Arkansas' Role in Research and Development

by John Ahlen  on Monday, Jul. 9, 2012 12:00 am  

John Ahlen

In the early 1980s, states began developing policy initiatives designed to replicate the job-creation engines that had emerged and been noticed in a few places around the country.

It appeared that in places like the Boston area, Silicon Valley and the Research Triangle, university-based research and development had spilled over campus boundaries and sprouted new, high growth, technology-based businesses. As the small businesses succeeded in taking innovative products and services to the marketplace, they grew, hired employees whose value was in what they knew, created wealth and spun off new companies. The vibrant business environments were also attractive to established companies that wanted access to the talent and the research facilities of the nearby universities.

Arkansas was among the states to enact such initiatives. Creation of a science and technology authority was recommended by a legislative council task force that made its report in January 1983. According to the report, only seven entities in the state had annual research budgets exceeding $1 million at that time: the Agricultural Experiment Station ($18.3 million); the University of Arkansas-Fayetteville ($10.4 million); the University of Arkansas for Medical Sciences ($3.1 million); the Arkansas Department of Pollution Control ($3.7 million); the U.S. Army Pine Bluff Arsenal ($20 million); the National Center for Toxicological Research ($25.9 million) and the VA Medical Center ($1.2 million).

These state and federal agencies and academic institutions represented the base on which to build and, with the passage of Act 859 of 1983 that created the Arkansas Science & Technology Authority, the state was prepared to “move quickly and aggressively, with a vision for the future.”

The Arkansas Science & Technology Authority began operations in fiscal year 1984, made a strategic shift as part of Governor Bill Clinton’s economic development legislative package in 1985, and began operating a new portfolio of technology-based economic development programs in 1986.

The four key points in the new strategy involved building university research capacity, transferring technology from the university and federal laboratories to existing businesses, creating university-based incubators to nurture new technology companies, and investing seed capital in such new technology companies so they would not leave the state in search of early stage financing.

During the authority’s budget hearings in late 1986, a member of the joint budget committee asked how many jobs the authority had created – it had been four years since the organization had been established, certainly jobs had been created. The answer was that there were no new jobs yet.

The committee recommended the budget request, but the exchange underscored two significant challenges faced by technology-based economic developers. The first and most obvious challenge was that the job-creation engines the states were hoping to replicate had taken decades to reach maturity and the production of jobs was a lagging indicator of their success. Job creation followed successes in numerous other areas, such as productive research in sophisticated laboratories, graduation of scientists and engineers with skills in new applications, spin-offs of new startup companies, evolution of new mechanisms to finance early-stage companies that did not have collateral for loans, and refining new products and services to make them attractive and affordable to customers.

It was only after the company began to scale up production to meet market demand that it needed to hire increasing numbers of skilled production workers.

The second challenge, and one not especially obvious at the time, was that this process of replication was being invented by practitioners as they were doing the job. There was no job description, no job manual and no jobs to count at the beginning of the undertaking.

A great deal was happening in the early 1980s and the pace was going to increase.

New technology-based economic development policies were put in place through the 1990s and built on the foundation established in 1985 at the Arkansas Science & Technology Authority. The bills addressed gaps between existing programs and exploiting new opportunities; for example new programs addressed how to take advantage of the federal Small Business Innovation Research program, speed technology development and improve math and science education.



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