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ROCKY MOUNTAIN REGION

From Site Selection magazine, July 2004

ROCKY MOUNTAIN REGION

Tech Transfer Thrives

In Mountain States

University research is generating startups,
jobs.

The scenic University of Utah campus
launches three to eight startup companies each year.

by JOHN W. McCURRY

T

      ocky Mountain states have long had a leg up in
the all-important quality-of-life variable of the site selection conundrum.
What’s not to relish about an environment free of traffic congestion
and filled with clean air, stellar scenery and endless recreational
opportunities?

      But there’s also plenty of bleeding-edge research
going on in the labs and incubators of the region’s major universities.
Some of these efforts are well known, while other universities have
fledgling programs and are quietly building the foundation of technology
transfer. The entrepreneurial spirit that helped settle this region
nearly 200 years ago is clearly alive today as university technology
transfer departments help launch dozens of homegrown companies every
year.

      Following is a state-by-state look at some of
the higher education economic development efforts in this five-state
region.

UIRP Paces

Idaho’s Technology Effort

    Doug McQueen, director of the University of Idaho
Research Park (UIRP) in Post Falls, near Coeur d’Alene, says a “grow
your own” economic development policy is the norm in this part of the
Rockies. McQueen came to Idaho after developing Arizona State University’s
Research Park. He is also a former executive director of the Association
of University Research Parks.

Idaho Gov. Dirk Kempthorne (left), is
shown during a recent visit to the Center for Advanced Microelectronics
and Biomolecular Research (CAMBR) at the University of Idaho Research
Park in Post Falls, Idaho. Also pictured are Jody Gambles, (center)
associate director of CAMBR and Dr. Wusi Maki, a CAMBR scientist.

      “Our goal is to expand the presence of, and
the participation by, the university in the community,” McQueen says.
“We’re starting a new branch campus here. This county is the fastest
growing in the state and it’s not where the university is, so there
is a need and an opportunity to expand through academic programs and
research partnerships. Coeur d’Alene, Idaho, has been discovered and
business is booming here.”

      UIRP is home of the Center for Advanced Microelectronics
& Biomolecular Research (CAMBR), which has made its name developing
ultra-low-power microelectronics for NASA. This technology will soon
migrate into the biotech/medical device field through a new company,
MicaBio.

      McQueen says the technology will enable the analysis
of foods for organic materials through microelectronic testing and
identification. Simply put, researchers will be able to place a tiny
sample of food on a chip and feed it into a machine for analysis.
The device may have some medical device applications and could potentially
help spur a cluster of companies in the area, says McQueen, who adds
that the technology may have synergies with those developed by a neighboring
company, Lifestream, which developed cholesterol
testing devices.

Montana Also Takes

Home-Grown Approach

    Montana State University in Bozeman has plenty
of efforts underway to develop startups in various technologies. These
include Tech Link, a largely federally funded agency that functions
as a Department of Defense (DOD) and NASA technology transfer center,
and TechRanch, a recently developed business incubator.

      Tech Link, created in 1996, is the DOD’s only
external technology transfer center and last year accounted for a
third of all DOD licensing, says Will Swearingen, Tech Link director.
The technology covers every conceivable field, Swearingen says, ranging
from medical to advanced materials to communications. The technology
is not weapons-related, but all of it has strong commercial applications.

      “Our role is to find technologies that you can
start businesses around and to work with existing startups to help
them find new technologies and develop relationships with sponsoring
federal agencies,” he says. “We’ve worked with more than 150 companies
throughout the Northwest and have had 10 startups so far, many in
partnership with TechRanch.”

      Swearingen cites Visual
Learning Systems
in Missoula as an example of a high-tech company
succeeding with the help of Tech Link. Visual Learning Systems developed
an innovative software system that enables computers to automatically
analyze satellite images and aerial photographs.

      John O’Donnell considers Bozeman to be “the coolest
small town in America bar none.” An entrepreneur whose past endeavors
include starting successful Internet and software companies in Seattle,
O’Donnell came to Montana about three years ago to open TechRanch,
MSU’s incubator. O’Donnell says Montana missed out on the boom times
of the 1990s and has been struggling to create “high-paying, intellectually
stimulating” jobs. But he calls MSU the “ultimate sleeper research
university” with the potential to reverse the state’s fortunes, one
start-up at a time. TechRanch recently began partnering with MSU’s
College of Business, which has created a new minor in entrepreneurship.

      “We put students in the incubator, give them
assignments and they get credit and experience while my bootstrapping
entrepreneurs get pro bono research,” he says. “‘Management 463, Entrepreneur
Experience’ is the most popular course.”

Wyoming Working

to Create Firms

One company executive calls Bozeman “the
coolest small town in America bar none.” Among the Montana city’s
hip attributes are the Rockies themselves (above) and Advanced
Technology Park, home of the TechRanch incubator, on the campus
of Montana State University.

    Wyoming has the distinction of being the only
U.S. state with just one four-year institution of higher learning,
so naturally the University of Wyoming is the focal point for technology.
The university also has a robust set of economic development outreach
programs. William Gern, the university’s vice president of research,
says the school offers one of the most comprehensive programs through
its partnership with the Wyoming Business Council.

      Gern says the university’s tech transfer office,
the Research Product Center, is doing a “landslide” business. The
office works with faculty inventors to spin their technology out into
companies. The university also operates a market research center,
providing information to assist businesses with location decisions.
This includes the use of GIS tools.

      In the works is a new, 25,000-sq.-ft. (2,300-sq.-m.)
incubator, with steel slated to go in the ground later this year.

      “I’m becoming much more optimistic,” Gern says.
“We’re not the Silicon Valley by any means and we’re not the Colorado
Front Range by any means, but the university is putting itself in
good position. We feel a strong responsibility to develop the technology
sector in Wyoming.”

      One of the companies produced by the university
is CC Technology Inc., whose subsidiary
Delta Nu is advancing application of Raman spectroscopy (the measurement
of wavelength and intensity of inelastically scattered light from
molecules) into environmental monitoring, medicine and agriculture.

Utah Gets

Most From R&D Funds

    Technology transfer is robust in Utah, with three
major universities churning out startup companies annually. In fact,
the state may be the entrepreneurial epicenter in the region. Entrepreneur
ranked Salt Lake City No. 5 in its annual list of Best Cities for
Entrepreneurs in 2003.

      Tech transfer heads at the University of Utah,
Utah State University and Brigham Young University all came to their
respective jobs from industry. They have a collaborative relationship
and meet quarterly for lunch.

      Dr. Jayne Carney, head of technology transfer
at the University of Utah in Salt Lake City, says the university
produces between three and eight startups a year. Many become part
of the area’s biotech and medical device clusters. Carney came to
Utah about two years ago after working for Arch Chemicals.

      “We have an extremely entrepreneurial faculty
and they are interested in being very involved in commercializing
their inventions,” Carney says. “It’s also interesting how so many
of our entrepreneurs become serial entrepreneurs. We’re very fortunate
our angel investors fund a company and move on to another to fund
it.”

      Dr. Ted Stanley has been director of research
at the university for more than 20 years. In 1985, he started Anesta,
a company based on technology he invented for delivery of medicine
for cancer pain. That delivery system, Actiq, is now a $400-million
annual product for Cephalon, which acquired Anesta in 2000. Stanley
is now involved in another startup, Zars,
which is developing technology to deliver pain medicine through
the skin.

      Stanley is also mentoring young faculty in
the process of technology transfer. Carney describes him as a good
example of someone doing well while doing good.

      “The university has historically been pro this
concept and very supporting of doing these kinds of things,” Stanley
says. “It’s part of the can-do mentality here. Although there are
not that many venture capitalists here, there are lots of people
with lots of entrepreneurial ideas. I’m trying to stimulate young
people in the medical departments who have creative ideas to do
the same. I try to help them through the difficulties of never having
done that before because I can see some of the pitfalls.”

      The latest launch is Sentrx
Surgicals
, a medical device company that will specialize
in adhesion-free healing of surgical wounds. Founder Richard Kuehn
is one of those serial entrepreneurs Carney talks about. Kuehn was
CEO of Salus Therapeutics, which he
sold to Genta last fall. Salus also was based on technology licensed
from the university.

      Kuehn, who says his new company will seek to
commercialize a chemistry that can be applied to many post-surgical
applications, is putting together a venture syndicate to raise $3
million in initial funding.

      “That will get us started and located and through
some critical milestones,” Kuehn says, adding that the company will
probably find space at Research Park. Kuehn expects to recruit chemists
from the Wasatch Front, but will likely cast a wider net for his
management staff.

      Kuehn says that Utah hasn’t quite reached the
level of entrepreneurship seen in other areas.

      “It’s not like being in Palo Alto where every
third person you bump into has been through two or three companies,”
he says. “It’s tougher here to find people who have that kind of
vetting.”

      Steve Kubisin, vice president, technology commercialization
for Utah State University’s Research Foundation, came to the university
about two years ago following a long career in industry with companies
such as Union Carbide, Alcoa and GE. His mission: to invigorate
the university’s economic development and commercialization efforts.

      About 50 companies had come out of the university
over the last 25 years, but most are small cottage industry companies
and aren’t closely affiliated with the university. After two years,
he says efforts are “gaining traction” and he expects the number
of startups this year to be up 300 to 400 percent. All are based
on the university’s proprietary technology.

      “We are trying to better leverage the technology
we have here, make sure it’s protected via patents and use our stronger
position to form larger companies that have further reach,” Kubisen
says.

      Technology in the works includes development
of seeds with increased crop yields; a project that detoxifies animal
waste to generate methane and create electricit; robotics and the
twisteron, a development that modifies air flow over airplane wings
to produce a reduction in induced drag without a reduction in lift.
Kubisen also says a California group is interested in licensing
USU technology for an application in consumer electronics. He says
the technology helps overcome performance limitations.

      Brigham Young University, with 30,000 students,
is the largest private university in the U.S. And despite the fact
that its primary mission from the Mormon church is to educate rather
than be a research frontrunner, the school is getting a lot of bang
for the research buck. A 2002 study by the Chronicle of Higher Education
found that BYU ranks number one in startups produced per dollar
of funding.

      “The amount of research we do is relatively
small, but what we do tends to be fairly productive,” says Dr. Lynn
Astle, director of BYU’s technology transfer office. “We spin out
three to four companies a year.”

      While BYU was once known for its software design
— Novell and WordPerfect came out of the university in the late
1980s — today the major focus is on engineering in a diverse group
of sectors. There have been plenty of success stories in recent
years, most notably Sonic Innovations,
a developer of digital signal processing technology that allows
hearing aids to be tuned to the hearing loss of an individual. The
company is the fastest growing maker of hearing aids in history
and was ranked number 117 of the 2003 Deloitte Technology Fast 500.

      The latest company is Procerus,
a developer of an auto pilot system with potential applications
for the military, firefighting, the border patrol, searches for
lost people and traffic reports. The technology allows a computer
to control the flight of an airplane with a 20-inch (51-cm.) wingspan,
much smaller than any drones in current use.

Colorado Among

Research Leaders

    The University of Colorado receives a half billion
dollars annually in research funds, making it the fifth largest public
research university as measured by federal support. About half of
that funding goes to bioscience while the remainder is spread across
traditional research areas of engineering, atmospheric sciences, physics
and chemistry.

      Startups are on the rise at the university. David
Allen, the university’s associate vice president for technology transfer,
says six companies debuted last year, 10 will launch this year and
projections call for 12 during the next fiscal year. Of these, 90
percent are based in Colorado. Adams says Colorado’s Front Range is
well known for its entrepreneurial community.

      “One of greatest attractions here is a high quality
of life with the mountains and climate,” Adams says. “When people
come, they don’t like to leave. Companies have very little problem
attracting talent here. We have a lot of serial entrepreneurs here,
people willing to wait until the next opportunity comes along.”

      Thriving sectors include telecommunications,
information storage and photonic-optics, Adams says. He says his department
recently adopted a different approach to tech transfer. Teams composed
of business leaders, students and faculty work to license technology.
Last year, 28 teams were involved, resulting in the creation of four
companies.

      “It accelerates the program and expands our bandwidth,”
Adams says. “Students are able to do a lot of analysis work under
the review of a team of experts in a particular area.”

      Colorado State University is in the process of
redefining its economic development mission, says Tony Franks, vice
president of research and information technology.

      “We’re assessing how we take ideas and make sure
they have the broadest impact on society,” Frank says.

      Last fall, CSU was awarded $22.1 million by the
National Institutes of Health to build a biodefense and emerging infectious
diseases research center. The new facility adds to the university’s
recognition as a major center of biosecurity and infectious disease
research.

      “It will make one of the largest free-standing
levels of biosecurity Level 3 space and will be attractive to private
sector partners to work on infections agents,” Frank says.


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