Oregon's Next New Thing

Jon Perr

The news this week brings some telling developments in the War between the States. Not between Red and Blue, but in the battle for the Green.

Across the country, states are making serious and high profile investments in the next wave of industries and technologies that will drive future business start ups and new job creation.  In California, San Francisco will likely be the site of the Golden State's new stem cell research center.  The Bay Area, already the home of 80,000 biotech jobs and the recipient of half of all new biotech venture funding during the first quarter, will be the focal point for distributing $300 million in grants for each of the next 10 years.  The city sweetened the deal with $17 million in perks, including the rent-free use of a facility adjacent to the University of California, San Francisco complex.

California voters, even in the face of massive state budget deficits and a hostile attitude in Washington,  are not alone in making the needed investments to help secure future economic growth and prosperity.  In Massachusetts, the state Senate overwhelmingly passed its own stem cell initiative by a margin to withstand the veto of its governor and obvious 2008 GOP presidential candidate Mitt Romney. In New Jersey, acting governor Richard Codey is aggressively pushing a $400 million investment fund for stem cell R&D in the Garden State...

But What About Oregon?

These examples highlight the evolution of a new wave of state economic development away from "race to the bottom" tax breaks and giveaways .  Increasingly, cities and states are leveraging their university communities, supplementing local venture capital pools, and building on the workforce skills of their industry-leading companies.  These effort feature new private/public partnerships, mixed use zoning and performance-based incentives to new businesses (for example, paid only for jobs exceeding a specified average wage).  Stem cells and the associated controversies aside, over 40 states and metro areas as diverse as New Mexico and St. Louis are encouraging "biotech corridors" and investments in emerging homeland security technologies.

The competition, of course, is fierce.  Colorado, ranked 3rd in a nanotech index published by Lux Research, is debating how to maintain its edge in the wake of losing key home state firms to California.  The Portland Business Journal reports that Oregon is ranked in the middle of the pack (17th by Lux Research, 28th by Small Times Magazine).  This performance comes despite the presence of industry leaders like Intel, FEI, HP, LSI Logic, the state's university infrastructure, and investments in organizations like the Oregon Nanoscience and Microtechnologies Institute (ONAMI).

So where will Oregon finds its next new thing? Besides nanotech, a couple of candidates present themselves.  One possibility is as the hub of Linux and open source software development.  Oregon is not only home to Linux creator Linux Torvalds and the Open Source Development Labs (OSDL), but to industry heavyweights like IBM, Intel, and HP.  A new project in the city of Beaverton, the Open Technology Business Center, is aimed at leveraging Oregon's unique role in the global Linux eco-system to drive the creation of new firms and jobs.  And as Linux plays an increasingly prominent role in the development of Asian economies from China and Thailand to Japan and South Korea, Oregon could be uniquely positioned to become the center of a "Lintel" counterpart to Seattle's Wintel universe.

Perhaps the biggest opportunity - and unknown - is in the area of clean and renewable energy technologies.  Oregon's natural water and wind resources, along with its university assets, give the state advantages over potential competitors.  As energy demand soars in China, India and other rapidly growing Asian economies, new technologies and products could both fuel economic growth in the Pacific U.S. and help control costs at home.  Being in the forefront of American national energy independence, too, makes clean energy development an issue of national security as well as economic growth for Oregon. The environmental benefits of course don't hurt either; this is case of doing well by doing good.

All of this will be well worth watching in the next election cycle.  In one form or another, Oregon's future will be on the ballot in 2006.

By Jon Perr May 05, 2005