There are always winners and losers in every state budgeting process. Unfortunately, science, technology, and Oklahoma’s commercialization efforts were the losers this time around.
Not only did the Legislature cut the overall budget of the Oklahoma Center for the Advancement of Technology and Science (OCAST) by 5.5 percent (and as a result i2E, as well), another $4 million was cut ($2 million each) from the Oklahoma Applied Research Support (OARS) grants fund and from the i2E Seed Capital Fund.
It is disheartening to see state structural budget problems impact Oklahoma’s commercialization efforts.
As a result of this loss of seed funding, four to eight new companies will not get started in Oklahoma and new innovations that could have been funded by OARS won’t be.
When outstanding inventors and entrepreneurs can’t get the resources they need to move ahead with their research, invention, or startups in one state, they begin to look around.
Oklahoma happens to be sandwiched between states — like Texas and Kansas — that are growing enormous portfolios of new companies with plentiful resources for innovation and entrepreneurship. When Oklahoma reduces the resources that are allocated to research and commercialization, we risk driving the jobs and revenue that go along with new technology across our borders.
It’s happened before.
Alexion Pharmaceuticals Inc. is a publicly traded biopharmaceutical company with a market cap of $30.73 billion, worldwide sales of $1.5 billion, and is ranked No. 2 on the 2012 Forbes list of Innovation Companies. Alexion’s blockbuster drug Soliris is founded on a technology that came from Oklahoma Medical Research Foundation.
At the time Alexion was being envisioned and founded, it couldn’t raise investment capital in Oklahoma, but the funding needed could be raised in Connecticut.
So Oklahoma technology was commercialized on the East Coast and the jobs, revenue, and multiplier benefits were “exported” from Oklahoma to Connecticut.
Crescendo Bioscience, recently purchased by Myriad Genetics for $270 million, was founded in Oklahoma in 2002 as Riley Genomics, on a technology develop at the Oklahoma Medical Research Foundation for a quantitative blood test for rheumatoid arthritis.
But all the revenue and job creation associated with Crescendo Bioscience is happening in San Francisco, where the company moved in 2007 because the $5 million in funding it needed wasn’t available in Oklahoma, and the California venture capitalists who invested wanted the company to move there.
Crescendo Bioscience was ranked 27th in Deloitte’s 2013 Tech Fast 500 list.
The question we should be asking is what would Oklahoma now be willing to pay in tax rebates and other incentives to move either one of these companies back into the state?
Likely a lot more than the few million dollars of risk capital that it would have taken to keep them in Oklahoma in the first place.
Scott Meacham is president and CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state appropriations from the Oklahoma Center for the Advancement of Science and Technology. Contact Meacham at i2E_Comments@i2E.org.
DID YOU KNOW?
The total venture capital investment in U.S.-based biotech deals in 2013 was $4.5 billion. The $2.08 billion that was invested in San Francisco and Boston opportunities is greater than Europe’s $1.9 billion total venture capital investment for last year.