Raleigh-Durham, USA (ECONOMYNEXT) – The innovation office in North Carolina’s Department of Commerce operates on a small budget but boasts of big achievements, having pioneered state-level science education and research and helped start-ups that are now American multinationals.
“We focus on the innovation ecosystem,” explained John Hardin, Executive Director of the Office of Science, Technology and Innovation (OSTI), North Carolina (NC) Department of Commerce.
“We pick and choose the portions we can be most effective in, where we can make the big steps.”
North Carolina was the first state in the USA to create an advisory board focused on STI (Science, Technology & Innovation), way back in 1963. It operates under the secretary of commerce and supports scientific, technological, engineering, and industrial research applications in NC.
That focus on STI helped the state, the second poorest in the USA in 1949, relying on agriculture like tobacco and cotton, with a lot of low wage jobs, to be now ranked above average, around 23rd or 24th.
And the North Carolina School of Science and Mathematics, funded by the state, with students not having to pay for tuition or lodging, was the nation’s first public residential high school focused on science, technology, engineering, and math.
The North Carolina bio-technology center was the first-ever state level bio-tech centre in the USA.
“Innovation happens naturally – people are always innovating – but it happen faster and more efficiently and effectively when you got a supportive system,” Hardin told reporters on a tour of US innovation and start-up hubs organised by the US State Department’s Foreign Press Center.
Innovation – the creation of new products and services that drives future economic growth and wellâ€being – accounts for one-third to one-half of economic growth of the USA.
“We get a lot done with a small budget, acting as facilitator and catalyst,” says Hardin. “You need the right type and level of funding, supportive policies, facilities and culture.”
OSTI has just three staff – the Executive Director, Assistant Director and Executive Assistant – supported by two or three Research Associates and interns.
But it also has 25 Board Members, including the Governor and Secretary of Commerce, drawn mainly from universities and private industry in North Carolina.
Its current budget is just $319,770, 93% of which covers personnel but the office handles grant programs funded through other budget lines with amounts ranging from $1 million to $5 million annually.
The ‘One NC Small Business Program’ set up in 2006 by a bipartisan coalition of NC lawmakers broadened an existing program to include support for small, high-tech, entrepreneurial growth businesses.
It provides matching grants to NC businesses of up to $100,000 in the highly competitive Phase I federal Small Business Innovation Research (SBIR) grants program, created in 1982 to support small businesses which lack funding.
“The matching funds helps plant the seeds (of business) and fertilise the seeds to help them grow,” says Hardin. “When you plant a small tree, it’s only after about the second year that it starts to take off – it’s the same with small companies.”
Since 2006, OSTI has awarded 558 grants, worth nearly $36 million, to 245 organizations, mainly small businesses in the state, about 30% of which are bio-technology firms.
The impact is significant in job creation. OSTI says that between 2006 and 2011, with the average number of employees per grantee small business being 10, the combined job creation and retention rate per grantee with 245 grantees, is 20 percent of the existing workforce.
And 98% of the active companies are still in North Carolina, of whom 80 percent are free-standing, with five percent having being acquired by bigger firms and 15 percent being dissolved or going bankrupt.
Start-ups that OSTI helped include chip maker Qualcomm and cyber security firm Symantec Corp., which are now multinationals, and Cree, the designer and manufacturer of LED lighting.
How OSTI works is useful for Sri Lanka whose own COSTI (Coordinating Secretariat for Science, Technology and Innovation) is the leading government body responsible for coordinating and monitoring all science, technology and innovations activities in the country.
COSTI started Sri Lanka’s national nanotechnology initiative through which it set up SLINTEC – Sri Lanka Institute of Nano Technology – a public-private partnership that’s led to several patents from research funded by companies.
Hardin of North Carolina’s OSTI says the organisation works in two ways – at the strategic and tactical level.
At the strategic level, OSTI‘s work is evaluation and advising policymakers, with a deep analysis every two years of how North Carolina state is doing in STI and comparing its performance with other states in the USA.
“We are also a champion and communicator – we pick emerging technologies or sectors and do a deep dive analysis and explain to policymakers and the public why it’s important and it what needs to do better,” said Hardin.
For example, it did a deep analysis of the nano-tech sector and found the state strong but could be stronger.
More recently, in 2016 it prepared a road map for big data, analytics and data science.
“Most businesses are focused on the ‘here and now’ and don’t have the time to look down 20-30 years like the government – that’s what we do. Half our time is spent at the strategic level.”
At the tactical level, OSTI works as a funder and implementer, running grant programs to help start-ups.
It also works as match maker, getting people in the workforce and in the education and research sectors to know each other better, as well as helping recruit and keep hi-tech firms in the state.
“Most of our work involves starting companies from within and growing them,” says Hardin.
(This story is part of a series from a tour of America’s new innovation and start-up hubs, covering Raleigh-Durham in North Carolina, Austin in Texas and San Diego in California organised by the U.S. State Department’s Foreign Press Center.)
(COLOMBO, June 05, 2017)