Institute For The Future

IFTF Comments on Senate Bill for Science Park Grants and Loans

Respectfully submitted by Anthony Townsend

Research Director

Institute for the Future

 

As the United States begins to recover from an historic economic recession, the Senate is considering a bill that will make a major investment in the infrastructure for science- and technology-based innovation so critical to the nation's long-term economic success. S.583 proposes to provide grants and loan guarantees for the development of new science parks and expansion of existing science parks over the next decade. While this bill is a step in the right direction and will create jobs in the short term, it has three important flaws that need to be addressed for it to have lasting economic impact.

 

First, the bill focuses exclusively on physical development of new science parks, and the expansion of existing ones. In essence, it seeks to build a new generation of science parks based on the real-estate driven models of the past. The science park model dates to the science camps built during World War II to develop the atomic bomb. It was adapted in the 1950s to meet the economic development needs of places as diverse as Stanford University and the North Carolina Research Triangle. It's over a half-century old and needs to be updated to support American R&D in the 21st century.

 

Earlier this year, the Institute for the Future developed a comprehensive forecast of the future of science parks in partnership with the Research Triangle Foundation of North Carolina, titled "Future Knowledge Ecosystems: The Next Twenty Years of Technology-Led Economic Development". That forecast, publicly available at www.iftf.org/iasp, presented three scenarios for the future of science parks. In none of these scenarios did we foresee a major expansion of science parks using conventional real estate business models. Either driven by changes in R&D management, high energy costs, or new competing business models, we found that traditional science parks will come under severe stress in almost any possible future. Science park managers sense this future already. While many science parks are successful today, many are working to evolve their business models to focus on higher value-added services.

 

 

Second, the bill does not address the need to upgrade and redevelop existing science parks in ways that will ensure this substantial existing infrastructure is ready for the 21st century of global competition in science and technology. The old post-War model of single-tenant buildings, isolated in suburban research campuses is no longer working, but transforming existing parks to a more modern mixed-use, multi-tenant collaborative R&D environment will require investment. While the bill does provide a window for these kinds of projects, it should more explicitly support them. For instance, providing grants and loan guarantees to science parks to convert single-tenant buildings to multi-tenant buildings, or tax credits for companies that invest in common, shared instrumentation and infrastructure are two possible tools to achieve this goal.

 

The current bill not only doesn't provide tools for upgrading existing parks, it may actually undermine the existing market by creating a glut of new R&D space at precisely the wrong time. Many existing science parks are already in financial trouble - expanding the competition for tenants by building new science parks is unwise.

 

 

Third, S.583 should be expanded to support not just the "hardware" of science parks but also their "software". In our study, we found that the most important element of future science parks business models will be the creation of mechanisms for long-term development of social capital - the networks of people, organizations, knowledge and trust that distinguish simple office parks from real innovation clusters. Put simply, while many regions have tried to emulate the physical model of Silicon Valley, they rarely succeed because they do not invest the resources to support the more value-adding work of connecting investors and entrepreneurs, developing talent and training, and embedding science and technology in a broader community context. This bill cannot limit itself to just the physical side of building successful science parks, it needs to pair that investment with organization-building efforts that can sustain larger economic development initiatives around science parks over time.

 

 

While S.583 is an important piece of legislation, it can and should be improved if we are to fully realize the potential of one of the United States' most valuable assets for future innovation in science, technology and business.