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A University's Role in the Knowledge Economy:
The University of Maryland Experience
C. D. Mote, Jr., President
Presented at the American University of Cairo, Egypt
January 5, 2006
I wish to thank President David Arnold for the kind invitation to address you all here today and for his warm hospitality during our visit.
I would also like to commend the American University of Cairo for its commitment to the intellectual and cultural development of Egypt and the Middle East.
Egypt is a welcome source of graduate students for the University of Maryland. Our Computer Science Department alone has nine students. Some have gone on to successful academic careers in the U.S. About two students are admitted each year to the Department of Mechanical Engineering and ME is currently home to the top two graduate students from Cairo University (Class of 2003). We know of three who have returned to faculty positions at universities in Egypt.
Our ME Department is currently hosting a Fulbright scholar, Yasser Shabana from Helwan University.
THE UNIVERSITY OF MARYLAND: BRIEF ORIENTATION
I expect that most of you have heard of the University of Maryland but probably know little about it. Allow me to give you a very brief orientation.
Founded 150 years ago, the University of Maryland is located on 1,200 acres (490 hectares), just nine miles from the White House to the south and 30 miles from Baltimore to the north. Its 1,500 member professoriate, supported by an equal number of other faculty, teach 35,000 students—25,000 undergraduate and nearly 10,000 graduate students. The campus boasts 3,800 international students.
Thirty-two of the University's programs are ranked among the top 10 nationally, according to U.S. News and World Report, and it is one of the top ranked public research universities in the country.
Because of its proximity to the nation's capital, it is surrounded by a wealth of government agencies, national libraries, museums, research centers, and government laboratories devoted to research and development, including such well known organizations as the National Science Foundation (NSF), Food and Drug Administration (FDA), National Institutes of Health (NIH), National Aeronautics and Space Administration (NASA), National Oceanic and Atmospheric Administration (NOAA), the National Institute of Standards and Technology (NIST), the U.S. Department of Agriculture (USDA), the National Archives (NARA) and many others. The research program is externally funded at about $350 million per year.
The University of Maryland is the State's flagship university for both graduate and undergraduate education, offering comprehensive programs in the disciplines of agriculture and natural resources, architecture, arts and humanities, behavioral and social sciences, business, chemical and life sciences, computer sciences, education, engineering, public health, information studies, journalism, mathematical and physical sciences, and public policy. These programs are organized in 90 academic departments and 300 research institutes and centers. The six professional schools—dentistry, law, medicine, nursing, pharmacy and social welfare—are located at the University of Maryland Baltimore.
BACKGROUND POINT: KNOWLEDGE ECONOMY
Today, I would like to offer comments on global partnerships between business, government and universities that drive development in today's knowledge economy.
The knowledge economy seeks to increase productivity and beneficial outcomes through talented teams, including targeted partnerships, and by providing the tools, working environment and wherewithal for executing the plan.
The knowledge economy is about talent, assets and productivity. It is not about regions and countries. The Internet has connected the world so that talent is assembled on a worldwide scale, not a regional or national one. We are witnessing the death of distance in a rapidly increasing range of professional responsibilities that extends well beyond call enters to include evaluation of xrays from Massachusetts hospitals by Indian doctors, tax accounting, engineering design, operation of security entrances in Washington by doormen in Pakistan.
The three legs of the triangle making up the knowledge economy are businesses, governments and universities and through the Internet and modern communications, these legs are tightly joined. Everyone is connected to everyone.
The first leg is businesses. Businesses of all sizes are world businesses, not local ones. For all intents and purposes there are no national or regional businesses. This past summer I met a woman selling hot sauces by the jar at a farmer's market in Truckee, California. She took orders at her website and shipped sauces worldwide using DHL. She's a global business.
Governments, the second leg, worry about regional issues and their global interests are interpreted in a local context. Governmental promotion of world business is for local benefit. Governments are more interested in the local benefits provided.
Universities, the third leg of the triangle, have both local and global responsibilities. University missions are about knowledge, talent, productivity and innovation as well as education of the "best and the brightest." Because their missions are central to sustained innovation and competitiveness, universities cannot sit on the sidelines in this knowledge economy. They must act globally like industry some times, and act locally like government at others. A major change over the past fifteen years is that the knowledge economy, being fundamentally global, requires universities to work on a global scale with universities, government, and business. A second change is that universities are now partners, a leg of the triangle, with governments and businesses. They are no longer subordinates to them because universities hold many of the keys to success in the knowledge economy.
UNIVERSITY OF MARYLAND ACTIVITIES
In building the symbiosis between government, industry and universities, the University of Maryland has focused attention on innovation, entrepreneurship and partnerships in every action we take. I will outline some of our activities under these rubrics.
I. Innovation—The most important determinant for increasing productivity is innovation. We strive to embed the spirit of innovation in every operation of the university, make it an expected work product, and reward it.
One innovative project with Egypt demonstrates a typical international partnership development. In 1990 an Egyptian student earned his Ph.D. in our Department of Animal and Avian Sciences and joined the faculty at Assiut University. His thesis research on the effects of environmental chemicals in birds, including field species, laid the foundation for continuing collaboration. The partnership has expanded to the biology of aging in birds and to optimization of reproduction of Egyptian poultry. The economic implications make this a significant issue for the poultry industry in Egypt.
I am certain that you have similar experiences on the importance of innovation.
II. Entrepreneurship—The entrepreneurial spirit, the second ingredient for a successful university in the knowledge economy, must also be embedded and valued through tangible actions across all operations of the university. Let me speak about the University's entrepreneurship: (i) education, (ii) support and funding, and (iii) services.
Entrepreneurship Education
We offer university courses on entrepreneurship for undergraduate and graduate students, and for people at other campuses and within the community at large. Our Schools of Engineering and Business created the Hinman Campus Entrepreneurship Opportunities Program that brings undergraduate students together, outside their major field of study, in a dynamic, living-learning environment that spurs the formation of new companies. I call it the entrepreneur's dorm. A high-technology living environment provides students with the tools they need to create their own companies. Weekly seminars, entrepreneurship courses, counsel by professional entrepreneurs and venture capitalists, and an annual business plan competition are examples of the services provided. Winners of the competition receive cash prizes to help initiate their promising new ventures. This year, more than 100 Hinman CEO students are engaged in more than 20 new companies in various stages of development. In its first year the program led to 12 companies, with 9 often receiving financial support from investors. The Hinman CEO Program won the Price Institute's top prize as the best entrepreneurship program in the U.S. in 2002.
A quarter of the graduates either run a company, or team with another Hinman student in running a company, thus demonstrating the value added from bringing these budding entrepreneurs together.
The top eight companies founded by these students are generating $1,300,000 in annual revenues (and growing), and in the academic years 2003-05 Hinman companies have won about $200,000 in grants and awards.
In another program offered through the Maryland Technology Enterprise Institute (MTECH) in engineering holds Technology Start-up Boot Camps on weekends for students, faculty, staff, and others. These boot camps cover the basics of starting a new business venture. The most recent one, held in October 2005, served about 500 participants from 42 companies, 8 government agencies, and 18 other universities, all located in four states. These compressed programs initiate people on matters ranging from business plans to venture capital and public offerings.
Entrepreneurship Support and Funding
Let me describe opportunities provided to support and fund entrepreneurship.
The university's Technology Advancement Program (TAP) is the most successful business incubator in the State of Maryland. Created in 1985, TAP is a university-based business incubator providing space, state-of-the-art biotechnology and information technology facilities, and both business and technical counseling and support for technology-based early stage companies. The start-ups pay 'market' rent for the space, and the University acquires 1% of its equity per year to compensate for the services and counsel provided. About 400 companies have applied for admission and 70 have been admitted. More than 50 have now graduated. The private and public investment in TAP companies totals $500 million.
Another example of support for entrepreneurship is the "New Markets Growth Fund." It is a professionally managed, independent, $20 million venture capital fund that invests in early-stage companies in low-income areas around the University. A team of MBA students in our Robert H. Smith School of Business analyzes potential "deals" and counsels companies under the direction of professional venture fund managers. Half of the venture funds were raised from private sources and half loaned by the federal government. It is the first university-based fund to raise capital focused on both technology startups and community development.
Backed by a core membership of angel investors, the Dingman Center for Entrepreneurship in the School of Business launched the Capital Access Network to provide access to capital for entrepreneurs in the Washington area. A three-step approach includes: (i) mentorship on business plans, finances, and championing good ideas; (ii) distribution of executive summaries to a network of angel investors, say 5 to 10 per month; and (iii) a monthly investor breakfast where entrepreneurs and their mentors present their business plan to an angel investor group. Typically 2 to 4 companies are presented at each breakfast. It offers angel investors the opportunity to provide entrepreneurs with capital, professional advice, and management expertise while opening access to angel investors for budding entrepreneurs.
Our entrepreneurship center also offers the campus community the opportunity to Pitch Dingman. Every Friday at a "brown bag luncheon" anybody from the campus can pitch a business idea to the Dingman Center for counsel, networking, and possible financial support. Many budding entrepreneurs are educated in this process.
Entrepreneurship Services
Let me now speak briefly about some entrepreneurship services provided by the University and supported by the State of Maryland.
The campus Office of Technology Commercialization offers "Invention of the Year" prizes in the life sciences, physical sciences, and engineering. It also files for patents (26 in FY05), and executes license agreements (43) for various technologies (55), with some (11) developed by University start-up companies. You might be interested to know that eight of our faculty members who came to us from Egypt have filed disclosures on 23 inventions since their arrival. Some work in our Agricultural Experiment Station in cell biology and molecular genetics, and others work in computer science, electrical and computer engineering, and mechanical engineering.
The Maryland Industrial Partnerships Program (MIPS) fund allows Maryland companies to leverage their research funds with state support, while gaining access to faculty expertise and the research enterprise at the University. These joint university-company research projects funded by MIPS enable companies to accelerate commercialization of their private technology. Companies pay a part of the university cost at a rate depending on their size. The State of Maryland pays the rest. This past year MIPS was named the top venture support program nationally by the U.S. Small Business Administration's Office of Advocacy.
Another important service, the University's Bioprocess Scale-Up Facility, is a flexible test-bed equipped and staffed to assist small and large companies with scaling up bench-top biological processes to a production-scale manufacturing line. Without this service many small companies would founder at the stage of full-scale production because of the scale-up costs. This facility has been supported by the State for about twenty years and was expanded last year because of its success in attracting and retaining companies in the State. Government labs, like the FDA and NIH, also use the facility and it is an excellent training ground for students who move into biotech manufacturing positions. These students are in great demand.
Yet another service, the Maryland Technology Extension Service (MTES), is subsidized by the State of Maryland to provide private companies with consultation by faculty. As an outreach arm of the University for the past two decades, it contributes to business and technical solutions for more than 500 industrial companies annually.
Finally, our ASPIRE program links student researchers to industrial problems. It broadens the educational experience of undergraduate engineering students through their direct involvement in engineering projects of current interest to private industry. Students usually collaborate with engineering faculty and staff on these projects.
These and similar services reach 1,000 companies each year. Since 1985 the overall impact of these efforts is estimated to have added $8.5 billion to the economy of the State of Maryland.
III. Partnerships
Organizations expand their assets and assemble talent and facilities through the judicious formation of partnerships. University of Maryland partnerships extend beyond universities to both international companies and international governments as well as to U.S. ones. Everyone is connected to everyone.
Partnerships with major U.S. government agencies, like NOAA, FDA, NASA, USDA, NIH and others, are particularly convenient because they are located essentially next door to the University and they are large research enterprises that benefit from university participation.
Partnerships with overseas governments are also common. For instance in 2004, a partnership with the Argentine government provided training for staff members of the Argentine Senate.
In 2002 a partnership between the Ministry of Science and Technology of China and the University of Maryland established the China-U.S. Science Park, the first research park for the People's Republic of China outside of the mainland.
In November 2004 a cooperative agreement between the University of Maryland and the China National Office for Chinese as a Foreign Language (NOCFL) of the Ministry of Education formed the Confucius Institute of Maryland to teach the language, literature and culture of China. The University offers the Chinese examination for teachers of Chinese language, the only site outside of Beijing.
The University of Maryland founded its Institute for Global Chinese Affairs (IGCA) in 1996 to promote better understanding between the Chinese and American peoples. The institute has established training programs for Chinese middle management executives that last from a month to a year on topics tailored to the needs of each training group. About 1,000 Chinese leaders from government, universities, and businesses have come to the IGCA for training on topics like public administration, management, finance, and banking.
A recent partnership with overseas governments occurred just a few weeks ago. A consortium of 20 U.S. universities, including Maryland, signed an agreement with the Indo-U.S. Interuniversity Network for Higher Education and Research to enhance engineering and computer science education and research in India through a satellite e-learning network. The Indian partners include Amrita University, the Indian Space Research Organization, and the Department of Science and Technology.
The University of Maryland's partnerships with industry extend to international companies, like Japan's Fujitsu Ltd. that works on human-computer interface problems, and to international institutes like Germany's Fraunhofer Institute that undertakes work on software at Maryland.
The University of Maryland Research Park, M-Square, is located about 1 km from the main campus on 50 hectares of university property. The site attracts both government research facilities and private sector companies. The Park is a partnership between the University, the State of Maryland, and a private developer who builds and manages the park properties and business. The build-out of the park will accommodate up to 6,500 employees in 300,000 sq meters of laboratory and office space. The Center for Weather and Climate Prediction, a NOAA program with 800 employees, is moving to the park to partner with the University's Department of Atmospheric and Oceanic Science and the NASA Goddard Space Flight Center. The goal is to create a world center for weather and climate prediction. Its building is under design and will open in 2007. The first major tenant of the Park is the University's Center for Advance Study of Language. It is located there along with the National Foreign Language Institute, making it a national focal point for linguistics.
A 12,000 sq meter speculative research building will open in Fall 2006. It is flexible research space that will be rented by university, government and commercial research enterprises that wish to be close to the University, NOAA or other residents in the park. An earth system modeling interdisciplinary research program, which is a partnership between NOAA, NASA Goddard and the University, will come together in this new building using about 3,000 sq meters. Other tenants are being sought, from inside and outside the country. It is an optimal place for industrial, research or university teams who may wish to partner with the University or other laboratories in the area. The Park will expand in 12-15,000 sq meter buildings to about 300,000 square meters in its current configuration.
Conclusion
To summarize what is required for success in the knowledge economy, we must create a university culture of innovation and entrepreneurship that balances the triangular partnerships developed between universities, industry and governments with the fundamental university responsibilities to create knowledge and transmit it broadly to students and society. This must be achieved while simultaneously respecting the ever-present driver of the knowledge economy - assembly of talent and other assets to increase productivity.
A key point to remember is that innovation is a culture, not a project. An innovative university is a collective state of mind, not any single action.
Government, industry and universities each have to do their part if their partnership is to succeed; otherwise, like any other highly trained team, it won't work.
CDM, JR.
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