Dale Brill: The potential of Florida’s innovation system

Florida’s future depends on innovation. Innovation is needed to address threats, including rising sea levels, the effect of nitrogen cycles, ocean acidification and more. If solutions to these challenges are to find their genesis in Florida, a commitment to innovation is necessary to fully transition state and local economies that compete for investment capital, skilled workforce and overlapping targeted industries.

Innovation suffers from many myths, including the one depicting the lone scientist able to radically change the world with a stroke of individual genius. In practice, innovation is a team sport with funders and nearby industry to provide partners and talent supply. Take air conditioning, for example, which was first proposed, scientifically explained, and built by John Gorrie M.D. of Apalachicola. After being awarded a patent for his invention in 1851, Gorrie was forced to travel to the North for investment capital and skilled production capabilities concentrated there. Distance, time and money proved too challenging to overcome. In 1906, Willis Carrier would successfully introduce the innovation of air conditioning as a spinoff company in New York.

There are a few more missed opportunities in Florida’s history. Gatorade and Taxol are two high-profile innovations from the University of Florida and Florida State University, respectively, that netted their institutions considerable revenue but did not generate job-creating production facilities in Florida. It’s difficult to overcome the sway of funding sources and availability of development and production infrastructure. The good news is that there is evidence that commercialization and technology transfer in Florida is hitting its stride.

For example, five Florida universities reported receiving about $410 million in 1996 from federal or industry-related funding sources but offered no technology licenses over the next seven years. By 2006, 12 Florida universities received $718.7 million in federal and industry-related funding with 817 licenses available for commercialization over the next seven years. In 2013, Florida universities netted nearly $1.2 billion from public and industry funding sources.

The importance of university-industry relationships extends well beyond funding as demonstrated by Stanford’s spawning of Silicon Valley through collaborative development with Hewlett-Packard, General Electric, Lockheed and more.

Silicon Valley demonstrates the effect of regional innovation systems. States and nations continue efforts to pursue Stanford’s magic with the understanding that world-class research institutions remain a principle catalyst. To get some sense of Florida’s potential as an innovation system, let’s examine indicators of university-related investments in research, development capacity and talent development in comparison with other states chasing the same dream.

Turning to the Milken Institute’s 2014 State Tech and Science Index, we find Florida ranks 45th in Academic R&D Dollars per Capita, 45th in R&D Expenditures on Engineering per Capita, 45th in R&D Expenditures on Math and Computer Sciences per Capita, 42nd in R&D Expenditures on Physical Sciences per Capita, and 42nd in R&D Expenditures on Life Sciences per Capita. Of the 18 inputs used to calculate Florida’s overall ranking of 40th in the Milken Research and Development Inputs Composite Index, highlights include placing 24th in Research and Development Expenditures on Environmental Sciences per Capita and 33rd in both Federal R&D Dollars per Capita and Industry Research and Development Dollars per Capita.

Inputs like those certainly tell only part of the story. A reasonable argument can be made that spending isn’t the answer. We turn then to related outputs to see what results the state has realized from its comparative frugality. Data compiled by MiQuest and illustrated by Meredith Pugh at the University of Virginia, illustrates enviable performance in terms of the number of patents per research and development dollar spent. Consistent ranking in the top 10 indicates our researchers make good use of what they are given.

Looking at two final output indicators of Florida’s innovation system, we see measures that parallel the often contrasting goals of job creation through innovation capture and revenue generation through licensing. A key mechanism of job creation from university research and development is the rate of spinouts business creation. Data demonstrates a considerable shift since 2007 from 24th to 11th in 2013. In contrast, Florida’s competitive ranking in university royalty and license income has declined from fifth in 2007 to 28th in 2013. It appears the two objectives are in conflict.

What are we to make of all this? A consistent top 10 ranking in patent production and considerably improved performance in spinout businesses from university research suggest that our universities are indeed a productive component of Florida’s innovation system. For Florida to emerge as a vibrant innovation system viewed as globally competitive, increased investments in the university research community must address the tension between job creation expectations and licensing revenue necessity.

Dr. Dale Brill is founder and obsessive thinker for Thinkspot Inc., a Florida-based consulting firm. He has previously served as chief marketing officer for VISIT FLORIDA under Gov. Jeb Bush, director of the Office of Tourism, Trade & Economic Development within the Gov. Charlie Crist administration and president of the Florida Chamber Foundation. You can reach Dale by e-mail at [email protected]. Column courtesy of Context Florida.