ISTC Members at the S&T Leadership Forum on Biomedical Commercialization November 14th on Capitol Hill. From left: Robert Metz – Horizon Pharma, Nancy Sullivan – IllinoisVentures, Kapila Viges – EnterpriseWorks Chicago, Rep. Randy Hultgren, Barbara Goodman – iBIO Institute, Jeff Margolis – ISTC, John Flavin – Chicago Innovation Exchange, Mark Harris, ISTC

By Mark Harris, President and CEO, Illinois Science and Technology Coalition (ISTC)

Hosted by Rep. Randy Hultgren (IL-14), the November 14th ISTC Science & Technology Leadership Forum on Biomedical Technology Commercialization on Capitol Hill enabled Illinois innovation leaders to highlight the importance of basic research funding and federal technology commercialization programs to our state.  The event coincided with important debate in Congress about the future of federal support for scientific research.  Outcomes of the America COMPETES reauthorization, for instance, which supports basic research funding, technology commercialization programs, and STEM education will have a decades-long impact on our state and nation.

Illinois’ economy is increasingly linked to federal support for scientific research as our universities and national labs become the engines of economic growth.  Whether it’s the 369,000 people directly or indirectly employed due to the biotechnology sector, the $3.4 billion in economic output of the Illinois Medical District, or the $2.26 billion in R&D dollars brought into the state annually –all seeded by federal investment – Illinois is an innovation economy.  If implemented, however, federal spending cuts, known as the sequester, will create an “innovation gap”, halting this engine.

With a growing share of technology output including a 54.1% increase in patent production over the past 10 years, Illinois taps federal research support to generate intellectual property that is licensed – like the multi-billion dollar Lyrica® and HIV-1 protease inhibitor PrezistaTM co-developed at UIC – or spun out of research institutions like the 100 startups created based on university IP from 2006-2011.  The Washington, DC-based non-partisan Science Coalition report Sparking Economic Growth 2.0 highlights 100 companies started based federally-funded research.  Ten of those companies are based in Illinois.

The dialogue with Congressional staffers and Executive Branch agency representatives at the S&T Leadership Forum identified four key priorities for enhancing the Illinois innovation pipeline; research support, seed funding, talent, and research institution-industry partnerships:

Strong and consistent support for basic and applied research

In FY2011, the most recent year available, the federal government provided $40.8 billion in federal academic research support ($1.5 billion for Illinois).  Scientific research requires long-term planning, with discoveries taking years or even decades.  Such planning is hindered by unpredictability in future funding.

Biotechnology companies like Horizon Pharma can depend on this discovery channel to feed their product pipelines as observed by Robert Metz, Senior Vice President of Business Operations and Government Affairs at the S&T Leadership Forum, “Strong and consistent funding for basic research is needed to create a foundation for innovation which can lead to development and eventual technology commercialization.  Sequestration and other cuts in scientific research funding will adversely impact innovation and can create gaps in the technology pipeline vital to building a strong biotechnology sector.”

In addition, the sequester would limit operations of our two Department of Energy national laboratories. The potential impact on Argonne, which provides essential drug discovery support for companies like Eli Lilly and Abbvie through its Advanced Photon Source, was highlighted recently in Crains Chicago Business.

De-risking technology through access to federal seed funding
For a fraction of percent greater investment, the federal government can also unlock the value created through basic research and de-risk new technologies for industry and investment partners.  As John Flavin, Executive Director of the Chicago Innovation Exchange at the University of Chicago noted at the Forum, “Without critical support like SBIR awards, potentially life-saving products are left to die on the vine.”

One idea with exciting potential found in the proposed Technology Transfer Act would redirect the 0.5-1.0 percent year over year increase in STTR funding to proof-of-concept funding. IllinoisVENTURES CEO Nancy Sullivan shared how keeping research discoveries in university labs and utilizing these dollars to test commercially relevant milestones, increases the potential to create market-supported technologies and sustainable startups.  Forming companies too early leads to a higher failure rate from Ms. Sullivan’s experience.

Creating the talent pool to commercialization federally-funded research
Developing talent that can link technology with the marketplace is one of the major bottlenecks to technology-based economic development. The NSF I-Corps program is one new model for tech commercialization talent development, bringing the lean startup model to university labs including the University of Illinois.  Beyond the lab, efforts like the University of Illinois EnterpriseWorks and EnterpriseWorks Chicago and the Northwestern NUvention courses create this human capital.  One component of the America COMPETES reauthorization is the Regional Innovation Program, championed by Rep. Hultgren. One proposal for the Regional Innovation Program would continue to create opportunity for these programs, while expanding eligibility to include venture development organizations like the iBIO Institute. Institute Senior Vice President Barbara Goodman observed at the Forum that by partnering with programs like the Institute’s PROPEL, a relatively small amount of federal funding can leverage additional investment – active PROPEL companies have raised more than $95 million with less than 20% coming from government sources.

Catalyzing research institution-industry partnerships
As Mr. Metz noted at the Forum, “Technology innovation and commercialization requires connections between research institutions and universities, private industry, and government to drive research and development, share risk, and link knowledge.  Support for innovation hubs and clusters are ways to catalyze these partnerships.” The federal government is positioned to bring together institutions that develop technology to those that commercialize it including the SBA cluster grant program which includes the Illinois Smart Grid Innovation Cluster that creates an ecosystem that supports business growth and entrepreneurship for smart grid energy technologies.

The Regional Innovation Program has supported initiatives like the Rockford Jobs and Innovation Accelerator Challenge which linked the Rockford aerospace industry with NIU, EIGERlab, Rock Valley College, and others to foster innovation, train the future workforce, and create visibility for the community.   Through the JIAC award, Rockford has created or retained over 3,300 jobs in one year, surpassing the two year goal of 2,100.

Illinois Academic R&D Expenditure by Field, FY2011


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