1. Egils Milbergs Executive Director Washington Economic Development Commission Olympia, Washington www.wedc.wa.gov egilsm@wedc.wa.gov 360-586-5661 Innovation Partnership Zones Building a World Class Innovation Ecosystem Presentation for : Innovation Awards The Council of State Governments Edmonton, Alberta Edmonton, Alberta July 19, 2012 1

2. The Problem We Need to Solve 2WEDC 2.0

3. A Ten Year Vision Make Washington the most attractive, creative and fertile environment for innovation in the world by 2020 3

4. New Economic Development Model Traditional ModelInnovation Driven Model Attracting companiesInvesting in talent, ideas and infrastructure JobsIncomes Top down developmentBottom-up organic growth Closed innovationOpen innovation Competing regionsCollaborating regions 4WA Economic Development Commission

5. What do we need to do? Progress needed along four dimensions Intellect Investment Infrastructure International Emphasize career transition, access to learning resources and the skills that employers need. Create innovation ecosystem to foster new products, start-ups and manufacturing. Design a 21 st century infrastructure, an efficient regulatory system and align to local objectives. Grow the global presence of Washington’s business. 5WEDC 2.0

6. Aerospace Interactive Media Biomedical District Clean Tech, Smart Grid, Biofuels Defense Technology Biotech, Energy, Semi- conductors, Exports Wine, Water Global Health World’s Largest Innovation Park Food Processing, Rail Innovation Wind, Solar, Data Centers, Adv. Mfg. Marine Ocean Energy Agriculture, Composites Sustainable Industries “Twilight” Medical Devices Financial Services Electric Cars Clean IT Urban Clean Water

7. 7 Innovation Partnership Zones WA Economic Development Commission Challenge: lots of innovation assets at the local level, but no coordination. Assumption: innovation happens at the grassroots level. Solution: identify a consensus vision based on local assets and capabilities and create organizational, leadership structure to coordinate and align local efforts among businesses, ports, higher education, local government, tribes, and other stakeholders. IPZ Universities Community and Technical Colleges Private sector businesses PortsTribesChambers Local government Local development organizations Other stakeholders Communit y colleges Universities Tribes Ports Local government Private sector Non- profits

8. 8 Case Study #1: Walla Walla WA Economic Development Commission Zone Objective(s): Water resource management and viticulture promotion. Region is home to more than 100 wineries. Sustainable Living Center (SLC) is a new nonprofit educational tenant of the Water Center. Nelson Irrigation Corporation is a private sector partner that engineers irrigation equipment and systems internationally and has developed groundbreaking products for water efficiency utilization. City of Walla Walla Confederated Tribes of the Umatilla Indian Reservation (CTUIR) ETS Laboratories Port of Walla Walla Walla Walla County Commissioners Walla Walla Valley Wine Alliance Nelson Irrigation Corporation Walla Walla Watershed Alliance Walla Walla Watershed Management Partnership Walla Walla Community College (WWCC) City of Walla Walla Confederated Tribes of the Umatilla Indian Reservation (CTUIR) ETS Laboratories Port of Walla Walla Walla Walla County Commissioners Walla Walla Valley Wine Alliance Nelson Irrigation Corporation Walla Walla Watershed Alliance Walla Walla Watershed Management Partnership Walla Walla Community College (WWCC) Training: WWCC’s Enology & Viticulture Program includes a two-year, full-time course of study, designed for students pursuing careers in the wine industry.

9. 9 Case Study #2: Tri-Cities Research District WA Economic Development Commission Zone Objective(s): Energy storage, smart grid, and biofuels. 1,700-acre area located in North Richland. PNNL as anchor tenant. Highlights Leveraged $155,000 of state capital grant funds with federal stimulus, port, and City of Richland funds for a total investment of $2.4 million for infrastructure and road construction. Innovatek, a tenant of the IPZ, has a Department of Energy Phase Three Accelerant Grant for production of stand-alone electrical generation fuel cells. PNNL received $14.2 million for its role in two biofuels research consortia funded by the Department of Energy. Includes “STAR Researcher” Brigitte Ahring. Dr. Ahring is the Battelle Distinguished Professor of Chemical Engineering and serves as the director of the Center for Bio-products and Bio-energy for all WSU campuses. City of Walla Walla Confederated Tribes of the (WWCC) Port of Benton Columbia Basin College Benton Franklin Workforce Development Council Pacific Northwest National Laboratory (PNNL) YAHSGS LLC Western Sintering Co., Inc. Science Applications International Corporation Moravek Biochemicals, Inc. Isoray Medical Innovatek, Inc. Areva NP Surgical Implant Generation Network Energy Northwest City of Walla Walla Confederated Tribes of the (WWCC) Port of Benton Columbia Basin College Benton Franklin Workforce Development Council Pacific Northwest National Laboratory (PNNL) YAHSGS LLC Western Sintering Co., Inc. Science Applications International Corporation Moravek Biochemicals, Inc. Isoray Medical Innovatek, Inc. Areva NP Surgical Implant Generation Network Energy Northwest

10. 10 Case Study #3: Grays Harbor Sustainable Industries IPZ WA Economic Development Commission Zone Objective(s): Green and sustainable industries Received $1 million at the time of designation in 2007 to build the lab and incubation space and leveraged with a 2010 federal Small Business Administration (SBA) grant ($427,500), allowing for acquisition of a 20,000-square-foot building on port property. IPZ branding helps port’s efforts in leveraging assets and attracting new businesses. Highlights Establishing a regional partnership to capture industrial byproducts as resources and share research and development efforts among a group of companies. Grays Harbor Paper generates green paper byproducts that have been used by Paneltech in the manufacturing of their products. Port of Grays Harbor Grays Harbor Public Development Authority: Satsop Development Park Grays Harbor College Grays Harbor EDC Pacific Mountain Workforc Development Council Imperium Renewables Paneltech International Wishkah River Distillery Port of Grays Harbor Grays Harbor Public Development Authority: Satsop Development Park Grays Harbor College Grays Harbor EDC Pacific Mountain Workforc Development Council Imperium Renewables Paneltech International Wishkah River Distillery

11. Regional Innovation Clusters Evolve Growth Transformational Nascent Emerging Trajectory None or few firms Growth potential Few to many firms Fast growth Some linkages Accelerated collaboration Many linkages Attraction of firms Many nodes Dense linkages Region to Region Next generation STARS IPZs R&D EIRs Patents Incubators JOBS Potential Innovation Assets Tax Incentives Talent Gap Funding SBIR 11WA Economic Development Commission

13. Going Forward 1.Relationship capital is the secret sauce 2.More focus on local vision, plans and metrics 3.Operational funding is critical 4.New financing resources and tools e.g. TIF 5.Aligning agency programs to local priorities 6. “Porous” boundary definitions 7.Leveraging assets between IPZs 8.Web based collaboration platforms 9.Best practices clearinghouse 10.Rigorous evaluation of outcomes WEDC 2.013

14. 14 September 2012 celebrates Commerce & Innovation Economy www.thenextfifty.org WEDC 2.0

15. Thank You! WEDC 1.115

16. Metrics IPZ Annual Reporting Number of trained workers added to state workforce as a result of training provided within IPZ Number of potential business sites added (commercial and industrial building developed, redeveloped or newly occupied) attributable to IPZ innovation, research, and commercial application Number and type of other assets developed (to retain, grow and attract business) Dollar value of infrastructure and other investments completed Evidence of commercialization of IPZ research (licenses, patents, trademarks, etc.) Descriptions of research being conducted within the IPZ and potential commercial applications Other reasonable performance criteria that may be developed by Commerce. IPZ Performance Metrics Additional investment – Private sector investment – Investment from outside the zone Job creation / retention – # of jobs created – # of jobs retained within wage range Increased commercialization activity – $ increase in sales or sales orders associated with IPZ research – # of licenses, patents, applications for innovation research Increased collaboration and/or community partnerships – Zone-hosted conferences, creation of incubator, visiting scholars Unique criteria – Formation of an advisory board – Incorporation as a non-profit – Launching and IPZ website Creation of tailored curriculum WEDC 2.016