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Session 3B - David Bliven

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Reenergize

Despite New Mexico's strengths in research and scientists, most intellectual property generated in the state is licensed out of state. The Technology Commercialization Council was created to address this issue and diversify New Mexico's economy beyond oil and gas. The Council recommends focusing state resources on commercializing energy from the sun, as it leverages the state's core competencies and strengths in solar and algae. A holistic plan is needed that includes workforce training, funding, management recruitment, and branding to compete with other states that are making large investments in technology commercialization.

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NEW MEXICO TECHNOLOGY COMMERCIALIZATION COUNCIL Framing of Issues and Opportunities
Why Does NM Not Place More Focus on Greater Tech Commercialization?  Despite:  $4-6 Billion in annual funded research – equivalent of 10 Stanford’s or MIT’s  NM is ranked #2 nationally in scientists and engineers as a percentage of the workforce  Innovation Capacity Ranking of #11  Most NM generated IP gets licensed out of state
Kauffman Foundation Study  New firms add an average of 3 million jobs in their first year, while older companies lose 1 million jobs annually  During recessionary years, job creation at startups remains stable, while net job losses at existing firms are highly sensitive to the business cycle.
The Council Was Created to Address This?  Oil and gas proceeds, makes up nearly 20%  $1.00 change in Oil = $9M change in budget  $0.10 change in Natural Gas = $19M change  Income Taxes – 25%  Sales Taxes – 42% - Primarily Tobacco/Alcohol, Insurance and Motor Vehicles  Investment Income – 10%  Other – 3%
Who is Involved?  Presidents and Heads of Research/Tech Transfer – UNM, NMSU, NMT  Directors and Heads of Tech Transfer – LANL and Sandia  Industry and Venture – LANB, Intel, Cottonwood  Economic Development – Former Head of ED at Rio Rancho and Mesa del Sol  Outside Experts – Oklahoma, Texas and NC
Why is Now the Time to Diversify?  New Administration in NM  Focus on New Energy Sources Nationally and Globally – a strength for New Mexico  Long Lead Time to Significant Results  Other States are Making their Bets
Give Me Some Examples  Texas - $3 Billion 2020 Cancer Research Initiative, Plus $200 Million Emerging Technology Fund, $500 Million to Upgrade Research Universities  Massachusetts - $1 Billion 2015 Life Sciences Act – Create Jobs, Drive Innovation & Start-up Activity  Ohio - $1.1 Billion Third Frontier Project – Expand High–Tech Research Capabilities, Create High- Paying Jobs  Virginia - $3 Billion Higher Education Bond Proposal  Canada - $2 – 3 Billion – Research Chairs Program – Recruit & Retain up to 2,000 Star Faculty
How Do We Compete with That  First Decide we want to compete  Then compete where we can win  Focus resources  Pick area (s) of sustainable advantage  Commit to long term holistic plan  Build statewide consensus and endorsement  Be loud and aggressive
What About the Current Bets?  Film Industry?  Sustainable Advantage?  Based on Core Competency?  SuperComputer Center?  Jobs Impact?  Sustainable Advantage?  SpacePort?  Statewide Impact?  Green Grid?  Jobs Impact?
So What Should the Criteria be?  Leverages Statewide Core Competency and Resulting Statewide Impacts  Applicable to Multiple Large Markets  Core Competency is Differentiable vs. Other States  Potential to Create Multiple High Wage Jobs  Consistent with State Image/Political Will
Results from Council  #1 – Energy from the Sun  #2 – Smart Grid  #3 – Oil & Gas  #4 – Computing  #5 – Nuclear Power  #6 – Wind Energy  #7 – Micro-Nano Systems  #8 – Bio-Medical  #9 – Bio – Fuels  #10 - Sensors
Focus on #1 to Best Leverage Resources  Energy from the Sun  Solar & Algae  Leverages Series of State wins in both areas  Includes entire state  Focus on underlying core science advantages that can be sustained and leveraged
What is a Holistic Plan  Workforce Training  Public Policy  Incentives  Tech Commercialization Funding  Start-up Capital  Management Recruitment  Endowed Research Leadership Recruitment  National Branding  Industry Recruitment
How Much Money is Needed?  To compete with other states commitment must be comparable to the film industry/ Space Port at a minimum  That means over $100 million/year over a 5-10 year horizon - $500M to $1B (not all incremental) – let’s get serious about competing and winning  Permanent fund, tax incentives, private and federal government sources all must be accessed
Initial Priority Action Items  Increase translational and applied research 3 centers of excellence – UNM, NMTech, NMSU  Increase endowed chairs and post-doc funding  Additional tech maturation funding existing under-utilized ETI’s  Restructure  SBIR matching program
Initial Priority Action Items  Expand NM Fund-of-Funds program  SIC fro 9% to 10%; SBIC from 1% to 2%  This incremental 2% equals approximately $80M  Recruit additional experienced management  Waive taxes on reinvestment of common stock/founder gains  Credit on state income taxes for 5% or greater common shareholders – for payroll, state corporate and property taxes paid by corporations
Projected Impacts?  States reporting from 3:1 to 11:1 impacts  SIC reports 6.7:1 results to date  Over 1,100 jobs created – over 2x the average NM salary  Early in cycle – expect 10x over next 10 years – say 11,000  Doesn’t include this incremental commitment and multipliers – estimated over 50,000 private sector jobs over next 20 years.  Would double our high tech private sector jobs base And based here – Sustainable!
Next Steps?  Draft a preliminary plan - Done  Solicit additional input from economic development groups statewide - Done  Educate legislature regarding statewide support at all levels of leadership - In process  Highlight statewide impact – In process  Brief incoming Governor – In process  Line up first steps for 2012 legislative session – In process
NEW MEXICO TECHNOLOGY COMMERCIALIZATION COUNCIL Framing of Issues and Opportunities

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Session 3B - David Bliven

  • 2. Why Does NM Not Place More Focus on Greater Tech Commercialization?  Despite:  $4-6 Billion in annual funded research – equivalent of 10 Stanford’s or MIT’s  NM is ranked #2 nationally in scientists and engineers as a percentage of the workforce  Innovation Capacity Ranking of #11  Most NM generated IP gets licensed out of state
  • 3. Kauffman Foundation Study  New firms add an average of 3 million jobs in their first year, while older companies lose 1 million jobs annually  During recessionary years, job creation at startups remains stable, while net job losses at existing firms are highly sensitive to the business cycle.
  • 4. The Council Was Created to Address This?  Oil and gas proceeds, makes up nearly 20%  $1.00 change in Oil = $9M change in budget  $0.10 change in Natural Gas = $19M change  Income Taxes – 25%  Sales Taxes – 42% - Primarily Tobacco/Alcohol, Insurance and Motor Vehicles  Investment Income – 10%  Other – 3%
  • 5. Who is Involved?  Presidents and Heads of Research/Tech Transfer – UNM, NMSU, NMT  Directors and Heads of Tech Transfer – LANL and Sandia  Industry and Venture – LANB, Intel, Cottonwood  Economic Development – Former Head of ED at Rio Rancho and Mesa del Sol  Outside Experts – Oklahoma, Texas and NC
  • 6. Why is Now the Time to Diversify?  New Administration in NM  Focus on New Energy Sources Nationally and Globally – a strength for New Mexico  Long Lead Time to Significant Results  Other States are Making their Bets
  • 7. Give Me Some Examples  Texas - $3 Billion 2020 Cancer Research Initiative, Plus $200 Million Emerging Technology Fund, $500 Million to Upgrade Research Universities  Massachusetts - $1 Billion 2015 Life Sciences Act – Create Jobs, Drive Innovation & Start-up Activity  Ohio - $1.1 Billion Third Frontier Project – Expand High–Tech Research Capabilities, Create High- Paying Jobs  Virginia - $3 Billion Higher Education Bond Proposal  Canada - $2 – 3 Billion – Research Chairs Program – Recruit & Retain up to 2,000 Star Faculty
  • 8. How Do We Compete with That  First Decide we want to compete  Then compete where we can win  Focus resources  Pick area (s) of sustainable advantage  Commit to long term holistic plan  Build statewide consensus and endorsement  Be loud and aggressive
  • 9. What About the Current Bets?  Film Industry?  Sustainable Advantage?  Based on Core Competency?  SuperComputer Center?  Jobs Impact?  Sustainable Advantage?  SpacePort?  Statewide Impact?  Green Grid?  Jobs Impact?
  • 10. So What Should the Criteria be?  Leverages Statewide Core Competency and Resulting Statewide Impacts  Applicable to Multiple Large Markets  Core Competency is Differentiable vs. Other States  Potential to Create Multiple High Wage Jobs  Consistent with State Image/Political Will
  • 11. Results from Council  #1 – Energy from the Sun  #2 – Smart Grid  #3 – Oil & Gas  #4 – Computing  #5 – Nuclear Power  #6 – Wind Energy  #7 – Micro-Nano Systems  #8 – Bio-Medical  #9 – Bio – Fuels  #10 - Sensors
  • 12. Focus on #1 to Best Leverage Resources  Energy from the Sun  Solar & Algae  Leverages Series of State wins in both areas  Includes entire state  Focus on underlying core science advantages that can be sustained and leveraged
  • 13. What is a Holistic Plan  Workforce Training  Public Policy  Incentives  Tech Commercialization Funding  Start-up Capital  Management Recruitment  Endowed Research Leadership Recruitment  National Branding  Industry Recruitment
  • 14. How Much Money is Needed?  To compete with other states commitment must be comparable to the film industry/ Space Port at a minimum  That means over $100 million/year over a 5-10 year horizon - $500M to $1B (not all incremental) – let’s get serious about competing and winning  Permanent fund, tax incentives, private and federal government sources all must be accessed
  • 15. Initial Priority Action Items  Increase translational and applied research 3 centers of excellence – UNM, NMTech, NMSU  Increase endowed chairs and post-doc funding  Additional tech maturation funding existing under-utilized ETI’s  Restructure  SBIR matching program
  • 16. Initial Priority Action Items  Expand NM Fund-of-Funds program  SIC fro 9% to 10%; SBIC from 1% to 2%  This incremental 2% equals approximately $80M  Recruit additional experienced management  Waive taxes on reinvestment of common stock/founder gains  Credit on state income taxes for 5% or greater common shareholders – for payroll, state corporate and property taxes paid by corporations
  • 17. Projected Impacts?  States reporting from 3:1 to 11:1 impacts  SIC reports 6.7:1 results to date  Over 1,100 jobs created – over 2x the average NM salary  Early in cycle – expect 10x over next 10 years – say 11,000  Doesn’t include this incremental commitment and multipliers – estimated over 50,000 private sector jobs over next 20 years.  Would double our high tech private sector jobs base And based here – Sustainable!
  • 18. Next Steps?  Draft a preliminary plan - Done  Solicit additional input from economic development groups statewide - Done  Educate legislature regarding statewide support at all levels of leadership - In process  Highlight statewide impact – In process  Brief incoming Governor – In process  Line up first steps for 2012 legislative session – In process