April 1, 2012

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On the Horizon

Six Years In, USTAR is Beginning to Shine

Heather Stewart

April 1, 2012

The Utah Science Technology and Research initiative (USTAR) was launched in 2006 with great fanfare. That year, the Utah Legislature provided the initiative with a hefty dose of cash—about $65 million in one-time funding, $110 million in bonding capacity and $19 million in ongoing funds.

The investment came with the anticipation of an enormous payout. USTAR was initially projected to generate, over a 35-year period, 422 companies that would provide 123,406 high-paying jobs and create $5 billion in new state taxes.

USTAR was designed to invest heavily in research at the University of Utah and Utah State University—the state’s two research universities—and then spin that research out into the marketplace with new products or companies. USTAR Executive Director Ted McAleer calls it “innovation-based economic development.”

Six years into the initiative, the program is making strides, particularly on the investment side. At the end of fiscal year 2011, USTAR had recruited more than 40 top researchers to the state, luring them away from world-class institutions like Harvard, MIT and Case Western Reserve. So far, these researchers have been awarded $137.4 million in direct USTAR grants and USTAR-assisted grants, bringing an infusion of research funding into Utah.

And the research itself is progressing rapidly. So far, more than 120 invention disclosures and 46 provisional patents have been filed based on USTAR-supported research.

“The long-term impact of these researchers is going to be amazing,” says McAleer. He describes the top researchers as “rainmakers” who are able to pull in vast amounts of federal and other research dollars.

Key to the success of the recruitment effort has been the construction of two state-of-the-art research facilities. The BioInnovations Center at USU has been in operation for about a year, while faculty members are just starting to move into the Sorenson Molecular Biotechnology Building at the U.

These facilities create an interdisciplinary environment where researchers can both focus on their own areas of interest and learn from the work of others. The new building at the U is now the epicenter of the colleges of science, engineering and medicine, says McAleer—a unique situation not found on many other campuses.

In such a collaborative environment, “magical things have a tendency to happen,” he says.

To Market
So far, USTAR is excelling at what academic institutions do best: generating and developing new ideas and technologies. The researchers are busily working, pumping out new technologies, discoveries and world-changing ideas.

But Brad Bertoch of the Wayne Brown Institute (WBI) says the second piece of USTAR’s mission, commercialization, is stalling—and for good reason. The academic world is not so great at commercialization, he says.

Taking a new idea into the market is a very labor-intensive process. “Technology commercialization is a contact sport,” says Bertoch. Commercialization—raising capital and taking a finished product to market—requires a great deal of mentoring and supportive services.

According to Bertoch, the private sector is better equipped to guide fledgling companies along this path.

“The mechanism has been entrepreneurship coupled with a very robust venture capital community here in Utah that takes those fledgling, nascent little companies and adds value in terms of resources, training and contacts, and helps them deliver products to market,” he says.

WBI, for example, launches about 50 companies each year and, in total, helps them raise about $20 million in capital. In contrast, the U has earned the top spot nationally for creating spin-offs for two years in a row, but last year the U spun off about half the number of new companies as WBI.

“In the area of commercialization, USTAR is one of a number of players and plays an important but not all-inclusive role,” says Bertoch.

However, Bertoch clarifies that he is very supportive of USTAR and believes it has been tremendously successful in creating “human capital” in the form of the researchers and their students, building the state’s research infrastructure and attracting new federal dollars.

“USTAR provides a tremendous amount of economic value in the present and in the future,” he says.

USTAR Regional Technology Outreach
USTAR operates four regional Technology Outreach and Innovation Program offices to collaborate with universities across the state. The partnership helps Utah entrepreneurs and companies commercialize the undergraduate research taking place in these schools. The impact of these regional offices is impressive:

• More than 300 commercialization projects

• 11 new companies launched

• $24 million in outside funding raised

The regional Technology Outreach offices provide business consulting, business plan development, market analysis, networking, product development and patent research.


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