Collaboration between the public sector, private industry, and research universities has always been an essential ingredient of growing a strong economy and thriving, entrepreneurial workforce.
As one of the fastest growing states in the country, Arizona’s growth over the past decade is a result of intentional collaboration by state leaders, and today our economy is more diversified than ever. But increasing global challenges are quickening the pace of competition.
To fulfill our transition to a resilient, innovation-driven economy and build a prosperous, more equitable future for all Arizonans, we must double down our diversification efforts and make the investments needed to scale Arizona’s specializations in emerging growth sectors — or get left behind as other markets write the future.
Applied Research Accelerates Economic Growth
At the Partnership for Economic Innovation, our passionate collective of business and community leaders is on a mission to fulfill our potential as a state to become a world-class, diversified economy. A place where innovators can bring world-changing ideas to market – and where all Arizonans have an opportunity and a clear pathway to the ‘good jobs’ of tomorrow’s economy.
One of our main strategies for accelerating Arizona toward this future is through the creation of industry-led Applied Research Centers, which are focused on developing emerging technologies with the potential to improve lives here in Arizona, and around the world. Applied research is a critical step in any product development process utilizing novel technologies, in order to test and validate new applications in the real world.
PEI currently has two Applied Research Centers, each focused on readying high-potential new technologies for commercialization.
Our WearTech Applied Research Center focuses on developing future-of-health and biomedical technology, while the Arizona Blockchain Applied Research Center is partnering directly with industry Members to pioneer blockchain solutions for complex real-world problems. We’ve been able to accelerate important projects through our Centers that wouldn’t have been possible without investment from the Arizona Legislature.
Shared Funding to Diminish the ‘Valley of Death’
Here’s how our model works: at PEI, we’ve been able to combine public investment made available by the state with matching private funds to catalyze applied research projects that would traditionally encounter the ‘valley of death’ investment gap.
Each PEI applied research project has three critical elements: a company that can invest in the private portion of the shared research budget, (2) a product idea that answers a market demand, and (3) a shared vision of improving our community. We’re not investing in tech for tech’s sake; we’re investing in transformative technologies positioned to improve the health and wellness in our Region.
By connecting companies who are seeking novel solutions to talented research teams and shared funding, our Applied Research Center model de-risks innovation investment and helps early-stage concepts bridge the ‘valley of death.’
The ‘valley of death’ exists in any innovation enterprise. But given the need for a high level of successful startups and innovative technology to stay competitive worldwide, helping projects overcome the ‘valley of death’ is particularly critical in Arizona.
Building the Momentum to Scale
Access to public funds is an important piece of the strategy, but it is not the only piece. Our model is scalable, so more investment will create a ‘fly-wheel effect’ that will continue to demonstrate returns year-over-year.
Applied research, engineering, STEM capacity – and increasing the ability of all Arizonans to access these pathways – are the vehicles that will create the innovation flywheel that helps homegrown companies succeed, while also attracting outside investment and organizations.
Our Public Investment Proposal to Fuel Arizona’s Economy
As of last year, PEI was able to leverage an initial public investment of approximately $800,000 made available by the state legislature through the ACA-administered Applied Research Fund.
According to a 2021 impact study from Rounds Consulting Group, every dollar of that initial taxpayer investment is projected to generate $4 to $5 in state and local tax revenues over the course of a decade. That ratio stays the same as state and private investment increases.
Last year, the state legislature continued its support for innovation and made an additional $5M available in the Applied Research Fund to advance applied research focused on wearable technology and blockchain. These funds will provide the support needed to advance a new cohort of promising applied research projects led by innovators across Arizona.
This year, it’s important that we continue our momentum and make the investments needed to scale.
A continued investment of $3-5 million in the Applied Research Fund will make a huge impact on Arizona’s ability to lead in technological innovation, entrepreneurship, and economic growth.
Initiatives like Applied Research Centers are already creating a return on investment toward building our next economy. But these centers are just scratching the surface of what Arizona can do.
Now is the time to scale our investments in a proven economic model and propel Arizona toward being a world changing innovation hub.