Analysis shows strong return for Governor’s Oregon Innovation Council

SALEM -- An independent economic analysis released Oct. 30th shows that Oregon’s three-year-old initiative to build a partnership between the state’s businesses and universities to generate economic growth is beginning to create jobs, spin off new companies and build critical research infrastructure around the state.

The report by San Francisco-based RTI International concluded that companies funded by the Oregon Nanoscience and Microtechnologies Institute (ONAMI) would create as many as 608 new jobs by 2011, and as many as 1,363 by 2013. ONAMI, the state’s first Signature Research Center and the model for the two newest SRC’s, facilitates collaboration between private industry and the state’s universities in “green” nanotechnology and energy generation.

"ONAMI's success shows that the innovation model the Legislature and I created is working," said Gov. Ted Kulongoski. "This report underlines the importance of continuing to create an environment that encourages innovation in Oregon so that we can maintain its position as a leader in renewable energy and other emerging industries, creating jobs today that are sustainable into the future."

ONAMI was created in 2003 and became a model for the work of the Oregon Innovation Council (Oregon InC), which brings together the best thinking from business, higher education and government. Its charge is to create new living-wage jobs and grow existing businesses; bolster innovative research; increase access to public and private funding, and help Oregon become a global leader in emerging industries such as nanoscience, renewable energy and sustainability.

In the last Legislative session, seven of the council’s proposals received funding totaling $28 million, including the Oregon Wave Energy Trust, which has launched two wave energy projects in Reedsport and Coos Bay to generate clean, renewable electricity from the motion of the waves, and the Oregon Translational Research and Drug Development Institute (OTRADI), which is focused on developing and commercializing therapies to fight infectious diseases.

Earlier this month, ONAMI received $13.4 million in research funding from the federal government as part of a defense appropriations bill. The money includes funds for the ongoing development of miniature tactical energy systems at Oregon State University; research into safer nanomaterials and manufacturing at the University of Oregon, and research into nanoelectronics and nanoscale metrology at Portland State University.

Since inception, ONAMI researchers have been awarded approximately $100 million in national and private research funds.

According to the RTI report:

• Companies that ONAMI funding helped create will generate as many as 608 new direct and indirect jobs by 2011, and as many as 1,363 by 2013. These are not only research jobs requiring four-year degrees, but also include jobs for technicians and skilled workers earning living wage salaries. (These are the most conservative estimates; the report states an upper bound forecast for 2013 would be as many as 2,103 jobs.)

• Oregon’s $2.5 million investment in matching funds for competitively awarded grants alone has generated a six to one return, bringing in $15.2 million in federal grants since 2006.

• Ten spin-off companies have been launched or critically enabled by ONAMI funding.

• ONAMI has generated $77 million in cash inflows to the state that likely would not have occurred had ONAMI not been created. (State costs include $38 million since 2004, leaving a net economic benefit of $39 million.)

The report was commissioned in April by the Innovation Council and the Oregon Economic and Community Development Department. The purpose of the report was to estimate the economic benefits to the state generated by ONAMI that would not have accrued had ONAMI not been created.

RTI collected historical program and financial data from ONAMI as well as university and industrial affiliates to determine the extent to which ONAMI impacted their research agenda and business opportunities. RTI conducted nearly 70 interviews and fielded surveys to ONAMI researchers, shared facilities’ users, and commercialization gap-funded companies. RTI concluded that:

• ONAMI’s “shared facilities” model, which allows the state’s research universities and industry to avoid duplicating costly infrastructure resources, permitted Oregon’s businesses to keep research activity in the state that otherwise would have been contracted out of state.

• Oregon businesses matched the state government’s contributions 75 cents on the dollar. Business leaders cited the need for statewide research alliances, the effectiveness and novelty of ONAMI’s programs, and ONAMI’s focus on developing Oregon’s research infrastructure as the key attributes that catalyzed more than nearly $30 million in state-of-the-art instruments, office space, and in-kind services they have donated to ONAMI since the program’s inception.

• Three shared facilities -- Center for Advanced Materials Characterization in Oregon (CAMCOR), Center for Electron Microscopy and Nanofabrication (CEMN) and Microproducts Breakthrough Institute (MBI) -- are of such high quality that users from outside of the Pacific Northwest travel to Oregon to use them, paying market rates that are used to defray the state’s operating costs.

The Innovation Council has proposed a $26 million package for the 2009-11 biennium, which would continue to fund the existing programs and add an initiative aimed at bolstering the forestry industry. That proposal would help the Oregon timber industry -- the nation’s largest producer of lumber and a critical source of employment in 15 counties -- integrate research and technology developed in different labs to increase tree production by $1 million; save $1.6 million in transportation costs and help commercialize new products.

“After every economic downturn, Oregon emerges stronger, more diversified, and in a better position to lead America into the future,” said Oregon InC Chair David Chen. “I think the innovation model that ONAMI represents shows that the work of the Oregon Innovation Council is helping the state grow its way out of these tough economic times.”

The Oregon Economic and Community Development Department provides economic, community and cultural enhancement throughout the state. The Department administers programs that assist businesses, communities and people. Oregon's economic development system is designed to meet the state's changing economy, provide flexibility in funding statewide and regional needs, and focus on funding economic and community development services for rural and distressed communities. Visit www.oregon4biz.com for more information on doing business in Oregon.

Contacts: Skip Rung, ONAMI, 541-713-1331; John Doussard, OECDD, 503-229-5116; and Nathan Buehler, OECDD, 503-986-0050

Download the 101-page report (PDF)