Florida Atlantic University. Book Report. Authors: Michael I. Luger & Harvey A. Goldstein. Maribel F. Fields April 10, Professor: James Carras
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1 Florida Atlantic University Book Report Title: Technology in the Garden: Research Parks and Regional Economic Development Authors: Michael I. Luger & Harvey A. Goldstein Chapell Hill, NC: Univeristy of North Carolina Press, 1991 Maribel F. Fields April 10, 2007 Professor: James Carras URP 6549: Public Sector and Economic Development Planning
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3 The book Technology in the Garden: Research Parks and Regional Economic Development, describes the results of a research study on the economic development impacts of research and development (R&D) parks and how the benefits of such parks are distributed among populations groups, primarily among minorities and women. In summary, the authors provide an overview of the population of research parks in the United States; the expected economic development outcomes of research parks based on a review of the relevant regional development literature; the introduction of a model of the stages of development of research parks and concepts of success and failure; the results of a cross-sectional analysis of a large sample of research parks and case studies of the three most successful research parks in the United States the Research Triangle Park, the University of Utah Research Park, and the Stanford Research Park; the two-way relationship between the research parks and their associated universities; and the implications of the study results for the design of regional economic development and technology policies. Research parks (also known as science or technology parks) are defined by the authors as organizational entities that sell or lease spatially contiguous land and/or buildings to businesses or other organizations whose principal activities are basic or applied research or development of new products or processes. Research parks are an important element in state and regional development strategies in the United States, as well as in Western Europe and Japan, Australia, and many other developed countries. The earliest research parks in the United States were created in the 1950s. Today there are approximately 116 research parks in the U.S. Research parks formation was cyclical prior to the 1970s and it has been growing exponentially since then. In terms of the economic structure of R&D, research shows that R&D is highly clustered in a small number of areas, that a suitable Spring 2007 Page 3 of 8
4 supply of scientists, engineers and technicians is one of the most important factors for the spatial clustering of R&D, and agglomeration economies seem to matter to several R&D industries. The authors identified three stages of park development that include incubation, consolidation and maturation. They evaluated the outcomes of each stage to measure success. They measured success in terms of the number of jobs represented by the R&D organizations that have located in the parks and in terms of the following induced changes: Employment growth Business start-ups Regional income and income equality Employment opportunities for women and minorities Occupational mix and local wage structure Research capacity of the local university(ies) Business climate and political culture Based on the analysis they concluded that the critical factors that are necessary for parks to stimulate significant employment growth within the region are vintage (the date the park was established the early bird gets the worm ), linkage (nature of the university-park linkage), and amenities (businesses favor R&D that provide essential services). Evidence shows that parks that failed were located in smaller regions with slow growth, and stresses the lack of patience, commitment and understanding of institutional relationships by key leaders. Spring 2007 Page 4 of 8
5 Case Studies: Research Triangle Park Created in 1959, the Research Triangle Park in North Carolina is the largest, and one of the most successful research parks in the world. Size: 6700 acres Workforce: 32,000 Universities: R&D oriented organizations: R&D organizations ranking of benefits Income inequality Critical Success Factors: Employment growth for the region: 52,000 (including the park s workforce) Univ. of North Carolina Tenants: Data General, Dupont, Duke University IBM, Northrop, Glaxo, North Carolina State Univ. Northern Telecom, etc. 50 Owner: Research Triangle Foundation 1. Access to entry-level labor force Manager: Research Triangle 2. Access to faculty consulting Foundation 3. Employees courses and training 4. Cultural milieu 5. Opportunities to subcontract RTP has not had any substantial Women workforce 45.5% effect on raising the level of earned income inequality of the region. Minorities workforce 15%* 1. strength of 3 research universities 2. the timing or vintage of the park 3. vision, cohesiveness, and strong support of key group of businesses, universities, and state government. R&D objectives: * Minorities are underrepresented in the park s workforce compared to the region as a whole. 1. diversify the state s economic base 2. increase the number of high-paying paying jobs in the state 3. increase employment opportunities for local university graduates and out of state North Carolinians Spring 2007 Page 5 of 8
6 Case Studies: University of Utah Research Park Created in 1970, the Research Park is adjacent to the University of Utah campus in the foothills overlooking Salt Lake City. Size: 320 acres Workforce: 4,200 Employment growth for the region: No objective standard to judge employment growth, the park is smaller than the other two examples and newer. Universities: University of Utah Tenants: Terra Tek, NPI, R&D oriented 57 Owner: University of Utah organizations: R&D organizations ranking of benefits Manager: University s administration Income inequality Critical Success Factors: 1. proximity to research universities 2. preference of CEO 3. access to major airport 4. access to skilled labor access to markets The R&D was responsible for a modest increase in the number of highly paid workers but it probably did not contribute to a bimodal distribution of income. 1. entrepreneurial climate of the university 2. research strength of the university s departments 3. a supportive state and local government 4. annual supply of well-trained graduates from the university Women workforce Minorities workforce R&D objectives: 30% 6.5% 1. diversification of the region s economic base 2. transfer of technology to other businesses 3. creation of high-paying jobs for local university graduates 4. expand employment opportunities in the area Spring 2007 Page 6 of 8
7 Case Studies: Created in 1951, the Research Park is located in Palo Alto, California and it was opened by Stanford University. This park is regarded as the granddaddy of research parks. The evolutionary path of this park is a result of changing university needs, the research capability and entrepreneurial spirit of the university, the growing environmental consciousness of the surrounding community, and the adaptability of park planners and managers. Size: 660 acres Workforce: 28,000 Employment growth 350 firms and 22,000 jobs for the region: Universities: Stanford University Tenants: Kodak, General Electric, Hewlett-Packard, Beckman Instruments, etc. R&D oriented 31 (59 businesses) Owner: Stanford University organizations: R&D organizations Manager: ranking of benefits 1. proximity to skilled labor 2. proximity to university 3. business climate/positive reputation 4. proximity to major airport Lands Management Department, administrative unit of the university Income inequality Critical Success Factors: In the 1950 s before the park existed, the income inequality was the same as it was nationwide, after that it worsen. The authors don t have hard evidence to link the trends in inequality to the growth of the park and related activity. 1. world s largest concentration of high-tech industry 2. research strength of the university s departments 3. positive business climate 4. helped to shape the political culture of the region 5. annual supply of well-trained graduates from the university Women workforce Minorities workforce R&D objectives: 40% 20% 1. generate revenue for the university 2. bring industry and university researchers closer together Spring 2007 Page 7 of 8
8 In conclusion, the authors indicate that R&D can be a costly economic development strategy. Based on their data, 50% of R&D start-ups fail and 50% of surviving parks change their focus. They also mention that for state or local governments with small populations and without research universities, the probability of success is even lower than 0.25 and that parks that achieve real estate vitality may not generate the economic development outcomes needed. In addition, they concluded that jobs created by research parks are appropriate for bettereducated workers and that park-related growth benefits white males relatively more than women and minorities, since white men tend to occupy the types of jobs that park businesses offer. In my opinion the case studies selected were limited to R&Ds with universities that have been established for many years. The authors did not provide detailed analysis on the outcome of new and successful R&Ds. In addition, further analysis of R&Ds located in small areas with no universities should be included to illustrate the differences in terms of the success measures. Even though the authors conclusion contain all the current challenges for new R&D s, I found very useful that they provided proposed alternatives for R&D parks for job creation of a wider range of skill levels. This book is a very good resource to learn about the history of R&Ds in the U.S., economic development impacts of R&D parks and how the benefits of such parks are distributed among populations groups. Spring 2007 Page 8 of 8
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