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Academics, executives discuss innovation economy

House Minority Whip Steny Hoyer spoke Monday at a Connect panel about the importance of federal investment in education and research. He was joined by seven local leaders, including moderator Rep. Scott Peters and former Mayor Jerry Sanders, all of whom agreed that continued federal funding of America’s innovation economy is essential to the United States maintaining its position as a world leader in technology.

“At a time when frankly we have magnified, on a geometric scale, the ability to do productive research, from the public sector standpoint we are on the brink of disinvesting in basic research,” said Hoyer, a Democrat from Maryland. “It’s bad for our country, bad for our people and bad for mankind.”

Hoyer said that when he served on the labor and health subcommittee in Congress for 23 years, the committee made it a habit to fund 33 percent of all grant applications, since scientists and academics found that at least one-third of all applications were bona fide “good science.”

“Ladies and gentleman, I’m sure you know this to be the case, but in some of our institutes we are at single digits,” Hoyer said of current grant funding percentages. “Which means we are leaving two-thirds on the table unfunded, unpursued.”

Pradeep Khosla, chancellor of the University of California, San Diego, said the lack of federal funding leads many aspiring researchers to choose different career paths or go the private route, since researchers at universities are responsible for finding their own funding, which is no small task.

He said this is the price they pay for getting to drive the direction of their lab, but they are losing talent because of a lack of funding doesn’t benefit the country.

“When you get to drive your direction, the ‘penalty’ you pay is you have to raise your research funding, even though we as a campus spend a lot of research funding,” Khosla said. “It’s not enough to do the research. So the federal government has to step in and pay for it, and when the young person who’s talented, who can pick between A, B and C, he’s going to pick the path of least resistance. Why make life more difficult than it already is?”

He said the cost to the university of hiring a young chemist, physicist or biotech assistant professor is roughly $1 million to $1.5 million dollars in what they call a startup package that includes no federal funds.

“We do that because we believe in the individual, in the area and the work she’s doing, and we would love for the feds also to believe in our belief in that individual,” Khosla said.

Sanders, president of the San Diego Regional Chamber of Commerce, and Magda Marquet, on the board of directors of Biocom, highlighted the importance and relevance of immigration reform, particularly when it comes to highly skilled workers.

“All of our businesses need students that are educated at UCSD, San Diego State, Point Loma, USD,” Sanders said. “Many of them are foreign students, but we need the engineering skills that we train them in.”

Marquet added that she doesn’t think it makes financial sense to not keep these students here.

“All these bright people who come for Ph.D.s and post docs — we spend resources, time and money, we train them, and then after we train them we send them home,” Marquet said. “And you know, as an immigrant, I just think this doesn’t make sense.”

Hoyer and Peters agreed that the only chance of passing an immigration reform bill would be taking a comprehensive approach. Hoyer said that while he didn’t agree with all of it, if the bill that recently passed in the Senate were put forward on the floor of the House, he would vote for it. Unfortunately, he said his Democratic minority doesn’t have the power to bring the bill to the floor.

“I’m hopeful that we can move the Senate bill, and frankly I think there are the votes for the Senate bill on the floor of the House,” Hoyer said. “But unfortunately, or fortunately, almost all of those are on my side of the aisle. And my side of the aisle can’t pass something, nor can my side of the aisle bring something to the floor.”

Holly Smithson, president of CleanTech San Diego, said that from her perspective, one of the biggest positive steps that politicians in Washington could make to benefit San Diego’s innovation economy would be to add some degree of certainty to regulatory policies and incentives for innovation.

Panelists Mark Cafferty, the president of the San Diego Regional Economic Development Corporation, and John Dunn, on the board of directors of Connect, echoed that statement.

“What we need to do, whether you’re in the minority or majority of Congress, is to recognize that we need a systemic regulatory environment with which the Sapphire Energies and the Soy Techs and the renewable companies of the world, who literally pump in hundreds of millions of dollars into these economies, and they have to be able to plan more than one year, more than five years, so that we can have consistent tax policies that invite this type of private investment,” Smithson said.

Hoyer said that policies need to be extended beyond several-year timeframes.

“This is the most unstable environment that I have seen, and nobody can make decisions in any kind of rational way when you have no idea what the parameters of the future are going to be at a federal policy level, whether its tax policy or regulatory policy,” Hoyer said.

“Hopefully, we will get to a point where we can agree on a set of rules, which you may or may not like more or less, but you will be pleased that you can rely on the fact that they are the rules, and therefore plan accordingly.”

The panelists all expressed gratitude at having the opportunity to discuss issues key to their industries with leaders like Peters and Hoyer. The event began with a moment of silence for Connect’s CEO Duane Roth, who recently died. The discussion was held in his honor, as several speakers noted it was exactly the type of event he would have organized, participated in and relished.

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