South Dakota is to effectively integrate a robust science and technology ...... conducted by the Department of Education to aid teachers as they work to align their.
2020 Vision: The South Dakota Science and Innovation Strategy SD EPSCoR REACH Committee April 2013
SD EPSCoR REACH Committee _____________________________________________________________________________________________________________________
David C. Link REACH Committee Chair Executive Vice President Sanford Health Systems Curt Hage REACH Committee Vice-‐Chair CEO, Home Federal Bank, Retired James A. Rice Executive Director, SD EPSCoR South Dakota State University James W. Abbott President, University of South Dakota David Chicoine President, South Dakota State University Duane Hrncir Acting President, South Dakota School of Mines & Technology Laura Jenski Vice President for Research, USD Kevin Kephart Vice President for Research, SDSU Ronald White Vice President for Research, SDSMT Georgia Hackett Vice President of Institutional Relations Sinte Gleska University Jack R. Warner Executive Director South Dakota Board of Regents Paul D. Turman System Vice President for Research and Economic Development, SD Board of Regents Kathryn Johnson South Dakota Board of Regents Senator Phyllis Heineman Senator Jeff Haverly Representative Susan Wismer Senator Corey Brown
Thomas R. Loveland USGS/EROS Gary Archamboult SBIR Coordinator Small Business Development Center Mel Ustad Director of Commercialization SD Governor’s Office of Economic Development Pat Lebrun SD Science & Technology Authority Melody Schopp SD Dept. of Education Jason Dilges SD Bureau of Finance and Management Kirby Mellegard Manager, Materials Testing, RESPEC Pat Costello SD Governor’s Office of Economic Development Brad Wheeler Wheeler Manufacturing Paul Batcheller PrairieGold Venture Partners Eddie Sullivan Sanford Applied Biosciences Scott Morgan Sisseton Wahpeton College Hannan LaGarry Oglala Lakota College Donald L. Endres Glacial Lakes Capital, LLC Christine Hamilton Christiansen Land & Cattle, Ltd. Whitney Robertson Dir. of Commercialization, Sanford Health Sherri L. Rotert Attorney, Novellus Law, P.C. Ed Duke Director, SD NASA EPSCoR
Table of Contents Executive Summary
1
Preface
2
List of Tables & Figures
3
2020 Vision
4
Why South Dakota Needs This Plan
4
The Approach
The South Dakota Innovation Equation
5 5
A Bird’s-‐Eye View: The Strategy Blueprint
7
The Target Sectors
1. Value-‐Added Agriculture and Agribusiness 2. Energy and Environment 3. Materials and Advanced Manufacturing 4. Human Health and Nutrition 5. Information Technology/Cyber Security/Information Assurance How the Target Sectors Match the Criteria
8 8 9 9 9 10 10
The 2020 Vision Strategy
12 12
Strategy Area: IDEAS
14 14 17
The 2020 Vision Strategy Map Resources and Assets The Ideas Strategy Strategic Investment in Research Areas and Assets Aligned with Target Industry Sectors Animating the Next South Dakota Economy: The 2020 Vision New Value Project 1. Senior Faculty Science and Innovation Professorships 2. University/Industry Research and Innovation Centers 3. Target Sector Advisory Councils 4. Invigorate the On-‐Campus Innovation Orientation
Strategy Area: TALENT
Create a Culture of Entrepreneurship on the Campus
Faculty Release Time for Entrepreneurial Ventures and Commercialization Activities Entrepreneurs in Residence within South Dakota’s Colleges and Universities Implement Policies, Training, and Systems within Higher Education that Inform Faculty and Facilitate their Involvement in Entrepreneurship, Commercialization and Intellectual Property Development Activities
17 19 19 20 22 22
23 24 24 24 25
Promote Science, Technology, Engineering, and Math (STEM) Study at All Educational Levels 25 Expand Successful Middle and High School STEM Activities Creating Greater Exposure for Students Around the State 26 Build Stronger Foundations that Ease the Movement of Students with STEM Interest Between All of the Postsecondary Institutions in the State – The Regental Institutions, the Private Colleges and Universities, the Tribal Colleges and the Technical Institutes 26
Develop Incentives to Encourage Students to Pursue STEM Degree Programs, and Reward Institutions for Graduating Students in These High Need Areas
27
A Note on Postgraduate Education and the Target Industry Sectors Guidelines for Aligning Higher Education within This Science and Innovation Strategy Master’s Degrees: The Attractive, Expedient, Cost-‐Effective Option The Ph.D. Degree
28 29 30 32
Refining the Role of Postgraduate Higher Education within The 2020 Vision Strategy 28
Strategy Area: COMPANIES
Access to Very Early Stage Capital and to Growth Financing: Filling the Gaps Early Stage Funding Initiative Addressing the Moderate Risk/Moderate Return Gap
Fostering Growth Management Experience in High Impact Companies Design-‐Centered Manufacturing and Product Development Capacity
33 33 33 34 34 35 35
Establish Center(s) for Industrial Design that Reach Across College Disciplines and Functions Assist Small and Medium-‐Sized Companies to Incorporate Higher Levels of Design into Existing and New Products 36 Create and Embed Improved Design and Creativity Curricula into Technical Programs at the State’s Four Technical Institutes and the Three Tribal Colleges, such as Engineering Technology, and Applied Design into Arts Programs 36
Management Matters
Organizing, Funding and Delivering Science and Technology-‐Based Innovation Services at the State Level to Enable Regional Economies
36 36
Tracking 2020 Vision Progress and Impact
37
2020 Vision Implementation Notes
43
Appendix A
49
Appendix B
52 52
The 2020 Vision Global Indicators: Overall Prosperity Strategy Area: Ideas Strategy Area: Talent Strategy Area: Companies 2020 Vision Management Strategy Area: Ideas Strategy Area: Talent Strategy Area: Companies
Calibrating South Dakota’s Innovation Capacity Development of Target Industry Sectors How the Target Industry Sectors in South Dakota were Selected Target Industry Sector Criteria The Target Industry Sectors Target Sector Relationships How the Target Sectors Match the Criteria
38 38 39 42 43 43 45 47 49
52 53 54 86 87
Appendix C
Indicator Descriptions
90
ENDNOTES
98
Executive Summary The goal of 2020 Vision: The South Dakota Science and Innovation Strategy is to build science and technology capacity in South Dakota that will promote innovation, foster knowledge-‐based companies, generate higher wage jobs and build the capacity to sustain the prosperity they create. The South Dakota economy is in great shape by most accounts and that has been true for some time. From 2006-‐2011, during a period including the worst economic decline since the Great Depression, the state still managed to add 16,000 jobs, a 3% increase, while national employment was stagnant. However, in an era where robust economies are driven by talent that generates new ideas that create new value, there are some alarm bells sounding in the not-‐so-‐far distance. While South Dakota has the third lowest unemployment rate in the country, its median household income ranks 33rd; its workers earn, on average twenty-‐five percent less than their counterparts throughout the country; and the state ranks 49th in the U.S. in the number of high technology establishments as a percent of all business establishments. South Dakota’s state government, education, and private sector communities have recognized that to thrive in a knowledge-‐based economy change is needed and there are signs that this change has begun. But this recognition is tempered with the realization that there is more that needs to be accomplished. To provide a coordinated framework to launch the next stage of the state’s economic growth the SD EPSCoR Advisory Committee (REACH Committee) proposes 2020 Vision: The South Dakota Science and Innovation Strategy to address this challenge. The 2020 Vision Strategy is, at its core, a collaborative venture between the state’s public and private sectors to build the capacity to produce and grow the new ideas, the talent and the companies that will power South Dakota’s future innovation-‐rich, higher value economy. The strategy does this in two steps. First, through careful analysis it identifies the existing and emerging industry sectors that are best positioned to drive a robust future South Dakota economy. Second, it proposes eight initiatives that are defined by actions that will build the solid base of science, technology, engineering and math (STEM) knowledge and know-‐how needed to support and grow these target industry sectors over the next several decades. The 2020 Vision Initiatives 1. Strategic Investment in Research Areas and Assets Aligned with Target Industry Sectors 2. The 2020 Vision New Value Project: Building academic innovation capacity and leveraging research strengths within university/industry multidisciplinary centers to support new value creation and growth within the target industry sectors 3. Create a More Entrepreneurial Culture on Campus 4. Promote Science, Technology, Engineering, and Mathematics (STEM) Study at All Educational Levels 5. Refine the Role of Postgraduate Higher Education within The 2020 Vision Strategy to Provide Talent and Knowledge to the Target Industry Sectors 6. Access to Early Stage Capital and Growth Financing: Filling the Gaps 7. Fostering Growth Management Experience in High Impact Companies 8. Design-‐Centered Manufacturing and Product Development Capacity
1
Preface South Dakota has recognized that science, technology, engineering, and mathematics (STEM) research, an educated and skilled workforce, and an entrepreneurial business environment are the foundation of the state’s competitiveness in a global economy. If South Dakota is to effectively integrate a robust science and technology (S&T) strategy into the broader state economic development enterprise, the process of developing that strategy must be inclusive of all stakeholders: citizens, industry, public, private and tribal postsecondary education, K-‐12 education, economic development organizations and state government. From this perspective, Governor Dennis Daugaard tasked the SD EPSCoR Advisory Committee with the responsibility of developing a state-‐wide science and technology strategy to help guide and focus infrastructure development investments. This document, “2020 Vision: The South Dakota Science and Innovation Strategy” represents a year-‐long effort by the Committee and community economic development stakeholders identified on the back cover. The partnership that resulted assessed the state’s existing research and STEM industry strengths, and looked to the future to identify areas where emerging research and industry sectors have the potential to achieve leadership positions. Using this assessment, the 2020 Vision proposes a set of South Dakota-‐specific strategies for strengthening basic and applied STEM research, aligning workforce development activities with these research strengths and continuing to grow the entrepreneurial culture that is the hallmark of a knowledge-‐based 21rst-‐century economy. James A. Rice Director, SD EPSCoR
2
LIST of FIGURES Figure 1. The 2020 Vision Strategy Blueprint
p. 7
Figure 2. 2020 Vision Strategic Initiative and Action Plan
p. 13
Figure 3. 2020 Vision Implementation Plan Summary
p. 48
Figure A-‐1 Academic Science and Engineering R&D per $1,000 of GDP
p. 51
Figure B-‐1 Employment Growth in Value-‐Added Agriculture and Agribusiness
p. 56
Figure B-‐2.Employment Growth in Energy and Environment
p. 63
Figure B-‐3 Employment Growth in Materials and Advanced Manufacturing
p. 70
Figure B-‐4 Employment Growth in Human Health and Nutrition
p. 77
Figure B-‐5 Employment Growth in IT/Cyber Security/Information Assurance
p. 82
Figures B-‐6 and B-‐7: Interaction Between Target Sectors
p. 86
LIST of TABLES Table 1.
Target Sector Criteria Characteristics
p. 11
Table 2. Table 3.
Translational Research Innovation Infrastructure Target Industry Sector Alignment
p. 16
Economic Sectors and Professional Science Master’s Degree that Could Stimulate Development of a Workforce Contributing to Economic Development in the South Dakota Higher Education
p. 31
Table A-‐1
Innovation Capacity Indicators
p. 50
Tables B-‐1 to B-‐5
pp. 57-‐61
Tables B-‐6 to B-‐10
pp. 64-‐68
Tables B-‐11 to B-‐15
pp. 71-‐75
Tables B-‐16 to B-‐20
pp. 78-‐80
Tables B-‐21 to B-‐25
pp. 83-‐85
Table B-‐26
Target Sector Criteria Characteristics
p. 88
Table B-‐27
Target Sector Criteria Measures
p. 89
3
2020 Vision The goal of 2020 Vision: The South Dakota Science and Innovation Strategy is to build science and technology capacity in South Dakota over the seven-‐year period from 2013 to 2020 that will promote innovation, foster knowledge-‐based companies, generate higher wage jobs and build the capacity to sustain the prosperity they create.
Why South Dakota Needs This Plan The South Dakota economy is in great shape by most accounts and that has been true for some time. From 2006-‐2011, during a period including the worst economic decline since the Great Depression, the state still managed to add 16,000 jobs, a 3% increase, while national employment was stagnant. The unemployment rate within the state remains at just over half the national figure -‐ 4.4% versus 7.7% in November 2012.1 However, in an era where robust economies are driven by talent that generates new ideas that create new value, there are some alarm bells sounding in the not-‐so-‐far distance. While South Dakota has the third lowest unemployment rate in the country: •
Its median household income ranks 33rd;2
•
Its workers earn, on average, twenty-‐five percent less than their counterparts throughout the U.S.;3
•
It ranks 40th among the states in the share of its workforce that is employed in science and engineering occupations;4 and
•
It ranks 49th in the U.S. in high technology establishments as a percent of all business establishments.5
See Appendix A for more information on South Dakota’s ranking among the 50 U.S. states and within a group of 9 other benchmark states for various innovation capacity indicators. South Dakota’s state government, higher education and private sector communities have recognized that change is needed to thrive in a knowledge-‐based, higher value-‐added, innovation-‐rich economy. Fortunately, there are signs that this change has begun. From 2000 to 2009 the state’s levels of academic science and engineering R&D per $1,000 of Gross Domestic Product more than quadrupled {Appendix A, Figure A-‐1} gaining much ground on the overall U.S. level. This is in part a reflection of the state’s investment in its Governor’s Research Centers, in Ph.D. programs and in facilities like the Sanford Underground Research Facility (SURF). But this recognition is tempered with the realization that there is more that needs to be accomplished. To provide a coordinated framework to launch the next stage of the state’s economic growth the SD EPSCoR
1 Bureau of Labor Statistics, Local Area Unemployment Statistics, Unemployment Rates for States, December 2012. 2 U.S. Census Bureau, Current Population Survey, 2010, 2011, and 2012 Annual Social and Economic Supplements. 3 Bureau of Labor Statistics, Occupational Employment & Wage Estimates & Local Area Unemployment Statistics.
4 National Science Foundation, National Center for Science and Engineering Statistics, State Science and Engineering Profile, 2012. 5 Ibid.
4
framework to launch the next stage of the state’s economic growth the SD EPSCoR Advisory Committee (REACH Committee) proposes 2020 Vision: The South Dakota Science and Innovation Strategy to address this challenge.
The Approach The primary goals of this science and innovation strategy are to build the capacity to create and grow knowledge-‐based companies, produce better-‐paying jobs and generate more opportunity for all South Dakota’s citizens. This approach is founded on the belief that the state’s colleges and universities will play a crucial role in the success of the strategy because of 1) the scientific knowledge, technological know-‐how, and R&D capacity they bring to the innovation process in South Dakota and 2) the talent, knowledge and character of the thousands of students that they graduate each year. It explicitly recognizes that the state’s workforce development system and the knowledge and know-‐ how within its workforce will govern the fortunes of the companies that will determine South Dakota’s economic future. The analytical approach and its findings that inform the strategy and its recommended actions seek to answer three basic questions: 1. What high growth and what core industry STEM-‐oriented sectors (target industry sectors) are the most likely candidates to drive a robust, higher value future South Dakota economy? 2. What translational research infrastructure and what STEM-‐related innovation infrastructure should be in place to propel these sectors? 3. What strategies and actions are needed to produce the talent to do all of this?
The South Dakota Innovation Equation For the purposes of this science and innovation strategy, “innovation” is defined as something newly put to use in markets and as the actual process of transforming new ideas into value in the marketplace. In developed economies, a solid base of science, technology, engineering, and mathematics (STEM) knowledge and know-‐how is required to conceive and develop the new ideas that in turn produce value-‐intensive technology and the products, processes, and services in which it is embodied. A regional economy’s capacity to innovate and create new value is the key to sustaining an improving quality of life and a vibrant economy. Over the long run, this capacity is what distinguishes thriving communities from those that struggle just to stay in place. The 2020 Vision Strategy is expansive; it seeks to carve out a big space for South Dakota in the U.S. innovation economy. Over the last three decades there have been numerous and increasingly complex visual representations of the elements and activities that define the innovation process. This strategy employs a simple model to address three elements that capture the essence of the innovation process and then adopts these three elements as its basic strategy areas. 5
In this model innovation is both a process and an output and is governed by three key elements and their interactions: Ideas, Talent and Companies. •
Ideas = the ability and capacity to generate new ideas and transform them into value in the marketplace.
•
Talent = producing, nurturing and attracting talent to generate new and valuable ideas and start and grow the companies.
•
Companies = the innovation implementation vehicle where the new ideas, the new value and the talent come together.
Within the plan each one of these basic strategy elements contains a set of general strategic initiatives that address key area objectives designed to create real economic impact within a group of carefully selected target industry sectors. In turn, each of the strategic initiatives is defined by a series of actions to realize each of these objectives.
6
A Bird’s-Eye View: The Strategy Blueprint Figure 1 presents a visual representation of this science and innovation strategy and its relation to the target industry sectors as described in detail in the body of this report and its appendices. It is intended as a blueprint that offers a bird’s eye view of the linked core strategy elements (shown as interlocking gears in the diagram) and their place and role within a unified concept and plan that promotes innovation, fosters knowledge-‐based companies, generates higher wage jobs and builds the capacity to sustain the prosperity they create. The plan’s basic strategic initiatives are listed within each element area. Figure 1. The 2020 Vision Strategy Blueprint
Va lu e- A d d e d A g ri cu ltur e a nd A g ri b us ine s s
IDEAS Initiatives:
!
Strategic Investment in Research Areas and Assets Aligned with Target Industry Sectors Boost Innovation Capacity and Leverage High Value Research Strengths Through University/ Industry Centers
E ne rg y a nd E nvi ro nm e nt
COMPANIES Initiatives: Access to Early Stage Capital and Growth Financing
TALENT Initiatives:
!
Create a Culture of Entrepreneurship On-Campus Promote STEM Study at all Education Levels
Fostering Growth Management Experience in High Impact Companies Design-Centered Manufacturing and Product Development Capacity
A d va nc e d M anu fa c tur ing a nd M ate r ia ls H um a n H ea lt h a nd N utr i tion
Refine the Role of Postgraduate Higher Education
Inf or m a tion T e ch nol ogy
Source: RTS, 2013.
7
The Target Sectors What high growth and what core industry STEM-‐oriented sectors are the most likely candidates to drive a robust, higher value future South Dakota economy? The analysis linked these four basic criteria together as a lens through which to view South Dakota’s economic sectors and identify the strategy’s target industry sectors. A detailed explanation of the criteria and analysis are described in Appendix B. 1. The sectors show critical mass and/or demonstrable momentum as a statewide strategic choice from an economic development policy standpoint including consistency with the adopted targets of the state and its regions. 2. The sectors demonstrate potential impact across the state including urban, rural, and Native American areas. 3. The target sectors demonstrate strong or very promising showings in South Dakota within a prescribed series of economic measures. 4. The sectors are built on a portfolio strategy that balances levels of risk and reward associated with mature industries with a long history with the state’s economy, industries that have established themselves in the last few decades, and emerging industries that are still small but demonstrate long-‐term potential. Based on the analysis of the state’s economy and the criteria enumerated above, the following five sectors were presented to and adopted by the REACH Committee at its October 18, 2012 meeting.
1. Value-Added Agriculture and Agribusiness The value-‐added agriculture and agribusiness target industry sector’s size, presence across the state, historical importance, and strong relationship to the state’s university system and the Agricultural Experiment Station render it a viable target industry sector. In addition to its historical economic importance, the sector will be important in the future in view of its potential role in renewable energy production, value-‐added manufacturing, and bioscience applications. It is important to note that 1) even within what are considered “traditional” subsectors such as crop production or farm management, the level of technology and knowledge intensity are often very high and 2) this sector should have significant overlap with the other four target sectors (including even information technology).
8
2. Energy and Environment Energy and environment covers the broad range of renewable and non-‐renewable energy production relevant to South Dakota today and into the future. Renewable energy refers to the technologies of solar, wind power, geothermal power, hydropower (dams), and biofuels. Non-‐renewable energy in South Dakota includes coal and the potential for significant future oil and gas production. Energy and environment also includes manufacturing and energy processing industries and the electrical energy grid. Finally, this target industry sector definition also includes companies that are engaged in creating a safe and secure supply of renewable and non-‐renewable energy needed to power the U.S. economy. The broad range of specific subsectors across the energy and environment industry sector means that, like value-‐added agriculture and agribusiness, this target has economic impacts and presents economic opportunities in all areas of the state.
3. Materials and Advanced Manufacturing The materials and advanced manufacturing industry sector includes a broad range of manufacturing subsectors along with emerging materials development activities that play a role in a number of industries including energy and health care. South Dakota exhibits a remarkable strength within this industry and its continued success is expected. Higher levels of investment in plant and equipment, embedded advanced technology, and the need for production, technical and management workers with significant STEM skills characterize this industry sector. This target industry is well distributed across the state with much of the employment distributed in more urbanized areas. It is expected to continue its strong growth performance into the future with wages well above the state average.
4. Human Health and Nutrition The sector includes firms that are conventionally defined as bioscience or biotech as well as the various components of the overall health care industry. When analysts look at the health care industry within regional and state economies, they usually describe the industry as a local or supporting industry in that it simply provides health care services to those who live within the region and does not bring in dollars from outside the region unlike base industries such as manufacturing. But in some economies, human health and nutrition is a true base industry as it brings in dollars, income and wealth from outside the regional economy. This occurs when a region provides health care to people outside the region as a health care hub. This is the case in South Dakota, which boasts several significant base or export-‐oriented sectors within human health and nutrition broadly defined, especially in the I-‐29 corridor surrounding Sioux Falls and in the Rapid City area. There are other segments within human health and nutrition distributed across the state as well. The employment and earnings growth for the human health and nutrition target industry sector has outpaced the overall U.S. performance in recent years and is expected to continue to surpass the overall U.S. growth performance well into the future. 9
5. Information Technology/Cyber Security/Information Assurance Information Technology/Cyber Security/Information Assurance (hereafter IT) is the smallest of the target industry sectors but has the potential to be a strong performer, especially in term of medium-‐ and long-‐term employment growth, for three reasons: • • •
the research and technology strength within the university system. the large banking industry within the state that has significant need for enhanced security. there is an increasing need for protection of electronic medical records within human health.
It can be seen as an emerging sector within the portfolio strategy criteria described at the beginning of this section. During the 2006-‐2011 period when nearly all industry sectors in the economy lost employment within the state and the nation, the IT sector instead grew by 20.3% in South Dakota and 8.4% in the U.S. That growth is expected to continue within South Dakota and also continue to outpace national growth.
How the Target Sectors Match the Criteria A summary description of how each of the target industry sectors measured up against the four selection criteria is presented in Table 1. The five target sectors represent a strong portfolio that balances mature and emerging industries, sectors that are strong in different areas of the state, and moderate to high growth sectors. For more information on how the target industry sector portfolio was developed please refer to Appendix B.
10
Table 1. Target Sector Criteria Characteristics Target Sector Value-‐Added Agriculture & Agribusiness
Energy & Environment
Materials & Advanced Manufacturing
Size (2011 Employment)
Growth Competitiveness Technology Concentration Mature/ Statewide 2011-‐2016 (Location Performance Match Emerging Quotient)
Wages
(Momentum)
50,280
Yes
Slow
Yes
Yes
2.9
$35,301
Very Large
Highest in Central
0.20%
Moderate
Strong
Very high
Below State
19,626
Yes
Good
Yes
Yes
1
$54,356
Moderate
Well Distributed
14%
Moderate
Strong
Similar to U.S.
16,645
No
Strong
Yes
Yes
2.5
Mature
Established
Above State $52,566
Established Moderate
Most in East
28%
Strong
Strong
Very High
Above State
24,935
Yes
Good
Yes
Yes
High
$52,072
Large
Strongest in East
11%
Moderate
Strong
1.24
Above State
12,223
Yes
Strong
Yes
Yes
Low
$56,121
Small
Well Distributed
30%
Strong
Strong
0.51
Human Health & Nutrition Information Technology/ Cyber Security/ Information Assurance
Established
Emerging
Above State
Source: RTS, 2013.
11
The 2020 Vision Strategy The remainder of this document presents the initiatives and actions that define South Dakota’s 2020 Vision Strategy. The plan is organized around the three basic strategy elements that drive the innovation process. Each strategy element contains a set of general strategic initiatives that: •
Address key area objectives designed to create real economic impact within the target industry sectors.
•
Define a series of actions to realize each of these objectives.
•
List key outcomes and performance tracking metrics for each of the strategy initiatives.
The 2020 Vision Strategy Map A summary view of the plan is presented in Figure 2. The plan serves as an avenue to view the entire strategy as a whole piece and as a framework for the more detailed plan description that follows.
12
13
Source: RTS, 2013.
Figure 2. 2020 Vision Strategic Initiative and Action Plan
Strategy Area: IDEAS Objective: Boost STEM-‐oriented capacity to generate research outcomes and technological opportunities that can translate into applications within the group of target industry sectors that are positioned to drive a robust South Dakota economy into the future.
Innovation begins with ideas that have the capacity to actually generate new value in the form of new or improved products, processes and services and the technologies and designs that enable their usefulness. The Ideas strategy area focuses on actions to build on and leverage existing translational research capacity and innovation infrastructure. For the purposes of this strategy, “translational research assets” are defined as those public and private, non-‐profit entities and programs whose mission is to generate research outcomes that will produce value in the marketplace. “Innovation infrastructure” is defined as the public and non-‐profit systems, services and facilities that directly enable innovation. To this end, the focus of this strategy area is on the roles of universities, non-‐profit research organizations and the public sector in moving new ideas and knowledge through the value creation process – new value that will reside in South Dakota companies. It is important to note that the current translational research asset base represents only a small part of the overall public and private research enterprise, which can feed the innovation process in South Dakota. However, from this strategy’s perspective translational research assets are at the “point of attack.” If research can’t be translated into market applications then this strategy will fail.
Resources and Assets In addition to a growing research effort within its university system, South Dakota has a substantive STEM-‐oriented innovation infrastructure that will serve as a resource base for this strategy area. A representative listing of the elements that comprise this infrastructure are listed below. Since 2004 South Dakota has been investing in the development of translational research centers through its Governor’s Research Center Program. Though they are small, virtually every active center is pursuing applications within this strategy’s target industry sectors and several centers have spun out companies and licensed technology within these sectors. For the purposes of this strategy, the state’s research organizations with primary and explicit translational research missions are at the vanguard of the STEM-‐oriented innovation infrastructure. Information on these various centers and their alignment with the target industry sectors is presented in Table 2. The group includes all Governor’s Research Centers plus two major private, non-‐profit translational research entities, Sanford Research and Avera Research Institute. All of these organizations exist to generate research outcomes that will translate into application and value in the marketplace. In all cases the potential applications from their research agendas align with the target industry sectors. Also shown in Table 2 are two major innovation infrastructure assets – the Sanford Underground Laboratory at Homestake and the USGS Earth Resources Observation and Science Center in Sioux Falls. Both operations are world-‐class facilities 14
whose research activities include translational research with 2020 Vision target industry sector applications. In addition to the group of existing translational research centers that are aligned with the target industry sectors, the South Dakota STEM-‐oriented innovation infrastructure features a group of substantive innovation enabling assets within the Ideas strategy area including: •
An impressive array of applied research facilities located at University of South Dakota (USD), South Dakota School of Mines & Technology (SDSM&T), Dakota State University (DSU) and South Dakota State University (SDSU) include: o The Post Traumatic Stress Disorder and Traumatic Brain Injury Research Program and the Catalysis Group at USD o The Animal Disease Research and Diagnostics Lab, the Seed Technology Center and the Geographic Information Science Center of Excellence at SDSU o The Composites and Polymers Engineering Lab, the Additive Manufacturing Laboratory, Arbegast Materials Processing and Joining Laboratory and the Center for Friction Stir Processing at SDSM&T o The Center for Technology Security and the Center for the Advancement of Health Information Technology at DSU
•
Important concentrations of exemplar companies, particularly in the Rapid City, Sioux Falls and Brookings areas. Generating the new value that enables the creation and growth of knowledge-‐based, innovation-‐rich South Dakota companies and jobs is the aim of the Ideas strategy. These knowledge-‐intensive companies offer a solid foundation on which to build. Endnote-‐A
15
Table 2. Translational Research Innovation Infrastructure Target Industry Sector Alignment
Source: RTS, 2013.
16
The Ideas Strategy The Ideas strategy builds upon existing university and non-‐profit research strengths that have the potential to produce high impact economic outcomes within the target industries. This strategic investment goal has two objectives: 1) develop robust translational research conduits between the R&D activity within the research community and the target industry sectors and sub-‐sectors that will power South Dakota’s future economy and 2) boost valuable idea generation and new value-‐creating capacity by fostering a stronger innovation culture within the academic research community.
Strategic Investment in Research Areas and Assets Aligned with Target Industry Sectors Action: Research and development-‐related grants, investments and initiatives intended to build innovation capacity or yield commercially promising outcomes should focus on the following distinctive South Dakota high value R&D areas and innovation enabling assets: 1. Advanced Manufacturing and Materials 2. Energy and Environment 3. Human Health and Nutrition (including Medical Technology) 4. Information Technology/Cyber Security/Information Assurance 5. Plant and Animal Bioscience 6. Underground Science and Engineering 7. Visualization (from the molecular level to global systems) The South Dakota academic research enterprise has well established and distinctive profiles in the 2020 Vision high value research areas that are well positioned to generate applications in markets within the strategy’s target industry sectors. In the case of the human health and nutrition area, solid strengths in a number of academic research domains are significantly expanded and amplified through a non-‐profit sector that features very substantive translational health research missions and programs from Sanford Research and Avera Research Institute. It is important to note that these high value research areas are presented and described as academic research domains whose output, if strategically focused, can advance the growth and prosperity of the five target industry sectors. The seven areas above represent groupings of research activity that can serve the knowledge-‐based dimensions within each of the five target industry sectors. For instance, research outcomes in the plant and animal bioscience area may produce market applications within the valued-‐added agriculture and agribusiness, energy and environment or human health and nutrition sectors. In some cases the name of the research areas and the names of the industry sectors are the same and some cases they are not. 17
The strategic investment focus also includes two internationally recognized innovation-‐ enabling research assets with the capacity to generate high value research outcomes and applications that cut across all target industry sector markets – the Sanford Underground Research Laboratory (Sanford Lab) at Homestake and within the Visualization domain, the United States Geological Survey's National Center for Earth Resources Observation and Sciences (EROS) in Sioux Falls. Sanford Lab, a world-‐class multidisciplinary underground science and engineering research facility located in the Black Hills of South Dakota, provides an environment free from cosmic radiation disruption to conduct extremely sensitive experiments. Experiments now installed nearly a mile underground, protected by a thick layer of rock from cosmic noise, could yield answers to some of the deepest mysteries of modern physics in the next few years. In addition to its basic research and education outreach efforts, the facility features the capacity to enable R&D with the potential to generate applications across the target industry sectors. In that regard, Sanford Lab is home to South Dakota’s Governor’s Research Center for Ultra Low Background Experiments (CUBED), which, among other activities, is pursuing materials purification and crystal growth research with applications in advanced manufacturing and materials, human health and nutrition, and energy and environment target industry sectors. The facility is also engaged in applied research on the use of exotic “extremophile” life forms that could boost production of biofuels. Fourteen research collaborations are active at the Sanford Lab and they include nearly 1,000 scientists from throughout the United States and Europe. Endnote-‐B EROS is a unique resource because it is the largest civilian repository of remote sensing data in the U.S. and is recognized as a global leader in applied earth systems science. As an interdisciplinary innovation-‐enabling asset, EROS features strong collaborative research capacity in geographic information systems, digital mapping, and geostatistics domains with the potential to generate high value applications in the plant and animal bioscience, human health and nutrition, and energy and environment industry sectors. In addition, EROS is a participant in a joint collaboration with SDSU in the Geographic Information Science Center of Excellence (GIScCE).
18
Animating the Next South Dakota Economy: The 2020 Vision New Value Project
Action: Implement The 2020 Vision New Value Project over a seven-‐year period beginning in 2013. The New Value Project will boost the innovation orientation within high value research areas. It will consolidate and leverage existing high value research strengths through multidisciplinary university/industry South Dakota Research and Innovation Centers (SDRICs). SDRICs are designed to support new value creation and growth within the strategy’s target industry sectors. (Table 1).
As shown in Figure 2, The 2020 Vision New Value Project is defined by four specific actions: 1. Science and Innovation senior professorships with accompanying research enrichment funds within the 2020 Vision high value research areas and individuals of national prominence in both science and knowledge-‐based commercial development; 2. Multidisciplinary university/industry South Dakota Research and Innovation Centers (SDRICs) to support the target industry sectors; 3. Target sector advisory councils to provide guidance on links to and collaboration with research centers, other infrastructure investments, and workforce development; and 4. Invigorating the on-‐campus innovation orientation through creating an Industrial Partnering function within the state’s colleges and universities, establishing incentives and rewards for licensing technology to South Dakota companies, and designing and implementing new program guidelines to guide some portion of the South Dakota EPSCoR-‐related projects toward technological innovation opportunities.
1. Senior Faculty Science and Innovation Professorships Acting in an oversight capacity as “managing partner” for The 2020 Vision Strategy and in close coordination with the Board of Regents and the Governor’s Office of Economic Development, the REACH Committee should lead the effort to create and fund five Science and Innovation Senior Professorships over a seven-‐year period. These positions should be filled with individuals of national prominence in both science and knowledge-‐based commercial development. The senior faculty professorships should be established as university positions or joint appointments and each position should be tightly linked to the mission and the research agenda of a specific SDRIC. The objective is 1) to create a cadre of faculty that combine entrepreneurial accomplishment with R&D excellence in strategic high value research domains that drive the SDRICs and feed the target industry sectors and 2) to do this in a way that builds a culture on-‐campus that rewards and recognizes these activities.
19
The Science and Innovation Professorships will be funded through a state matching program. In addition to salary, the budget for each professorship should include funding for equipment and core facilities needs associated with each position. The research support components of the budget for each Science and Innovation Professorship will be an important asset in the recruiting process for these senior faculty positions.
2. University/Industry Research and Innovation Centers The South Dakota Governor’s Office of Economic Development’s Office of Commercialization, in close coordination with the REACH Committee and the Board of Regents, should design and implement a program to establish five multidisciplinary university/industry South Dakota Research and Innovation Centers (SDRICs) to function as robust translational research conduits between the R&D activity within the research community and the target industry sectors and sub-‐sectors that will power South Dakota’s future economy. The five recommended SDRICs are listed below. As indicated by the name, each SDRIC is designed to support one of the five target industry sectors. However, it is anticipated that each SDRIC’s research agenda and its research outcomes will often include commercially viable applications within the other target industry sectors. For example, the plant and animal bioscience SDRIC is primarily tasked with supporting science-‐ and technology-‐ intensive innovation opportunities within the valued-‐added agriculture and agribusiness target industry sector. However, its research agenda should include commercially viable applications within the other target industry sectors, especially human health and nutrition. It should also be noted that the information technology-‐oriented SDRIC is designed to focus on the cyber security and information assurance domains where there is strong higher education R&D capacity. Recommended South Dakota Research and Innovation Centers: 1. Advanced Manufacturing and Materials 2. Cyber Security and Information Assurance 3. Energy and Environment 4. Human Health and Nutrition (this includes medical devices and instruments and human bioscience therapeutics and diagnostics applications) 5. Plant and Animal Bioscience The implementation effort for each SDRIC should begin with the preparation of an operating plan that spells out the mission, structure, objectives, programs and activities, financing plan, staffing, industry roles and participation, as well as risks
20
and intended outcomes for the participating universities and industry partners and intended economic development outcomes. Science and Innovation Professorships and the SDRICs As mentioned earlier, it is recommended that these senior faculty professorships be established as university positions or joint appointments and that each position be tightly linked to the mission and the research agendas of a specific SDRIC. To this end, the qualifications for recruitment candidates should feature strong science and innovation profiles that fit within the mission of a specific SDRIC and upon hiring these individuals should have a formal affiliation with the SDRIC through joint appointment and/or board and advisory committee seats. However, these professorships are designed as senior faculty positions to allow the individual to perform research, generate innovation opportunities and train talent within their scientific domain without regard to industrial application boundaries. For instance, a biopolymer scientist may be producing research outcomes with very promising applications in food packaging, biofuels, pharmaceuticals and wound healing.
The Governor’s Research Center Program and the SDRICs The Governor’s Research Center (GRC) program should become an integral part of the larger scale SDRIC program. The GRC program is producing translational research outcomes at the project level, and commercializeable intellectual property in some instances, and has even resulted in several companies (see Table 2 for alignment of these centers with the target industry sectors). However, these centers are operating at a modest scale, with sporadic industry support and the strategic focus has been diffused across the eight currently active centers without a unified vision or strategy to boost their sustainable operating scale and effectively integrate them into the broader South Dakota economic development enterprise. The Governor’s Research Center Program is well positioned to support the SDRICs and its currently active centers are well suited to function as robust translational research programs within the SDRIC group. To this end, the SD EPSCoR Office, the SD Board of Regents, and the SD Governor’s Office of Economic Development jointly issued a South Dakota Research Infrastructure Center Programs’ Request for Proposals (RFP) in October of 2012 that invited submissions for two new center-‐type programs that advance The 2020 Vision Strategy mission. First, the South Dakota Research and Innovation Center Program specifically ties the SDRICs to the state’s NSF EPSCoR Research Infrastructure Improvement Track 1 program and solicited proposals for the establishment of SDRICs as described in The 2020 Vision Strategy. Second, the Governor’s Research Center Program invited proposals that refocus the existing program on applied, translational research and education initiatives that meet specific and significant industry knowledge and workforce development needs in the state’s targeted research sectors.
21
SDRIC Design Considerations As plans are drafted and the SDRICs’ development paths begin to take shape, it is recommended that several design elements and issues that address private sector participation and scope and scale of activities be carefully considered. For a description of these design considerations see Endnotes at the conclusion of this document. Endnote-‐C
3. Target Sector Advisory Councils Working in concert with the REACH Committee, the Governor’s Office of Economic Development should establish 2020 Vision Target Industry Sector Advisory Councils to provide guidance on links to and collaboration with research centers, other infrastructure investments, and workforce development. The Target Sector Advisory Councils will provide input into the SDRIC research and development agendas. Each council should be comprised of nine to fifteen members and should include representatives from industry, academia and government. However, as the councils are designed to deliver the industry perspective on research needs and opportunities and on competiveness issues, the private sector presence should represent a supermajority with two-‐thirds of the members coming from industry.
4. Invigorate the On-‐Campus Innovation Orientation As shown above, the first three elements of The 2020 Vision New Value Project define a strategy and vision for linking university research and higher education and non-‐profit translational research assets to the industry sectors that will drive future economy. This final element focuses on advancing the on-‐campus innovation orientation through two actions. Establish New Program Guidelines to Guide Some Portion of the SD EPSCoR-‐Related Projects Toward Technological Innovation Opportunities
The objective of this action is to craft process and establish a practice to, when appropriate, guide EPSCoR’s research outcomes toward and connect them to intellectual property creation and technological innovation opportunities. SD EPSCoR is currently designing such an approach. Establish Industry Partnering Functions within South Dakota’s Colleges and Universities Built on a Business Model that Emphasizes Responding to Company/Industry Needs
The objectives for the College and University Industrial Partnering Function are 1) to expand the operations of existing university sponsored research or technology transfer offices to establish an on-‐campus presence that helps investigators work with private industry to advance commercialization opportunities and to encourage industry-‐ sponsored research and 2) to formally establish and support an on-‐campus presence to address private industry education, training and workforce development needs and issues.
22
Strategy Area: TALENT Objective: Increase the capacity and the ability of the state to produce the talent needed to fulfill the needs of the target sectors and more broadly to develop the talent to continually rebuild and reinvent the economy of South Dakota.
The 2020 Vision Talent strategy focuses on building, nurturing and retaining the state’s STEM talent base while promoting an entrepreneurial culture and innovation mindset. It is defined by three initiatives: 1) creating a culture of entrepreneurship in higher education, 2) promoting the study of STEM at all educational levels, and 3) refining the role of postgraduate education. Simply put, in today’s global economy talent trumps everything. Without talent and the ability to continually re-‐invigorate that talent, the U.S. and South Dakota will not be able to compete in a knowledge-‐based global economy. To this end, the 2020 Vision Talent strategy adopts a comprehensive approach to STEM education by providing a quality basic education and STEM knowledge from K-‐12 through higher education graduate and postgraduate programs. It includes providing tools to facilitate life-‐long learning so that people can adapt to the inevitable changes in occupational skill needs (especially within the 2020 Vision target industry sectors) and pursue good careers as opposed to jobs. This strategy also focuses on producing the entrepreneurial talent both inside and outside academia that is necessary to rapidly innovate in today’s global economy. South Dakota has both positives and negatives in its ability to respond to these challenges. The state has a strong K-‐12 system. According to the most recent National Science Foundation data, 92% of the state’s residents aged 25-‐44 have high school degrees, ranking the state 8th in the country. The state’s K-‐12 system does well on measures like 8th grade math proficiency. South Dakota also produces significant numbers of science and technology-‐oriented degrees at the baccalaureate level and compares favorably to other states. At the graduate level South Dakota’s science and engineering degree production lags behind other states. The South Dakota economy employs relatively fewer degreed individuals at every level and particularly, in the sciences and engineering (see Appendix A, Table A-‐1 for the state’s ranking). When compared to its counterparts nationally, South Dakota higher education is also behind the curve in developing an on-‐campus entrepreneurial culture and innovation mindset. Much greater emphasis has been placed on on-‐campus entrepreneurship support and training in recent years so the system has begun to gain some ground but there is still considerable room for growth to achieve national best practice levels. A series of initiatives and actions is presented to produce the STEM-‐related talent required to propel South Dakota’s future innovation economy in general and, in support of this strategy’s target industry sectors.
23
Create a Culture of Entrepreneurship on the Campus Action: Build infrastructure to encourage entrepreneurship and commercialization activities among undergraduate, graduate students and faculty to generate a culture of innovation throughout South Dakota higher education. The objective of this initiative is to develop and infuse an entrepreneurial talent base into faculty, staff and student populations that will generate ideas, products and services that create companies and employment opportunities in South Dakota. The on-‐campus entrepreneurship culture initiative includes the three elements described below.
Faculty Release Time for Entrepreneurial Ventures and Commercialization Activities South Dakota higher education should implement and promote policies for faculty release time specifically for entrepreneurial ventures and commercialization activities. Design considerations for this element are offered in the strategy’s concluding Endnotes section. Endnote-‐D
Entrepreneurs in Residence within South Dakota’s Colleges and Universities The REACH Committee, working closely with all of South Dakota’s colleges and universities and the GOED Office of Commercialization, should take the lead in establishing an “Entrepreneurs in Residence” program. Many entrepreneurs feel a need to give back to the communities that supported their efforts. This is particularly true of alumni who feel a strong connection to their university and state. In addition, entrepreneurs, particularly serial entrepreneurs, are often looking for that next idea. Academic environments with an innovation orientation can serve as fertile fields for growing these ideas. Effective Entrepreneurs in Residence programs lead by example and serve as models of behavior to faculty, staff, and students. Universities use their Entrepreneurs in Residence programs in different ways. Entrepreneurs in Residence can serve as mentors to faculty who are just beginning to think about company creation and innovation, teach classes or serve as guest lecturers. Depending on their backgrounds they can become part of a research program. They can also lead and evaluate entrepreneurial contests for faculty and staff and provide awards or financing to winning proposals.
24
Implement Policies, Training, and Systems within Higher Education that Inform Faculty and Facilitate their Involvement in Entrepreneurship, Commercialization and Intellectual Property Development Activities Under the REACH Committee auspices, it is recommended that the Board of Regents, individual college and university research offices or their technology transfer function and the GOED Office of Commercialization work together to design, implement and promote a system-‐wide program to inform and train faculty in policies, practices and institutional goals related to entrepreneurship, commercialization and intellectual property and facilitate their involvement in the activities. This action is designed to increase the scope and speed at which university-‐originated technological advances are commercialized within South Dakota. While its scope is relatively modest when compared to the New Value Project actions, it is every bit as important because it is the bridge to the private sector. This action item should also be viewed as an opportunity to develop uniform and clear policies and practices that can be easily understood by private sector partners.
Promote Science, Technology, Engineering, and Math (STEM) Study at All Educational Levels Action: Create programs to encourage the study of science, technology, engineering, and math (STEM) at all educational levels in order to drive innovation and build a stronger workforce and economy. In today’s knowledge-‐based economy, states are required to think aggressively about the role of STEM education and the potential impact it can have on fostering innovation. STEM education and the skills it promotes, including those that require less than a four-‐year degree, is needed to some extent in almost every occupation. In addition, STEM educational opportunities also foster the soft skills that are so highly valued by employers in survey after survey – critical and creative thinking, problem-‐solving skills, and the ability to work collaboratively. As a state, South Dakota has failed to generate an adequate number of STEM graduates due largely to the fact that many students either fail to recognize the alignment these skills have with high paying careers, or they are inadequately prepared to engage in the curriculum required for these programs. The 2020 Vision Strategy addresses this South Dakota STEM education challenge in three ways. First, it expands middle/high school efforts to interest students in STEM-‐related education, activities and careers. Second, it seeks to build stronger foundations that ease the movement of STEM students between all postsecondary institutions in the state – the regental institutions, the private colleges and universities, the tribal colleges, and the technical institutes. Third, it develops incentives to encourage students to pursue STEM degrees and rewards institutions for graduating those students.
25
Expand Successful Middle and High School STEM Activities Creating Greater Exposure for Students Around the State South Dakota has a number of innovative and effective programs that seek to help middle and high school teachers develop and use STEM teaching resources that are designed to renew student interest in science and technology. These include the PROMISE program at Sanford, the Title II Improving Teacher Quality State Grants, and the work being conducted by the Department of Education to aid teachers as they work to align their classroom content with the National Common Course Standards and assessments that are forthcoming. Specific to students, the Sanford Underground Research Facility (SURF) and GEAR Up each provide a variety of innovative programs designed to serve students (especially Native American students) interested in science and engineering. To foster student interest in health programs and research, the South Dakota Department of Health’s Scrubs Camp program teams educators and health care professionals to provide high school students with a glimpse of the vast career opportunities in the health care field. Three limitations exist that minimize the impact for these initiatives. First, distances within the state serve as a barrier limiting involvement only to those students and teachers who are in close proximity to postsecondary institutions or who already have the financial resources that are necessary to participate. Second, like in most states, the programs in South Dakota are not integrated or managed systematically resulting in a series of disparate and potentially duplicative initiatives. Finally, many of these programs take an orientation-‐based approach when continued/lasting exposure creates an opportunity for solidifying teacher pedagogical practices and student interest. To address these limitations the state should facilitate efforts to collaborate across these activities to create a unified focus and leverage the investments the state and school districts have already made by expanding the “Classroom Connections” distance learning initiative. For instance, the South Dakota Legislature considered legislation during the 2012 session to establish a Math and Science Academy; however, the program lacked critical support due to the fact that it was limited to students in the Sioux Falls area. A similar proposal that expands the “Classroom Connections” program could create the necessary synergy for expanding STEM learning for all South Dakota students.
Build Stronger Foundations that Ease the Movement of Students with STEM Interest Between All of the Postsecondary Institutions in the State – the Regental Institutions, the Private Colleges and Universities, the Tribal Colleges and the Technical Institutes Under the auspices of the REACH Committee, it is recommended that a working group be formed to address postsecondary transition issues and opportunities for students with STEM interest from the perspective of the students and all the relevant education and training institutions. The objective is to build on the considerable body of existing articulation work to craft an effective, unified and clear approach to promote the pursuit of STEM programs and fields and to encourage and facilitate the movement of these STEM students across these institutions and into careers and/or more advanced STEM education levels. Articulation agreements have grown significantly over the past decade, but the number of students taking advantage of these programs has been limited. Generating greater numbers 26
of students who use the STEM-‐related postsecondary education and career paths illuminated by these agreements is an important component of this strategy. This is particularly true within rural, Native American and other under-‐served populations where tight collaborations between postsecondary institutions will provide a win-‐win environment where the higher education institutions within the Board of Regents system can help technical institutes and tribal colleges prepare their students to enter STEM educational programs. Examples of actions that might be considered include jointly developed and expanded 2+2 programs between regental institutions and technical institutes and the development of certificate programs that would allow current degree holders to expand their opportunities for becoming employed in STEM-‐based fields.
Develop Incentives to Encourage Students to Pursue STEM Degree Programs, and Reward Institutions for Graduating Students in These High Need Areas This action features two elements, one that addresses a modification of the South Dakota Opportunity Scholarship Program to target students pursuing STEM fields and another element that seeks to help all postsecondary institutions improve retention and completion of all students in STEM fields. 1. The state should modify the guidelines and funding levels for the South Dakota Opportunity Scholarship (SDOS) program to increase the scholarship awards by $500 a year for the four-‐year period for qualified students entering STEM-‐related degree programs that support the targeted industries. The Opportunity Scholarship program has proved to be a successful mechanism for attracting and retaining South Dakota students. Endnote-‐E A total of 9,695 South Dakota high school graduates have established initial eligibility in the scholarship program since the first cohort began during the Fall 2004 semester. While the program works well in attracting and retaining South Dakota students, only about 32% of the recipients currently pursue degree programs in STEM-‐related fields. At present, Opportunity Scholarship recipients receive $5,000 over four years with $1,000 awarded for each of the first three years of attendance and $2,000 the fourth year of attendance. This recommended action would boost the award level to $7,000 over four years of attendance for students entering programs in these targeted STEM areas. In addition, since the first cohort took advantage of the SDOS eight years ago, the buying power of the $1,000 scholarship has decreased by 20.3% (U.S. Inflation Calculator, 2012). As a result, students are provided approximately $797 in actual purchasing power toward college expenses. A targeted effort on behalf of the state could leverage a needed increase in this successful scholarship program that also increases the number of STEM majors. 2. The state should incentivize higher education STEM degree production in fields that are aligned with the targeted industry sectors and STEM fields in general. While changes to the funding structure for the Opportunity Scholarship program may be an initial step toward growing the number of STEM graduates, postsecondary institutions should also be encouraged to improve retention and completion of other STEM-‐interested students. State level work on the implications for a performance funding pool may be 27
useful for achieving this goal. During the 2012 legislative session, the regental system was awarded $3 million in one-‐time funds that were intended for distribution across the six campuses based on increases in the number of graduates. A model was developed where graduates were classified according to one of four possible degree levels: associate’s, bachelor’s, master’s/specialist’s, and doctorate/first professional, and according to one of two possible field types: regular or premium. Premium fields represent key workforce development priorities for the state. For example, a graduate from a premium field – such as engineering – was valued at an amount 3.00 times higher than an analogous graduate from a regular field. Using this approach, funds were allocated to the campuses and each institution was asked to invest these funds into initiatives that would further improve graduate production and rates. A similar approach may be useful by either targeting only STEM degree production, or rewarding institutions at a greater level for premium fields that are aligned with traditional STEM degrees. Consideration should also be given to higher-‐level awards for producing graduates in premium STEM fields that are aligned with the target industry sectors.
Refining the Role of Postgraduate Higher Education within The 2020 Vision Strategy Action: At the system level, align, expand and create higher education postgraduate programs as needed to provide knowledge and talent to the target industry sectors. This initiative is designed to provide knowledge and talent to the target industry sectors by focusing and considering expanding postgraduate programs currently producing target industry relevant degrees, by establishing new master’s level career path options to support growth in target sectors, and by developing an approach to tracking, assessing and modifying this alignment on a continuous basis.
A Note on Postgraduate Education and the Target Industry Sectors Within The 2020 Vision Strategy, South Dakota’s higher education institutions and the SDRICs will play a critical role in the production of the talent that will be responsive to target industry sectors growth and prosperity. For South Dakota postgraduate education to fulfill its role within this strategy it must accomplish three things. 1. It must have the capacity to produce graduates with the skill sets and knowledge
that are aligned with what target industry sector employers need and value right now.
2. It must track, assess and modify this alignment on a continuous basis to support
the target industry sectors on an on-‐going basis in a very dynamic economic environment.
3. Within this approach it needs to consider new educational options that allow students to see an immediate connection to these jobs and lifelong careers.
28
Guidelines for Aligning Higher Education within This Science and Innovation Strategy The Board of Regents in close coordination with the REACH Committee and other higher education institutions should consider approaches for realigning and expanding master’s and doctoral curricula and degrees to support the target industry sectors and their associated SDRICs and for tracking, assessing and modifying this alignment on a continuous basis. Because this initiative addresses a strategic focus on postgraduate education in support of the target industry sectors, it is recommended that the approach include discussions from all the stakeholders. The group should be anchored by 2020 Vision’s Target Industry Councils but should also include those in the academic and research institutions, those in state agencies, and those in business and commercial enterprises that will ultimately employ graduates and provide economic growth. The following basic guidelines are suggested as a potential starting point.
Strategic planning The strategic planning necessary to ensure alignment between academic programs across the state should be closely tied to the expectations and achieved growth within the economic sectors. The 2020 Vision Target Industry Councils will be important participants in these discussions. Assess the Current State of Higher Education Recognize the core missions of universities -‐ Not all institutions in the state have the same roles in supporting the growth of the five economic sectors. Review Courses and Curricula • Identify under-‐enrolled programs – Information generated through the Board of Regents’ annual program productivity review process may identify targets for realignment actions. •
Peripheral programs -‐ Some courses and curricula that are peripheral to the five economic sectors may be targets for redirection.
•
Continued emphasis should be placed on increasing investment in existing, relevant programs -‐ Those academic programs that directly support the five target sectors may receive increased investments to support increasing numbers of institutions, faculty members, and the scope of activities.
•
Create new academic programs – If the current statewide curricula, even with redirection of some existing academic programs, are not capable of supporting the necessary growth of the five target sectors, new academic programs may be necessary.
Monitor Progress • The production of graduates should be compared with targets set in the strategic planning process. •
Track employment and impacts on socio-‐economic growth -‐ Placement and career paths of graduates should be tracked and information collected to calculate the return on investment in academic programs. 29
•
Adjust -‐ If graduation production and return on investment targets are not attained, the data will reveal academic programs that need adjustments.
Master’s Degrees: The Attractive, Expedient, Cost-‐Effective Option For the purposes of The 2020 Vision Strategy, it is recommended that the South Dakota Board of Regents, working closing with the REACH Committee, consider creating or expanding master’s degree programs that allow students to swiftly acquire new skills and perspectives in fields directly related to economic growth. Master’s programs of three types – research-‐based master’s degrees, project-‐based master’s degrees and professional science master’s (PSM) degrees may be an effective way to further support growth in the target sectors. 1. Research-‐based master’s degrees. Research-‐based master’s degrees typically include a mixture of graduate level course work and thesis research. The time to completion of a research-‐based master’s degree is typically 2 – 4 years, ending in a thesis. Students finishing a research-‐based master’s degree have the option to move directly into careers, or into research positions, such as those at research centers connected with or businesses in the targeted economic sectors. Students will also have the option of continuing their education by entering doctoral programs. 2. Project-‐based master’s degrees. Students finishing project-‐based master’s degrees take graduate level courses and work on projects that can include elements of research, or lead to products, such as computer models, management plans, or a prototype of a device. The project does not lead to a thesis. Students typically finish project-‐based master’s degrees in 2 – 3 years, are not likely to pursue a doctoral degree, and are immediately ready for the work place in the target industry sectors. 3. Professional Science Master’s degrees. Professional science master’s (PSM) degrees are a relatively new curricular tool, and allow students with interests in science and technology to complete academic programs that are similar in approach to a MBA degree. More than 60 universities across the country have created more than 90 PSM degrees. The 2020 Vision Target Industry Councils should be included in the planning process for the PSM programs. Many PSM degrees that currently exist in other states are directly related to The 2020 Vision Strategy’s five target industry sectors (Table 3). These examples of PSM degrees, along with new degrees created specifically for the state provide a simple, cost-‐effective way to quickly produce curricula needed to support economic sectors. The National Professional Science Master’s Association helps connect those from universities with stakeholders in business and government to create graduate degrees to fill specific needs of students seeking careers, and businesses seeking a larger work force. PSM degrees are designed to feed specific economic sectors, such as those target sectors identified within this strategy. Additional information on developing PSM programs is available. Endnote-‐F 30
Table 3. Economic Sectors and Professional Science Master’s Degree that Could Stimulate Development of a Workforce Contributing to Economic Development in the South Dakota Higher Education Energy and Environment
Health and Nutrition
Advanced Materials
Agriculture and Biotechnology
Information Technology
Solar Eng. & Commercialization
Biomedical Engineering
Nanoscience
Biotechnology
IT Security
Electric Power Engineering
Pharmacology
Material Science
Bioinformatics
Information Systems
Biofuels
Pharmacology Engineering
Composite Materials
Genomics
Computer Networks
Adv. Energy Fuel Management
Epidemiology
Manufacturing Commercialization
Bioprocess Engineering
Analytics
Bioenergy
Environmental Health
Polymers
Biomanufacturing
Media Networking
Environmental Science
Nutrition
Crystal Manufacturing
Trade & Economics
Geographic Information Systems
Energy Economic & Policy
Food Safety
Metal Manufacturing
Applied Statistics
Films & Membranes
Fossil Fuel Technologies
Renewable Energy Technologies
Battery Technology
Source: RTS, 2012. NOTE: PSM degrees listed include those existing in other states (italics), and traditional master’s degrees that exist in South Dakota (Bold). All the potential degrees are in STEM disciplines, and contribute directly to economic sectors with emerging research centers (adopted from the National PSM degree lists, 2012).
31
The Ph.D. Degree Vibrant Ph.D. programs are important signatures for a university system. As with all degrees in higher education, the creation of new Ph.D. degrees fosters academic progress and scholarship. Creating new university degrees at all levels occurs as the natural evolution of higher education and it is important to recognize that Ph.D. programs in South Dakota exist to accomplish goals other than aligning higher education with the five target sectors identified as a key to statewide economic growth. However, for the purposes of the analysis that informs this strategy, the roles of existing and potential Ph.D. degree programs are viewed in light of their likely capacity to support the innovation base and talent demands as the target sectors grow and develop. It is recommended that the state consider the following strategies to enrich and expand its Ph.D. degree offerings to support the expansion of target industry sectors and the SDRICs. New Ph.D. Degrees The Board of Regents, working in tandem with the REACH Committee, should continue to investigate opportunities to affiliate with the research infrastructure at other locations when considering new STEM Ph.D. programs. 2020 Vision Target Industry Council representatives from companies or subsectors with strong or emerging R&D needs and programs should be included in the Ph.D. degree enrichment planning discussions. It is important to keep in mind that for new programs under the best of circumstances those contributions are at least ten years in the future. One option to consider that would lower the risk and accelerate the timing of contributions from new STEM Ph.D. programs is to use the South Dakota system to create the Ph.D. level courses, but to use research infrastructure at other locations. For example, the U.S. DOE National Laboratories, such as Oak Ridge National Laboratory, provide numerous fellowships for Ph.D. students who do their thesis research using Oak Ridge facilities. Even though the National Laboratories provide fellowships, the universities must provide the coursework, grants, and academic infrastructure necessary to attract the top faculty members and graduate students in the field. Assess Modifications in Ph.D. Degree Programs The Board of Regents, working closely with the REACH Committee to link to advanced research and talent-‐related target industry sector needs and opportunities, should review the existing Ph.D. degree programs across institutions. The South Dakota Board of Regents system offers a number of related Ph.D. degrees in closely related fields, some of which are relatively new programs and each with small numbers of graduates. Aggregating these degrees into single degrees operated in a joint-‐campus framework may optimize use of resources, increase enrollments, create critical mass and visibility, and enhance communication and cooperation across the institutions. Enhance Existing Ph.D. Degrees The Board of Regents and the individual higher education campuses, working with the REACH Committee and the GOED to connect to private sector support, should craft a program development plan to expand activity within existing Ph.D. degree programs. 32
Focused efforts to increase activity in existing degrees can be cost effective. Such efforts might include: 1) better marketing for the programs; 2) increased financial aid for students including providing health insurance as a graduate student recruitment tool; 3) hiring new faculty members to support the development of courses and research; 4) improving curricula; 5) working with the 2020 Vision Target Industry Councils to create research and development options with the private sector; and 6) working with the 2020 Vision Target Industry Councils to connect academic programs to internships in the private sector.
Strategy Area: COMPANIES High impact, knowledge-‐based companies generate better paying jobs at faster rates than other companies. They are often the wealth generating engines within regional economies and are responsible for a disproportionate share of income and employment growth. They are the limiting factor in a successful economic strategy. These companies must start, grow and prosper in South Dakota for The 2020 Vision Strategy to work. Objective: Increase capacity to start and grow knowledge-‐based companies and help existing knowledge-‐based companies prosper and remain in South Dakota.
This strategy area completes The 2020 Vision Strategy’s innovation formula. It focuses on companies in which the new value and talent reside and addresses three needs: 1) access to capital, 2) fostering growth management experience in high impact companies, and 3) building design-‐centered manufacturing and product development capacity.
Access to Very Early Stage Capital and to Growth Financing: Filling the Gaps Action: Implement an approach for providing greater access to capital within two well-‐defined market gaps – very early stage (pre-‐seed and proof of concept) and expansion stage for high growth, insufficiently collateralized companies.
Early Stage Funding Initiative Under the auspices of the Research and Commercialization Council within the Governor’s Office of Economic Development, a Risk Capital Steering Committee should be organized to develop and manage public/private partnerships to provide proof-‐of-‐ concept funding for university-‐associated technological opportunities and pre-‐seed funding for qualifying very early stage companies. 33
The Proof of Concept Early Stage Funding Initiative should include the following elements: •
The funds should focus on innovation opportunities within the state’s universities, the SDRICs and the target industry sectors.
•
The funds should be awarded as investments, rather than grants, with fund repayment, equity or royalty-‐based return provisions to help replenish the fund over time.
•
The initiative should be designed to support South Dakota companies that have received SBIR Phase I or Phase II awards helping them to efficiently commercialize research results.
•
This funding should be available to universities, non-‐profit research institutions, private sector technology companies and entrepreneurs.
•
The key success indicator for these funds should not be financial return to the state. Instead, it should measure to what extent these investments boost the resource levels of their targets. This public investment is intended to produce a public good for South Dakota. In this case the goal is to build the capacity to compete in the knowledge-‐based, STEM-‐oriented economy. An indicator for this can be captured in a single measure – follow-‐on funding.
Addressing the Moderate Risk/Moderate Return Gap The Research and Commercialization Council’s Risk Capital Steering Committee should also be charged with developing a plan to provide financing to companies that are expanding in South Dakota but do not qualify for a traditional bank loan. Most knowledge-‐based companies in South Dakota will not meet conventional venture capital investment criteria, which will limit their ability to grow and create good wage jobs for STEM graduates. If and when these companies need to expand and require working capital, their financing options are extremely limited. As part of its overall responsibilities, the GOED and Risk Capital Steering Committee should explore approaches to developing new programs to boost private sector capacity to make working capital loans for expansion of these high growth potential knowledge-‐based businesses.
Fostering Growth Management Experience in High Impact Companies Action: Build teams of experienced mentors and student interns to assist companies – especially startup and early stage companies with high growth potential. This action advances the overall strategy in three important ways. 1. It connects emerging companies with emerging talents. 34
2. It addresses the entrepreneurial culture issue within universities. 3. It will begin to build a base of scientific and technical entrepreneurs with high growth company experience. The program would capitalize on the success of the Dakota Roots and Dakota Seeds programs. The Dakota Roots program, which has successfully connected to former South Dakotans interested in returning to South Dakota, will be expanded to connect experienced entrepreneurs and business people as mentors with high growth potential South Dakota businesses and entrepreneurs. Dakota Seeds interns with appropriate skills and interests should be included as part of the team to provide not only valuable human capital but develop the entrepreneurial and management skills of the student intern. This program should provide a grant to employers that will cover one-‐half the internship for up to one year. The first placement priority would be STEM students enrolled in entrepreneurship courses. The initiative and teams should be integrated into the “proof of concept” investment program and business accelerator programs managed by business incubators throughout South Dakota. Its goal should be to develop ten to twenty mentor, intern and high growth business teams each year.
Design-Centered Manufacturing and Product Development Capacity Action: Develop and launch South Dakota Innovation in Design – a statewide manufacturing and product development initiative. Strengthening South Dakota’s design capacity represents an under-‐recognized and undervalued opportunity that will increase the competitiveness of South Dakota products, increase innovation and generate new business opportunities. Endnote-‐G Because this design-‐focused product innovation initiative entails collaboration among private sector companies, all levels of postsecondary education, and state government, it is recommended that the implementation effort be guided by a steering subcommittee managed by the REACH Committee. The steering subcommittee should be comprised of individuals from private sector design-‐intensive firms and manufacturing companies, the South Dakota Board of Regents, the South Dakota Manufacturing Extension Partnership (MEP) Center (Manufacturing & Technology Solutions) and appropriate representatives from the universities, tribal colleges, and technical institutes. This initiative is comprised of three elements.
Establish Center(s) for Industrial Design that Reach Across College Disciplines and Functions The center or centers would be outward-‐focused in terms of engaging and serving companies but also transform educational programs by creating new curricula, establishing internships, and identifying design projects for teams of students. The state’s universities offer much underlying capacity here including USD’s College of Fine Arts, digital arts and design at DSU, graphic arts and design and manufacturing engineering 35
technology (for design-‐centered manufacturing) at SDSU and the strong advanced manufacturing orientation at SDSM&T. The state’s three tribal colleges should also factor into this initiative on the workforce side both in terms of design-‐centered manufacturing and product design.
Assist Small and Medium-‐Sized Companies to Incorporate Higher Levels of Design into Existing and New Products This may include the Manufacturing & Technology Solution partnering with universities, tribal colleges and technical schools to (1) apply “extension style” outreach to identify and work with firms; (2) help find opportunities to improve both product design and product presentation that will result in increased sales and new market niches; and/or (3) organize design networks among firms interested in developing new design capabilities. Networking among businesses will make design more accessible and affordable to smaller firms and spur innovation.
Create and Embed Improved Design and Creativity Curricula into Technical Programs at the State’s Four Technical Institutes and the Three Tribal Colleges, such as Engineering Technology, and Applied Design into Arts Programs The goal is to generate a pipeline of creative workers more adept at good design and with entrepreneurial skills for those who want to become independent designers or start small firms. Activities include: •
Establishing innovation/design internships in small and medium-‐sized enterprises with high growth potential
•
Organizing workshops and seminars to increase companies’ awareness and capacity to innovate, including beyond production and into marketing (packaging, web sites, etc.)
Management Matters The goal of The 2020 Vision Strategy is to build science and technology capacity in South Dakota that will promote innovation, foster knowledge-‐based companies, generate higher wage jobs and build the capacity to sustain the prosperity they create. Realizing this goal will require focus, discipline and careful management of public resources.
Organizing, Funding and Delivering Science and Technology-Based Innovation Services at the State Level to Enable Regional Economies While there is a system that is already at work in South Dakota, The 2020 Vision Strategy offers a plan to make this system work better – to focus its resources on a common goal and connect the existing programs and services at the state level to produce real impact in South Dakota’s regional economies and to build the capacity to do this on a continuous basis.
36
Action: Create a statewide alliance to advocate for funding and to manage The 2020 Vision Strategy on an ongoing basis.
The State of South Dakota should assign the task of promoting The 2020 Vision Strategy and monitoring its implementation to the South Dakota EPSCoR Advisory Committee (the REACH Committee). As the plan’s creator, the REACH Committee is well positioned to guide the strategy implementation effort. The committee has a statewide presence and is comprised of private sector, education, and government leaders committed to building and sustaining a more prosperous South Dakota in a knowledge-‐based, innovation-‐rich global economy. Given its mission, make-‐up and history, the REACH Committee is well positioned to become the managing entity for the plan and its wide array of services and resources over the seven-‐year period.
Tracking 2020 Vision Progress and Impact The goal of The 2020 Vision Strategy is to build science and technology capacity in South Dakota to promote innovation, foster knowledge-‐based companies, generate higher wage jobs and build the capacity to sustain the prosperity they create. Within a very dynamic economic environment, the ongoing capacity to 1) track progress toward objectives and gauge impact for each of the initiative’s objectives and 2) adjust programs and shift resources based on this information will play a large role in realizing this goal. Over the last two decades as states have grappled with implementing and evaluating their own knowledge-‐based economic development strategies, various assessment approaches for tracking this work also have continued to evolve. As a result, a range of metrics, indicators, indices, and rankings are now available from multiple sources (the National Science Foundation, the Information Technology and Innovation Foundation, the Milken Institute, etc.) for states to track progress and impact and their position relative to the U.S. as a whole and to other states. The 2020 Vision Strategy proposes a simple and direct assessment approach. This section of the report offers a series of targeted outcomes and associated progress indicators for the overall strategy and for the initiatives within 2020 Vision’s three major strategy areas – Ideas, Talent and Companies. This group of outcomes and indicators is intended as a starting point for a 2020 Vision Assessment function that should be incorporated into the ongoing implementation and management effort and then adjusted as more experience is gained.
37
The 2020 Vision Global Indicators: Overall Prosperity Targeted Outcomes
Indicators
Source
Increasing Incomes
Per Capita Personal Income
U.S. Department of Commerce, Bureau of Economic Analysis, Regional Data. http://www.bea.gov/iTable/iTable.cfm?ReqID=70&step=1& isuri=1&acrdn=4.
Rising Standard of Living for Families
Median Household Income
U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements. http://www.census.gov/hhes/www/income/data/statemed ian/.
Per Capita Real Gross Domestic Product (GDP) by State
U.S. Department of Commerce, Bureau of Economic Analysis, Regional Data. http://www.bea.gov/iTable/iTable.cfm?ReqID=70&step=1& isuri=1&acrdn=1.
More Value Produced by the State Economy
Strategy Area: Ideas Strategic Investment in Targeted Research Areas and Assets Targeted Outcomes
Indicators
Source
Growth in Academic Science and Engineering Research
Academic Science and Engineering Article Output per $1 Million of Academic S&E R&D
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s5o49.htm.
Growth in Academic Science and Engineering Article Production
Academic Science and Engineering R&D per $1,000 of Gross Domestic Product
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s4o46.htm.
38
The New Value Project: Innovation Capacity Targeted Outcomes R&D Activities: Growth in Private Industry R&D Endnote-‐H R&D Activities: Growth in Non-‐ Industry R&D
(Federal, State, and Non-‐Profit)
Growth in Patenting Activity Relative to Private Sector Science and Engineering Jobs (New Product Innovation Indicator -‐ General)
Growth in Innovation Intensive Small Business (New Product Innovation Indicator -‐ Small Companies)
Indicators Business-‐Performed R&D as a Percentage of Private-‐Industry Output
Source National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s4o45.htm.
Non-‐Industry Investment in R&D as a The 2012 State New Economy Index, Information Technology and Innovation Foundation. http://www2.itif.org/2012-‐snei-‐ Percentage of Gross master-‐tables.pdf. State Product (State GDP) Patents Awarded per 1,000 Individuals in Science and Engineering Occupations
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s5o51.htm.
Average Annual Federal Small Business Innovation Research Funding per $1M of Gross Domestic Product
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s6o55.htm.
Strategy Area: Talent Create a Culture of Entrepreneurship on Campus Targeted Outcomes Growth in Academic Intellectual Property Development Activities
Indicators Academic Patents Awarded per 1,000 Science and Engineering Doctorate Holders in Academia
Source National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s5o50.htm.
39
Promote STEM Study at all Education Levels Targeted Outcomes School: Higher Levels Math and Science Proficient Students in Middle School
School: Greater Numbers and More Emphasis on Bachelor’s Degree in Science and Engineering Work: Growing Share of Technical Workers within the Workforce Work: Growing Share of People Employed in Science and Engineering Occupations within the Workforce
Indicators
Source
The Proportion of a State's Eighth Grade Students in Public Schools that Has Met or Exceeded the Proficiency Standard in Mathematics
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s1o6.htm.
Bachelor's Degrees in Science and Engineering Conferred per 1,000 Individuals 18–24 Years Old
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s2o17.htm.
Science and Engineering Degrees as a Percentage of Higher Education Degrees Conferred
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s2o19.htm. National Science Foundation, Center for Science and
Technical Workers as a Engineering Statistics, Science and Engineering Indicators Percentage of the 2012. Workforce http://www.nsf.gov/statistics/seind12/c8/c8s3o38.htm.
Individuals in Science and Engineering Occupations as a Percentage of the Workforce
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s3o33.htm.
40
Refining the Role of Postgraduate Higher Education within The 2020 Vision Strategy Targeted Outcomes
Indicators
Science and Engineering School: Graduate Students Greater Numbers and per 1,000 Individuals More Emphasis on 25–34 Years Old
Advanced Science and Engineering Degrees
School: More Emphasis on Science and Engineering Doctoral Degrees
Source National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s2o21.htm.
Advanced Science and Engineering Degrees as a Percentage of S&E Degrees Conferred
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s2o22.htm.
Science and Engineering Doctoral Degrees as a Percentage of S&E Degrees Conferred
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s2o24.htm.
Employed Science and Engineering Work: Doctorate Holders as Growing Share of a Percentage of the Employed Science Workforce and Engineering Science and Engineering Doctorate Holders within the Workforce Doctorates Conferred per 1,000 Employed S&E Doctorate Holders*
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s3o34.htm.
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s5o47.htm.
*This indicator represents the rate at which the states are training new S&E doctorate recipients for entry into the workforce. High values indicate relatively large production of new doctorate holders compared with the existing stock of employed doctorate holders. States with relatively low values may need to attract S&E doctorate holders from elsewhere to meet the needs of local employers.
41
Strategy Area: Companies This strategy area features the following initiatives: •
Access to Very Early Stage Capital and to Growth Financing: Filling the Gaps
•
Fostering Growth Management Experience in High Impact Companies
•
Design-‐Centered Manufacturing and Product Development Capacity
All three initiatives are designed to produce the following outcomes: Targeted Outcomes
Indicators
Greater Numbers and a Larger Share of High Technology Companies within the South Dakota Economy
High-‐Technology Establishments as a Percentage of all Business Establishments
A Higher Rate of High Tech Business Formation
Net High-‐Technology Business Formations as a Percentage of all Business Establishments
A Larger Employment Base within the South Dakota Economy Generated by Growing High Tech Companies
Employment in High-‐ Technology Establishments as Percentage of Total Employment
More High Technology South Dakota Companies Receiving Venture Capital Funding
Venture Capital Deals as a Percentage of High-‐Technology Business Establishments
Source National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s6o52.htm.
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s6o53.htm.
National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s6o54.htm. National Science Foundation, Center for Science and Engineering Statistics, Science and Engineering Indicators 2012. http://www.nsf.gov/statistics/seind12/c8/c8s6o57.htm.
*This Indicator Represents the Extent to Which High-‐Technology Companies in a State Receive Venture Capital Investments.
42
2020 Vision Implementation Notes This section of the plan addresses the timing, sequencing, and responsibilities for implementing the recommendations within the eight major strategic initiatives that define The 2020 Vision Strategy. While the information presented here will no doubt be modified each year that the plan is in effect as it adapts to real events and developments, it is intended as the starting point for organizing and launching the implementation effort.
2020 Vision Management Assign formal responsibility for promoting The 2020 Vision Strategy and managing the overall implementation effort to the South Dakota EPSCoR Advisory Committee (the REACH Committee). Primary Responsibility: South Dakota Governor’s Office Timing: First Meeting, March 2013
Strategy Area: Ideas Ideas Initiative 1: Strategic Investment in Research Areas and Assets Aligned with Target Industry Sectors Research and development-‐related grants, investments and initiatives intended to build innovation capacity or yield commercially promising outcomes should focus on the following distinctive South Dakota high value R&D areas and innovation enabling assets: • • • • • • •
Advanced Manufacturing and Materials Energy and Environment Human Health and Nutrition (including Medical Technology) Information Technology/Cyber Security/Information Assurance Plant and Animal Bioscience Underground Science and Engineering Visualization (from the molecular level to global systems)
Primary Responsibility: Board of Regents Collaborators: South Dakota colleges and universities: President, Vice President for Research Timing: Beginning June 2013 and continuing throughout the 2013 – 2020 period. As this initiative calls for an on-‐going strategic emphasis applying for and obtaining grants, making and receiving investments, and launching initiatives in the seven high value areas, this activity should formally commence for all areas as soon as the REACH Committee is organized to monitor the effort.
43
Ideas Initiative 2: 2020 Vision New Value Project Senior Faculty Science and Innovation Professorships
For planning purposes, twelve to eighteen months is used as the time period to establish, fund and recruit for the position and procure funding for associated core facilities and equipment needs. Primary Responsibility: The REACH Committee Collaborators: Board of Regents and Governor’s Office of Economic Development (GOED) Timing: Preparation for the first position scheduled to begin in June 2013 with preparations for the four subsequent professorships beginning at six-‐month intervals. South Dakota Research and Innovation Centers (SDRICs)
In view of the planning needs (beginning with the 2013 SD Research Infrastructure Center Program Request for Proposal (RFP)) and the funding requirements, for the purposes of this implementation effort the first three SDRICs are sequenced in over a five-‐year period. Primary Responsibility: Governor’s Office of Economic Development Collaborators: REACH Committee, the Board of Regents and the associated Target Industry Advisory Council Timing: Three SDRICs over a five-‐year period. This implementation period may be expanded or compressed once the process for establishing the centers has been vetted. The order in which the SDRICs are established may be decided through an RFP process or otherwise be determined by the Governor’s Office of Economic Development, REACH Committee, Board of Regents planning group. Target Sector Advisory Councils
Establishing the Target Sector Advisory Councils does not need to be synchronized with the establishment of the SDRICs. In addition to providing input into the SDRIC research and development agendas, the Target Sector Advisory Councils are also designed to deliver the industry perspective on competiveness issues to the economic development community, government, workforce development actors as well as sector-‐specific research needs and opportunities to the university community. In view of the above and in view of the importance of the target industry sectors to the state’s economic future, the Advisory Councils should be established as soon as possible. Primary Responsibility: Governor’s Office of Economic Development Collaborators: REACH Committee Timing: Beginning in June 2013, form and convene a council for its first meeting every 60 days. All five councils will be up and running by the end of the first quarter of 2014. The sequence should be established by the GOED and coordinated with SDRIC development plans.
44
On-‐Campus Innovation Orientation
w New EPSCoR Program Guidelines for Technology Innovation Opportunities Primary Responsibility: South Dakota EPSCoR Program Collaborators: REACH Committee Timing: June 1, 2013 – September 1, 2013 wIndustry Partnering Functions within South Dakota Colleges and Universities Primary Responsibility: Each South Dakota college and university Collaborators: Governor’s Office of Economic Development, REACH Committee Timing: June 1, 2013 – January 1, 2014
Strategy Area: Talent Talent Initiative 1: On-‐Campus Entrepreneurial Culture Faculty Release Time for Entrepreneurial Ventures Primary Responsibility: Each South Dakota college and university Collaborators: Board of Regents Timing: June 1, 2013 – September 1, 2013 Entrepreneurs in Residence Primary Responsibility: REACH Committee Collaborators: Governor’s Office of Economic Development, participating universities, Target Industry Advisory Councils Timing: September 1, 2013 – June 1, 2014 On-‐Campus Polices, Training and Systems to Facilitate Entrepreneurship, Commercialization, and Intellectual Property Development Primary Responsibility: Participating universities Collaborators: Board of Regents Timing: June 1, 2013 – January 1, 2014
Talent Initiative 2: Promote STEM Study at All Educational Levels Expand Successful Middle and High School STEM Activities Primary Responsibility: Department of Education Collaborators: A REACH Committee subcommittee comprised of stakeholders throughout the state Timing: Ongoing function beginning September 1, 2013
45
Stronger Links Among All Postsecondary Institutions to Ease Transition for STEM Interested Students Primary Responsibility: Board of Regents Collaborators: A REACH Committee subcommittee comprised of stakeholders from the regental institutions, private colleges and universities, the tribal colleges and the technical institutes as well as students Timing: September 1, 2013 – January 1, 2014 Incentives to Encourage Students to Pursue STEM Degrees and Rewards to Institutions for Producing Graduates in High Need Areas Primary Responsibility: Board of Regents Timing: Targeted Increased Opportunity Scholarship Funding – March 1, 2013 – September 1, 2014; Expanding Performance Funding Pool to Target STEM Degree Production – June 1, 2013 – February 1, 2014
Talent Initiative 3: Refine the Role of Postgraduate Education On-‐Going Approach for Aligning Higher Education within this Science and Innovation Strategy Primary Responsibility: Board of Regents Collaborators: The REACH Committee Timing: September 1, 2013 – January 1, 2014 Consider Role of Master’s Degree Programs to Produce Talent as Target Industry Sectors Expand Primary Responsibility: The Board of Regents Collaborators: REACH Committee Timing: Recommendations and Plan for First Phase – September 1, 2013 – January 1, 2014 Explore Modifications in Ph.D. Degree Programs with Small Numbers of Graduates in Closely Related Fields Across Institutions Primary Responsibility: Board of Regents Collaborators: REACH Committee Timing: Recommendations and Plan for First Phase – September 1, 2013 – January 1, 2014 Enhance Activity in Existing Ph.D. Programs Primary Responsibility: The Board of Regents and the individual higher education campuses Collaborators: REACH Committee Timing: Program Development Plan – September 1, 2013 – January 1, 2014
46
Strategy Area: Companies Companies Initiative 1: Access to Capital Early Stage Funding Initiative Primary Responsibility: Governor’s Office of Economic Development Timing: Operating Plan Prepared by Risk Capital Steering Committee – June 1, 2013 – October 1, 2013 Addressing the Moderate Risk/Moderate Return Growth Financing Gap Primary Responsibility: Governor’s Office of Economic Development Timing: Operating Plan Prepared by Risk Capital Steering Committee – June 1, 2013 – October 1, 2013
Companies Initiative 2: Fostering Growth Management Experience in High Impact Companies Primary Responsibility: Governor’s Office of Economic Development Timing: New Program Operating Plan – June 1, 2013 – October 1, 2013; Program Launch, June 1, 2014
Companies Initiative 3: Design-‐Centered Manufacturing and Product Development Capacity Primary Responsibility: Innovation in Design REACH Committee Subcommittee Collaborators: Board of Regents, Manufacturing Technology Solutions (SD MEP Center), appropriate representatives from the universities, tribal colleges, technical institutes and private sector design-‐intensive firms and manufacturing companies Timing: Development of a Design in Industry Operating Plan that Integrates All Three Elements, May 1, 2013 – January 1, 2014 Establish Center(s) for Design in Industry that Reach across College Disciplines and Functions Timing: Design in Industry Center Begins Operations, January 1, 2015 Assist Small and Medium-‐Sized Enterprises (SMEs) to Incorporate Higher Levels of Design into Existing and New Products Timing: Launch of SME Design Assistance Program, June 1, 2014 Create and Imbed Improved Design and Creativity Curricula into Technical Programs at the State’s Four Technical Institutes and the Three Tribal Colleges Timing: Launch of Technical Program Design and Creativity Curricula, September 1, 2014
47
Figure 3: 2020 Vision Implementation Plan Summary
Source: RTS, 2013.
48
Appendix A Calibrating South Dakota’s Innovation Capacity The information presented in Table A-‐1 offers a bird’s-‐eye view of South Dakota’s innovation capacity position within the U.S. and relative to a group of benchmark states. The table’s eight elements as a group and individually are not intended to represent a comprehensive innovation capacity statement for South Dakota; but rather a series of focused innovation capacity “soundings” to deliver a sense of where the state stands within a national context. The states that comprise the benchmark group were selected for diverse but specific reasons. Colorado, Iowa, Kansas, Nebraska, North Dakota, and Wyoming are all in the same Economic Development Administration (EDA) region. Within that group, Iowa, Nebraska, and North Dakota share a border with South Dakota and are often included in other peer group comparisons. Wyoming also shares a border with South Dakota. Its economy is substantially different from South Dakota because it is dominated by extraction industries; however, it represents an interesting data point for comparison purposes because it is the least populated state in the country. Kansas is included as a Great Plains state with a long-‐standing state investment profile in science and technology-‐ based economic development. Arkansas and Kentucky are included as relatively poor rural states with several decades of state-‐based science and technology-‐based investment history and with newly minted state science and technology strategies. North Carolina is included as an example of a poor rural state with per capita and median income rankings at the very bottom that used strategic investments in science and technology-‐based economic development and higher education to transform a large portion of its economy and, over a period of several decades, substantially boost its median and per capita income ranking among the states. National rankings among the fifty states for these nine states plus South Dakota for eight innovation capacity indicators are presented in Table A-‐1. As mentioned above, these specific indicators were selected to deliver a sense of where the state stands within a national context. Together they can be viewed as at least part of a baseline from which The 2020 Vision Strategy impacts can be assessed over the coming years. The eight indicators that define this innovation capacity profile include three different normalized R&D related measures – support for Academic R&D on the higher education side, Industry R&D as a Percent of Private Industry Output, and Average Annual SBIR Funding on the private sector side. The bundle includes two different intellectual property creation views as measured by patent production. One view, Patents per 1,000 Individuals in Science and Engineering Occupations, is from the private sector perspective. The other view, Patents per 1,000 Science and Engineering Doctorate Holders in Academia, is from the higher education perspective. The profile also includes two measures of the presence of knowledge-‐based activity and capacity within the South Dakota economy – Individuals in Science and Engineering Occupations as a Percent of the Workforce and High Tech Establishments as a Percent of All Business Establishments. The final indicator in the profile is perhaps the most basic and most important measure – Median Household Income. 49
Table A-‐1: Innovation Capacity Indicators
State
Average*Annual* Patents*per* Patents*per* Individuals*in* HighATech* Academic*R&D* Industry*R&D*as* Federal*SBIR* 1,000* 1,000*Science*&* Science*&* Establishments* per*$1000*of* Percent*of* Funding*per* Individuals*in* Engineering* Engineering* Median* as*Percent*of*All* State*Gross* PrivateA $1M*of*State* Science*&* Doctorate* Occupations*as* Household* Business* Domestic* Industry* Gross*Domestic* Engineering* Holders*in* Percent*of* Income*(2011) Establishments* Product*(2009) Output**(2008) Product*(2008A Occupations* Academia* Workforce* (2008) 2010) (2010) (2008) (2010)
Arkansas
43
41
28
46
13
44
49
31
Colorado
19
19
3
23
28
4
8
2
Iowa
20
27
44
17
14
37
24
48
Kansas
28
25
45
26
47
26
35
22
Kentucky
30
36
33
31
25
41
44
43
Nebraska
15
33
39
39
10
29
17
45
North*Carolina
5
20
21
18
16
17
40
24
North*Dakota
3
30
32
33
40
33
18
50
South*Dakota
40
44
49
42
48
40
33
49
Wyoming
48
47
38
32
42
34
16
20
*Private-‐industry output is the portion of state gross domestic product contributed by state businesses. Sources: National Science Foundation, National Center for Science and Engineering Statistics, State Science and Engineering Profile, 2012; U.S. Census Bureau, Current Population Survey, 2010, 2011, and 2012 Annual Social and Economic Supplements.
As shown above, the Median Household Income ranking is well above the other rankings for the other indicators, pointing to the health of South Dakota’s current economy. However, South Dakota’s rankings are consistently in the 40s for those “lean forward” indicators that are typically held to provide clues for the strength of the state’s future innovation capacity – normalized measures of academic and industry R&D, Small Business Innovation Research (SBIR) funding levels, patents, presence of STEM-‐related occupations and of high tech businesses within the economy. On the positive side of the ledger, when South Dakota’s academic science and engineering R&D expenditures are examined over the 1998-‐2009 period a much brighter trend emerges. As depicted below in Figure A-‐1, academic science and engineering R&D in South Dakota has surged since 2000. Although the state has a way to go before it reaches the national level, it has gained a good bit of ground. In this very dynamic national R&D support environment just about every state has a science and technology plan and strategy. South Dakota will need to be very strategic about support for graduate education and research if these activities are to be funded at a level that will allow them to get to national norms and to generate large-‐scale economic impact. 50
Figure A-‐1. Academic Science and Engineering R&D per $1,000 of GDP
Notes: Academic R&D reported for institutions with R&D over $150,000. GDP reported in current dollars. Source: National Science Foundation, National Center for Science and Engineering Statistics, Academic Research and Development Expenditures (various years); Bureau of Economic Analysis, Gross Domestic Product data.
51
Appendix B Development of Target Industry Sectors Included in this appendix is the analysis of the South Dakota economy used to determine a set of target sectors. These sectors are examined in relationship to the higher education system and its research assets, the EPSCoR program process, and the sector’s place in the South Dakota economy.
How the Target Industry Sectors in South Dakota were Selected The targeting of specific industry sectors or economic clusters is a fundamental part of economic development policy within the United States and virtually every state, including South Dakota, has an officially recognized set of targets. This analysis acknowledges and considers the state targets as well as targets that have been set by regions and metropolitan areas within the state. The different purposes of this report mean that there is an amplified focus on technology, postgraduate education, and STEM-‐related sectors and industries as opposed to a broader set of targets. As a point of comparison, the state’s current targets 6 are: o Bioscience o Advanced Manufacturing o Financial Services o Value-‐added Agriculture o Professional Business Services o Renewable Energy o Shooting, Hunting & Outdoors It should be noted that the definition of sector used in this report is broad in that it includes the various supply chain inputs into the final product. For example, value-‐added agriculture will include various supplies used on farms, the supply chain for farm equipment, and the equipment and sectors used in processing raw agricultural products into higher value-‐added products. This is somewhat similar to the definition used in economic cluster analysis. It may be helpful to think of the target sectors more as industries that include a number of sectors.
6 Governor’s Office of Economic Development; “Key Industries”; http://www.sdreadytowork.com/industries.aspx
(accessed January 7, 2013).
52
Target Industry Sector Criteria The analysis started with the development of criteria that are used in filtering sectors. The criteria were used as a guide, not as an artificial and automatic screening system. Instead, professional judgment was also used to balance the findings on the various criteria with the broad goals of the project. The objective was to answer the following question: “What high growth and what core industry STEM-‐oriented sectors are the most likely candidates to drive a robust, higher value future South Dakota economy?” Criteria 1. The sectors show critical mass and/or demonstrable momentum as a statewide strategic choice from an economic development policy standpoint including consistency with the adopted targets of the state and its regions. 2. The sectors demonstrate potential impact across the state including urban, rural, and Native American areas. 3. The target sectors demonstrate strong or very promising showings in South Dakota in various economic measures: o Sector Employment Levels -‐ Is the sector a significant economic engine within the state? o Sector Employment Growth -‐ Has the sector experienced employment growth? o Sector Competitiveness -‐ Has the sector shown relative competitiveness in the state? Shift share analysis is employed as a competitiveness measure to adjust employment growth by overall national employment growth and national employment growth within the sector to see if the sector in the state outperformed expectations.7 o Sector Employment Concentration – Using location quotients, this analysis determines if the sector in South Dakota is relatively more concentrated than in the nation. For example, the film industry in Los Angeles and the financial sector in New York City are strongly concentrated relative to the rest of the country. South Dakota is similarly concentrated in agriculture.8
7 “Shift share is a standard regional analysis method that attempts to determine how much of regional job growth can be
attributed to national trends and how much is due to unique regional factors. Shift share helps answer why employment is growing or declining in a regional industry, cluster, or occupation.” http://www.economicmodeling.com/2011/12/05/understanding-‐shift-‐share-‐2/ 8 This analysis scans the regional economy for “above average” concentrations of employment or establishments in a particular industry or industry segment. At the regional level these measures, which are called location quotients, can indicate relative areas of specialization within the economy. Location quotients are typically calculated on the basis of employment concentrations or numbers of establishments. If employment is used as the relevant variable, the location quotient is calculated by measuring the percentage of a region’s total employment that is found within a particular industry, compared to (divided by) the same ratio for the nation as a whole. If the resulting ratio is greater than one, it can be assumed that the industry is relatively specialized in that industry. The higher that number, the greater the location quotient, and the more significant the regional specialization.
53
o Sector Technological Focus -‐ Is the sector based on technology and value-‐added processes? o Sector Wages -‐ Does the sector have higher than average wages compared to the overall economy? 4. The sectors are built on a portfolio strategy that balances levels of risk and reward: o Mature industries that have a long history within the state’s economy such as agriculture o Established industries that are significant parts of the South Dakota economy such as financial services o Emerging industries that are still small but demonstrate long-‐term potential such as information technology
The Target Industry Sectors Based on the analysis of the state’s economy and the criteria defined above, the following five sectors were presented to and adopted by the REACH Committee at its October 18, 2012 meeting: o o o o o
Value-‐Added Agriculture and Agribusiness Energy and Environment Materials and Advanced Manufacturing Human Health and Nutrition Information Technology/Cyber Security/Information Assurance
A Note on Bioscience and the Target Industry Sectors: The bioscience and biotechnology industry, much like information technology, has become ubiquitous. Bioscience applications function as enabling technology or are integrated into products, processes and services across a multitude of industrial sectors throughout the U.S. In order to advance a tightly defined strategic focus, this analysis elected to concentrate on industry application and to subsume the many and varied bioscience applications within the above listed target industry sectors. Often when “bioscience” is identified as a target industry the focus is dominated by human therapeutics and diagnostics. In South Dakota’s case, while this is very important, there are numerous other current and potential applications in the other four sectors. From this strategy’s perspective, it is easier and more effective to address the role of bioscience knowledge and technology within a specific segment within a specific sector; for instance, crop resiliency in value-‐added agriculture, biofuels within the energy and environment sector, biometric technologies for personal identification and security within the information technology sector, tissue healing with human health target industry sector and so on. The target industry sector analysis, based on the most recent available data, is presented below.9
9 The economic analysis presented in this section uses a data system developed by Econometric Modeling Specialists
International, (EMSI). The system combines employment data from the federal Quarterly Census of Employment and
54
Value-‐Added Agriculture and Agribusiness South Dakota has long relied on a very strong and globally competitive agricultural sector driven by climate, location, transportation, and other advantages. The agricultural and agribusiness industry has changed dramatically over the years and the state’s industry has successfully responded to those changes. As noted above, the full range of businesses that are part of the sector are included-‐from wholesale providers of equipment, seed and fertilizers through production to processing and distribution. Of the target sectors, value-‐added agriculture and agribusiness is the most broadly distributed across the state. This is truly a statewide industry. Figure B-‐1and Tables B-‐1 through B-‐5 display data on the 2006-‐2011 performance of the industry and projections through 2016. The data demonstrate that the industry is large and highly concentrated, as measured by location quotient,10 and is distributed across the state. It should also be noted that employment declined from 2006-‐2011 and is not expected to rebound from 2011-‐2016. In general, earnings are also relatively low at $35,300, below the state average of $37,600; however, there are numerous subsectors (6 digit NAICS codes), especially in processing and manufacturing-‐related activities that are much higher than the state average. The value-‐added agriculture and agribusiness sector’s size, presence across the state, historical importance, and strong relationship to the state’s university system render it a viable target industry sector. In addition to its size and historical economic importance, the sector will be important in the future in view of its potential role in renewable energy production, value-‐added manufacturing, and bioscience applications. Other potential sources for economic growth within the sector are presented below. It is important to note that 1) even within what are considered “traditional” subsectors such as crop production or farm management the level of technology and knowledge intensity is often very high and 2) this sector should have significant overlap with the other four target sectors (including even information technology). o Supply chain opportunities §
Pre-‐ and post-‐crop production
§
Farm machinery manufacturing
o Technical services §
Farm management
§ Environmental, scientific and technical services Wages (QCEW) produced by the Department of Labor with total employment data in Regional Economic Information System (REIS) published by the Bureau of Economic Analysis (BEA), augmented with County Business Patterns (CBP) and Nonemployer Statistics (NES) published by the U.S. Census Bureau. Projections are based on the latest available industry data, 15-‐year past local trends in each industry, growth rates in statewide and (where available) sub-‐state area industry projections published by individual state agencies, and (in part) growth rates in national projections from the Bureau of Labor Statistics. The system is continuously updated by EMSI. 10 As previously mentioned, a location quotient (LQ) is a ratio measure of the concentration of a sector or occupation in a regional economy compared to the national economy. A LQ above 1 indicates that the region has a higher concentration than the nation as a whole. For example a LQ=2 means the state has double the concentration found in the U.S. economy.
55
o Small-‐scale manufacturing §
Breweries and wineries
§
Specialty foodstuffs – cheese, etc.
o Renewable energy feedstock Figure B-‐1. Employment Growth in Value-‐Added Agriculture and Agribusiness 2006-‐ 2016 Source: Economic Modeling Specialists International, (EMSI), 2012.
56
Table B-‐1. Value-‐Added Agriculture and Agribusiness NAICS Codes Sorted by 2011 Employment Levels NAICS& Code 112000 111000 311611 424510 424910 423820 424520 115115 311612 115210 115112 325193 311513 333111 114210 115114 311615 311821 113310 311412 311119 311111 115113 311511 115116 311812 333112 312111 311811 114111 115310 311222 311941 312130 311999 311991 311514 312113 311330 424590 113210 325311 311340 311919 325314 311421 311830 312120
Description
2006&Jobs
2011&Jobs
2016&Jobs
Animal&Production Crop&Production Animal&(except&Poultry)&Slaughtering Grain&and&Field&Bean&Merchant&Wholesalers Farm&Supplies&Merchant&Wholesalers Farm&and&Garden&Machinery&and&Equipment&Merchant&Wholesalers Livestock&Merchant&Wholesalers Farm&Labor&Contractors&and&Crew&Leaders Meat&Processed&from&Carcasses Support&Activities&for&Animal&Production Soil&Preparation,&Planting,&and&Cultivating Ethyl&Alcohol&Manufacturing Cheese&Manufacturing Farm&Machinery&and&Equipment&Manufacturing Hunting&and&Trapping Postharvest&Crop&Activities&(except&Cotton&Ginning) Poultry&Processing Cookie&and&Cracker&Manufacturing Logging Frozen&Specialty&Food&Manufacturing Other&Animal&Food&Manufacturing Dog&and&Cat&Food&Manufacturing Crop&Harvesting,&Primarily&by&Machine Fluid&Milk&Manufacturing Farm&Management&Services Commercial&Bakeries Lawn&and&Garden&Tractor&and&Home&Lawn&and&Garden&Equipment&Manufacturing Soft&Drink&Manufacturing Retail&Bakeries Finfish&Fishing Support&Activities&for&Forestry Soybean&Processing Mayonnaise,&Dressing,&and&Other&Prepared&Sauce&Manufacturing Wineries All&Other&Miscellaneous&Food&Manufacturing Perishable&Prepared&Food&Manufacturing Dry,&Condensed,&and&Evaporated&Dairy&Product&Manufacturing Ice&Manufacturing Confectionery&Manufacturing&from&Purchased&Chocolate Other&Farm&Product&Raw&Material&Merchant&Wholesalers Forest&Nurseries&and&Gathering&of&Forest&Products Nitrogenous&Fertilizer&Manufacturing Nonchocolate&Confectionery&Manufacturing Other&Snack&Food&Manufacturing Fertilizer&(Mixing&Only)&Manufacturing Fruit&and&Vegetable&Canning Tortilla&Manufacturing Breweries Total
21,081 11,102 3,345 1,738 1,342 1,570 1,153 1,047 776 761 591 521 602 705 464 264 611 498 298 303 329 146 168 208 83 313 112 148 128 0 108 52 29 43 39 49 47 40 31 52 12 15
