Five years after its inception and nearly three years after losing most of its state funding, Arizona's public-private science partnership is still bearing fruit - particularly in Southern Arizona.
Since its founding in 2007 by three regional business-leadership groups, Science Foundation Arizona has awarded about $105 million in research and education grants, according to an annual report issued Friday by the Battelle Technology Partnership Practice.
Statewide, according to Battelle, the research grants have resulted in a cumulative total of 1,776 direct jobs, up 252 from the 2011 fiscal year, as well as:
• A total of 179 patents filed or issued (up 59 from fiscal 2011);
• 22 technology companies formed (up seven from 2011); and 16 technology licenses (up four from 2011).
And research projects funded by the foundation continue to attract private capital - a key aim of the foundation.
For each dollar invested through the research grants, which were funded primarily with state money, an additional $4.40 was raised in support of the grant projects, up from $3.15 reported a year ago.
"We continue to see gains," said Ryan Helwig, a senior economist at Battelle.
Even though state funding ended in 2010, follow-on funding from other sources has fueled new gains, Helwig said.
"What we're seeing are the payoffs from investments made over several years," he said, citing industry matching funds required for many of the grants, as well as additional federal research funding, venture capital and foundation funding.
All told, the matching and leveraged funds total more than $270 million, with a total economic impact of $592 million over the past five years, Battelle found.
"It really represents significant new dollars coming into the state, and what we see as a broad economic impact that university and industry partnerships, and research and development in general, can deliver," Helwig said.
And though SFAz's scope is statewide, Southern Arizona has won a somewhat disproportionate amount of funding.
Of the roughly $105 million in grants SFAz has awarded, more than half has gone to projects primarily in Southern Arizona, mainly to University of Arizona researchers and their partners.
"I think the folks in Tucson should be especially pleased," said Margaret Mullen, Science Foundation Arizona's chief operating officer.
Major SFAz grants in Southern Arizona include some $4 million in grants for University of Arizona solar research and some $13 million in support of the Tucson-based Critical Path Institute, which is working with federal regulators and drug companies to boost drug development.
Other grants have supported UA research with Medipacs, a UA technology incubator company developing a new kind of wearable medicine infusion pump; a new UA mining technology institute; and a genomic testing lab set by UA's Bio5 Institute and a local biotech firm.
Among the three regions studied, Southern Arizona got the most jobs created from the grants (894); more than half (13) of the new companies; more than $100 million in outside funding; and has the most SFAz-funded graduate research fellows.
"You have some very innovative ideas we've been pleased to invest in," Mullen said.
Mullen cited C-Path, the UA Institute for Mineral Resources (set up with an $8.7 million SFAz grant fully matched by industry); and new concentrating photovoltaic solar-energy technology being pioneered by UA astronomer Roger Angel.
Angel's research group got a $2.2 million SFAz grant in 2008 to help develop his solar technology, which uses an array of mirrors to concentrate sunlight on super-high-efficiency photovoltaic cells.
Angel said that with federal Department of Energy funding matched by the SFAz grant, he was able to refine the system, file three patents and form a company, REhnu, that has attracted a couple of million dollars in outside investments. The company is now working on perfecting a high-capacity manufacturing process for the system's square-dish-shaped mirrors.
"I think without SFAz, we wouldn't have gotten there," Angel said, adding that SFAz has a top-notch board and grant-review team that focuses on commercial potential.
"They really want to know how you're going to commercialize (a technology) and how it will compete," Angel said.
In 2007, SFAz awarded a $2.2 million grant to UA Bio5 genetic scientist David Galbraith and local biotech firm High Throughput Genomics (now known as HTG Molecular Diagnostics).
The money went to set up a new lab at Bio5, using HTG's proprietary high-capacity test system.
T.J. Johnson, CEO of HTG Molecular Diagnostics, said the project helped the company develop "microarrays" of genetic testing material, boosting its capacity to allow thousands of simultaneous tests.
"That eventually led us to have a new product on the market," he said.
Such funding is crucial to small high-tech companies, particularly when venture capital and other private funding sources are scarce, Johnson said.
"Science Foundation Arizona has provided a critical area of collaborative funding that is missing from other mechanisms," he said.
But with research funding dwindling, SFAz is focusing more on programs to improve science, technology, engineering and math (STEM) education, to help prepare a more qualified workforce - a major concern particularly for high-tech employers.
"If you don't have a workforce pipeline to ensure employers they'll have qualified workers, you're dead," Mullen said.
SFAz has invested in teacher training and K-12 science and math programs aimed at boosting a qualified workforce, as well as in grants to university research fellows.
Statewide, more than 8,073 teachers and 314,000 students have been involved in SFAz-supported programs, including 2,584 teachers and 73,500 students in the past year.
Perhaps as the economy and state budget rebound, Mullen said, state funding could return.
"I'm confident that at some point in the future, with the return on investment we're getting, we'll get public funding again," Mullen said, adding that money may be more targeted to specific projects.
"It really represents significant new dollars coming into the state, and what we see as a broad economic impact that university and industry partnerships, and research and development in general, can deliver."
Ryan Helwig, senior economist at Battelle Technology Partnership Practice
Dollar amount of total research and education grants awarded or scheduled by Science Foundation Arizona (by fiscal years ending June 30)
Total grants (millions)
2012 $ 3.4
2012 scheduled $4.9
Southern Arizona grants (millions)
2007 $ 4.3
2008 $ 8.3
2010 $ 9.4
2012 $ 2.5
2012 scheduled $3.5
Source: Science Foundation Arizona
Contact Assistant Business Editor David Wichner at firstname.lastname@example.org or 573-4181.