Keying Science to Business Success

Some might say that the main campus of Pennsylvania State University sits smack dab in the middle of nowhere. Philadelphia is about 194 miles southeast and Pittsburgh is 140 miles west of the University Park campus located in State College in rural Centre County. Though the campus hosts a business incubator, no major research park and no big cluster of businesses dependent on the university's academic talent and labs are nearby.

University officials and local development authorities, however, hope to change the university from a rural ivory tower bastion to the center of a sprawling high-technology entrepreneurial zone that extends up and down the soon-to-be-completed Interstate Highway 99. The highway will allow easy access from the region to markets in Canada and along the eastern U.S. coast. By signing up with a new Pennsylvania state program that fosters technology transfer, business creation, and job development in so-called Keystone Innovation Zones (KIZ), Penn State officials and leaders from three local counties hope to turn local moribund economies around.

Penn State wants to build on the example of North Carolina's Research Triangle Park, says Henry C. Foley, associate vice president of research and director of strategic initiatives at the university. But this university official says that Penn State, along with Centre, Blair, and Bedford Counties, doesn't want to duplicate Research Triangle Park's biotechnology focus.

Officials of the three counties want to leverage the university's expertise in materials science to exploit what Foley expects will be the next wave in high technology: the coming boom in the manipulation of matter at the molecular level. Penn State has the muscle to be at the vanguard of such a boom. "It's our turn now," says Foley, who formerly headed the school's chemical engineering department and is an expert on nanoporous carbon materials. With annual research expenditures of $545 million, the university excels in fields such as ceramics, electronics and photonics, polymers, nanotechnology, and defense technology.

Foley says the KIZ initiative will also put new impetus behind the university's plan to build and equip an $80 million interdisciplinary materials science building in University Park. The new lab would replace aging facilities, attract and keep first-rate scientists, and increase the faculty's ability to work with and spin off new high-tech businesses.

THE STATE'S KIZ economic stimulus program, signed into law earlier this year, creates partnerships among universities, business groups, and local government organizations. A modest operational grant of $225,000 helps to start the endeavor. Tax credits of $25 million beginning in 2006 will be available to entrepreneurial businesses in the newly established zones, and the state plans to make available $10 million to support technology transfer in the zones over the next three years.

State officials have already approved two KIZ zones. One is in the city of Bethlehem with Lehigh University, and the other is in the city of Lancaster with Franklin & Marshall College. Both are heavily oriented toward health care, pharma, and biotechnology. Penn State officials and their partners hope to get their zone approved later this year so they can start their KIZ organization just before the beginning of 2005.

Paul M. Hallacher, director of research programs development at Penn State, says companies from other states often benefit more from Penn State researchers' expertise than do the local rural communities nearest the university. A KIZ focused on Penn State could change that.

Bette B. Slayton, president of the Bedford County Development Association, one of the groups partnering with Penn State, says many Penn State graduates--University Park hosts 42,000 students--leave the area to find jobs.

Vic F. Russo, president of Ben Franklin Technology Partners of Central & Northern Pennsylvania, says he is also active in promoting a KIZ around Penn State. BFTP is a state-funded, privately run economic development agency that specializes in aiding start-up firms. If officials successfully establish a local KIZ, Russo says companies like NanoHorizons could be the rule rather than the exception along the I-99 corridor. BFTP has put $300,000 into NanoHorizons.

The Penn State spin-off has developed thin-film-based nanostructures with uses including a role in chemical threat detectors and in mass spectrometers for small-molecule drug candidate analysis. With a KIZ in place and a new interstate corridor to markets that are suddenly much closer than before, NanoHorizons could be the start of a cluster of I-99 corridor businesses smack dab in the middle of what Penn State's Foley hopes will be the next wave in high technology.