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HomeMy WebLinkAbout10-06-11 Economic Development Council minutes, draft/ City of Bozeman Economic Development Council (EDC) Meeting Minutes October 6, 2011 10:30 am – 12:00 pm Madison room, City Hall, 121 N. Rouse Members Attending: Chris Westlake (Midwest Welding and Machine), Cheryl Ridgely (Bozeman Deaconess Hospital), Anders Lewendal (Contractor), Chris Mehl (City Commission), Wendy Bay Lewis (Career Coach/Corp. Trainer), Chris Mehl (City Commission) Members Absent: Tracy Menuez (Human Resource Development Council), Stuart Leidner (Prospera Business Network), Daryl Schliem (Bozeman Chamber of Commerce) Staff Present: Aimee Kissel (Deputy City Clerk – taking minutes) Guests / Public Present: Nick Zelver, Technology Transfer Office, Warren Vaughan, County Planning and Economic Development NOTE: These minutes are not word for word and should be considered in addition to the audio recording of the meeting. A. Call to Order – Chair Chris Westlake Chris Westlake called the meeting to order at 10:36 a.m. B. Minutes – September 1, 2011 A quorum was not present so the minutes were not approved at this time. C. Public Comment None. D. Non-Action Items 1. Technology Transfer at Montana State University (Nick Zelver, Associate Director Technology Transfer Office) http://tto.montana.edu/ Mr. Westlake introduced and welcomed Nick Zelver, Associate Director of the Technology Transfer Office at Montana State University. Mr. Zelver provided background regarding why Technology Transfer was established in 1991. He explained their mission involves providing the best social benefit that comes out of their technologies. There is generally an internal disclosure process, followed by a patent process and then often to a publication. Often this works as a gateway to commercial use. Tech Transfer uses press releases, website posting and contact lists to help promote the technology. Pharmaceutical, medical is the largest area of Tech Transfer. He stressed the importance of looking at MSU as a larger resource and said they are recognized by the Carnegie Foundation as a premiere research University. This designation helps the University receive grants. The best opportunity is when the licensing is associated with an ongoing relationship. They go beyond license patenting. For example, a typical outcome may include sharing research tools through commercialization. Local companies, such as Ligocyte has received grant and proposal money involving the University. Awards are much more likely to be granted if collaboration in place. Patent developments come out of applied needs, they then establish a patent and encourage ongoing collaboration continually developing that patent. Mr. Zelver provided an overview of several of the large grants Tech Transfer and other MSU offices assist in obtaining. The SBIR, or Small Business Innovative Research Grant is a hugely valuable source of start up money. These grants come from large government agencies such as the Department of Defense, which are required to set aside a percentage of their budget for grants to small businesses. In Phase I, this grant is generally $100,000 to prove out a concept. With Phase II consisting of $500,000. The companies that receive these grants are highly encouraged to collaborate with the University. The MSU organization, Tech Link, primarily facilitates licensing Department of Defense Technologies. MilTech is a combined Tech Link and Montana Manufacturing Extension Center program specifically to help companies with the Dept. of Defense. Wendy Bay Lewis joined the meeting. Mr. Zelver explained several other common grants saying some require or strongly encourage collaboration. The bulk of the research is fundamental to the University and not geared towards commercialization. Not all research grants mandate working with companies. Mr. Lewendal asked how Tech Transfer quantifies their success. Mr. Zelver said they have 200 licenses currently and ½ of those are with Montana companies. Their primary goal is licenses but they also emphasize working with local companies. Mr. Zelver explained the license process. There is a licensing issue fee to cover basic costs. A royalty is negotiated when commercialized. 50% of the net royalties go to the researchers which is the highest percent provided by universities. There is a minimum yearly royalty. They generally have a year window starting with a provisional patent and then finding a company to start more extensive patent costs which can be $30,000 to $50,000 over the life of the patent in the US. This step is very challenging for startup companies. Mr. Zelver explained there are various stages in a patent with a typical time of 3 to 5 years for a patent to be issued with the bulk of the costs coming at this time. The model is ingrained in law. Ms. Lewis said she has been thinking about what role the council has to continue to build tech. transfer benefits within the community. She spoke regarding the forum which occurred on campus last week and the conversation there about what types of measurements to use for tech. transfer. The speaker emphasized that if job creation is used as a measurement, the outcome will be job creation. How can the council nurture this relationship? What is the Councils role, structure? Ms. Ridgely asked about the relationship with Tech Ranch, incubators and private investors? Mr. Zelver said TechLink provided some of the funding to start TechRanch because they felt the more local companies were around the more opportunities TechLink would have. A number of technologies and companies went through TechRanch or worked through TechRanch. Of about 50 start ups in the last ten years or so came from technologies at MSU. About 10 of those went through TechRanch. They were able to develop technology at MSU while starting their company. Mr. Zelver feels it is highly critical to have a forum where the technology community can get together. He provided an example of a group in the early 90’s which had informal meetings during lunch to share information. We depend on entrepreneurs and a network is critical. TechRanch had periodic seminars which were valuable. At Senator Tester’s forum on Friday, Joe Shaw talked about how Bozeman is on the map for optics. This is a huge opportunity. It is important to be on the map for state legislatures, Montana, and the world and to leverage that. Mr. Zelver said we need to develop visibility and networking. Cr. Mehl asked how one cluster helps create another cluster? Mr. Zelver said it is important to promote the success of an industry locally to promote more research. Mr. Westlake spoke regarding the importance of demonstrated fertility within the area and the importance of capitalizing on those things. We depend on a base of entrepreneurs. What can we do to promote that? For example is a big asset. The percentage of people who are cut out to be entrepreneurs is small, but development is also a factor. Is there research going on at the University or applied within the business arena that we could use to identify the genes of success in the environment. Mr. Zelver spoke regarding expansion efforts to teach entrepreneurism and University programs that encourage students to work with industries. They have senior capstone projects in engineering where they work with local companies to develop a prototype for a company. How that then reaches to the community is part of the challenge. Ms. Lewis spoke about recommendations that came out of the Tester panel discussions last week. The Kauffman foundation analyzed Montana as to structural infrastructure and found a lack of air service and high speed internet within the state. Ms. Lewis also spoke to the importance of a ‘doorway’ at the University for Economic Development and the need for a specific person charged with economic development at MSU. Ms. Lewis said she sees entrepreneurship growing in the business school but not in other schools such as the scientific field. She said the Councils charge as a group should be how we can hone economic development relationships. Mr. Zelver would like to address the issue of an ultimate point person for economic development at the University and get back to the Council. Mr. Zelver said we need a more visible way to capitalize on what we have. The economic summits put on by Paul Polson showed that the technology sector of the area have grown tremendously. Ms. Ridgley spoke regarding a link that has been broken in the last five to six years. The University and research provides the infrastructure for intellectual capital and then Tech Transfer area would need the backing of investment bankers. When investment banking imploded, the ability to obtain seed money to go from one point to the other became much more difficult. How can we reinvest to keep link going. Mr. Zelver said the University said the gap funding climate is very challenging. Mr. Westlake spoke regarding the importance of processes and discipline in place for acquiring funding. The process of obtaining the funding is part of the success in the development. Ms. Ridgely spoke regarding the discipline structure of the incubator in addition to being the conduit for the funds. Cr. Mehl said the challenge to the University from the City is to attract venture money asking what role the University or Foundation sees in providing that capital to encourage their graduates. Ms. Lewis said venture capitalists have set up specific geographical areas for niches. We need to learn how to demonstrate that Montana is a viable place and overcome the perception that Montana is a risk. Cr. Mehl said that the market has spoken. Changing that perception will take a long time, what will we do in the meantime? Ms. Ridgely said some of the issue is scale. There are a variety of elements. We should focus on what we can do and bridge the gap between University efforts and capital for companies to stay here. She explained that networking was the #1 thing that came back from the business community from the EDC summit. Quarterly lunches and seminars have a high return for low investment. Mr. Zelver said he would like to tap into telecommuters. They would like to interact. He suggested something like a breakfast forum for telecommuters. Ms. Ridgely spoke about how Tech Ranch kept incubator graduates engaged with the next tier coming up. Mr. Zelver said he would welcome the opportunity to work with the Council. Mr. Westlake spoke about the Council’s role to catalyze, to accelerate, to make connections, identify barriers, so we can enable the potential to exist. Most entrepreneurs do not go to entrepreneur school. Entrepreneurs need things at the speed of business. What are the barriers to really help? A big piece is getting these people together. Cr. Mehl said the City sees itself as a firm base for entrepreneurs to build on – good infrastructure, quality of life etc. and access to markets and an educated workforce. Networking is a part of that, but comes after these things. Ms. Ridgely spoke about the EDC making it a priority to work with Brit to put on a summit again. If we make it a regular thing, schedule it and do it and maintain the continuity we started. Let’s make a motion to do it again and also look at the next things we can do together. Mr. Zelver said he feels it would be great to get a panel of those who were within the Gallatin Technology group in the ‘90’s to hear their perspective. Ms. Lewis said the Wheeler Center did do an entrepreneurship meeting. Ms. Lewis asked about the status of a workforce study. Is there a way we can assess what people need? Do we need an incubator back? Ms. Lewis spoke about her experiences with a start up Business Expansion Retention volunteer group and setting up a vision, mission and goals. Cr. Mehl said that Prospera did do an assessment that we have used. The Commission put an economic development chapter in the Community Plan and advised creating this group. The EDC has set up an agenda. Brit has a five or six page work plan. What have we done to do oversight hearings and focus on those things? He feels the EDC does not meet enough to have both discussions and work on the work plan; and by default the EDC has become more of a discussion group. Ms. Ridgley said we do have a plan in place and it is important to keep that plan in front of us at all times. We did have a plan to have speakers come in to raise the intelligence of the group and facilitate partnerships; however we do need to come back to the plan. Mr. Lewendal asked whether we have tried to identify what we are missing. Why do some companies go elsewhere? Board members spoke about the agenda for next Month: Mr. Westlake said right after the debrief of the survey after the summit, each of us was asked to identify from the work plan the top three things we felt we need to do together as a group. In the meantime, Mr. Fontenot has been working on the plan to make it easier for someone outside the community to find help in economic development. Going back to the plan and seeing where we should focus. Brit said he is working with MMEC to work on a manufacturing summit around the free trade zone area and broaden that. This summit has a fall time frame. The next agenda will include an update on where that is. The EDC has also been tasked by the City to provide an outside perspective on the CIP. The EDC is awaiting an opportunity to engage in that. The EDC will provide guidance to the Impact Fee Advisory Committee as asked. Ms. Ridgely suggested that Mr. Fontenot come back with a plan for the agenda next month with the things that have been completed and still need done so we know the next steps, goals. Mr. Westlake spoke as a council of volunteers, how much do we engage in the work vs. advisement? That is a decision to be made as individuals and the collective. When we met twice a month, it became too much for some among us. What is the balance? Cr. Mehl told EDC members they can exercise their ability to advise Mr. Fontenot on his priorities. Mr. Westlake spoke about the need for a mid course evaluation. Mr. Westlake thanked Nick Zelver for coming to the meeting and having this discussion. FYI / Discussion Mr. Westlake spoke to questions that the EDC should come back to such as: What’s missing? We know funding is a piece? A robust incubator? What needs to be done to fix it? Do we know why Montana is low in venture funding? What barriers are there to investing in our community? Are there things structurally that can be done to strengthen confidence in our area? Telecommuter forum? Maintaining a catalyzing affect in the community – Summits? Broader economic development community – Open door to the University? Sub-Committees involved more actively throughout the month in different areas. Example, Ms. Lewis’s offer to drive the relationship with the University around technology and economic development. Warren Vaughan, County Planner and Economic Development Mr. Vaughan said a meeting will take place next Friday with Mr. Fontenot, Maria with Prospera and Mr. Vaughn regarding planning an upcoming entrepreneurship summit. Mr. Vaughan also said there will be a Nov. 10th meeting at the courthouse regarding the Montana Department of Commerce’s, Montana Broadband Project. They are creating a giant broadband map across the state. There is some relationship there with Montana Opticom. Mr. Westlake mentioned the EDC’s prior identification of the importance of ports and spoke to the internet as a port for technology. The Rocky Mountain Economic Development District had its first meeting recently and formally voted to reconstitute themselves. They are hoping to hire someone part time in the next 6 to 12 months. Their next meeting will be next week. Mr. Vaughan relayed a story that emphasized that telecommuters are hungry to get together. Ms. Kissel volunteered to send out an email to members with the established priorities, link to past minutes and prior EDC documentation. Mr. Westlake asked that the prioritized plan be printed on posters that can be posted on the wall and printed out on a regular sheet of paper that members can reference. F. Adjournment Chris Westlake adjourned the meeting at 12:06 p.m. *NOTE – Full audio of this EDC meeting is available at: http://weblink.bozeman.net/WebLink8/0/doc/45380/Electronic.aspx ___________________________________ _ Chris Westlake, Chair PREPARED BY: ____________________________________ Aimee Kissel, Deputy City Clerk Approved on: Economic Development Council meetings are open to all members of the public. If you have a disability that requires assistance, please contact our ADA Coordinator James Goehrung, at 582-3232 (TDD 582-2301).