By Shelia Watson
Contributing Writer

When the South Carolina Innovation and Research Centers Act was passed by the state Legislature, the overall objective was to cultivate a knowledge-based economy in the state.

A recent legislative audit and economic impact statement suggest that the objective can easily be met.

The act created three innovation centers, one at each of the state’s research universities—the University of South Carolina, Clemson University and the Medical University of South Carolina—that will be operated through the South Carolina Research Authority.

The act is focused on taking research from the universities and transitioning it into the private sector by helping the universities find industry partners that would turn the research being generated there into commercially viable products.

“The examples of Silicon Valley and Research Triangle Park have proven that regional collaboration between leading universities and private-sector companies bolsters economic development,” said Rep. Bobby Harrell, R-Charleston, who sponsored the bill. “South Carolina has world-class research facilities of our own, and we have yet to fully explore how these relationships could drive innovation and economic development in our state.”

The legislation marks the first time the three research universities are partnering with the SCRA to fuel innovation. The act amended a state code, which created the new South Carolina Research Innovation Centers division of the SCRA.

“There’s a prescription in the legislation that calls for us to have a separate component, and we’re complying with that,” said SCRA President and CEO Bill Mahoney. “We’re absolutely committed to fulfill the letter and the spirit of that. The last thing we want to do is create yet another under-funded organization to look at economic development.”

Mahoney said leaders of the innovation centers are talking with the universities and local economic development institutions about collaboration opportunities.

“What we’re doing requires each region to form a coalition with other entities that have strong economic and technology programs so we can get the programs aligned. Cluster formation strategy has proven successful many times in other states.”

Harrell described the innovation centers as helping to commercialize research by doing proof-of-concept, assisting with the patent process, conducting market research, helping a company develop a business plan and helping form a management team around an idea.

The legislation appropriates $12 million for the first three years from the SCRA to the innovation centers. After the initial three-year period, the state will explore methods to provide additional funding until the innovation centers have a reasonable opportunity to become self-sustaining.

The innovation centers are doing well so far, with 37 candidate companies in the screening and matching process, Mahoney said.

The SCRIC has both short-term and long-term measurements in place. However, Mahoney said, because it takes four or five years to see any cumulative effect, they must have a long-term view of success.

Legislative audit findings

If future achievement is based on the SCRA’s past record, there is a good chance for success. A legislative audit of the SCRA completed in August found that “the SCRA has provided substantial benefits to the state.”

The audit highlighted several benefits to the state, including activities related to its mission, such as advancing the research capabilities of the state’s universities and promoting the development of research and technology-related industries in South Carolina. The SCRA has earned significant revenues primarily for doing research and development projects for the federal government.

In addition, the SCRA has succeeded in other strategic goals, such as establishing research institutes in cooperation with the state’s research universities and increasing employment in the research parks it is mandated to operate.

Among the negatives were the organization’s lack of success in starting for-profit companies, one of its strategic goals, and a need for improved communications to state officials.

Economic impact study

A recent economic impact study completed by Charleston Southern University’s Center for Economic Forecasting estimated the SCRA’s return on investment for the state. The study found that for every dollar the state has invested, the SCRA returns $6,542 annually.

According to the study, “with a one-time investment valued at less than $12 million followed by no state investment for over 20 years, the South Carolina Research Authority has created a prosperous enterprise. The total economic impact for the past 22 years of the research operations and the businesses who reside in the parks is $6.9 billion. This has created an annuity with the forecasted total economic impact of $1.2 billion annually.”

“We were formed back in 1983 by an act of legislation,” said Mahoney. “We had an initial grant of $500,000 and 1,400 undeveloped acres to manage the research operations, to develop the parks and to bring in technology to benefit South Carolina.”

With 180 corporate partners, along with collaboration with the research universities, Mahoney says the SCRA is doing a great job.

“In the 22 years we’ve been in business, we’ve had a direct hand in creating many new companies. With the innovation centers, we aim to continue that success.”

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