What Are Technology Programs Really Supposed To Do?

Here is an interesting story about one of Ohio's Third Frontier Programs. It raises a very important issue about what is the intended impact of these types of high-tech programs. Are innovation-oriented economic development programs really about job creation? In my assessment, that is not their primary role. Rather these programs are about new product and process innovation and stimulating technology-based enterpreneurship. If we are successful in achieving these two goals, then new jobs will develop.

I have weighed in on this debate earlier with my new stakeholder-based value creation model that recognizes different types of value to be created for different types of ED stakeholders. Go here to download it.

A state program that earmarked almost $70 million to spur high-tech projects and new companies has not created a significant number of jobs, a recent study concluded. The report assessed a fund run by Ohio's Department of Development that is one leg of the Third Frontier program, a hallmark of Gov. Bob Taft's $1.1 billion effort to increase high-tech jobs in the state.

The program's impact on the commercial economy has been slight," according to the study by Policy Matters Ohio, a Cleveland- based research outfit. "Though it's still early and more new products could come out of the program, commercialization results so far are not substantial."

The fund was started five years ago to lure federal money for technology and development, especially for the Glennan Microsystems Initiative. The organization, near NASA Glenn Research Center, aims to create very small mechanical devices that work in harsh environments. Glennan Microsystems has received more than any other applicant - almost $5 million. So far, Glennan is close to creating new products, has spun off four new companies and has drawn $35 million from others. But the organization has created fewer than 20 jobs.

Jobs are certainly an important measure, Program Director Walter Merrill said. Yet, he added, "those weren't the only outcomes." His organization is about to spin off another company and has 20 patents pending or in place, Merrill said.

Frank Samuel, the Governor's science and technology adviser, called Glennan's ability to attract seven times more money than the state fund gave it "pretty darn good." What's more, Samuel said, the primary goal of the Third Frontier Action Fund is not to create jobs. Rather, the fund aims to cultivate an entrepreneurial climate and allow scientists to develop products and help them attract other investors.

There is room for perspective on this situation. The overall economy has killed, not created, jobs in the past three years. Only recently has the economy begun to throw off some job growth. Second, these programs do take time to show results, and they will, if they are properly designed and managed. I will add that it is far more difficult to stimulate technology-based entrepreneurship in Ohio and NEO than the often admired high-tech meccas across the country. All of these issues should be given consideration is any 'serious' evaluation effort, which it does not sound like Policy Matters Ohio conducted.

Go here to read more.