PRESS RELEASES   Gaining a leadership role in a Knowledge-based economy 03/23/2004 By Heidi R. Centrella The Journal Record With more and more jobs from manufacturing to movie-making – being shipped overseas, many Americans are scrambling to find stability in the workplace. But the workplace is changing. “In America today, we have found ourselves as the leaders of a global economy and in a sense, we’ve created a tiger, and we’re riding it,” said Mike Anderson, president of Presbyterian Health Foundation. “It’s very significant because it’s bringing new wealth, new opportunities to the entire world.” However, he said, in the large, global picture of the reality of economics, America is no longer the place where there is going to be much primary manufacturing. The nation’s leading role in the global economy is in the area of innovation. “Our role in this global economy is to be the people who have new ideas, so we have a knowledge-based economy and the leading edge of the knowledge-based economy is evidence-based technology or science-at-work,” Anderson said. But in order to garner that leadership role, several things must be done. And it starts with increasing the number of college graduates and post-graduates. “On a per capita basis, we (Oklahomans) are lagging behind the national average on college graduates,” he said. “We also need to increase specifically people in the areas of science and mathematics because that is where the new economy is going to be created – if not here, then other places in the world. And it’s important for us to realize that the leading edge of the new economy will be in technology.” According to Anderson, for every dollar expended by the state in developing technology through the Oklahoma Center for the Advancement of Science & Technology, $1.1 is paid back to the state by the companies that OCAST has started. In other words, he said, the state gets its money back with a tithe. Additionally, in looking at the general revenues of OCAST dollars spent in 2002, the return on investment totaled $304.3 million. “Where could you go to invest $12 million to $13 million per year and get back per year $304 million?” he said. The reason for this is these companies hire people who have excellent salaries and who produce and turn those general revenues around in the society in which they live, and the companies themselves have a general revenue flow in the economy that’s worth many times more the original investment of the state itself, he said. The Presbyterian Health Foundation Research Park maintains 22 companies and about 1,000 employees. The average annual income for said employees in $55,000 in this biotechnology enterprise. That doubles the average income in both Oklahoma City and the state. This, according to Anderson shows how having a technology-based economy does produce the kind of jobs and the people that help the entire economy. But it also requires people with excellence in education. Battelle Memorial Institute conducted a study about a year ago in which it was discovered that 41 of the 50 states have initiatives aimed at building biotech companies. “That wouldn’t happen if there wasn’t a significant reason behind it,” Anderson said. “It’s a huge thing we’re talking about in terms of opportunity.” While we’re not growing in terms of developing new oil reserves in America, we’re not growing in developing new gold mines, and we’re not going to be growing many more acres of wheat, one area that is open for growth is innovation and technology expansion. “This is why, if you took the 113 economic sectors of America, 81 of them have chosen biotechnology as the leading new economic growth area,” Anderson said. “So we’re not talking about something that’s not being talked about. This is huge.” In the previous 10 years, biotech companies grew modestly in America – from 1,231 companies to 1,467. However, the revenues in that period of time tripled to $28.5 billion, and the number of employees in that period of time grew from 90,000 to 191,000. “It’s a huge new world to applied science,” Anderson said. “And that’s why it looks like everybody’s not competing for the same small piece of pie. Believe me, this pie is going to be enlarged, and so will the pieces of pie.” Technology is the one sector where there is no limit because the knowledge has yet to be applied. It is the new, knowledge-driven economy that’s unlike the commodity-based economy of the past, Anderson said. “The whole world is involved in this new knowledge-based economy, and we have got to catch up with it,” he said. “We’ve got to get our schools caught up; we’ve got to produce the people for the future of this economy if we want to continue to grow.” “And Oklahoma City has a great opportunity – everything here from MAPS for Kids to more math and science in our schools to bring more researchers to our health center, which is a huge economic engine in this state, but certainly for this city.” The second-largest employer of the state sets inside the city limits of Oklahoma City. The Oklahoma Health Center, with its 28 agencies, produces an annual $3.6 billion impact on this economic area. According to Anderson, this is so because the knowledge-based center includes the OU Health Sciences Center with its seven colleges and 109 National Institutes of Health-approved scientists, and 48 Oklahoma Medical Research Foundation scientists, all of whom have grants. “Just that group of scientist, just a little over 160 people are bringing into this little economic melting pot called Oklahoma City an average of $500,000 in revenues per person, per year,” he said. That, he said, is just outside money those scientists bring in to this economic area in terms of research grants. However, some of those scientists are now beginning to spin off biotech companies, and Anderson said it’s their goal to grow those companies here. “To some degree, you could say it’s like a grand dream, but we think we’re dreaming in the right direction because we do have some facts of what’s going on already, and we do know what these jobs produce and can do for a state or a locale,” Anderson said. “In the long run, we want this to be a region listed in the 10 most cool communities. We can move in that direction, but we’ve got some work to do.” Anderson said there is a need to develop a technical skill area to stave off a talent migration, from which many cities across the nation have reaped benefits. Consequently, those regions’ increase in income has been commensurate with that. “Wherever knowledge workers cluster, whether it’s in a small town or in a big city, that’s where the wealth will gather,” Anderson said citing Joel Kotkin, a senior fellow at the Davenport Institute for Public Policy at Pepperdine University. “So the developing of technology-related companies is crucial for the short, as well as the long-term economic development of our community.”