The Austin Story

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By Linda P.B. Katehi

 In my series of articles on UC Davis and the role it plays in our local and regional economies, I want to draw attention to another university often held up as a model for its far-reaching economic impact.

According to a 2014 paper published by the University of Texas’ Bureau of Business Research, the Austin Technology Incubator at UT-Austin was directly involved in assisting companies from 2003-2012 that generated more than 6,250 jobs, $880 million in economic benefits and more than $20 million in local tax revenues.

Those are impressive numbers, and some of that economic activity was the direct result of commercialization from research conducted by University of Texas faculty and students.

To cite just one example, a recently successful UT start-up has developed technology that reduces underwater noise, generated by drilling and construction activities, that is harmful to marine life. AdBM Technologies, founded by an associate professor and two UT colleagues in 2013, has already reported sales projects in the pipeline worth more than $55 million.

The Incubator, which has been in existence for 25 years, also offers a variety of support services to companies that are not connected to the university. But without question, the UT Incubator is part of an impressive ecosystem of innovation and entrepreneurship that has developed over time in and around the public research university.

The Incubator has five broad portfolios:  Bio/Health Sciences; Clean  Energy; IT/Wireless; Development, which is faculty and student research; and Landing Pad, which provides services for companies wishing to relocate to the Austin area.

Illustrating the kind of serendipity that often occurs in such a robust innovation environment, the Development unit is run by a young medical researcher from Berkeley, CA who got her PhD at the University of Texas, but was frustrated when the timing was not quite right for her hopes of commercializing her research on genomic sequencing of lymphoma cancer cells.

Lydia McClure, who is now 30, began networking at the Texas Venture Labs in the university’s school of business, where she received a post-doc appointment. After her year appointment was up, instead of going back to her cancer research lab, Lydia was hired at the Incubator and last year worked with 150 start-ups in different stages of potential commercialization. In addition to her work in Austin, Lydia now travels around the country consulting other universities and cities hungry for economic opportunities that come from university research.

She knows that only a portion of the start-ups she’s currently working with will pan out, but the ones that do provide societal benefit with their products, as well as jobs and economic activity for UT graduates and others in and around Austin.

Since I became chancellor at UC Davis in 2009, our staff and faculty have stepped up the university’s entrepreneurial and technology transfer programs to create our own rich innovation infrastructure that can, over time, produce similar results for our region.

A New UC Davis Incubator

Just last week, for example, we celebrated the launch of the UC Davis – HM.CLAUSE Life Science Innovation Center in South Davis, which combines the resources of the university and seed specialist HM.CLAUSE. The incubator will provide much-needed laboratory facilities to help newly formed companies take root in the region. Currently, the center houses four companies looking to capture a spot in the marketplace and there is room for more.

One of the companies, DtoR, Inc., began when CEO Paul Feldstein, an assistant project scientist at UC Davis, came up with an idea for fast and powerful analysis of transcription, or copying DNA into RNA. Within a few months, the company was born with help from the new incubator.

The UC Davis – HM.CLAUSE Life Science Innovation Center is the first off-campus member of our distributed research incubation and venture engine, which we’ve dubbed the DRIVE network. Each company accepted into the DRIVE program has full access to the support resources offered by Venture Catalyst, a unit in our Office of Research, including a suite of services provided through START, a special program designed specifically to help grow robust technology startups.

Venture Catalyst provides a comprehensive set of enabling services and resources for the benefit of university entrepreneurs developing diverse technologies in all disciplines campus-wide.

Austin, inspired by students and faculty at the University of Texas, is now one of the top three markets in the country for start-ups, according to national statistics. Sometimes the university translates its own research into economic opportunity. Often, it works with other entrepreneurs drawn to the area in large part for proximity to and relationship with a major public research university.

I am not suggesting we try to become more like Texas. We have so many of our own great attributes and expertise, that Davis and the university don’t have to take a back seat to or aspire to be like anyone else.

But places like Austin and the University of Texas didn’t become successful by accident. They knew early on it was not enough to simply attract a lot of research grants and top faculty to work in the university’s labs.

What they understood from the start was the need to work together with state and local governments, industry, the university and other partners, to create an environment that inspires and nurtures innovation and entrepreneurial activity in a variety of creative ways.

That’s a valuable lesson for any region seeking to leverage a great university’s intellectual firepower in ways that benefit everyone.

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Disclaimer: the views expressed by guest writers are strictly those of the author and may not reflect the views of the Vanguard, its editor, or its editorial board.

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9 thoughts on “The Austin Story”

  1. Frankly

    “leverage a great university’s intellectual firepower in ways that benefit everyone”

    This should be a universally-understood primary mission statement for UCD.

    The pieces are all there except allowable  land use.

    The question is will the city of Davis support the university by allowing land to be used to help with this mission and reap some of the direct benefits, or will the university need to look elsewhere for more welcome communities that value the direct benefits.

      1. Frankly

        So let me understand, you would prefer that the university use its land to develop innovation parks that house for-profit business and it doing so would circumvent the design and amenity desires of Davis residents, and also eliminate the tax revenue benefit that would come to the city?

        1. Don Shor

          The university can house the incubators, the laboratories, and the start-up sites (as can Nishi). When they actually need to move up to larger sites they can move into the peripheral business parks.
          I don’t think the incubators and laboratories, or the early phases of most of these businesses, generate much tax revenue. Any multiplier effect from those businesses accrues regardless of whether they are on or off campus. And when the university occupies land off campus for those purposes, it goes off the tax rolls.
          I really think Nishi is key to this. I hope the city and university are actually working together on that one.

        2. Frankly

          I might be wrong about this, but I think the incubators and intial ventures would be on the private side and not contained within the UCD operations umbrella, and so these businesses would pay property tax.

          Also, I think the innovation park concept is one where startups and established companies cohabitate the same area.  Now, maybe the university land is close enough to the proposed innovation parks to support near enough proximity to foment that type of upstream and downstream innovation… however, the closer the better I think.  This is what the best-practices of other innovative business communities tell us.

          But getting back to the concept we are talking about… a public university helping move academic-born intellectual capital to the private for-profit economy by supporting the innovative development of  actual for-sale products and services… I don’t think this fits well on university property.  In fact, I think the university might be precluded from using its land for this activity without losing its tax-free land-use status.

          1. Don Shor

            Here is the site of the new HM Clause facility that Chancellor Katehi referred to: HM Clause site
            My guess is these sorts of collaborations may take various forms. If a company needs land for greenhouses or test plots, it’s going to be out in the county.

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