Infrastructure problems hinder clones of Silicon Valley

November 29, 2000

CLEVELAND -- Faced with losses of jobs and population, many older industrial regions have tried to copy the success of California's Silicon Valley and Massachusetts's Route 128 corridor in developing high-tech industries. States have sought to encourage such development by establishing science and technology programs, promoting ties between local industries and universities, and investing in university-based research which shows promise of commercialization.

How effective have these efforts been at duplicating the success of high-tech regions, and promoting jobs and economic growth? The answer, according to a new study from Case Western Reserve University's Center for Regional Economic Issues (REI), is: not very. The study shows that other places cannot readily generalize from the experiences of Route 128 and Silicon Valley.

The problem, according to authors Michael S. Fogarty and Amit K. Sinha, is that the knowledge developed as the result of a university-industry partnership is widely available, but very few places outside of the existing high-tech regions have the technological infrastructure to fully exploit it.

"If university research is to raise a particular region's productivity growth via technology, it must connect with local industry performance," say the authors. "Eventually, local gain requires that new technology be commercialized and take the form of investment in local facilities."

The study looks at Greater Cleveland's efforts to develop and commercialize technology in three areas -- functional electrical stimulation (FES), developed at CWRU; polymer displaced liquid crystals (PDLC), which emerged from research at Kent State University; and microelectromechanical systems (MEMS).

It finds that of the three, the region has only been able to capture a significant share of the commercial benefits of FES, through the 1993 founding of the company NeuroControl. But even that required "vigorous intervention" from the Edison Biotechnology Center, the authors point out, because of the region's low concentration of other biomedical device companies. Meanwhile, the benefits of liquid crystal technology were quickly diffused to Japan and California because they had companies in place which could take advantage of it.

Efforts to commercialize MEMS technology are still under way. While Northeast Ohio is hampered by a lack of MEMS-related research and technology in the area, the authors say it may be possible, with sufficient investment and strategic focus, to build an R&D network that is a partnership of local companies, universities, and institutions such as the Cleveland Clinic working on technologies closely related to MEMS.

Cleveland and other older industrial regions are also hampered in their drive to develop new technologies because their ties with local universities are more limited than in newer regions. One if the chief reasons for that, the authors explain, is because older industrial regions tend to specialize in mature technologies, and thus they have not had the same need to establish ties with universities whose research is predominantly in medical and biological sciences.

Fogarty and Sinha recommend that Cleveland and other areas establish advisory boards to study the interactions between local universities and industries as a way to raise issues, clarify goals, and strengthen connections between the institutions and government agencies involved. Such a board also might try to develop a system, or tool, to inform the board of factors it should consider in deciding whether to invest in a locally developed technology.

Case Western Reserve University

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