A Special Report from the NYS Assembly Task Force on
University-Industry Cooperation

Sheldon Silver, Speaker • William B. Magnarelli, Chair • January 2004

Message from the Chair
Dear Friends,

This year marks my third legislative session as chair of the Task Force on University-Industry Cooperation. While we are all engaged in trying to make the most of a year with constrained fiscal resources, the Task Force has managed to press onward in its mission of solidifying and energizing the collaborative activities and ventures between businesses and the State’s institutions of higher education.

Students in their years of undergraduate and graduate education, businesses seeking to expand their operations or retool for new projects, currently employed workers who need to hone their skills or learn new ones all benefit from cooperative relationships among industry and institutions of higher education. As the State continues to support high-tech research and development and as the programs in our two- and four-year colleges and universities continue to expand in content and thrive in reputation, I remain committed to doing my part in bringing these two sectors together so that they continue to work effectively for the benefit of all parties.

I hope that this newsletter provides a good overview of the accomplishments and directions of the Task Force. As always, if you have any questions or particular concerns, I encourage you to contact me.

William B. Magnarelli
Chair, New York State Assembly
Task Force on University-Industry Cooperation

Task Force Roundtable
On April 28, the committee hosted a roundtable in Albany on The Role of the State’s Community Colleges in High-Tech Economic Development. Joined by Assemblymember William Scarborough, Chair of the Commission on Skills Development and Career Education, I invited members of the business community, labor, and representatives from the State University of New York (SUNY) administration as well as administrators and faculty from SUNY’s and the City University of New York’s (CUNY) community colleges to discuss partnerships among these entities.

The 36 community colleges of the SUNY and CUNY, located throughout New York, provide academic opportunities for their students, and economic development opportunities for the State. The two years spent at a community college yield substantial benefits — from the provision of the necessary academic and study skills necessary to succeed in a four-year institution to advanced technical skills necessary to obtain employment in ever-advancing high-tech fields. The wealth of the resources found on the State’s community college campuses is inestimable.

The main purpose in holding the roundtable discussion was to determine whether there is an infrastructure in place that fosters community college-industry collaboration and to what degree and in what manner community colleges are involved closely with local businesses, either individually, in technology parks, or through industry associations. It was also important to ascertain the synergy that provides students with work experiences in high-tech product development and provides businesses with a bright, capable and highly motivated workforce-in-training.

Invitees were asked to consider the following questions:

  • What role can community colleges play in providing the workforce training necessary for jobs created as a result of high-technology research and development being conducted at universities throughout the State?
  • What are some successful high-tech partnerships between universities and community colleges and how do they work?
  • What can the State do to foster these partnerships?

At the event the discussion mainly centered around three broad issues:

There was consensus that State funding for community colleges to engage in industry-specific training is insufficient; however, given the current fiscal climate, enhanced funding for training programs is not likely in the immediate future. With that understanding, discussion turned to how to utilize existing resources in the most effective ways. The following key points were made:

  • Look to models, such as those in New York City, that take existing resources in community colleges — lab, equipment, space that can be used for business incubators – and offer them to companies in return for equity.
  • High-tech training is more expensive than traditional education and usually draws smaller enrollments. As a result, community colleges often cannot afford to offer these “high cost” programs. Industry should be engaged to fund more of the training it arguably needs.
  • Labs and equipment for skills training in high-tech industries are extremely costly and the expense is on-going as they need to be kept up-to-date. If there are State funds available for capital expenditures, they could be directed for this purpose.
  • The State could play a role in tracking business trends which would help the State determine how best to allocate its limited training funds.
  • One of the most significant problems with funds is that they can be difficult, if not impossible, for community colleges to obtain as a result of State regulations and caps.

Marketing and Networking
Apparently, the fact that community colleges are an economic development tool is not as well-known as it should be. The following suggestions were shared:

  • Economic development officers of community colleges should do more to get that news out to industry with assistance from four-year institutions.
  • Develop a Statewide Business Services Network, or database, where community colleges could list their courses and explain their capacities for developing courses quickly (turnaround time could be as little as a week) for easy access by businesses.
  • Use press releases and other types of notices to publicize programs and potentials. As a result, even small businesses without staff to research training options could find out what is available in their areas — in terms of both “soft” and “hard” skills. Currently, SUNY is developing such a database for businesses.
  • A regional rather than a college-by-college perspective would be more cost-effective and efficient, such as the Technology Roadmap being developed in the Capital Region. The Roadmap would, for example, be available for businesses looking in an area to see what strengths a particular region may have — e.g., faculty and programs.
  • Advertisements and forums such as the Task Force’s April Roundtable could be equally effective in getting the word out about what the community colleges’ roles are and could be in high-tech economic development.

Role of the Legislature
It was felt that the Legislature could also help ‘market’ community colleges themselves — i.e., make it clear through policy decisions that these entities have a vital role to play not only in academics, but also in skills training. I am continuing the dialogue begun at the Roundtable and will be looking into the issues raised during the discussion to determine what role the Legislature may play in making it easier for community colleges to work successfully as partners with industry, labor, not-for-profits, four-year institutions, and government in high-tech economic development.

Task Force Chairman Bill Magnarelli speaks with Syracuse University researchers at the 2003 UNYTECH Forum.

Upstate New York Venture Capital Forum
I was pleased and honored to accept the invitation from the Universities of Upstate New York Venture Forum (UNYTECH) 2003 to be the keynote speaker at their conference on October 20th in Canandaigua. The event was designed to give venture capitalists, angel investors, and entrepreneurs access and insight into early-stage companies that are spinning out of universities in the Upstate New York region. It showcased companies that grew out of university-developed technologies covering a broad range of disciplines including biotech, information technology, infotonics, biomedical and many more. UNYTECH’s goal was to provide a dynamic and focused networking opportunity for investors to learn about the significant and cutting-edge R&D going on in some of the State’s premier research institutions and to offer the universities and entrepreneurs an opportunity to meet potential sources of critical early stage capital so that their innovations could, in fact, progress “from lab to line.”

During the conference the nine participating universities — Alfred University, Binghamton University, Cornell University, SUNY College of Environmental Science and Forestry, Rochester Institute of Technology, Syracuse University, State University of New York, University at Buffalo, and University of Rochester — showcased research initiatives and emerging technologies that will surely change the shape of our world.

Investments in the Workforce
I am initiating a review and evaluation of how the State allocates both Federal and State workforce training funds. A substantial annual federal investment — over $300 million this year — for workforce training is made in New York with funds appropriated under the Workforce Investment Act. While the majority of this money is allocated according to a fixed federal formula, there are significant discretionary funds and I am making it a priority to study how these funds are distributed throughout the State to make sure that we are maximizing the benefits that can be derived from them.

With our first-class university system and dynamic businesses, the economic development resources in this State are second to none. I will continue to use every resource at my disposal to make sure that these resources are developed to their fullest potential.

Over the past few years, the State has invested hundreds of millions of dollars in university-based applied research and commercialization activities. These efforts include five Centers of Excellence, eight Strategically Targeted Academic Research Centers, five Advanced Research Centers, and fifteen Centers for Advanced Technology, as well as Technology Transfer Incentive Programs, a network of ten Technology Development Organizations, and capital support for business incubator facilities.

Along with Speaker Silver and my colleagues, I am committed to supporting a high-tech research and development agenda, recognizing that the investment needs to be evaluated as the entities receiving these funds make progress in fulfilling their richly diverse roles. Accountability is crucial when making substantial contributions with taxpayer dollars and I am determined to maintain conscientious and thorough oversight of how our investments are being distributed and utilized. Oversight will be ongoing throughout the year and throughout the State so that we may be assured that State funds are fueling a dynamic and creative research and development culture that translates into practical and critical technologies.

It is common knowledge that the manufacturing industry is suffering huge losses in the State as it is throughout the nation and even internationally. I believe that through new university-industry partnerships facilitated and encouraged by the Task Force, as well as pre-existing partnerships energized by Task Force initiatives, we may be able to find ways to mitigate these losses and the detrimental effects that they have on the individuals directly impacted as well as the economy as a whole.

Technologies being developed at our research institutions often lead to new processes and products that can benefit the manufacturing industry. Innovations and new products developed in the lab that might reduce costs and enhance a company’s bottom line could turn things around for many businesses. What is needed is a clear, easily accessible bridge between the industry and the research institutions. Manufacturing companies have to be poised to take advantage of scientific and technological discoveries taking place in our dynamic research facilities, and I plan to utilize the resources of the Task Force to provide an environment where such a position can be achieved.

Assemblyman Bill Magnarelli was the keynote speaker at the 2003 Universities of Upstate New York Venture Forum (UNYTECH) in Canandaigua, New York. Here, he discusses new technology with representatives from Infotonics Technology Center of Canandaigua.

Directing Private Capital to University-
Generated Innovations
Status of Venture Capital
According to the PricewaterhouseCoopers/Venture Economics/National Venture Capital Association Money Tree Survey, New York has experienced a drastic decline in the amount of venture capital that once thrived in the State. During the last three years the State’s venture capital pool dropped from approximately $8 billion to almost $800 million dollars.

Upstate’s rise and fall parallels the State’s (and nation’s) as a whole. While the total State investment peaked at almost $8 billion, upstate represented over $471 million in 2000 and a low point of only

$148 million in 2002. There is, however, good news for upstate New York. The percentage of venture capital being invested upstate is increasing: it went from 6% in 2000 to 18% in 2002.

In general, funding for seed phase early-stage technology development is lagging, and in New York State this problem has been particularly acute. Over the past five years only 1-3% of venture capital investments were invested in start-up companies.

During these uncertain economic conditions angel investors are especially reluctant to take risks. In addition to uncertainties in the economy, markets for allocating risk capital to seed phase early-stage technology ventures are notoriously inefficient. It is vital to encourage the formation of new companies that can subsequently compete for traditional venture capital investments, especially promising companies being formed as a result of State-supported university research.

To this end I was pleased to co-sponsor the “NYSEEDS” Tax Credit bill (A. 7910) which would encourage angel investors to direct their capital to established venture funds which focus on start-up New York companies. The tax credit would help angel investors maximize their investments, increase early stage capital and investments in new start-ups in the State, and stimulate the formation of desperately needed seed capital at the crucial, higher-risk, early phase of business development. The bill remained in Committee at the end of Session.

Task Force Chair Bill Magnarelli at the 2003 UNYTECH Forum.

I am happy to report that this was an excellent year for legislation related to Task Force issues. As sponsor of the following four bills, I am encouraged about the progress the legislation made through the Assembly and am optimistic about the legislative agenda for the upcoming 2004 session.

  • A. 6463 would require the New York State Office of Science, Technology and Academic Research to prepare an annual report to the Legislature on all programs that involve joint efforts between institutions of higher education and private industry for the purposes of research and development and commercialization of high-tech and bio-tech products. The bill passed both Houses, but was vetoed by the Governor.
  • A. 1957 would establish an annual Statewide Patent Fair to commercialize New York university patents for licensing. The bill passed in the Assembly in May and was sent to the Senate where it did not come up for a vote.
  • A. 8408 would require entities applying for or receiving certain state economic development grants to commit to first considering New York companies as primary suppliers. This bill passed the Assembly in June and was sent to the Senate where it did not come up for a vote.
  • A. 7987 would create a program to match federal grants awarded to New York universities for technology development in the New York State Office of Science, Technology and Academic Research. It passed the Assembly in June and was sent to the Senate where it did not come up for a vote.

Assemblyman William B. Magnarelli, Chair
Assembly Task Force on University-Industry Cooperation
Room 519 LOB • Albany, New York 12248 • 518.455.4826
333 East Washington St., Room 840 • Syracuse, New York 13202 • 315.428.9651

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