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U.S. economic lead linked to university research, development

Despite problems with the budget deficit, a volatile stock market and the slowdown in home building linked to problems in the subprime mortgage market, the U.S. still has the world’s best economy, according to the “Global Competitiveness Report“ released recently by the World Economic Forum.

The annual report that surveys 11,000 business leaders in 31 countries indicated the keys to the success of the U.S. economy lie with a flexible labor market, a huge domestic economy and continual business innovation linked to an outstanding higher education system that promotes research and development.

That critical link between research and development and a strong economy came as no surprise to education and technology business leaders in the state.

“I would definitely agree that university research benefits the U.S. economy,” said Greg Hinkebein, president and CEO, Mississippi Enterprise for Technology Inc. “The best example that I have seen in Mississippi for spin-off business is the work done in geospatial technologies, especially at the Stennis Space Center. Today, there are 25 companies that have commercialized geospatial products at Stennis, employing approximately 150 people.”

Hinkebein said through the cooperative efforts of research being done at Mississippi State University (MSU), the University of Southern Mississippi (USM) and the University of Mississippi as well as NASA research, this cluster of new companies is now competitive worldwide with its products. Recently, geospatial companies in Mississippi have initiated new contracts with technology companies in France, Canada and India.

“Our Mississippi universities are considered extremely high skilled by this global industry,” Hinkebein said. “The university/private business partnership is becoming more common with companies in most developed countries, but particularly in the U.S. Just a drive up I-55 in Madison County provides evidence of this by the co-location of Nissan with the MSU Center for Advanced Vehicular Systems. The Japanese are very familiar with this type of partnership.”

Hinkebein’s company, the Mississippi Enterprise for Technology Inc. is itself a partnership with USM, NASA and 25 cluster companies.

University research is where the action is, said Heath Hall, vice president of external affairs and marketing, Mississippi Technology Alliance.

“It is where we will find cures for major diseases, solutions to our energy crisis and answers to every day problems,” Hall said. “We need to continue supporting our universities because we are living in a time, now more than ever, where technology and innovation will dictate our future. Mississippi is home to some of the finest university research in the country. Whether it is the super computing at Jackson State University, alternative energy at MSU, natural products at The University of Mississippi or polymers at the University of Southern Mississippi, we are on the right track. Research is important and commercialization of that research is crucial.”

As we look ahead, innovation is going to be the key to helping keep the U.S. at the economic forefront on a worldwide scale, said Dr. Kirk Schultz, vice president of research and development at MSU.

“Innovation requires research funding to allow out creative professionals the opportunity to pursue hunches and creative ideas,” Schultz said.

This past year, MSU attracted just more than $185 million in new grants and contracts.

“There have been a multitude of studies which have attempted to access the direct economic research, and generally a factor of four of five is used to access all economic (both short- and long-term) impacts of university research,” Schultz said.

As important as research is, it is noteworthy that the “Global Competitiveness Report” warns that the U.S. ranks 12th in the availability of scientists and engineers. “If U.S. immigration policies fail to attract skilled labor, it may see future declines in this area,” the report states.

“This should be a grave concern to all Americans, as the scientists and engineers are the key players in new discoveries and keeping us at the forefront of technical innovation,” Schultz said. “I do believe that the need to have more young people enter into careers in science and engineering has now been widely publicized, with a strong commitment from the federal government, industry and education to work together towards a solutions. However, with the significantly larger populations in India and China, we are going to need to redouble our efforts so that subsequent generations of Americans will continue to enjoy the prosperity that our technical prowess has brought to million of our fellow countrymen.”

Dr. Ed Ranck, associate director for USM’s Bureau of Business and Economic Research, said more needs to be done to retain scientists and engineers trained in the U.S.

“Our universities, obviously, are the best in the world because people from all over the world come to them and then go home,” Ranck said. “I think our weakness is letting too many come over here, get an education and then leave. I don’t think we are working hard enough to retain very well educated people from other nations who come here for education and science degrees and then leave. That concerns me, ranking 12th.”

That ranking, however, doesn’t greatly concern Ken Malone, director of the Trent Lott National Center for Excellence and Economic Development and Entrepreneurship at USM.

“I think the concerns may be overstated about rankings in scientists and engineers,” Malone said. “In developing nations like China, everything they are building is new. They are building lots of new roads, new buildings and new manufacturing plants. When you are building so many things, you need lots of engineers because everything you are doing, you are designing from scratch. In a very well developed economy like the U.S., we don’t need as many engineers because we don’t have to build everything from scratch. We are mainly incrementally building on what we have. We don’t need as many engineers.”

A very important second part, he said, is that yesterday engineer is today’s medical doctor. Many of the really high-value innovations today are occurring in medical technology. Total numbers of engineers and scientists fail to capture the high rate of growth in the medical profession in the U.S.

“And that is where the lion’s share of value in innovation exists today,” Malone said. “That is a simple thing to understand. You would pay your last penny to live an extra day, but there is a limit to what you would pay for another product.”

Malone believes a shortage that is more critical to the economy is with patent lawyers.

There is currently a backlog of 760,000 patent applications at the United States Patent and Trademark Office. It takes approximately 30 months for a patent application to go through the process.

“It’s hard to argue we need more scientist and engineers when we can’t process the 760,000 patent applications coming from the ones we currently have,” Malone said. “We need more patent examiners (lawyers) more than scientists.”

Research alone doesn’t bring economic growth. It has to be translated into commercial business spinoffs. That is a major focus at Mississippi universities.

“We are doing everything we can to help Mississippi focus on innovation,” Malone said. “Entrepreneurship is an important part of it. We link economic development and entrepreneurship for all the reasons this report brings out, and that is that economic development only occurs from innovation and entrepreneurship. We can get a lot of economic growth by recruiting automobile manufacturers, but you really get economic development from innovation.”

Some examples of successful local companies that have grown out of links to university research at USM include: Hybrid Plastics, which has grown from two to 25 employees in the past two years; KDL Solutions, which has commercialized new technology for obtaining fingerprints; Ablitech, which has developed a new technology for coronary stents; and, the Open Source Software Institute, which has spun off several companies related to software development especially for defense related applications.

Carl Hagstrom, COO of Hybrid Plastics, said the polymer science program at USM has been a definite asset in the development of Hybrid Plastics, both in its collaborative cutting-edge research efforts as well as it providing a source of highly trained, first-class employees.

Hagstrom said university research benefits the U.S. economy, not only in applied research but in basic science.

“In fact in many cases, the research could only have been done under university auspice,” Hagstrom said. “If the research is applied in nature, the trick is to effectively transition this research into the marketplace. There have been many attempts over the years to make this transition more effective and efficient. At this point, the U.S. appears to do it relatively well when compared to other countries. Much of the U.S.’s current economic health is due to our continued ability to innovate, and a large measure of that comes from the knowledge generated at our universities or from the people at those institutions who decide to be entrepreneurs.”

Contact MBJ contributing writer Becky Gillette at bgillette4@cox.net.

About Becky Gillette

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