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South Is Lagging in Bid To Develop Nanotechnology Industry, Report Finds

Posted May 8, 2006

— The South is lagging other regions of the nation in the opportunity to capitalize on the rapidly growing nanotechnology industry, according to the

Southern Growth Polices Board


The 14 states that make up the South represent some 20 percent of all nanotech research technology and features four of the top 25 nanotechnology-related research institutions, the RTP-based group said in a new report.

However, the South's "weakness are undeniable with the region consistently lagging behind the nation in annual growth in almost all categories," the report's authors stated in the report's executive summary.

Among key weaknesses cited is a lack of venture capital.

"Nanotechnology companies cite the abundance of talent and the overall quality of life as major assets of the region," the report said, "and lack of venture capital and national recognition as weaknesses."

A lack of patents was also listed as an indicator of the region's competitiveness.

Among a series of recommendations for improving the South's growth prospects in nanotechnology are the creation of a Southern Nanotechnology Network and a Southern Nanotechnology Institute.

The findings and recommendations are included in "Connecting the Dots: Creating a Southern Nanotechnology Network", an 80-page report, which was funded by the Oak Ridge National Laboratory's Technology Transfer and Economic Development Directorate.

The report focuses on strengths and weaknesses of the region in human capital, knowledge generation, patents, funding and commercialization.

States covered include: Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Virginia, West Virginia and the Commonwealth of Puerto Rico.

The most active states are North Carolina, Virginia, Georgia and Tennessee, the report said.

The four institutions highlighted as centers for nanotechnology research and development are: Georgia Institute of Technology, the University of North Carolina, Oak Ridge National Laboratory and North Carolina State University.

Weaknesses in Funding, Patents

"The Southern region's weaknesses in nanotechnology assets lie in patents and funding," the Southern Growth Policies Board said in a statement. "The South lags the nation in nanotechnology patents with only 14.8 patents per million in population in comparison with 40.9 for the nation."

The finding about venture capital reflects one often cited as a reason for a hindrance on faster growth of the region's high-tech industry. For example, in 2005 the Southeast ranked fifth nationally in receiving $1.2 billion of venture funding, according to PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association. But that amount is a fraction of the $7.6 billion invested in Silicon Valley and the $2.6 billion drawn to New England. The Los Angeles/Orange County region alone received $1.48 billion.

"Although the Southern region represents 20 percent of the nation's economic activity, it attracts only nine percent of the total U.S. venture capital in all sectors," the Southern Growth Polices Board reported. "Lack of venture funding affects the technology commercialization process and the region's ability to attract and grow new nanotechnology companies."

The Southern Growth Policies Board launched a venture capital initiative in 2005 designed to generate more investment funds.

More Collaboration Sought

Scott Doron, director of the Southern Technology Council, said the South's research institutions needed to improve collaboration in order to become more competitive with other regions.

"Our research suggests that the South can significantly increase its competitive advantage in nanotechnology through regional collaboration among research institutions and with the private sector," he said. "No Southern institution or locale has the critical mass of nanotechnology assets to go it alone and achieve global leadership. ... We need a Southern Nanotechnology Network to connect the region's assets and increase research, funding and new business creation."

North Carolina fared well in comparison to other Southern states in several categories. Other than being home to NCSU and UNC Chapel Hill (two of the top 25 nanotech institutions) as well as Duke (one of the top 100 institutions), North Carolina tied with Virginia for the biggest number of nano-related National Science Foundation grants (139), led the region in NSF funding ($53 million), and led the region in nanotech-related dissertations (125, or 3.4 percent of the national total). North Carolina also led in the number of patents by assignee and inventor.

The Southern Technology Council prepared the report for the Southern Growth Policy Board. The board was created by the region's governors in 1971.

("Connecting the Dots" is available for $20 through Southern Growth Policies Board. To order, send an email to ngos@southern.org with complete mailing and contact information.)


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