Lotteries and Tobacco Money: Basic Research Bonanza?

Boosted by revenue from lotteries and tobacco company settlements, state-financed basic research in the life sciences is soaring. The goal of such funding is usually to create wealth by attracting federal and private money. But this strategy raises difficult questions about how best to measure research outcomes, policy specialists say. At least 17 states have directed tobacco settlement money into research and all but three of them are focusing on fundamental studies rather than direct commercialization, observes Walter H. Plosila, vice president of public technology management at the nonprofit Battelle Memorial Institute, a technology developer in Columbus, Ohio. For example, Michigan has a $1 billion life sciences research initiative, Florida is spending $1.7 billion on biomedical research, and California has put into place a competitive program to fund its universities in a variety of research fields. However, Plosila warns, "The federal government is hardly a model for trying to gauge and measure the impact of these programs." States now must devise ways to assess "how much money makes sense," acknowledges J. David Roessner, associate director of the science and technology policy program at consultants SRI International of Menlo Park, Calif. "States are making attempts to collect and report performance and outcome-related data," notes Julia Melkers, a Georgia State University associate professor of policy studies. "But there are inconsistent definitions of what a new job is, how many new jobs there are, and how data are collected." This lack of standards pushes analysis into macro-level comparisons across states, and away from the more important assessments of individual programs' impacts. "We really need to address measurement issues, take a look at what the most important outcome measures are, and how they best can be integrated." Dan Berglund, president of the nonprofit State Science and Technology Institute, asks, "What exactly is research in the context of the states? What does it mean when we say the states are funding research?" He adds, "Most of the attention in the last year or two has been on those activities that have an economic development focus." The requirement to match federal funds is another reason for such spending by states, says Irwin Feller, director of the institute for policy research and evaluation at Pennsylvania State University. "Rarely do they support research as a link between education and science." Power to promote science research is devolving to the states, claims Joe Ragusco, California's deputy secretary of science, technology, and innovation. But he worries that the quest for matching funds and economic development through science investment could degenerate into a "zero sum game" of interstate competition in the forms of "stealing PhDs and subsidizing R&D parks." During a National Academy of Sciences workshop in July on state-funded life sciences research, representatives of 11 state governments described their current programs and the philosophies behind them. Money was a frequently mentioned motive: Ohio The reason that states are funding basic research can be summarized in two four-letter words, declares Ohio gubernatorial science and technology adviser Frank E. Samuel Jr. Those words are "fear" and "pork." He suggests that Ohio will spend $25.5 million of its tobacco settlement money on biomedical research and technology transfer next year because state leaders foresee $115 billion on the horizon in federal funding for such work. "The effort is to build capital to provide networks of business advisory support and, more recently, to develop privately managed equity funds," he says. Both the allocation of state funds and evaluation of research are influenced by a given program's potential to attract private or federal money. "So the evaluation becomes an outgrowth of the leverage. I'm not defending that, I'm just saying from a practical point of view that's how we evaluate success." Oklahoma "I can sum it up very simply: our job is to make the people of Oklahoma rich," states William A. Sibley, president of the Oklahoma Center for the Advancement of Science and Technology. He says of last year's R&D funding effort, "We invested about $6 million and we're getting back about $70 million." The state backs health research, technology and commerce centers, and manufacturing alliances, all under peer-reviewed programs. Maine "Basic research is business. States look at attracting federal dollars as part of their growth, and that's just a given," affirms Kerri-Ann Jones. She directs Maine's Experimental Program to Stimulate Competitive Research, part of a collaboration between the National Science Foundation and more than 20 states that traditionally receive relatively few federal funds for science and technology. Maine's investment in research grew tenfold between 1995 and 1999, Jones reveals. "The entire process in Maine is looked at through the economic development lens." Georgia No basic science per se is funded by Georgia, which attempts to use research results for creating wealth through the Georgia Research Alliance, a strategic partnership of universities, business, and state government. "The whole idea is to use state funding to leverage nonstate funding that will help us to go out and develop capital," explains alliance president C. Michael Cassidy. "We can't do what we do without a very strong commitment from the federal government." Research funds garnered by universities total about $900 million annually, much of it from federal sources, while the state contributes about $400 million. "How much is enough?" Cassidy says state legislators always ask about funding levels. "We tend to answer, 'How far do we want to go?'" New York New York's science treasure chest yields $250 million in venture capital annually, plus $150 million for workforce development, and $110 million for peer-reviewed support of studies at 15 research centers. "We wanted to start out using, whenever possible, peer review and merit review before funding a specific project," notes Russell W. Bessette, executive director of the New York State Office of Science, Technology and Academic Research. A half-dozen such awards made recently were for $15 million each, including research in drug design, structural biology, and photonics and microoptical electronic design. It's all part of Gov. George E. Pataki's $1 billion science and technology research initiative, parts of which remain to be approved, such as funding for state "incubators" of centers for excellence. Kansas Created by the state in 1986 and lottery-funded, the Kansas Technology Enterprise Corp. (KTEC) is a holding company that manages a portfolio of businesses and invests in emerging technology. "We're an integrated one-stop shop for promoting science and technology in the state," summarizes KTEC president Richard A. Bendis. "We have tried to create a commercial model which is not linear but circular." The state has leveraged $567 million in investments, with returns that include 268 startups and almost 1,200 jobs. Bendis sounds as pleased with the Kansas effort as he is dismayed by the federal government's failure to develop for states an integrated R&D funding plan that can survive from one administration to the next. He says of the past decade, "We've gone from meetings to plans to studies, to meetings to plans to studies." Kentucky The "Bucks for Brains" program first funded in 1998 to enhance the research prominence of Kentucky's universities received $120 million in state and private matching funds last year. A "new economy" commissioner was appointed in November to administer a $40 million high-technology grant and loan program. But the nonprofit Kentucky Science and Technology Corp. vice president Wimberly C. Royster protests, "Out of 125 or 130 legislators, I'd say if we got about five who understood what we're doing, I'd be happy." Pennsylvania A "greenhouse model" for science and technology development is followed by Pennsylvania Gov. Tom Ridge, according to his deputy chief of staff for technology initiatives, Timothy McNulty. Block grants are favored as catalysts for research institutes to make transitions to commercialization. "We will invest $100 million this year tax-free in life sciences greenhouses around the state," McNulty asserts. In biomedicine, especially in tissue engineering, entrepreneurs are seen as essential to accelerating the cross-disciplinary activity necessary for progress in both the business and scientific spheres. Utah With no federal labs, no lottery, and most of the land mass publicly owned, Utah has a limited tax base, points out gubernatorial science adviser Suzanne Winters. But the populace is highly educated and wired up. For 15 years, a "smart sites" program has created infrastructure in rural communities for outsourcing software and other high-tech development to large companies. The state has spent $32.5 million in that time, leveraging $345 million, mostly from federal sources. More than 170 companies have been helped and about 100 patents created. Minnesota Attaching a political vision to state-funded research is difficult in Minnesota, comments State Rep. Phyllis Kahn. "Minnesota did a lot of terrific work on wild rice initiatives in the 1960s," she mentions, but no patents were filed and California eventually superceded those achievements. Outcomes are not measured in an organized manner, she reports. Although peer review is required for all state-funded science and technology research, there is little agreement on review standards. "They border on being useless." New Mexico Los Alamos and Sandia National Laboratories provide New Mexico with federal research funding out of proportion to its population of about $2 million, notes gubernatorial science adviser C. Larry Winter. Accordingly, the state contributes little money for research and "it's very hard to trace." Winter estimates an annual outlay of $2 million. Concerning outcomes evaluation of that spending, he admits, "We really don't keep track of what we're doing." Steve Bunk (sbunk@the-scientist.com) is a contributing editor for The Scientist.

Lotteries and Tobacco Money: Basic Research Bonanza?

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