By Jeff Sklar
Arizona Daily Wildcat
Friday May 2, 2003
They won't argue with the importance of biosciences research, but analysts at a conservative think tank in Arizona think private industry, not the state, should be footing the bill.
Later this month, the Goldwater Institute will release a study that the institute's president said shows university spending doesn't drive economic growth.
In fact, said Darcy Olsen, the opposite is true.
"Some of the fastest growing states, like Arizona, have been giving less and less to the universities but doing better and better," Olsen said. In the study, which will be released May 12, analysts found that though Arizona ranked 46th in economic spending through the 1990s, its economy was the 16th fastest growing.
That means that research investments are better left to the private sector, which sees a higher return on every dollar it spends, Olsen said.
She cited a study showing that private industry gets a 22 percent return per year on research expenditures, while public institutions only get a 7 percent return.
"University research is critically important to the country, but that doesn't mean it has to be publicly funded research," she said.
In the long term, the state could spend more than $800 million on biosciences. That may include more than $100 million for research buildings that will be completed by the end of 2005 near the Arizona Health Sciences Center.
"If it is such a good investment, then surely there will be takers in the private marketplace," Olsen said. "True
entrepreneurship doesn't put all the risk on taxpayers."
But President Pete Likins said that without an investment from the government, companies would just move to an area with a more established biosciences infrastructure.
"Why would they come to Arizona?" he said. "We're just marginal players. If we don't get the research labs and expand our research operations then we're not even on the radar screen."
Likins said he expects conservatives in the Legislature will use the study as evidence that the state government should back off funding universities. But he said he's experienced the opposite of the study's findings.
Before coming to UA, Likins was president of a private university in Pennsylvania. In that state, the governor tried to stimulate industry development through the universities.
Lots of data says, "Boy, that worked," Likins said.
UA officials would love to say the same was true in Arizona, but currently, university research gets almost no funding from the state, said Dick Powell, UA's vice president for research and graduate studies.
Of the money that does fund research, virtually all of it comes from Proposition 301, a voter-approved sales tax that funnels money to university research.
"(State money) is really not something that supports our research," Powell said.
Though Olsen would rather see private, not state sources, fund research, industry researchers sometimes have different interests than people at universities, Powell said.
University research is at least in part driven by curiosity rather than profit, while companies do applied research that can quickly be translated to practical uses like medicines, which can be sold for a profit.
Olsen said that though private companies are interested in making money, they only turn a profit because they're creating products with practical value. She pointed to the AIDS cocktail and medicines for Alzheimer's Disease as advances that have come from private industry, not universities.
"All of those advancements in medicine · have come out of the pharmaceutical industry because they do save lives," Olsen said. "They only make money if they come up with these new advances."