U.S. Rep. Dick Gephardt

He carried a to-do list with him that he plans to take to Congress and the Obama Administration.

Changing the way the Food and Drug Administration regulates the development of new medicines,  making the research and development tax credit for companies permanent and establishing a federal office to spearhead public-private partnerships between universities, the National Institutes of Health and R&D companies were among the suggestions on the list.

“It needs to be the new space program in my view,” Gephardt told about 100 people at the packed Capital City Club in Raleigh. 

Gov. Beverly Perdue, mayors and economic development officials from across the state attended the event, which was meant as a first step to build grassroots support for Gephardt’s to-do list.

At stake is the global leadership position the U.S. built in the past 30 years in discovering new medical treatments, improving quality of life and advancing health care, according to a report the Battelle Technology Partnership Practice released June 10. The Council for American Medical Innovation, or CAMI, an advocacy group Gephardt chairs, commissioned the report.

Experts, investors and bright minds from industry, universities and foundations whose brains the Battelle researchers picked, pinpointed several risk factors that the U.S. is in danger of losing its medical innovation edge.

Among those factors is the declining number of novel medicines that have come to market in the past decade. Between 2005 and 2008, the FDA approved on average 19 per year compared to an average 31 per year during the 1990s. A nearly 29 percent decline in venture capital that set emerging biomedical companies back during the recession was also troublesome. So were the science scores among 12th graders, which declined almost 3 percent from 1996 to 2005.

Health care and research to find new treatments have long been among Gephardt’s interests. What caught his attention was a novel triple cancer therapy that saved his son’s life nearly 40 years ago, he said. Gephardt supported a form of universal health care and helped double the NIH’s budget to support basic research to about $30 billion in 2003.

The unprecedented increase in NIH funding several years ago and a $10 billion boost the NIH received in stimulus funds last year benefited research institutions across the Triangle, including Duke University, RTI International and the University of North Carolina.

But Gephardt’s agenda to spur medical innovation and create more R&D jobs in the U.S. will face a Congress and a White House trying to gain control over a ballooning federal deficit. Gephardt didn’t think the NIH’s budget will be cut, but he acknowledged the belt-tightening mood in Washington by saying that his to-do list isn’t a “big ticket item. Yes,” he added, “this costs money, but the payoff is enormous.”

A concentrated photovoltaic "solar tree" designed by MegaWatt Solar. (Image from MegaWatt Solar web site.)

I recently wrote a two-part post here reporting on a forum in Research Triangle Park which focused on barriers to homegrown global business innovation in the Triangle and in North Carolina. While contemplating the themes of the forum, and skimming today’s science news, I stumbled across this article in  Popular Mechanics magazine which looks into the advances in concentrated photovoltaics over the past few years — and leads with the example of MegaWatt Solar, a renewable energy start-up in our own backyard. The company was formed by three professors at the University of North Carolina at Chapel Hill who seek to create utility-scaled concentrated photovoltaic systems to supplement fossil fuels-based energy production. (They’ve also been featured in UNC’s Endeavors research magazine, and have landed a story or two in the News & Observer, no longer available in their web archives.)

It struck me that MegaWatt Solar is a good example of the applied research that our area universities can generate to solve real-world problems, and also of the links that can be established between professors with marketable ideas and business-savvy entrepreneurs that can help carry the ideas from the research bench to the bank. Their story is truly one of homegrown innovation, though to be fair they are still in the pilot study phase and working out some kinks.

Because I’ve already written this story, I’m not going to write it again… Below is a reprint of the cover story article I penned about the people behind MegaWatt Solar, and their mission, for the fall 2009 issue of UNC College of Arts & Sciences magazine. It is reprinted here with full permission from the editors.

UNC Arts & Science cover, fall 2009, with MegaWatt Solar founders.

The Power of 20 Suns

MegaWatt Solar is a small start-up energy company in Hillsborough, N.C., backed by $17 million from Norwegian venture capitalists and mentally powered by three researchers in UNC’s College of Arts and Sciences. Tucked away in a brick textile-mill-turned-office-park, the company is poised to bring a new concentrated photovoltaic system to market that could provide the cheapest large-scale renewable source of electricity available anywhere.

But they didn’t design it for your home. They designed it for your utility company, to offset peak energy demand, which tends to coincide with the sunniest portions of the solar day. The term MegaWatt describes their goal of producing one megawatt of electricity from over a thousand solar “trees” spread across about 10 acres. The solar trees rotate on a dual axis mount that tracks the sun across the sky vault. One megawatt of electricity — one million watts — is enough to power about 800 homes.

MegaWatt Solar was founded by astrophysicist Chris Clemens, theoretical physicist Charles Evans, computer scientist Russ Taylor and a private sector power-grid systems engineer, Dan Gregory. They built their alpha version in spring 2006 in Evans’ driveway from what he describes as “an aluminum erector set for adults,” with parts bought off E-Bay, cheap advertising signboard and a highly reflective material scavenged from the interior of a Solotube skylight.

The best part? It worked.

“Boy, it was bright, “Evans said. “Everyone ran to get their sunglasses.”

They measured its electrical output and knew they were on to something red hot. The alpha reflector had a concentrating factor of 24:1. However, the team reduced this to 20:1 in their final design, to balance limitations from excessive heat buildup with low-cost solutions. Still, the power of 20 suns is impressive.

Since that weekend science project, the researchers have ruthlessly honed their design in an iterative process. They are on their fourth version, which uses four trough-shaped mirrors to produce about 0.75 kilowatts, and Clemens thinks they are nearing the finish line. He believes they will have a marketable product within a year that produces 1 kilowatt. A power utility would need to install about 1,000 of the concentrated solar trees, which Taylor estimates would take about 10 acres, to produce one megawatt. From the get-go, the trio wanted the design to be as low-cost as possible.

Rows of photovoltaic cells engineered to receive 20 times the concentration of normal sunlight. (Image from MegaWatt Solar web site.)

They have one pilot project in Caswell County, where Piedmont Electric Membership Corporation has installed sixteen 12-mirror solar trees. The team is retro-fitting the units to address wind demands, but they expect the new solar plant to be online by December, when they will begin field-testing them. A second pilot project is planned in Florida. They are also field testing six units that are located a stone’s throw from their Hillsborough office. MegaWatt’s solar trees are modular in design, to allow for periodic upgrades in a fast-paced technological world. Clemens, whose background is in astronomical instrumentation, designed the rough concept for the unit, and Evans focused on perfecting the light collecting and concentrating system.

“One of our mantras was that because the mirrors are the component that would cover a lot of ground, they had to pretty much be cheaper than dirt,” Evans said. They settled on an inexpensive exterior signboard material called Dibond, topped with a 3M film. Clemens jokes that it is the “cheapest mirror known to man,” but its 94 percent reflectivity and extremely light-weight aluminum frame are no joke. Taylor and his team worked on the computing that drives the dual-axis mechanical and optical tracking system. His team designed software that learns and anticipates where the reflectors need to be, and directs them there. This software allows the units to be installed anywhere on earth, he said, and within three days the unit will learn all it needs to know to track the sun and keep the reflectors in the right place.

Clemens and Evans extensively researched other concentrated photovoltaic projects and picked the best elements from them. A central key to their process was using existing technologies and materials, which kept costs down. MegaWatt Solar does not plan to mass produce the solar trees. Rather, they plan to work directly with interested utilities, license the design to large engineering firms, and advise local contractors on the construction and parts-purchasing.

They’re not the first to propose concentrating light to make more efficient use of photovoltaic cells. But they may be the first to do it cheaply, reliably and at a utility scale.

While it would be impossible to separate the global from the state-level issues discussed at the forum, some of the local business people offered examples for specific challenges to innovation that they faced.

Alexander Macris is the president of Themis Group which is based in Durham, N.C. and is a strong example of the power of a science park like RTP to attract additional tech-based businesses to the region. Macris said that the Triangle region is one of the largest concentrations of gaming companies in the U.S. Most of the innovation potential in gaming is at the gaming engine and software level, he said, and the average median income of someone in the gaming industry is about $75,000. He expects to see about 300 to 400 new gaming-related jobs in the area over the next three to five years, he said, because the industry is growing in the double digits. But at the same time, the cost of game development is going up – whereas a decade ago it may have cost $1 million to develop a game, it costs $20 to $30 million to do so today, Macris said. Foreign countries give more tax credits to their gaming companies, he said, which makes them more competitive in the global field and is hurting U.S.-based gaming companies. “Targeted tax credits are a huge attractant to small and start-up businesses in the gaming industry,” Macris said. “And cool downtowns, the creative class really likes a vibrant downtown too.”

While deeper tax credits may help some start-ups get a toe-hold in emerging markets, retaining the best talent is necessary to sustain them over time. And while uber cool downtowns like the American Tobacco District in Durham are one component of enticements to retain the best brains, it’s a smaller part of the issue. Jennie Hunter-Cevera of RTI said that 50 percent of foreign students who earn a doctorate in the U.S. end up exporting their knowledge by returning to their home countries. “We have a brain drain going on, and we need to make it easier and more attractive for the brightest to stay,” she said. (What do you think will help retain top-graduating foreign students in the U.S.? Leave a comment.)

Tim Toben, who chairs the NC Energy Policy Council, said that certain existing state policies were attempting to tap emerging markets by requiring utility companies to use renewable energy for 12.5 percent of their energy mix by 2021. While critics say the target is too low, Toben said that N.C. has a record of being one of the most progressive southeastern states when it comes to energy and the environment. “The utilities know we are moving into a carbon-constrained future,” Toben said, citing a Duke Energy plan to drop their reliance on coal from 42 percent today t 32 percent in 2030, or even as low as 17 percent. “For entrepreneurs, what resources will replace this ? Wind? Nuclear? Biomass? There’s a lot of opportunity for entrepreneurs in a carbon-limited future and we want N.C. to be the leader in the Southeast in the new green economy.” (Which begs the question: What specifically is the state energy office doing to help start-ups like MegaWatt Solar or BioRxn?  I have not looked into this at all, so if you have any insight then please leave a comment down below.)

But even if the policies, foreign visas and the vision of local leaders and educators all align into the perfect climate for innovative business, what sort of characteristics do innovative businesses and visionary business leaders typically have? Clay Thorpe, a partner of Hatteras Venture Partners, shared a list of just such traits he amassed from talking to high-level personnel in Genentech. “I’ve been asked why N.C. has not had a homegrown success, a globally-innovative business develop here,” Thorp said. “And I’ve thought about this a lot. We’re the number three biotech hub in the country, and we’re good at attracting existing businesses to the area.” Thorp said he had an opportunity to meet with leaders from Genentech, widely considered one of the main founding companies of the biotech industry, and he asked them what they thought contributed to their success.

“You have to have a driver, like Bob Swanson at Genentech, who set the cultural tone.” Thorp said. “I hesitate to say it, but it’s almost 5 to 10 percent the quality of the technology and 90 to 95 percent the driver.” In addition to having a visionary and energizing leader, Genentech spent an inordinate amount of time hiring good people, he said. They would court people they wanted to attract, sometimes for years, and chose very carefully. The leaders also fostered an ethic of loyalty and hardwork, which resulted in dedicated employees “going the extra mile” when it was needed. The company was also built upon a foundation of “patient, long-standing capital,” Thorp said, which gave them the stability and time to do proper research. In addition, Genentech required its scientists to publish scientific papers on their research and they held them to such high academic standards that often Genentech papers were cited over papers by ivey-league academic researchers.

While there were no clear answers presented at the Global Innovation Forum on Friday, a lot of conservation was generated. We want to hear from you — what are your thoughts on state or federal policies, or cultural shifts, that will help carve a climate favorable to business innovation with global trade potential? Let us know in the comments section below.

“We’re here today to learn from you so that we can go back to Washington and do what we do,” said NFTC president Bill Reinsch in his opening remarks. “We want to build relationships with companies and open a conversation with them to develop stronger links.” Reinsch said that his group was traveling to technology-innovation clusters like RTP and Silicon Valley to find out first-hand from companies what sort of policies were encumbering them from doing business globally, which were helping, and what sort of ideas they had for the future.

How to create and sustain jobs and businesses is a question that both federal and local governments have wrestled with sharply and frequently since the economic downturn. Research Triangle Park, NC has long been a technology-hub and economic engine for the state, noted RTP CEO Rick Weddle, and the area has excelled in life sciences, information technology, and biotech markets, but capturing emerging markets like gaming and clean energy technologies will be vital to RTP maintaining its vitality in the future. But how can science parks like RTP, and the states they’re rooted in, cultivate homegrown small businesses (and they jobs and economic resilience they generate) in emerging and established markets, especially when the banks are slow to lend — if they lend at all — and cash is plain hard to come by?

NC State Treasurer Janet Cowell presented one state-level contribution to the problem: a still-forming program called the Innovation Fund that will invest $230 million in N.C. businesses over the next three to five years from the state’s $67 billion pension fund. “Our pension fund is bigger than General Motors,” Cowell said. “Other states have used this approach for distressed parts of their states, but we’re applying this method with a market-based approach which makes me confident we can expect a return on our investment.” In other words, the state may be coughing up cash from the pension fund in the short-term, but they expect the money to generate more cash over time. The state plans to allocate about 10 to 25 percent of the $230 million as venture capital, 5 to 15 percent will be growth equity, 40 to 60 percent will be used for buyouts, and 5 to 35 percent for special situations. They will sprinkle their investments across established and emerging market sectors including: agriculture, life sciences, clean technology, green technology and renewable energy. The Innovation Fund is managed by Credit Suisse which has 1,050 employees in N.C. out of 47,000 global employees, and Cowell said the state chose them because of their performance record managing similar funds. (For more information, visit www.ncinnovationfund.com.)

But cash is only one prong of the multi-pronged solution to stimulating local scientific and business innovations with global potential. Access to a well-educated and prepared talent pool is a second prong; policies inducive to global trade are a third. These aspects were hashed out at length by two panels focused on the role of state and federal policies.

Sandy Merber, a specialist in international trade regulation and sourcing for General Electric, cited a study that found 84 percent of U.S. businesses said they’d lost business opportunities with China in 2008 because of visa problems in getting their Chinese business partners to the U.S. “It took me one day to get an emergency business visa to get into China, while the average is four days,” Merber said. “Guess what the average is for a Chinese businessman to come here? 31 days. That holds up deals, and that’s got to be expedited.”

Jennie Hunter-Cervera, executive vice-president of RTI, shared that a big challenge her company faces is the labyrinthine international laws that businesses must navigate to get business licenses to work in other countries. RTI works in 40 countries and holds 40 different business licenses in these countries, but she said the process of obtaining a license often slows down the companies ability to grow. She also noted that collaboration is difficult in some foreign countries because they don’t honor the same gene patent laws. RTI wants to take its research “from the bench to the bank” she said, meaning that the group seeks a return on dollars sunk into basic research and development. But it’s far easier to get government-funded grants for basic research than for research demonstrating proof of concept – data that may be necessary to convince a bank or venture capital group to invest in translating a project into a marketable product. “Proof of concept grants are not well-represented in the federal grants mix,” she said.

Heather Osborne Clark, director of trade and policy for Merck & Co., said that her company earns 50 percent of its income outside the U.S. in about 140 different emerging markets, and she reiterated that streamlining foreign visa processes would be helpful to Merck’s growth. She also noted that the resources allotted to foreign government agencies tied to trade and commerce are proportionally larger (in comparison to gross domestic product) than what the US allots to our agencies. “We need to better fund our agencies so that we can be more competitive,” she said.

Most of the business people attending seemed to agree that one area they would like to see the federal government help them abroad was in protecting intellectual property rights in foreign countries. While their rights were well-protected in the U.S., they noted serious infringements could occur in other countries with little in the way of laws or hegemony to help them.

… Part II of this post explores NC-centric issues discussed at the Global Innovation Forum, such as green energy markets, gaming, and characteristics of a globally-innovative business.

The three tips could have come from self-help books, a consultant or a mentor. Instead, they came from the first TED talk in the Research Triangle Park area. The all-day, free event Saturday at RTP headquarters attracted more than 150 people, who on a sunny and balmy winter day sat inside, listened, did the wave and talked to people they had never met before.

Amy Calhoun

Durham couple Amy and Eric Calhoun organized TEDxTriangle, an offshoot of the TED conference, over the past 10 months using word of mouth, Twitter and Facebook to recruit speakers. In the spirit of TED, whose motto is “ideas worth spreading,” TEDxTriangle brought together local speakers willing to share their ideas and insights.

“We’ve been TED fans for a long time,” said Amy Calhoun, who runs a management consulting business. The goal of the conference, she said, was to get attendees excited, plant seeds of passion and help people connect to solve problems.

TED talks follow in the footsteps of storytellers who spread knowledge and wisdom – at TEDxTriangle they included the director of the Entrepreneurial Leadership Initiative at Duke University, a Raleigh author of books for program developers and New Music Raleigh, three clasically trained musicians who played a work of a living composer.

But TED talks go beyond traditional storytelling. They are among a growing number of events that combine old techniques with new technologies.

Raleigh, which just topped Forbes magazine’s most wired U.S. cities list, RTP and Durham have been venues for these digital storytelling events. There’s IgniteRaleigh, which allows for five minutes and 20 slides, and its counterpart, FizzledDurham. And there’s Pecha Kucha Night, which gives each presenter six minutes and 40 seconds to get an idea across in 20 slides.

Together, these events are a grab bag of anecdotes, each with an idea at its core and a kernel of wisdom as inspiration.

A few examples from TEDxTriangle:

• Ideas are fragile and slippery, said Andy Hunt, author of “The Pragmatic Programmer.” Carry a notebook with you and jot them down as a drawing. “Doodling is good for thinking,” Hunt said.
• Christopher Gergen, the director of Duke’s Entrepreneurial Leadership Initiative, is about to open Bull City Forward in the downtown Kress building, where he hopes to nurture innovators willing to take on social problems. To follow through and put ideas into practice, Gergen suggested shifting from fear of failure to fear of regret.
• “Talent is not in short supply, passion is in short supply,” said August Turak, a business consultant and author who gets inspired by regular visits to a South Carolina Trappist monastery, where 24 monks work in silence.

When the stories are told, the new technology takes over.

Social media tools take on the role of word-of-mouth to spread the reach of the storytellers on the Internet beyond time and place. The videotaped TED talks are posted on YouTube, where they can be watched round the clock and the world. Bloggers write about the talks and their posts are distributed on Twitter.

Events like TED and Ignite aim at what Hugh Hollowell called connecting people with yearning to form tribes. Hollowell runs a Raleigh nonprofit to end chronic homelessness. The kernel of wisdom in his TEDxTriangle talk: Tribes spread ideas and change the world.

Zach Ward

To become a member of a tribe could be as easy as what Zach Ward, an impromptu comedian and founder of DSI Comedy Theater in Carrboro, did with a fellow comedian to perform at TEDxTriangle.

To reach his creative place  on stage, Ward said he accepted every idea his counterpart presented him without judgment and then added to it. Ward, who emceed TEDxTriangle, called this “Yes, and …”

Nanofibers make a better lightbulb

Scientists at RTI International build a lightbulb that is five times more efficient by using a blue light emitting diode, or LED, and nanofibers.

The RTI lightbulb uses a material that is made from fibers much smaller than human hair. The fibers are then coated with photoluminescent material and mounted on a housing that contains a blue LED. But the light that the fibers reflect is white and more pleasing than other energy-efficient lightbulbs.

“Because lighting consumes almost one-fourth of all electricity generated in the United States, our technology could have a significant impact in reducing energy consumption and carbon dioxide emissions,” said Lynn Davis, director of RTI’s Nanoscale Materials Program, in a prepared statement. “The technology also does not contain mercury, which makes it more environmentally friendly.”

Funding for the project came from the U.S. Department of Energy. Watch an RTI video how the lightbulb is made here.

Bayer CropScience loses second case in GM rice dispute

A St. Louis jury sided with three farmers in Arkansas and Mississippi, who claimed Bayer CropScience was responsible for contaminating U.S. rice crops with a genetically modified strain it was testing. The jury ordered the German company, which has its U.S. headquarters in Research Triangle Park, to pay $1.5 million.

Four years ago, Japan and Europe restricted imports of U.S. rice after the GM strain was found in the U.S. food supply. Prices dropped and U.S. rice farmers suffered extensive losses. Thousands have filed claims against Bayer CropScience.

This is the second case the company has lost. Two Missouri farmers were awarded $2 million in December.

Forum aims to stoke creativity

The unemployment rate isn’t budging. In December, it was 11.2 percent statewide and 9 percent in the Research Triangle area. But speakers during the two-day Emerging Issues Forum in Raleigh had a few suggestions to help us get out of our funk.

The forum, which is a brainchild of former Gov. Jim Hunt, was all about creativity this year – from the role the arts play in economic development to ways that promote out-of-the-box thinking.

One interesting suggestion that came up during the forum that could have particular application in research and product development: Bonuses, organizational charts and patents stifle creativity. More on that here.

Americans had it, too, but two years after we triggered a global recession we’re worried that we lost it.

No wonder a forum Monday and Tuesday on how we can get our juice back in the 21st century sold out, drawing hundreds of people to the Raleigh Convention Center. An interesting question that popped up again and again at the Emerging Issues Forum was whether proprietorship stifles innovation.

Michael Tiemann

“We need to move from an ownership society to a leadership society,” proclaimed Michael Tiemann, vice president of open source affairs at Raleigh-based software company Red Hat. Open source software allows free access to the lines of code, essentially the brains to the hardware’s brawn.

Tiemann believes that open source software works better, because it is constantly updated and improved by a wide variety of programmers. More than half of the proprietary software is delayed coming to market or has serious bugs, he said.

His answer seemed unequivocal: Control stifles creativity. Ownership breeds defects. Many heads are better than one.

Others have raised the same question in their own words. Author Elizabeth Gilbert in a Ted Talk asked whether creative genius is something that comes from us or something that comes through us. Daniel Pink, an author and one of the speakers at the Emerging Issues Forum, in a Ted Talk said research of what motivates us shows that money rewards dull thinking while autonomy stimulates it.

The Internet, born in the U.S. Department of Defense about half a century ago, was arguably the most powerful innovation of the 20th century. The Web created a digital world that transcends culture, geography and class. It also brought about open source software and companies like Google, which reaps huge financial rewards by giving its employees autonomy.

Indeed, many painters, writers and actors are creative because they aren’t part of an organizational chart. But the most creative idea doesn’t pay the bills unless you stick a price tag on it and somebody pays for it.

Many technological and medical innovations and the many years of expensive research they require have been possible because of patents, which are basically claims of ownership. Thomas Edison had a patent for the light bulb. So did Alexander Graham Bell for the telephone, George de Mestral for velcro and Gertrude Elion for leukemia-fighting drugs, to name a few.

The pharmaceutical industry, which could use a dose of innovation, has restructured its drug research groups into ever smaller entities to promote creative thinking. With little to show for their efforts, large drugmakers are now cutting R&D costs and increasingly raiding the laboratories of smaller biotech companies.

Are the concepts promoted by open source believers like Tiemann and career analysts like Pink transferrable to drug research, or even publishing, another struggling industry? Or do we need some creative new business models, too?

There seem to be more questions than answers.

Sure, Red Hat bought Cygnus Solutions for $674 million in 1999, a decade after Tiemann said he cofounded the open source company with about $6,000. But how many right-brain thinkers like Pink and Gilbert can demand large speaker’s fees?

Michael Linksvayer

Creative Commons, whose vice president Michael Linksvayer spoke on the same panel as Tiemann, is a nonprofit. Creative Commons aims to boost creativity by providing tools that, as Linksvayer put it balance protection of the inventor’s rights with public access. Wikipedia operates on a license provided by Creative Commons, so does Lulu.com, a Raleigh-based company online publisher.

Lulu.com is reportedly eyeing an initial public offering of stock in Canada worth about $48 million. And how does the online publisher create that much value? By charging authors, the right-brain thinkers who add to the marketplace of ideas.

The Entrepreneur of the Year awards program, run by Ernst & Young, one of the four big business auditing companies, is changing that.

Garg was named one of six winners of the award in the Carolinas Thursday night at the Westin Hotel in Charlotte. He is now eligible for the national awards, which Forbes.com has called one of seven “Get-Ahead Executive Retreats.” Last year, Matthew Szulik, CEO of Red Hat in Raleigh, won a regional and national Entrepreneur of the Year award.

The attention clearly boosts Garg’s and Tranzyme’s standing, but the jury is still out whether it will help RTP. Tranzyme was poised to consider an initial public offering a year ago, but Wall Street was reeling from the credit crisis. A partnership with a large drugmaker or a sale of the company were also options.

The Entrepreneur of the Year winners in the Carolinas were selected by a panel of regional business, academic and community leaders. Among the accomplishments they looked at to pick Garg were the more than $50 million in venture capital he helped raise for Tranzyme in 2005 and 2007 to fund the company’s research.

Investors wouldn’t have risked that much money if Tranzyme’s executive leadership had fumbled or the company’s technology had raised questions. So far, Garg and his executive team have overseen a smooth development of Tranzyme’s most advanced experimental drug to late-stage testing. A second drug is in Phase II testing and two other compounds are in animal testing.

Tranzyme’s technology aims to stimulate or block the ghrelin receptor, which is found on the surface of cells lining the stomach and the small and large intestines. Ghrelin is a hormone that is involved in many physiological processes, including the release of growth hormone, appetite regulation, gastric acid secretion, gastrointestinal motility and blood pressure regulation.

TZP-101, the company’s most advanced drug, is projected to enter Phase III testing for post-operative ileus and is in Phase II testing for diabetic gastroparesis, two painful disorders in which portions of the gastrointestinal tract stop functioning.

That means, the time to plant seeds for tomorrow’s innovation is now, when the global economy is shrinking, unemployment is rising and one of the world’s largest carmakers, General Moters, is about to restructure in the biggest industrial bankruptcy in U.S. history.

We also have to prepare the soil to make them grow in a park where we intend to reap science-driven innovation, said Robert Atkinson, founder and president of the Information Technology and Innovation Foundation, a Washington, D.C., think tank.

In the 1960s and 1970s, Research Triangle Park benefited from the strides large corporations made in research and development. In the 1970s, the biggest companies dominated the generation of innovative technologies. But that has changed significantly in the past 30 years.

Today, large corporations are moving R&D jobs offshore, to lower-cost countries. Companies with fewer than 5,000 employees contribute more than 80 percent of the top 100 innovations. And science-driven job growth increasingly depends on collaboration that crosses borders and involves companies large and small as well as universities.

What does that mean for RTP? Atkinson will offer suggestions at the International Association of Science Parks conference in Raleigh this week.

Atkinson, who in 1989 received a Ph.D. in city and regional planning from the University of North Carolina at Chapel Hill, is one of the key speakers at the IASP conference, which is bringing more than 750 participants from about 50 countries to the Triangle. He spoke to Science in the Triangle in advance of his presentation Wednesday. Here is an edited version of the conversation:

Q: What should the Research Triangle area do to foster and tap science-driven innovations and create jobs for another 50 years?

A:The Triangle has largely focused on being a branch plant for R&D. The area has long struggled with becoming more entrepeneurial.

An institutional culture change is necessary at Triangle universities. Right now, the corporate labs are doing their thing and the universities are doing their thing. Scientists, institutions and the business community need to work much more collaboratively.

This is a leadership issue that must be tackled by the Triangle business community, political leaders and universities.

Q: Why is it important to address this issue now?

A: Downturns can be fertile periods for innovation. Higher quality startup companies tend to spring up during downturns than during prosperous times. Innovation is critical to the economic success of a region such as the Triangle.

Q: Can you provide examples of how other regions do it?

A: Silicon Valley has always been much more collaborative than the Research Triangle area.

In southern California, the University of California at San Diego is tapping the resources and experiences of a cluster of wireless engineering companies. Representatives of the companies help the university to interview job applicants for faculty positions. My God, what a radical idea.

In Ottawa, Canada, the Information and Communications Technology Council brings together members from companies, universities and federal labs to allign their ideas and needs and direct job growth.

Atkinson, president of the Information Technology & Innovation Foundation, a Washington, D.C., think tank, told members of the subcommittee about 18 months ago that the U.S. is losing more R&D jobs to competition abroad than it is gaining.

I came across the testimony transcript while researching key speakers at the International Association of Science Parks conference that starts June 1 in Raleigh. Atkinson, who has been affiliated with the Brookings Institution and was a Clinton appointee to a commission that looked at information technology’s effects on workers and communities, will address how research parks like Research Triangle Park, one of North Carolina’s economic engines, can summon their strengths to keep innovation and jobs at home.

That’s important for the Triangle for several reasons: About 700,000 jobs in the Triangle alone are R&D-related. State government is spending millions of dollars every year to boost the area’s biotech and pharmaceutical industry, which five years ago became an economic development priority. And while U.S. companies may benefit from moving R&D jobs to India, China or Russia – a business strategy known as offshoring – it won’t benefit the Triangle much, because RTP is home to so few corporate headquarters.

Atkinson backed his offshoring claims with plenty of statistics. Here are the most striking numbers he cited:

• From 1998 to 2003, U.S. majority-owned affiliates increased their R&D investments overseas by 52 percent. Total corporate R&D investment by U.S. and foreign firms in the U.S. rose 26 percent during the same time period.
• From 1999 to 2003, corporate R&D investments as a share of gross domestic product  fell 7 percent in the U.S. It grew by 3 percent in Europe, by 9 percent in Japan and even faster in China and India.
• From 2005 to 2007, R&D investments rose 4.9 percent in the U.S. and 8.7 percent in the rest of the world.
• A survey by the Industrial Research Institute, a leading professional organization for corporate R&D managers, found that 52 percent of respondents reported that offshoring R&D led to reductions in U.S. R&D spending or staff. The survey was published in 2006.
• R&D salaries in China are one-sixth of those in the U.S. An electric circuit engineer with a master’s degree and five years experience earns an average $18,000 in India, compared to $84,000 in the U.S., and the Indian engineer works 450 hours more per year than his or her American colleague.
• Incentives may be more attractive outside the U.S., whose R&D tax reductions ranked the 17th most generous in 2004.