Science in the Triangle

Ted Zoller

North Carolina’s Research Triangle last year scored as the brainiest U.S. region, ahead of San Francisco’s Bay Area, which is home to Silicon Valley. Universities in Raleigh, Durham and Chapel Hill and Research Triangle Park, a research and development hub of world renown and state economic engine, had a lot to do with the winning score.

But brainiest doesn’t mean most entrepreneurial as Ted Zoller, an associate professor at the University of North Carolina’s Kenan-Flagler Business School and director of UNC’s Center for Entrepreneurial Studies, found out.

Depending on the counting method, the RTP area generated 1,500 startup companies since 1970 or 358 startups since 1984. Any way you look at the numbers, they represent a fraction of the more than 5,500 information technology and life science companies that have sprung up in Silicon Valley in the past 25 years.

So, how could the RTP area more effectively turn the local brainpower into companies that develop better medicines, faster computer chips and cleaner energy? What is needed to better capture the ideas and turn them into more businesses and jobs?

Incubators have long been the tool to do just that: help innovation hatch and grow.

RTP itself is kind of an incubator as the Daily Beast, the online publication that coined the smartest city contest, pointed out. Established more than 50 years ago on a few thousand acres unsuitable for agriculture, RTP was meant to attract R&D facilities of large corporations looking to expand.

A more traditional definition of a business incubator is a place where small, fledgling companies can develop technologies invented at universities or in large corporate labs. Incubators that fit that definition have also been around for about half a century. But not in RTP, which focused on corporate R&D activities for a long time.

The First Flight Venture Center, the oldest of at least eight existing technology-based business incubators in the Research Triangle, opened in 1991.

Rody Spivey, a plant physiologist at Agarigen, holds a container with genetically engineered button mushrooms

But the traditional model of a business incubator has evolved over the years. Aside from a common aim to nurture startups and spinoffs, incubators today may not even share the same designation. Some offer just inexpensive lab and office space to lease. Others also provide business advice, shared equipment or help with fund raising. Depending on the array of services offered, they may be called accelerators. Or they may be virtual, a network of contacts with expertise and deep pockets an inventor can tap.

Agarigen is one of an estimated 80 startups in RTP incubators, according to Anna Penner, RTP’s director of business development.

The company, which spun out of Pennsylvania State University, has leased office and lab space at the Park Research Center since 2007. Its 13 full-time employees are trying to coax genetically engineered button mushrooms to make proteins for 3 million vaccine doses in as little as three months.

Bacteria and yeast cells have been used to make proteins. Biogen Idec uses hamster cells at its large RTP plant and Biolex uses genetically engineered duckweed at its Pittsboro facility. Agarigen aims to set itself apart with a production system that’s less expensive, more flexible and faster - perfect to respond rapidly to emergencies or to counter biowarfare.

“Our system is just simpler,” said Don Walters, a molecular biologist who’s Agarigen’s co-founder and research director.

Walters and Agarigen’s other co-founder, Penn State mushroom science expert Peter Romaine, picked RTP to set up their startup because of the area’s talent pool in molecular biology, particularly in genetically engineering plant seeds. “RTP is one of the premier places on the planet,” Walters said.

He and Romaine have their own network of contacts and more than $9 million in funding from the U.S. Department of Defense. All they need is space for labs and offices that’s reasonably priced. Park Research Center, a 13-building complex that for 30 years was the home of the National Institute of Environmental Health Sciences, was the most suitable of the handful of labs he checked out, Walters said.

Scott Daugherty

But different startups have different needs, said Scott Daugherty, executive director of the N.C. Small Business & Development Center.

Development of a life science technology usually requires dedicated lab space. Also, inventions made at a university must be developed off-campus or the university can make claims on the technology, Daugherty said.

Startups working on software or with computer technology could set up shop in the garage, he said. “You can do that at your kitchen table if you have enough computing power in your home.”

But a little seed money and expert advice can boost the number of startups being formed.

A key difference between Silicon Valley and the Research Triangle, Zoller found out, is the density of experienced entrepreneur and investor networks. When he visualized them, the Silicon Valley networks formed a tightly wound ball of strings whereas the Research Triangle networks looked more like a necklace with a few beads strung here and there.

JoyStick Labs, one of the Research Triangle’s youngest incubators, plans to add some beads to the necklace. Formed about a month ago by a group of entrepreneurial experts, JoyStick Labs hopes to boost the number of video gaming companies and draw talent from gaming hubs in Atlanta and northern Virginia by offering up to $18,000 in seed money, use of its Durham facilities and mentoring from gaming experts and seasoned investors.