KANSAS BIOSCIENCE INDEX 2008

Innovation Capacity Education Capacity Workforce Capacity KANSAS BIOSCIENCE INDEX 2008 Industrial Output Prepared by: Research & Development Capacity

ACKNOWLEDGEMENTS The Bioscience Authority contracted the Docking Institute of Public Affairs at Fort Hays State University to produce this report, which results from the efforts of a team of the staff and policy fellows at the Docking Institute. The team members include: Paul Adams, Ph.D. Policy Fellow Carl Parker, Ph.D. Policy Fellow Mark Bannister, J.D. Policy Fellow Jian Sun, Ph.D. Research Scientist Brett Zollinger, Ph.D. Policy Fellow Drafts of this report were reviewed by Michael Walker, the acting director of the Docking Institute. We are grateful to him for his time, comments, and suggestions.

KANSAS BIOSCIENCE INDEX 2008 TABLE OF CONTENTS LIST OF TABLES... ii LIST OF FIGURES... iii PREFACE... 1 EXECUTIVE SUMMARY... 2 INDUSTRIAL OUTPUT... 5 RESEARCH & DEVELOPMENT CAPACITY... 10 INNOVATION CAPACITY... 14 EDUCATION CAPACITY... 17 WORKFORCE CAPACITY... 19 i

LIST OF TABLES Table 1: Current Dollar Gross State Product... 5 Table 2: NAICS Codes for Bioscience Companies as Defined by the Economic Growth Act... 7 Table 3: Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Award Number and Amount, 2004... 16 Table 4: Life Science Doctorates Awarded... 17 Table 5: Workforce... 19 ii

LIST OF FIGURES Figure 1: Percentage Change of Gross State Product... 5 Figure 2: Per Capita Gross State Product... 6 Figure 3: Per Capita Income... 6 Figure 4: Establishment in Private Bioscience Industry as Defined by Bioscience Statute... 8 Figure 5: Employment in Private Bioscience Industry as Defined by Bioscience Statute... 8 Figure 6: Employment in Private Bioscience Industry as a Percent of Workforce... 9 Figure 7: Average Wage in Private Bioscience Industry as Defined by Bioscience Statute... 9 Figure 8: Research & Development Spending as a Percent of Gross State Product, 2004... 10 Figure 9: R&D Spending by Performing Sector, 2004... 10 Figure 10: Academic R&D Spending by Field, 2004... 11 Figure 11: Academic R&D Spending by Field, 2005... 11 Figure 12: Academic R&D Spending by Field, 2006... 11 Figure 13: Academic R&D Spending by Fund Source, 2004... 12 Figure 14: Academic R&D Spending by Fund Source, 2005... 12 Figure 15: Academic R&D Spending by Fund Source, 2006... 12 Figure 16: Academic R&D Spending by University... 13 Figure 17: Academic R&D Spending in Bioscience as a Percent of Total Academic R&D Spending, 2006... 13 Figure 18: Patents Awarded... 14 Figure 19: Patents Awarded per 1,000 Individuals in Science and Engineering Occupations... 14 Figure 20: Academic Patents Awarded per 1,000 Science and Engineering Doctorate Holders in Academia... 15 Figure 21: Bioscience Venture Capital Investment... 15 Figure 22: Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Funding Combined as a Percent of Gross State Product, 2004... 16 Figure 23: Bachelor s Degrees in Natural Sciences and Engineering Conferred per 1,000 Individuals 18-24 Years Old... 17 Figure 24: Life Science Doctorates Awarded as Share of Science and Engineering Doctorates Awarded... 18 Figure 25: Science, Engineering, and Health Postdoctorates in Doctorate-Granting Institutions... 18 Figure 26: Employed Science and Engineering Doctorate Holders as Share of Workforce... 19 Figure 27: Employed Life and Physical Scientists as Share of Workforce... 20 iii

PREFACE is a preeminent national bioscience center, serving healthcare, energy, agricultural, animal health, biomaterial, and national-security needs by virtue of its excellent research, education, and vibrant industry clusters. Vision Statement, Bioscience Authority In, scientists, researchers, and businesses have found tremendous success in bioscience. In doing so, they have created areas of expertise in sectors as diverse as animal health; bioenergy; biomaterials; drug discovery and delivery; and plant biology. The Economic Growth Act of 2004 demonstrates the state s deep commitment to continued bioscience growth in these areas. The act created the Bioscience Authority (KBA) with $581 million to invest in the expansion of the state s bioscience clusters and research capacity, the growth of bioscience startups, and bioscience business expansion and attraction. To monitor the growth of the bioscience industry, the KBA contracted the Docking Institute of Public Affairs at Fort Hays State University to produce a Bioscience Index. The index is designed to give a complete description of the bioscience industry growth in the state of as compared to five peer states and the nation since 2004. To construct the index, a set of indicators are finalized and grouped in five categories: industrial output, research and development capacity, innovation capacity, education capacity, and workforce capacity. Text, charts, and graphs are used to describe changes in the indicators. The KBA plans to commission annual longitudinal reports showing changes in those indicators and providing executive summaries of changing trends. This report serves as an inaugural report. Wherever possible, secondary data for those indicators from 2004 to the present are collected from public sources and analyzed. The pages that follow present the earliest changes in the bioscience industry in, the nation, and five peer states since 2004. When 2004 information is not available, this report uses data from a previous year that was closest to 2004. The KBA has a comprehensive strategy of investing in bioscience growth throughout the business cycle, from R&D to commercialization to business expansion and attraction. It is an investment approach that recognizes the symbiotic nature of research, commercialization, and industrial growth in the biosciences. In business terms, it s the smart, diversified way to go. Sandra Lawrence, KBA chairwoman 1

EXECUTIVE SUMMARY The Bioscience Authority (KBA) contracted the Docking Institute of Public Affairs to produce the Bioscience Index. The index is constructed around 23 indicators, which are grouped into five categories: industrial output, research and development capacity, innovation capacity, education capacity, and workforce capacity. The indicators describe bioscience industry change in since 2004 as compared with the nation and five peer states:,, North,, and South. This report serves as an inaugural report, and it finds: gross state product (GSP) was $99.1 billion in 2004. It grew by about 6.2% annually from 2004 to 2006, about the same as the national average. per capita GSP had a 5.46% increase from 2004 to 2006, higher than nation s 4.39% increase. The five peer states had a 5.96% increase on average in the same time period. per capita income in 2007 was $36,768, an 18.6% increase since 2004. The nation s 2007 per capita income was $38,611. The five peer states 2007 per capita income was $33,887 on average. had 981 private bioscience companies in 2004. The number rose to 1,075 in 2006, a 9.6% increase in two years. The employment in the private bioscience industry in was 14,889 in 2004 (1.08% of its workforce), and 16,135 in 2006 (1.15% of its workforce). The U.S. had 1.8% of its workforce working in the private bioscience industry in 2006. average wage in the private bioscience industry was $41,592 in 2006, a 7.68% increase from 2004. The nation s average wage in the private bioscience industry was $71,255 in 2006, an 8.88% increase from 2004. In 2004, the research and development (R&D) spending in was $2.2 billion, accounting for 2.19% of its GSP. More than 80 percent (83.2%) of the R&D spending was performed by the industry sector in in 2004. R&D spending at universities and colleges in was $333 million in 2004, $349 million in 2005, and $354 million in 2006. About 62% of academic R&D spending was on life sciences for all three years. About 52% of R&D spending came from the federal government from 2004 to 2006. Academic R&D spending at the University of and State University accounted for 90% of the total academic spending in from 2004 to 2006. Academic R&D spending in bioscience was $220 million in in 2006, which accounted for 62% of total academic R&D spending in the state. From 2004 to 2007, the U.S. Patent and Trademark Office granted 1,744 patents from. 2

For every 1,000 individuals in science and engineering occupations, had 8.6 patents awarded in 2004, and 10.1 patents awarded in 2006. The national figures in those two years were 16.6 and 16.7 respectively. For every 1,000 science and engineering doctorate holders at universities and colleges, had 7.9 academic patents awarded in 2001, and 2.3 academic patents awarded in 2005. The national averages were 12.3 and 9.2 respectively in those two years. Bioscience venture capital investment in amounted to $101.4 million from 2004 to 2007. received $5.58 million Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding combined in 2004. For every 1,000 individuals 18-24 years old, had about nine people with a bachelor s degree in natural sciences and engineering in both 2001 and 2005. In 2004, 31% of all the science and engineering doctorates awarded in were life science doctorates, 26% in 2005. There were 340 science, engineering, and health postdoctorates in doctorategranting institutions in in 2003 and 317 postdoctorates in the same fields in 2005. In, about 0.3% of its employed workforce was science and engineering doctorate holders in both 2001 and 2006. Only 0.34% of workforce was life and physical scientists in 2004, which was lower than the national average and the levels of most of the peer states. 3

INDICATOR CATEGORIES Bioscience means the use of compositions, methods and organisms in cellular and molecular research, development and manufacturing processes for such diverse areas as pharmaceuticals, medical therapeutics, medical diagnostics, medical devices, medical instruments, biochemistry, microbiology, veterinary medicine, plant biology, agriculture and industrial, environmental, and homeland security applications of bioscience, and future developments in the biosciences. Bioscience includes biotechnology and life sciences. Economic Growth Act The bioscience index is built around a set of 23 indicators, representing key components of the bioscience industry. They are organized into five categories: industrial output, research and development capacity, innovation capacity, education capacity, and workforce capacity. This report has five sections to present the analysis results for those categories. Industrial Output: A robust bioscience industry base provides a strong base for future growth. This section contains measures of ultimate economic outcomes (including gross state product and per capita income) and outputs in the bioscience industry (including private bioscience establishments, employment, and average wage). Research and Development (R&D) Capacity: Research and development accumulates knowledge, and use of the knowledge is crucial to successfully devise new applications. This section provides the measures of dollar amount of R&D performance as a percent of gross state product. The measures examine the total R&D performance (as measured by spending) and the performance of industry and academic institutions. The performance of the academic R&D is further differentiated by source and destination of R&D funding. R&D performance in bioscience is also examined. Innovation Capacity: Innovation could be either radical or incremental. The positive changes in thinking, processes, and services lead to increases in productivity and wealth in an economy. This section examines the number of patents issued, venture capital activities in bioscience, and the Federal Small Business Innovation Research Program. Education Capacity: Today s education capacity serves as the foundation for the future employment capacity, and the education quality ultimately determines the future economic performance. This section examines bachelor s and advanced degrees conferred in such fields as life science and natural science, and the number of science, engineering, and health postdoctorates in doctorate-granting institutions. Workforce Capacity: A highly skilled and educated workforce in the bioscience industry is very important to grow and sustain the bioindustry. This section examines the number of science and engineering doctorate holders in the workforce and the number of life and physical scientists in the workforce. Wherever the data is available, is compared with the nation and five peer states:,, North,, and South. and the peer states are all included in the Experimental Program to Stimulate Competitive Research (EPSCoR). These five EPSCoR states are in the same region as, and they provide an analytically sound benchmark for comparing states similar in ruralness, historical performance on R&D indicators, and lack of high concentration of industry and related innovation resources. 4

INDUSTRIAL OUTPUT Table 1: Current Dollar Gross State Product (million $) 2004 2005 2006 81,752 87,004 91,837 99,125 105,228 111,699 67,976 72,242 75,700 North 22,715 24,935 26,385 111,400 121,558 134,651 South 29,519 30,541 32,330 11,633,572 12,372,850 13,149,033 Source: U.S. Bureau of Economic Analysis GROSS STATE PRODUCT Gross state product (GSP) measures the total market value of all final goods and services produced by a state during a given time period. It indicates the overall economic strength of a state. Figure 1: Percentage Change of Gross State Product 10.77% 9.12% 6.27% 6.35% 6.15% 6.16% South 5.86% 3.46% North 5.82% 9.77% 5.55% 6.42% 4.79% 6.28% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% What does it mean for? overall economy is strong. Its GSP in 2006 was $111.7 billion, which ranked the second highest (behind ) among all the states under study. GSP was also the second highest among the study states in 2004 and 2005 (Table 1). The growth rates of GSP were stable since 2004. GSP grew by 6.16% from 2004 to 2005 and by 6.15% from 2005 to 2006, echoing the national trend. The GSP growth rates in fell behind the national averages in both years. GSP growth rate from 2005 to 2006 ranked second among the study states (after ), and its growth rate from 2004 to 2005 fell behind, North,, and. % change, 2005 2006 % change, 2004 2005 Source: U.S. Bureau of Economic Analysis 5

Figure 2: Per Capita Gross State Product ($) South 37,714 36,842 36,129 36,441 35,849 34,695 35,842 34,873 34,436 PER CAPITA GROSS STATE PRODUCT Per capita gross state product is the value of GSP in a given year divided by the population in that year. North 34,446 33,488 31,343 34,242 33,298 32,469 29,545 27,963 27,561 27,875 27,535 26,913 0 10,000 20,000 30,000 40,000 What does it mean for? per capita GSPs in 2004, 2005 and 2006 all fell behind the national averages. Among the study states, per capita GSP ranked third in 2004 and fourth in 2005 and 2006. In 2006, per capita GSP was $34,242, a 5.46% increase since 2004. The nation had a 4.39% increase from 2004 to 2006. The five peer states had a 5.96% increase on average (Figure 2). 2006 2005 2004 Source: U.S. Bureau of Economic Analysis Figure 3: Per Capita Income ($) 38,611 36,714 34,757 33,123 36,768 34,799 32,709 30,995 36,471 34,440 32,882 31,781 34,846 North 32,763 31,871 29,279 34,153 32,391 30,107 28,444 33,905 South 32,030 31,557 30,813 30,060 28,473 26,989 25,776 PER CAPITA INCOME Just as GSP measures the overall wealth of a state, per capita income indicates individual wealth. It measures the ultimate outcome of economic development: increase of personal wealth and improvement of quality of life. What does it mean for? per capita income was lower than the national average all the time since 2004. ranked second in 2004 and 2005 among the study states (after ) but jumped to first in 2006 and 2007. In 2007, per capita income was $36,768, an 18.6% increase since 2004. The nation had a 16.6% increase from 2004 to 2006. The five peer states had a 16.1% increase on average (Figure 3). 0 10,000 20,000 30,000 40,000 50,000 2007 2006 2005 2004 Source: U.S. Bureau of Economic Analysis 6

Bioscience company means a corporation, limited liability company, S-corporation, partnership, registered limited liability partnership, foundation, association, nonprofit entity, sole proprietorship, business trust, person, group, or other entity that is engaged in the business of bioscience in the state and has business operations in the state, including, without limitation, research, development, sales, services, distribution or production directed towards developing or providing bioscience products or processes for specific commercial or public purposes but shall not include entities engaged in the distribution or retail sale of pharmaceuticals or other bioscience products One of the factors that shall be considered is whether a company has been identified by the department of labor by one of the following NAICS codes: 325411, 325412, 325413, 325414, 325193, 325199, 325311, 325320, 334516, 339111, 339112, 339113, 334510, 334517, 339115, 621511, 621512, 541710, 541380, 541940, and 622110. Economic Growth Act Table 2: NAICS Codes for Bioscience Companies as Defined by the Economic Growth Act NAICS Code NAICS Title 325411 Medicinal and Botanical Manufacturing 325412 Pharmaceutical Preparation Manufacturing 325413 In-Vitro Diagnostic Substance Manufacturing 325414 Biological Product (except Diagnostic) Manufacturing 325193 Ethyl Alcohol Manufacturing 325199 All Other Basic Organic Chemical Manufacturing 325311 Nitrogenous Fertilizer Manufacturing 325320 Pesticide and Other Agricultural Chemical Manufacturing 334516 Analytical Laboratory Instrument Manufacturing 339111 Laboratory Apparatus and Furniture Manufacturing 339112 Surgical and Medical Instrument Manufacturing 339113 Surgical Appliance and Supplies Manufacturing 334510 Electromedical and Electrotherapeutic Apparatus Manufacturing 334517 Irradiation Apparatus Manufacturing 339115 Ophthalmic Goods Manufacturing 621511 Medical Laboratories 621512 Diagnostic Imaging Centers 541710 Research and Development in the Physical, Engineering, and Life Sciences 541380 Testing Laboratories 541940 Veterinary Services 622110 General Medical and Surgical Hospitals Source: U.S. Census Bureau 7

Figure 4: Establishment in Private Bioscience Industry as Defined by Bioscience Statute South North 207 198 190 306 292 280 689 683 655 597 570 603 985 947 914 1,197 1,173 1,104 2006 (US total: 82,542) 2005 (US total: 80,303) 2004 (US total: 78,103) 0 500 1,000 1,500 Source: U.S. Bureau of Labor Statistics ESTABLISHMENT IN PRIVATE BIOSCIENCE INDUSTRY AS DEFINED BY KANSAS BIOSCIENCE STATUTE The number of establishments in the private bioscience industry (see Table 2) indicates the size of the bio-industry. Size not only suggests the robustness of the industry, but also indicates the potential for expansion. What does it mean for? private bioscience establishment ranked the second highest among the study states. had 914 private bioscience companies in 2004, and 985 in 2006, a 7.77% increase in two years., which had the highest rank since 2004, had an 8.42% increase in the same time period. The nation had a 5.68% increase from 2004 to 2006 (Figure 4). Figure 5: Employment in Private Bioscience Industry as Defined by Bioscience Statute South North 19,411 18,907 18,792 17,373 16,942 16,642 43,453 43,577 43,609 39,668 39,176 40,323 54,236 53,364 51,894 51,547 50,817 50,729 2006 (US total: 5,972,140) 2005 (US total: 5,856,459) 2004 (US total: 5,760,145) EMPLOYMENT IN PRIVATE BIOSCIENCE INDUSTRY AS DEFINED BY KANSAS BIOSCIENCE STATUTE Employment in the private bioscience industry is another indicator of the size of the industry. What does it mean for? employment in the private bioscience industry also ranked second among the study states. The employment in private bioscience industry in was 50,792 in 2004, and 51,547 in 2006, a 1.61% increase in two years. The top state,, had a 4.51% increase from 2004 to 2006. The nation had a 3.68% increase in those two years (Figure 5). 0 20,000 40,000 60,000 Source: U.S. Bureau of Labor Statistics 8

Figure 6: Employment in Private Bioscience Industry as a Percent of Workforce North South United States Source: U.S. Bureau of Labor Statistics; National Science Foundation Figure 7: Average Wage in Private Bioscience Industry as Defined by Bioscience Statute ($) United States North South Source: U.S. Bureau of Labor Statistics 3.68% 3.68% 3.36% 3.55% 3.29% 3.23% 4.20% 4.29% 4.13% 4.14% 5.02% 4.92% 4.65% 4.59% 2006 2004 0.00% 2.00% 4.00% 6.00% 40,909 38,866 38,482 39,964 38,139 36,634 38,884 37,134 35,594 38,534 36,321 35,329 38,520 37,513 36,124 36,454 34,834 33,975 53,293 50,964 48,869 2006 2005 2004 0 20,000 40,000 60,000 EMPLOYMENT IN PRIVATE BIOSCIENCE INDUSTRY AS A PERCENT OF WORKFORCE This indicator shows the relative scale of the bioscience industry of a state as compared to its total economic size. What does it mean for? In, people who work in the private bioscience industry accounted for 3.68% of the workforce in both 2004 and 2006. Both percentages were below the national average (Figure 6). AVERAGE WAGE IN PRIVATE BIOSCIENCE INDUSTRY AS DEFINED BY KANSAS BIOSCIENCE STATUTE The wage in the bioscience industry is crucial for a state to attract and retain professionals and workers in the bioscience industry. The Bureau of Labor Statistics collects average annual wage information for different industry sectors. It is computed by dividing total annual wage by annual average employment in an industry sector. Total wage includes bonuses, stock options, severance pay, the cash value of meals and lodging, tips and other gratuities, and in some states employer contributions to certain deferred compensation plans, such as 401(k) plans. What does it mean for? average wage in the private bioscience industry was much lower than the national average, and ranked second among the study states in 2006. had a 9.09% increase in the average wage in the bioscience industry from 2004 to 2006. had a 6.31% increase, and the nation on average had a 9.05% increase in the same time period (Figure 7). 9

RESEARCH & DEVELOPMENT CAPACITY Figure 8: Research & Development Spending as a Percent of Gross State Product, 2004 RESEARCH & DEVELOPMENT SPENDING BY PERFORMING SECTOR North 2.46% 2.44% This indicator shows the contribution to the total R&D spending from different performing sectors (industry, academia, and nonprofit institutions). 0.73% 1.09% 2.19% What does it mean for? In 2004, the R&D spending in was $2.2 billion, highest among the study states. had a higher percentage of R&D performed by the industry sector than other reference states (Figure 9). 0.63% Figure 9: R&D Spending by Performing Sector, 2004 South 0.50% (Total:$283,439 million) 71.0% 1.9% 15.1% 12.0% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% (Total:$2,169 million) 83.2% 0.1% 15.3% 1.4% RESEARCH & DEVELOPMENT SPENDING AS A PECENT OF GROSS STATE PRODUCT This indicator measures the impact of research and development (R&D) on the economy and also the intensity of R&D that is occurring. What does it mean for? In 2004, the R&D spending in accounted for 2.19% of its GSP, which was lower than North and the national average (Figure 8). (Total:$814 million) (Total:$740 million) North (Total:$558 million) (Total:$514 million) South (Total:$149 million) 50.4% 51.8% 55.8% 48.4% 67.9% 34.8% 38.5% 43.9% 35.6% 3.8% 27.2% 0.7% 2.6% 11.0% 0.7% 0.3% 3.6% 4.7% 7.9% 10.6% 0% 20% 40% 60% 80% 100% Industry University & College Nonprofit* Other * Nonprofit includes only that which is federally funded and therefore the contribution by this sector is understated 10

Figure 10: Academic R&D Spending by Field, 2004 (Total:$183 million) (Total:$325 million) South (Total:$57 million) (Total:$333 million) (Total:$42,945 million) (Total:$283 million) North (Total:$152 million) 47.9% 63.4% 62.9% 59.7% 53.9% 77.2% 70.2% 10.1% 4.2% 6.5% 4.2% 8.3% 14.7% 8.2% 15.5% 21.8% 6.4% 8.7% 17.7% 10.1% 1.6% 11.1% 4.9% 4.5% 5.5% 2.5% 15.3% 8.4% 11.8% 11.2% 15.2% 3.7% 15.1% 7.6% 9.8% 0% 20% 40% 60% 80% 100% Life sciences Physical sciences Engineering Environmental sciences Other fields ACADEMIC RESEARCH & DEVELOPMENT SPENDING BY FIELD Universities and colleges are one of the major sources for knowledge and innovation. Their R&D spending on such academic fields as life science, physical sciences, and engineering is crucial for bioscience development. What does it mean for? academic R&D spending ranked first in 2004 ($333 million) among the study states, second in 2005 ($349 million) and 2006 ($354 million). From 2004 to 2006, about 62% of academic R&D spending was on life sciences, one of the important fields for bioscience development. Figure 11: Academic R&D Spending by Field, 2005 Figure 12: Academic R&D Spending by Field, 2006 (Total:$210 million) 75.0% 7.0% 1.8% 11.5% 4.7% (Total:$237 million) 75.6% 6.8% 1.6% 10.1% 6.0% (Total:$360 million) 71.8% 3.9% 1.2% 8.5% 14.6% (Total:$359 million) 68.7% 4.5% 1.3% 9.4% 16.2% South (Total:$67 million) 66.4% 4.1% 3.1% 18.1% 8.3% South (Total:$73 million) 68.4% 4.9% 4.4% 14.6% 7.7% (Total:$349 million) 62.4% 6.7% 18.8% 3.7% 8.4% (Total:$354 million) 61.6% 6.1% 17.0% 4.5% 10.8% (Total:$45,750 million) 60.3% 8.1% 5.6% 14.7% 11.3% (Total:$47,760 million) 60.4% 8.0% 5.4% 14.8% 11.4% (Total:$292 million) 56.0% 7.1% 14.8% 11.8% 10.3% (Total:$298 million) 56.4% 6.6% 15.2% 11.7% 10.0% North (Total:$150 million) 47.8% 9.5% 22.0% 4.5% 16.2% North (Total:$160 million) 46.3% 10.0% 23.9% 5.6% 14.1% 0% 20% 40% 60% 80% 100% Life sciences Physical sciences Engineering Environmental sciences Other fields 0% 20% 40% 60% 80% 100% Life sciences Physical sciences Engineering Environmental sciences Other fields 11

Figure 13: Academic R&D Spending by Fund Source, 2004 South 65.7% 19.0% 1.3% 9.9% 4.1% ACADEMIC RESEARCH & DEVELOPMENT SPENDING BY FUND SOURCE North 53.9% 51.4% 63.8% 4.9% 6.6% 18.1% 6.6% 3.7% 18.8% 20.6% 3.1% 5.7% 24.8% 13.6% 4.5% Today s economy is knowledge based. A healthy economy requires investment in R&D at universities and colleges from a variety of sources. Government and private businesses play an important role. 2.8% 51.3% 13.9% 28.0% 4.1% 5.3% 5.5% 49.7% 12.1% 27.5% 6.4% 39.9% 3.7% 43.8% 6.1% 0% 20% 40% 60% 80% 100% Federal government State and local government Industry Institutional funds All other sources What does it mean for? A little more than half of academic R&D spending came from the federal government. The share of federal funding in total academic R&D spending was lower than the national average from 2004 to 2006. Institutional funds comprised the second largest source of funds for academic R&D spending in (Figures 13, 14, 15). Figure 14: Academic R&D Spending by Fund Source, 2005 Figure 15: Academic R&D Spending by Fund Source, 2006 1.2% 5.1% South 63.8% 19.0% 7.0% 9.0% 62.9% 6.3% 19.0% 6.7% 63.8% 6.4% 5.0% 18.1% 6.8% South 59.7% 21.8% 0.9% 6.8% 10.7% North 52.2% 20.8% 4.6% 20.1% 2.3% North 52.8% 20.2% 5.7% 18.2% 3.0% 51.6% 14.3% 2.8% 27.6% 3.7% 52.4% 13.9% 2.5% 26.7% 4.5% 49.2% 22.4% 5.2% 16.3% 6.9% 47.8% 13.1% 5.6% 28.6% 4.8% 47.5% 12.7% 5.3% 29.8% 4.6% 46.4% 21.3% 6.4% 16.0% 9.8% 39.4% 3.5% 5.9% 46.1% 5.0% 41.7% 3.0% 6.4% 42.1% 6.8% 0% 20% 40% 60% 80% 100% Federal government State and local government Industry Institutional funds All other sources 0% 20% 40% 60% 80% 100% Federal government State and local government Industry Institutional funds All other sources 12

Figure 16: Academic R&D Spending by University (million $) KANSAS ACADEMIC RESEARCH & DEVELOPMENT SPENDING BY UNIVERSITY University of, all campuses State University Wichita State University Pittsburg State University 3 3 2 32 33 30 124 123 119 196 190 181 2006 2005 2004 This indicator shows how R&D funding is distributed among the state universities. To some extent, it demonstrates the R&D strength of a university. What does it mean for? The University of and State University are top two research universities in. Their R&D spending accounted for about 90% of the total academic spending in the state in 2004, 2005, and 2006 (Figure 16). 0 50 100 150 200 250 Figure 17: Academic R&D Spending in Bioscience as a Percent of Total Academic R&D Spending, 2006 ACADEMIC RESEARCH & DEVELOPMENT SPENDING IN BIOSCIENCE AS A PERCENT OF TOTAL ACADEMIC RESEARCH & DEVELOPMENT SPENDING (Bioscience R&D:$180 million) (Bioscience R&D:$249 million) 75.8% 69.5% This indicator measures the R&D efforts the universities and colleges exert in bioscience. South (Bioscience R&D:$50million) (Bioscience R&D:$220 million) US (Bioscience R&D:$29,308 million) (Bioscience R&D:$169 million) 68.4% 61.9% 61.4% 56.7% What does it mean for? Universities and colleges in spent $220 million in bioscience research and development in 2006, which accounted for 62% of total academic R&D spending in the state. The percentage is close to the US average, but behind,, and South (Figure 17). North (Bioscience R&D:$74 million) 46.2% Source: Battelle Memorial Institute 0.0% 20.0% 40.0% 60.0% 80.0% 13

INNOVATION CAPACITY Figure 18: Patents Awarded 470 403 447 543 PATENTS AWARDED PER 1,000 INDIVIDUALS IN SCIENCE AND ENGINEERING OCCUPATIONS North South 203 186 182 191 113 138 126 132 82 66 74 53 60 74 66 82 380 424 448 492 2007 (US total: 79,495) 2006 (US total: 89,795) 2005 (US total: 74,604) 2004 (US total: 84,249) This indicator measures the innovation capacity of a state s science and engineering workforce. What does it mean for? For every 1,000 individuals in science and engineering occupations, had 8.6 patents awarded in 2004, and 10.1 patents awarded in 2006. The numbers were lower than the national averages (Figure 19). Figure 19: Patents Awarded per 1,000 Individuals in Science and Engineering Occupations 0 100 200 300 400 500 600 Source: U.S. Patent and Trademark Office 16.7 16.6 PATENTS AWARDED NA 10.7 The number of patents indicates the level of innovative thinking and research which has the potential to be commercialized into products and services. South North 10.1 8.6 7.3 8.7 7.1 6.3 2006 What does it mean for? From 2004 to 2007, 1,744 patents from were granted by the U.S. Patent and Trademark Office. patent number ranked the second among all the study states (Figure 18). 2004 5.7 6.0 5.6 6.0 0.0 5.0 10.0 15.0 20.0 NA= not available 14

Figure 20: Academic Patents Awarded per 1,000 Science and Engineering Doctorate Holders in Academia North South 0 2.3 3.1 3.1 4.8 6.1 7.3 7.9 7.9 9.7 9.2 10.7 12.3 17.1 0.0 5.0 10.0 15.0 20.0 2005* 2001 ACADEMIC PATENTS AWARDED PER 1,000 SCIENCE AND ENGINEERING DOCTORATE HOLDERS IN ACADEMIA This indicator measures the innovation capacity of the science and engineering researchers at universities and colleges. What does it mean for? For every 1,000 science and engineering doctorate holders at universities and colleges, had 7.9 academic patents awarded in 2001, and 2.3 academic patents awarded in 2005. The national averages were 12.3 and 9.2 respectively in 2001 and 2005. ranked fifth among the study states (Figure 20). * Number of science and engineering doctorate holders in academia is 2006 data Figure 21: Bioscience Venture Capital Investment (million $) 61.6 9.8 1.2 28.8 6.2 39.6 6.1 NA BIOSCIENCE VENTURE CAPITAL INVESTMENT Bioscience venture capital provides critical funding for bioscience new startups and companies with high growth potential. South 4.0 NA NA NA 3.2 4.1 NA 5.1 0.2 3.7 12.5 2007 (US total: 11,566.4) 2006 (US total: 10,006.8) 2005 (US total: 8,436.1) 2004 (US total: 7,640.1) 39.4 What does it mean for? has very high bioscience venture capital investment. Bioscience venture capital investment in amounted to $101.4 million from 2004 to 2007, which is the highest among all the study states (Figure 21). North NA NA NA NA 0.0 20.0 40.0 60.0 80.0 NA= not available Source: Source: Battelle Memorial Institute 15

Table 3: Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Award Number and Amount, 2004 SBIR STTR Awards Amount (million $) Awards Amount (million $) 21 5.55 21 0.86 21 5.31 21 0.27 9 5.87 9 0.20 North 8 1.77 8 1.35 42 11.66 42 0.10 South 1 0.11 1 0.60 6,348 2,014.59 842 208.72 Source: U.S. Small Business Administration SBIR is a highly competitive program that encourages small business to explore their technological potential and provides the incentive to profit from its commercialization...the risk and expense of conducting serious R&D efforts are often beyond the means of many small businesses. By reserving a specific percentage of federal R&D funds for small business, SBIR protects the small business and enables it to compete on the same level as larger businesses. STTR is a highly competitive program that reserves a specific percentage of federal R&D funding for award to small business and nonprofit research institution partners. Small business has long been where innovation and innovators thrive. But the risk and expense of conducting serious R&D efforts can be beyond the means of many small businesses. Conversely, nonprofit research laboratories are instrumental in developing high-tech innovations. But frequently, innovation is confined to the theoretical, not the practical. STTR combines the strengths of both entities by introducing entrepreneurial skills to high-tech research efforts. The technologies and products are transferred from the laboratory to the marketplace. The small business profits from the commercialization, which, in turn, stimulates the U.S. economy. U.S. Small Business Administration Figure 22: Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Funding Combined as a Percent of Gross State Product, 2004 North South 0.002% 0.006% 0.009% 0.008% 0.011% 0.014% 0.019% 0.000% 0.005% 0.010% 0.015% 0.020% 0.025% Source: U.S. Small Business Administration; U.S. Bureau of Economic Analysis SMALL BUSINESS INNOVATION RESEARCH (SBIR) AND SMALL BUSINESS TECHNOLOGY TRANSFER (STTR) FUNDING The SBIR and STTR programs promote scientific and technical leadership in small businesses, and facilitate private and public partnership. They are important for the commercialization of research and innovation. What does it mean for? received $5.58 million SBIR and STTR funding combined in 2004. The funding was only 0.006% of gross state product in 2004. The percentage was lower than the national average and most of the peer states (Table 3, Figure 22). 16

EDUCATION CAPACITY Figure 23: Bachelor s Degrees in Natural Sciences and Engineering Conferred per 1,000 Individuals 18 24 Years Old South 11.8 13.0 BACHELOR S DEGREES IN NATURAL SCIENCE AND ENGINEERING CONFERRED PER 1,000 INDIVIDUALS 18-24 YEARS OLD North 8.9 9.0 8.6 8.4 10.7 11.4 Bioscience industry is technology-intensive. Its development requires workers with higher education in natural science and engineering. Many people enter the job market at 18-24 years old. This indicator measures how many of those young people have the science and technical potentials. 7.9 7.4 2005 6.9 6.8 2001 6.0 5.6 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 0 What does it mean for? For every 1,000 individuals 18-24 years old, had about 9 people with a bachelor degree in natural sciences and engineering in both 2001 and 2005. ranked higher than the national average, but lower than South and North (Figure 23). Table 4: Life Science Doctorates Awarded 2004 2005 49 53 81 64 66 65 North 14 18 71 70 South 15 17 6,983 7,262 17

Figure 24: Life Science Doctorates Awarded as Share of Science and Engineering Doctorates Awarded South North United States 26% 31% 26% 27% 40% 33% 30% 32% 45% 38% 39% 44% Figure 25: Science, Engineering, and Health Postdoctorates in Doctorate-Granting Institution 46% 53% 2005 2004 0% 20% 40% 60% LIFE SCIENCE DOCTORATES AWARDED AS SHARE OF SCIENCE AND ENGINEERING DOCTORATES AWARDED As defined in the Economic Growth Act, bioscience includes biotechnology and life sciences. This indicator demonstrates the research capacity in bioscience of a state s universities and colleges, and also the research potentials of a state s workforce in bioscience. What does it mean for? awarded 64 doctorates in life science in 2005, which accounted for 26% of all the science and engineering doctorates awarded that year. In 2004, 31% of all the science and engineering doctorates awarded in were life science doctorates. Although levels on this indicator were above the national levels in both 2004 and 2005, ranked the lowest among the study states on this indicator in both years (Table 4, Figure 24). North South 21 17 50 73 133 121 184 186 232 220 317 340 0 100 200 300 400 2005 (US total 48,601) 2003 (US total: 46,807) SCIENCE, ENGINEERING, AND HEALTH POSTDOCTORATES IN DOCTORATE- GRANTING INSTITUTIONS Postdoctorates likely remain connected to the chosen field and continue in the related employment or research. This indicator also shows the research capacity of a state in science, engineering, and health. What does it mean for? ranked first among all the study states on this indicator. There were 340 science, engineering, and health postdoctorates in doctorate-granting institutions in in 2003 and 317 postdoctorates in the same fields in 2005 (Figure 25). 18

WORKFORCE CAPACITY Table 5: Workforce 2001 2004 2006 1,194,024 1,228,163 1,292,886 1,347,715 1,378,713 1,400,169 925,783 940,047 945,270 North 336,228 338,221 346,359 1,614,627 1,608,849 1,650,877 South 400,352 409,263 417,100 137,115,199 139,213,523 144,581,912 Source: U. S. Bureau of Labor Statistics Figure 26: Employed Science and Engineering Doctorate Holders as Share of Workforce United States 0.43% 0.42% North 0.32% 0.40% EMPLOYED SCIENCE AND ENGINEERING DOCTORATE HOLDERS AS SHARE OF WORKFORCE 0.31% 0.31% 0.30% 0.29% 0.27% 0.27% Doctorate holders are most likely to assume a higher proportion of research responsibilities than people with lower-level degrees. This indicator measures the research capacity of a state s workforce in science and engineering. South 0.25% 0.25% 0.22% 0.21% 2006 2001 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% What does it mean for? In, about 0.3% of its employed workforce was comprised of science and engineering doctorate holders in both 2001 and 2006. levels on this indicator were lower than the national levels, the levels of North and in both 2001 and 2006 (Figure 26). 19

Figure 27: Employed Life and Physical Scientists as Share of Workforce EMPLOYED LIFE AND PHYSICAL SCIENTIST AS SHARE OF WORKFORCE North South United States NA 0.46% 0.46% 0.46% 0.46% 0.46% 0.43% 0.42% 0.40% 0.39% Life and physical scientists are a crucial research force in bioscience. This indicator measures the research capacity of a state s workforce in bioscience. What does it mean for? Only 0.34% of workforce was life and physical scientists in 2004, which was lower than the national average and the levels of most of the peer states (Figure 27). NA 0.34% 0.22% 0.24% 2006 2004 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% NA= not available 20

About the Docking Institute of Public Affairs This inaugural report is produced by the Docking Institute of Public Affairs at Fort Hays State University. The Docking Institute of Public Affairs began as the Fort Hays State University Institute of Public Affairs in 1980. In October 1989, The Board of Regents changed the name to the Docking Institute of Public Affairs, in honor of Governors George Docking and Robert B. Docking and Lieutenant Governor Thomas R. Docking. Since its inception, the Docking Institute has worked with hundreds of local, state and regional organizations, agencies and communities to assist them in charting their future success. The mission of the institute is to facilitate effective decision-making among governmental and non-profit leaders. The Institute's six primary programs are: 1) Survey research, program evaluation research, public policy research, and community and economic development research; 2) Strategic planning and consulting; 3) Grants facilitation; 4) Economic and community development consulting; 5) Public administration training programs; and 6) Public affairs programming through conferences, speakers, forums, television and radio programming, newspaper columns and scholarly publications. The Docking Institute of Public Affairs Fort Hays State University 600 Park Street Hays, KS 67601 Tel: (785) 628-5949 Fax: (785) 628-4188 www.fhsu.edu/docking

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