Report: Centers of Economic Excellence program is ‘best-in-kind’

The Centers of Economic Excellence program has had “a profound and positive impact on the prospects for economic growth and diversification in the state of South Carolina,” according to a report commissioned by the S.C. Commission on Higher Education.

The Washington Advisory Group, a Washington, D.C., company that provides strategic advisory services and management consulting to research universities, companies, governments and nonprofit organizations, conducted the report.

The objective of the study, which cost about $400,000, was to assess the effectiveness of the program in meeting its statutory goals, not to evaluate the work carried out within the centers. The centers are located at the state’s three research universities, Clemson University, the Medical University of South Carolina and the University of South Carolina. The program also appointed endowed chairs at the three research universities and S.C. State University.

As part of this process, Washington Advisory Group consultants interviewed more than 150 CoEE participants and stakeholders at universities and in the public and private sectors from August through October 2008.

The report said the program has raised the quality and relevancy of university research, improved the stature of the research universities and increased collaboration among the universities and between the universities and the private sector.

Economic impacts in terms of increased external funding, job creation and business location decisions have been significant and can be expected to grow as the program matures, the report said.

However, the program’s future funding is in jeopardy: Gov. Mark Sanford recommended cutting all state funding to the program in his budget released last week. He recommended the same last year, but the General Assembly rejected that request.

The key findings regarding the program include:
• The program has brought cutting‐edge research programs and equipment, matching funds and competitive research awards, and knowledge economy jobs to the state.
• The centers and endowed chairs are of high quality in terms of scholarship, research and economic impact.
• The program has transformed the culture of South Carolina’s research universities.
• Collaboration and entrepreneurship are now the norms.
• The program has raised the national and international reputations of the universities and made South Carolina more competitive in the global economy.
• The program benefits from strong business support, and the industry partners are pleased with the outcomes to date.
• The CoEE program has solidified relationships among the universities, hospitals, national laboratories and industry and has created a statewide network for innovation.
• A single, integrated statewide economic development plan does not yet exist in South Carolina, but the program has coalesced around clusters that could be components of such a plan.
• Graduate education is an industry attractor and a work force and economic benefit of the CoEEs.

The Washington Advisory Group determined that more than 2,000 jobs have been created or attracted to South Carolina by the program; that the state’s investment has been leveraged more than 3‐to-1 by nonstate matching funds and competitive research awards won; and the program’s most significant economic contributions are focused in three industrial sectors: energy and environment, advanced manufacturing and health.

In the course of the evaluation, the consultants identified several actions that could improve the program’s effectiveness and economic impact. The report said funding should be continued as a high priority for South Carolina.

Other recommendations include:
• The program could be more effective if a portfolio approach to investment were adopted in coordination with other state programs and incentives.
• Front‐loaded funding would accelerate new center startups and the state’s return on investment.
• The universities should identify potential funding match partners before a CoEE award is made.
• The program should increase the focus and emphasis on graduate education as a stimulus for creating a high‐tech work force in South Carolina.
• A new statewide approach to technology transfer could help commercialize research results.

The report also recommended modifying policies regarding the sunsetting of centers.

“Our conclusion is that the CoEE program is an extraordinary effort by the state of South Carolina to invest in its knowledge economy and is a best‐in‐kind program that is, or should be, the envy of other states,” the report said.