Chancellor’s Remarks to Tech Park Board: October 9, 2013

Oak Forest: Proposed Site for Little Rock Technology Park
Presentation to the
Little Rock Technology Park Authority
By Joel E. Anderson, Chancellor
University of Arkansas at Little Rock
October 9, 2013

UALR was not at all quick to become part of the search for a site for the Tech Park. The voters approved the funding for the Tech Park in August 2011. The Tech Park Board held its first meeting on November 9, 2011, with three potential sites already identified. Those sites raised legitimate community concerns and were removed from consideration. The board invited submission of other sites, and 23 more came in; after evaluation, the number was reduced to five. After evaluation, none of them remains in consideration. Three sites that came later—including the one in Oak Forest adjacent to UALR—are now under consideration as potential sites.

It was not until August 13, 2013, that the University raised the possibility of the Oak Forest site, only after developing serious concerns about the sites that had been proposed and those that were on the table at that time.

The University’s central concern throughout has been a successful technology park—believing that the strong vote for the tech park, to the tune of $22 million, was due in large part to confidence in the city’s research universities. I am concerned that if the park does not succeed, the universities will be blamed for it. My UALR colleagues and I have also been concerned because we know that tech parks do not succeed easily or quickly. Therefore, we have been most anxious that the technology park be launched with all the advantages possible so as to enhance the prospects of its success. Our judgment has been that the other sites were not optimal for success.

In selecting a site, there will be only one chance to get it right.

This sense of urgency to ensure that the tech park sees a successful launch is why we are willing to relinquish some dear property as a potential tech park site—property that we have been acquiring for the future growth and development of UALR. In this sense, the University has skin in the game: the land we are proposing has a value to us for future university development that considerably exceeds the dollars that the land would bring if sold to the Tech Park Board. Our concern for the Tech Park’s success is serious enough that we are willing to sacrifice our future use of the UALR property in the area.

If the Tech Park Board does not choose the Oak Forest site, the University will remain on course for future campus expansion and will continue acquiring property in the area.

Before I show the visuals, let me be more concrete about the concerns that motivate us to propose this Oak Forest site.

The Centrality of Research to Research (or “Technology”) Parks.

Research is central to research/technology parks. This may seem an obvious point, but I emphasize it for reasons that will become clear.

At the state level, Act 1045 of 2007, is the enabling legislation under which the Little Rock Technology Park was initiated. In Act 1045, which is 30 pages long, the word “research” appears 92 times, including three times in the title of the act.

The legislation reflected the reality that the results of locally done research are always at risk of being licensed to or bought by investors on the east or west coast. Those investors then use our research results there to develop businesses there and create jobs out of state there, not here.

The section in Act 1045 on legislative intent pivots on university research and states:

(1) It is the intent of the General Assembly to maximize the benefits to be derived from Arkansas’ institutions of higher education. Therefore, it is necessary to provide an environment conducive to the creation and retention of businesses that develop through Arkansas’ colleges and universities.
(2) In many instances, these businesses are founded by entrepreneurs engaged in research, and it is imperative that research facilities be made available in the State of Arkansas to encourage, house, and support these developing entrepreneurs and businesses.
(3) This chapter is intended to provide a mechanism by which appropriate research facilities may be developed, funded, and operated for the purpose of supporting and retaining Arkansas entrepreneurs and businesses dependent upon research for their further development.

In addition to the language of the enabling legislation, the feasibility study and recommendations by Angle Technology Group in 2009 was entitled, Study and Recommendations for a Research Park in Little Rock, Arkansas.

Unfortunately, somewhere along the way public discussion changed from “research park” to “technology park.” That change has had the effect of taking everyone’s eye off the ball. The point of departure for it all was research…university research…commercializing university research…and jobs, in our case, jobs for the people of Little Rock.

The use of the term “tech park” rather than research park has made this an easy misconception. I believe that for many, “tech park” brings to mind the laptop culture rather than the university chemistry laboratory or the engineering students working in the labs at midnight to try to fashion the metal or plastic prototype of a new invention that they hope will make them millionaires.

[I am, with permission, attaching as an appendix excerpts from a blog posting on the Arkansas Times Blog last June 1 that I thought did any unusually realistic job of getting at the kind of research and development process that is the basis for wanting a technology park. I encourage you to read it. Also, for a list of a number of important and well-known innovations that came from university research, see “100 Important Innovations That Came From University Research” at http://www.onlineuniversities.com/blog/2012/08/100-important-innovations-that-came-from-university-research/.]

Calling it a “tech park” rather than a research park has had the effect of moving the focus away from the key ingredient, university-generated research and the relationship to universities, toward peripheral ingredients.

Because the issue was framed as a tech park, it migrated from the original goal of a successful research park to that of a progressive urban, mixed-use, real estate development populated heavily by the cool and hip, the young and single.

We indeed want more of the creative class in our city. But Ground Zero for the creative class is the comprehensive university campus. It is pervasive and dense there—in faculty offices, in hallway conversations, over a cup of coffee or lunch at the student center or the off campus pizza places, in the classrooms, in galleries, in the laboratories, in the libraries, in the student residence halls, in the strolls across campus, at musical and theatrical performances, during half-time at basketball games, in faculty research projects, in student research projects, in the service-learning projects of students in the neighborhoods.

The folks who will be inventing and creating start-up businesses in the tech park will not fit the popular stereotype of the creative class. Instead, they will be the brainiacs who care more about lab time than happy hour. They will rarely be the ones who dropped out of college with a big internet business idea. They will be the very hardworking faculty who are engaged in the slow grind of scientific and technical research. They will be graduate and undergraduate students, across a very wide assortment of disciplines, with ideas based on complex research. They are the folks who can create relevant jobs for Arkansas’s long-term future.

The reason that Little Rock can even aspire to a successful technology park is that nowadays this city has two research universities whose research can fuel it. My concern is that to date very little attention has been given to keying the decisions about the development of the tech park to the universities. In short, the relationship of a given site to the vital contributions of the universities has been taken for granted. That is a mistake.

Tech Park Operating Costs

Let me explain in terms of dollars and cents.

In time a site will be chosen, a first building will be in place, and an executive director will have been hired. That executive director is going to wake up some morning, and in the cold light of day is going to ask the question, where are the dollars going to come from for the annual operating budget? That early budget will include the salary of the executive director, with fringe benefits, travel reimbursements, and entertainment expenses directly related to the executive director’s day-to-day work. There will have to be at least one additional competent staff person, eventually more. There will have to be computing equipment and broadband connections, and the building will have to be cleaned and maintained and utilities paid. There will be a need for security and also the maintenance of the grounds and parking areas. The list goes on. The necessary maintenance and operations dollars can get up into six figures in a hurry.

If the tech park is next door to a university—either UALR or UAMS—there is a substantial institutional infrastructure in place, as well as a substantial research infrastructure. In that close setting, the executive director can leverage the university resources already in place and thereby reduce operating costs significantly. At the same time, tech park tenants can have convenient access to a broad range of extraordinarily expensive human and physical resources that have already been built by the university.

Those physical resources are not very movable—they cannot be readily shared or accessed from a distance. The user must be on site, in a campus building, and in an office or a laboratory. The human resources are not much more inclined to move around either.

Recently, by chance I heard strong testimony to the importance of proximity. Before I presented a speech unrelated to the tech park, I was visiting with my host who was a senior officer, an MD, in the state Health Department. He also holds an appointment at UAMS and also was a part of the VA Hospital many years ago. There had been a tech park story in the newspaper that morning, and it prompted him to remark that closeness really did matter. He said that when the VA Hospital was over on Roosevelt Road—just across town from the UAMS campus—that they had had a variety of important relationships with UAMS. But, he said, when the VA Hospital moved and was located next door to UAMS, the number of valuable interactions back and forth greatly increased.

It stands to reason. How we do lunch is a metaphor for the convenience factor. Day in and day out, most of us eat at a place near where we work, and we eat with people who work nearby. Because it is convenient. It is easy. It becomes a habit. And what is true of most of us is also true of people who are trying to build a high-tech business in a tech park. If interaction with university personnel and access to university resources are conducive to their success, then closeness to the university makes a difference in tech park success.

In my opinion, the development of the research park in Little Rock, even with the initial $22 million from the voters, will be a long, slow grind—one that will involve a lot of pulling ourselves up by our own bootstraps for a good number of years. It will much more closely resemble the experience in Fayetteville than that of St. Louis or Winston-Salem.

I will leave my discussion of this concern with this observation: if the tech park were located next door to UALR, then UALR would be able to provide substantial free, in-kind assistance. Also, a variety of services could be extended at marginal costs. The net effect would be a reduction in the annual operating costs that the executive director and the board will inevitably have to worry about. On the other hand, the more distance there is between the campus and the tech park, the less help the university can offer.

The story would be the same if the tech park were next door to UAMS like the VA Hospital. And that would be quite acceptable to UALR. It is a matter of public record that both universities face funding challenges, which means that cash available to support off-campus efforts of any kind is in short supply, so the value of the in-kind support that an up-close location can yield is not to be lightly dismissed.

As I transition to the slides, I want to recall that we have a very recent example of a major public project on a site that is not much more than a stone’s throw from Oak Forest. I refer to the Hillary Rodham Clinton Children’s Library of the Central Arkansas Library System (CALS) which is located at 10th and Madison, south of I-630 and a few blocks east of Fair Park. It is an instructive example.

[Go to Children’s Library Slide.]

The Children’s Library shows that (1) significant public projects do not have to go to less-conducive places where there is an empty big box or where the land is clear of people. It can go in an area that is primarily residential. The library project also shows that (2) with patience and sensitivity, you can acquire the necessary properties for such a project in a manner that is amicable and acceptable to all interested parties.

The University’s approach to neighbors in Oak Forest over the last two months leaves us confident that the same thing can occur there. The slides will provide a visual understanding of the area and the orderly way in which it could be developed, with minimal disruption to all interested parties.

ATTACHMENT
Technology Park

[Posted on Arkansas Times Blog 6/1/13. This post was in reference to an Arkansas Times piece on Luther Lowe, ASMSA graduate, now of Yelp.]

“…But let’s be clear; there’s plenty of high-tech innovation that has very little to do with the Internet and does not involve “going for it” with a keg and a ping-pong table.”
……
“Biotech, Nanotechnology, Ag science… These are areas where Arkansans are making enormous contributions to the scientific world right this very second. We have the researchers with the ideas. They have good environments within the universities where this research is taking place. What we lack is the incubator space, the prototyping facilities and the production lab space to begin to take ideas off the drawing board and toward commercialization. This is how businesses are grown in that world.

“It’s illegal to perform a lot of this work in university lab spaces because of state and federal laws that prevent commercial work from taking place in many of these areas.

“In a perfect world, here’s how the process would work: Let’s say that one of Alex Biris’ young geniuses at the UALR Nano lab invents a material that is an atom or two thick that ice crystals won’t adhere to. Sounds like the perfect substance to coat airplane wings, propellers and helicopter rotors, doesn’t it? Seems like this substance would be attractive to the aeronautics industry.

“Here’s where it gets interesting. Alex and his team can sell their idea and the formula for this substance to Boeing. Bell or Lockheed-Martin. Their scientists can take that formula and begin testing it, trying to figure out how durable it is, what compounds it needs to be mixed with to ensure that it will adhere to metal, etc., etc., etc. Alex and his team, and the University, might be paid pretty well in this transaction, but what will happen is that the people who’ve bought this technology will take it back to wherever they’re from, perfect it, and then begin employing people in Seattle or Wichita or Phoenix to actually make this new product.

“With the right kind of space in the right kind of Tech Park, Alex and his team have a lot more negotiating power and the City of Little Rock and the State of Arkansas have a lot more upside. Alex and his team can move their project out of the university’s lab and into an incubator space. They might strike a deal with one of the aforementioned companies, or even better, they might raise angel capital to fund their research. They begin doing the testing themselves, they develop a product and perfect it. Now they’re in control. Instead of selling their idea to one manufacturer, they sell their product to everyone in the sector. They build a production facility here in “Arkansas to make this Wonderpaint or whatever the snappy name the marketers come up with. Aerospace companies decide that it will be easier to make fuselage components near the source of this material and their factory becomes a magnet that attracts other investments here. They figure out how to make a cheaper version, and they begin marketing it across the globe as an addictive to asphalt that prevents roads from freezing over…and on and on.

“These kinds of operations exist all over the country. The model is working, companies are being born, they’re creating jobs. Most importantly, they’re controlling their own tech and keeping it close to home, where it’s helping to build their economies.

“…We need to ramp this thing up strategically, according to a plan driven by the scientists and businesses who will actually be using it.

“For the record, I’m not affiliated with the Tech Park Board, UALR or UAMS. I’m just an interested citizen. And…I think we also need a space in Little Rock, like the Iceberg in Fayetteville….”

[Posted June 1, 2013, in Arkansas Times Blog by oldandintheway.]