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The Role of Public Universities and Innovation

Universities create a workforce equipped with expertise in new technologies and generate employment for researchers internally. Beyond that, they serve as a platform for emerging entrepreneurship, another integral component of innovation. Faculty, students, and post-doctorate students all have gone on to be founders and leaders of cutting edge startup firms. Most importantly, universities function as an engine of innovative research for the state by foreseeing and developing emerging technologies. Breakthroughs in university research lead to new industries and markets, resulting in economic growth and jobs.[i]

As an example, the University of California, Berkeley, (UCB) located directly across the bay from the city of San Francisco, is well known as a center of innovation and technology research and for its contributions to innovative technologies and markets. According to Milken Institute's Economic and Fiscal Impacts of UC Expenditures, UCB had regional expenditures from 2002-2011 of $807 million, a $371 million impact on real gross regional product, a $267 million impact on real disposable personal income, a $120 million impact on total state and local tax revenue, and created 8,183 jobs in California. [ii]

UCB's contributions to the field of Biotechnology and the biotechnology industry in California can be traced back to 1971, when the first biotech company in California, CETUS, was founded by Berkeley professor and Nobel laureate Donald Glaser. Today, one in three California biotech companies has Berkeley scientists among founders, including Chiron, Exelixism, Turlarik, and Renovis, and 85% of California biotech companies employ UCB alumni.[iii]

Outside of The University of California, other universities, both public and private, support California’s reputation of academic excellence. The Milken Institute ranked three California universities in the top ten of its University Tech Transfer and Commercialization Index of 2005-2007, including Stanford University (9th), California Institute of Technology (5th), and The University of California system (1st).[iv] Furthermore, of the 150 largest publicly traded companies in Silicon Valley, 33 Stanford alumni-founded companies represent $850 billion in market value and $225 billion in revenue.[v]    

Barriers to Success

While the university system has been integral to establishing a creative and energetic California labor pool, it is unclear if it will be able to keep pace with future workforce demand. McKinsey's “Big Data” study isolates the significant role of California's universities in creating a workforce equipped with the skillset to adapt to emerging innovative technologies, and has determined that there is expected to be a shortage of 140,000 people with the analytical skills and know how necessary to make effective decisions regarding data analysis in the workplace by 2018.[vi]



 


[i] http://www.milkeninstitute.org/presentations/slides/2718GC11.pdf; Milken Institute's Economic and Fiscal Impacts of UC Expenditures, (2002-2011) accessed 8/10/11

[ii] http://www.milkeninstitute.org/presentations/slides/2718GC11.pdf; Milken Institute's Economic and Fiscal Impacts of UC Expenditures, (2002-2011) accessed 8/10/11

[iv] http://www.milkeninstitute.org/presentations/slides/2718GC11.pdf; Milken Institute's Economic and Fiscal Impacts of UC Expenditures, (2002-2011); accessed 8/10/11

[v] http://www.milkeninstitute.org/presentations/slides/2718GC11.pdf; Milken Institute's Economic and Fiscal Impacts of UC Expenditures, (2002-2011) accessed 8/10/11

[vi] http://www.mckinsey.com/mgi/publications/big_data/index.asp; Big data: The next frontier for innovation, competition, and productivity; May 2011, accessed 8/10/11

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