Inside Iowa State

September 23, 2005

Regents applaud plans for economic development funds

by Anne Krapfl

Iowa State will use a state appropriation earmarked for economic development to boost the capacity of a network aimed at taking university-developed technologies to the marketplace. A spending proposal approved Sept. 14 by the Board of Regents, State of Iowa, features two strategies:

• Fund a semi-annual grant program on campus that helps develop innovations with commercial potential, or supports the growth of existing companies.
• Fund new staff and activities in four ISU centers and programs that promote technology transfer and the commercialization of ideas.

The first year of the proposal includes immediate gap financing for six companies that involve ISU technologies and faculty. The funding (a total of $500,000) is expected to generate other investments or jobs within a year. In subsequent years of the plan, this funding would be part of the grant program.

State dollars for economic development

Last spring, as part of the annual budget-setting process, the Iowa Legislature awarded $5 million per year for 10 years to the three regent universities. The funds are to be used to create product, company and job growth in the state. The funds also require a 100 percent match by the units that receive them. Iowa State and the University of Iowa each received $1,925,000 this year, University of Northern Iowa received $950,000 and $200,000 is reserved for "other" schools (public or private). Board president Michael Gartner noted that if no one else asks for any piece of the last amount, it could be used by the regent universities.

Each university was asked to develop a proposal for how it would use its share.

Steve Carter, who serves as director of both the ISU Research Park and ISU's Pappajohn Center for Entrepreneurship, is one of the architects of Iowa State's plan to distribute the funds.

"Our belief is that we have a good system in place. One of the ways to improve it is to improve the capacity of what we can do," he said. "With a bulk of the new funds reserved for research and development-related activity, we anticipate a new level of activity. To handle it, we'll need more people and more tools."

To the marketplace

Iowa State's "innovation system" is the process of identifying ideas and technologies from ISU faculty, staff and students that have high commercial potential. It's coordinated by the office of the vice provost for research, but involves many players: the Pappajohn center; the research park, particularly a full-service business incubator in the park; the ISU Research Foundation, Small Business Development Center, Center for Industrial Research and Service; and Institute for Physical Research and Technology (IPRT) Company Assistance, among others. The process includes ongoing support for start-up companies.

"It's tremendously exciting to have this revenue stream for the next 10 years," Carter said. "This is a significant investment by the state in what we do.

"The challenge to us now will be to provide the results."

Here's a quick look at the two components of Iowa State's plan for using its Grow Iowa Value Fund dollars:

Competitive grants

As proposed, twice a year in a competitive proposal process, grants in the range of $25,000 to $200,000 would be awarded to faculty, staff or student plans to develop innovations with commercial potential or help grow existing companies. Proposals would be screened initially by the colleges, with a limit of three proposals per college per submission period. (Proposals from centers and institutes would be screened by the office of the vice provost for research.) A committee would review proposals and forward a list of recommendations to the provost and president, who would make the final decision on awards. Committee membership would include representatives from the Council of Deans, offices of the vice provost for research, IPRT director and research park/Pappajohn center director, as well as two members from the private sector.

Carter said there also would be a way to fund "really exciting" projects that come up quickly and at inopportune times for a grant deadline.

Up to $825,000 would be awarded in year one, and $1.325 million in subsequent years. An implementation plan for the grant program still is being worked out in the office of the vice provost for research.

Staff and tools

As proposed, four units will match a total of $600,000 annually to help grow the entrepreneurial environment for technology at Iowa State. The four are the Pappajohn center and ISU Research Park ($200,000 each), and IPRT and the office of the vice provost for research ($100,000 each). The funds will be used to add staff positions, hire consultants, and pay for market research studies for some fairly high-risk ventures. In the case of the research park, some funds also will be used to market to a national audience the opportunities at ISU and subsidize business expenses for start-up companies in the park.

The six companies that will receive initial financing this year are: Metabolic Technologies, Ames; CMNet Inc., Ames; CombiSep Inc., Ames; BIOva, Ames; Infiscape Corp. Ames; and Industrial Hardfacing Inc., Lamoni.

"It's tremendously exciting to have this revenue stream for the next 10 years. This is a significant investment by the state in what we do.

Steve Carter, director of the ISU Research Park and Pappajohn Center for Entrepreneurship