non-profit technology transfer arm of the university. WARFʼs WiCell Research Institute dis-tributes five lines of embryonic stem cells that can be used for federal supported by federal grants. Established in 1999,WiCell has distributed lines to 150 other institutions. It also conducts training sessions on how to work with the cells.

The work of Professor Thomson and his team would not have been possible except for the long tradition of investment in the life sciences at the UW-Madison, which established the first univer-sity genetics department in 1918 and which has consistently invested in its faculty and physical structure. At any given time, there are 8,000 scientific research projects taking place on the campus of UW-Madison, which reported a total of $662 million in research activity in fiscal year 2002.

The historic investment in life sciences at UW-Madison continues with BioStar, a $317 million initiative that builds on a public-private partnership to fund campus construction. Projects are being financed by a combination of state funding and private gifts and grants raised by the university. The idea was developed in the early 1990s as UW-Madison sought to overcome a backlog of high-priority building projects in research and med-icine. Two other programs that emerged -- called WisStar and HealthStar -- helped change the face of the campus.

Building projects under WisStar and HealthStar include: the current Biotechnology Center; new buildings for chemistry, biochemistry, pharmacy and engineering; a Health Sciences Learning Center; and an Interdisciplinary Research Addition to the UW Hospital.

BioStar would fund four new buildings over the next eight years: a Biotechnology Center addition ($27 million), a new microbial sciences building ($100 million), a biochemistry building upgrade ($85 million) and an interdisciplinary biology build-ing ($105 million).

That kind of infrastructure – both in human capital and physical facilities – is why UW-Madison can be a world leader in embryonic stem cell research (not to mention many other scientific disciplines). However, that leadership will be threatened, and soon, unless Wisconsin reiterates its support for academic R&D and, specifically, resists recurring political threats to curtail stem cell research.

WHAT IS THE EXTENT OF STEM CELL RESEARCH IN WISCONSIN

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“Infrastructure – both in human capital and physical facilities – is why UW-Madison can be a world leader in embryonic stem cell research.” - Wisconsin Technology Council

WHAT IS THE EXTENT OF STEM CELL RESEARCH IN WISCONSIN

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In what has been described as a “revolt” against the Bush administrationʼs decision to limit federal support for embryonic stem cell research, several states are aggressively moving ahead to seize the economic opportunity.

n California and New Jersey have passed laws specifically authorizing the cloning of human eggs to create stem cells for therapeutic research. The Legislatures of at least seven other states, includ-ing Illinois and New York, have considered similar bills.n An anonymous donor gave $25 million to the University of Texas to boost its stem-cell program in Houston.n Harvard and Stanford universities are each rais-ing $100 million to fund stem cell institutes.n New Jersey has created a $50 million Stem Cell Institute to be funded with state and private money, a move that will attract foundation dollars that have been frozen in place by the federal research limits. Ohio and Pennsylvania are pursuing similar initia-tives.n The University of Minnesota, which already has a stem cell institute, recently announced a drive to expand its work with human embryonic stem cells.

In California, a petition drive that collected 1.1 mil-lion signatures authorized a November ballot mea-sure (Proposition 71) that would underwrite stem cell research in that state with $3 billion in state bonds over 10 years. California, which also boasts half of the nationʼs biomedical research capacity and one-third of all U.S. biotechnology companies,

WHATʼS HAPPENING IN OTHER STATES AND NATIONS?

would become an even larger magnet for research dollars. The stem cell referendum, if passed, would create at least a dozen stem cell research centers.

“California will be the center of stem-cell research in the world,” predicted Palo Alto developer Robert Klein, co-chairman of the initiative campaign.

Klein may be correct, and the implications for Wisconsinʼs stem-cell research community are immense. Efforts to recruit researchers – indeed, entire programs – would escalate if California voters open up their checkbooks to the tune of $3 billion. Wisconsinʼs stem cell research effort, led by Thomson and his team, could be a tempting target.

Such ambitious efforts are not confined to the United States.

n Great Britain, which has recruited some top U.S. scientists to supplement its own research corps, has opened the worldʼs first global stem cell bank. Britain was the first nation to authorize the cloning of human embryos to produce stem cells for re-search. The cell bank was established in May 2004 at the National Institute for Biological Standards, north of London.n Foreign scientists in places such as Singapore, Australia, South Korea, Sweden, the Czech Republic, Finland and Israel have developed nearly 100 embryonic stem cell lines since the Bush administration curtailed federal research in August 2001.

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n Researchers in South Korea announced in early 2004 they were the first to clone a mature, human embryo, and then collect from it stem cells. “This proves that South Koreans are ahead of every-one else in the world in this field,” boasted Moon Shin-young, who led one of the university-based research teams.

In Wisconsin, stem cell research has benefited from two strong political patrons in former Gov. Tommy Thompson and, most recently, Gov. Jim Doyle. Also, legislation to limit stem cell research has never passed either the 99-member Assembly or the 33-member Senate. In June 2004, a coali-tion of state business leaders – including the pres-ident of Wisconsin Manufacturers and Commerce – signed a letter inviting candidates for state office to learn more about the benefits of stem research and “to carefully consider all the facts…”

In 2001, the Wisconsin Technology Councilʼs board of directors passed a resolution that urged Wisconsin policymakers to “focus on legislation that encourages high-tech research and start-ups, and should not create restrictions on research that place the state at a competitive disadvan-tage… If Wisconsin adopts legislation that restricts research, (researchers) would likely relocate to an institution in a state or country where no such limitations exist… Adoption of research restric-tions will send a signal that Wisconsin has a hostile regulatory environment for biotechnology research. The state of Wisconsin would face new

challenges in attracting world-class researchers who might be concerned that their research would be targeted next.”

The Tech Council resolution, which remains in ef-fect, also urges citizens to become informed about R&D-related issues and to encourage state and federal policymakers to “refrain from establishing constraints on research that are restrictive be-cause of the ineffectiveness of such guidelines in achieving the primary objective and the devastat-ing ancillary consequences.”

Still, there is a possibility that anti-research bills could re-emerge in the 2005 session of the Leg-islature. In other states, according to the National Conference of State Legislatures and the Coalition for the Advancement of Medical Research, such legislation has become law.

n South Dakota prohibits embryonic research.n Nebraska prohibits use of state funds for embry-onic research.n Arkansas, Iowa, Michigan, North Dakota, South Dakota and Virginia prohibit therapeutic cloning.n Kansas prohibits some cell or tissue research that is not eligible for federal funds.

It is worth noting that none of those states have significant human embryonic stem cell research projects.

WHATʼS HAPPENING IN OTHER STATES AND NATIONS?

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At a time when Wisconsin is working hard to nurture high-technology industries, it is critical that policymakers support the science and infra-structure that makes those industries possible. Our economy is changing, and Wisconsin must continue to be innovative or risk being left behind. Supporting pioneering research on human embry-onic stem cells sends a positive message to the scientists and science-based companies that al-

SUMMARY

ready call Wisconsin home. Without that support, attracting and nurturing new technology compa-nies, and attracting investment capital to support new enterprises, becomes extraordinarily dif-ficult. Wisconsin has a world-class advantage in human embryonic stem cell research. It should secure and leverage that advantage, for the bet-terment of mankind and the stateʼs economy.

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SUMMARY

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Council on Governmental Relations. Case Study of Facilities and Administrative Costs in Support of Research. (March 16, 2004, with supporting docu-ments from 2003)

Duke University Office of Public Affairs. “Durham and Duke: An analysis of Duke Universityʼs esti-mated total annual economic impact on the city and county of Durham.” Duke University Economic Impact (2003)

National Governors Association, policy position. “EDC-4. National Research, Development, and Technology Policy.” (First passed in 1993; revised 1995, 1997, 1999, 2001 and 2003 annual meetings)

National Bureau of Economic Research, Cambridge Mass. “Ideas and Education: Level or Growth Ef-fects?” Dowrick, Steve. NBER Working Paper 9709 (May 2003)

Association of American Universities, Washington, D.C. “University Technology Transfer of Govern-ment-Funded Research Has Wide Public Benefits.” (June 2, 1998)

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North Carolina Board of Science and Technol-ogy. “North Carolinaʼs Regions: Transitioning to the Knowledge Economy. Summary Proceedings of Regional Focus Groups Meetings.” Vision 2030 Science and Technology, Driving the New Economy (Document 3) September, 1999

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Editor: Tom Still, president, Wisconsin Technology Council

Contributors: Dan Berglund, State Science and Technology Institute Liz Katz, Wisconsin Technology Council Toni Sikes, Wisconsin Technology CouncilDr. Noel Radomski, Ph.D., University of Wisconsin-MadisonPark Printing

Design: Makin’ Hey! Communications

For additional copies, please contact:Wisconsin Technology Council615 E. Washington Ave.Madison, WI 53703608-442-7557tstill@wisconsintechnologycouncil.comwww.wisconsintechnologycouncil.com