Posted by: Contributing Columnist, Mississippi Business Journal Feature, News, Technology, March 4, 2016.
In my last column I talked about the importance of public-private partnerships for
spreading innovation. In this column I will present a methodology for assembling such partnerships which may be used as a sort of check-list to ensure that the right players are at the table. This is a two part article. The first part discusses the framework for the partnerships and the next part will show examples of how various stakeholders in Mississippi have come together to impact technology-based economic development in the state.
Developing and bringing a new technology to market successfully is often an expensive, risky and challenging proposition that requires several steps. For example, in the chemical industry one usually starts with conducting the research experiments in a laboratory. If these bench-scale lab experiments show promising results, the next phase is the construction a pilot-scale facility in which you try to replicate the lab process at a slightly larger volume. If your bench-scale reactor held a few ounces of the reacting chemicals, your pilot-scale unit may hold a few pounds.
The next step is to build a demonstration-scale plant using several hundred pounds of the very same reacting chemicals. The process has to be optimized for the inputs and the outputs at the pilot scale; in other words the amount of chemical input, the pressures, temperatures and other reaction parameters have to be determined precisely along with the fate of the by-products or wastes that are generated before a full-scale commercial scale unit can be constructed and operated. Depending on the scientific complexity of the process, the early stage research and development often requires sophisticated laboratories which can cost millions of dollars to set up.
This is where public-private partnerships can be very valuable. Let’s say an entrepreneurial scientist has an idea to develop a new material and has the technical know-how for that and has shown there is a market for such a product. However, finding tons of money to conduct controlled experiments, while taking the necessary safety precautions, is virtually impossible. Few investors would be willing to take that risk at this stage just to prove a technology.
On the other hand, there may be well equipped labs at a nearby university or a federal facility which may be a perfect fit to conduct the studies. There also may be an opportunity to license a technology from the academic or government institutions which would complement the entrepreneur’s idea and keep her from reinventing the wheel. As the technology development moves further down the path of commercialization, other government incentives such as tax credits for investing in research and development (R&D) may come into play. Local, state and federal policies can facilitate such transactions or hinder such cooperation. Eventually, when technologies are ready to be deployed at large industrial scale, workforce development and training assistance from universities and community colleges would be vital in preparing local citizens to successfully perform the highly technical jobs.
The interactions between governmental entities and private sector industry or entrepreneurs are almost always facilitated by non-profit organizations and generally make the process more efficient. Such non-profit organizations may be trade groups, economic development organizations or expertise-based advocacy organizations. Non-profit groups, also referred to as non-governmental organizations (NGO’s), can play central roles that bridge various state and federal agencies, private industry, and academic institutions for facilitating the development and deployment of new technologies and then helping with technology adoption by the general public.
The Butterfly Model shown here, which I developed during my doctoral research in International Development, is a graphical depiction of how various entities can be pulled together effectively by the right non-profit organization while maintaining transparency and confidentiality among all stakeholders. Non-profits can be effective at leveraging their resources and can help define project success metrics for the technology in question. Financial accountability and technical objectivity mechanisms must also be in place and should be independent of the project itself. Partnerships and support from other relevant non-profits will help multiply the intensity of the effort.
The other crucial role an NGO can play is in the communication of innovation to other stake holders by serving as the “body” of the butterfly and vested stakeholders from private and public sectors presented on the “wings” of the butterfly. An NGO can be an honest “knowledge broker” to disseminate unbiased information about the techno-economic feasibility of the proposed initiative, product or process. Establishing trust among all parties is key to a non-profit’s success for implementing this framework.
Using this graphical model is quite simple and it serves as a check sheet to visualize the various parties involved in the project and elucidate their respective roles. An accompanying spread-sheet will list each member of every representative group, and specify their expected contributions and the associated timeframes. The model may be used as a strategic planning tool, and on an ongoing basis to monitor the technology/project development progress.
Several examples to validate this model are currently available in the literature and will help build even better public-private partnerships in the future. I will discuss the SMART Business Act passed by the Mississippi legislature in 2013, the Mississippi Seed Fund, and the newly formed Mississippi Business Engagement Network in my next column. So stay tuned!
Dr. Sumesh Arora is Vice President at Innovate Mississippi, a non-profit organization with a mission to drive innovative business growth in Mississippi. His doctoral research was focused on how new ideas spread and its applications to business, economic and policy development. Follow him on Twitter @DrSumeshArora or contact via email at sarora@innovate.ms with questions about developing innovation strategy for your company or organization.