The meeting convened at 1:15 PM.  Vice Chancellor Vines called roll, then Chair Alley made note of the Council’s newest technical advisor, David Marks.  Mr. Marks introduced himself as a small business representative from Clackamas County. With Joe Johnson, President of Clackamas Community College, he had brought together the business community in the area to be better represented to country commissioners and legislators. He would be representing traditional industry for the Council. Chair Alley welcomed him and thanked him for his willingness to participate.  

Chair Alley then moved on to ask for any comments before approving the June minutes.  Bill Newman asked for one change to be made regarding a passage on page five regarding ORTDA.  He asked that the language “increase public funds available to managers of  ORTDA” be changed to “increase public funds available to Oregon Growth Account, including the ORTDA.”  Chair Alley asked, with these amendments, that a motion be made to approve the minutes. Al King moved, Ryan Deckert seconded, and the minutes were approved unanimously.

Next, Chair Alley asked Duncan Wyse of the Oregon Business Council to give an update regarding the Oregon Business Plan. This year, the OBC was bringing together an economic plan to present at the Leadership Summit held later in the fall sponsored by Oregon’s U.S. Senators and the new governor.   In that process they were trying to pull together best ideas for growth in Oregon and organizing those ideas into four categories: people (workforce and education), place (quality of life), productivity (business costs and business climate), and pioneering innovation and entrepreneurship.  Their recommendations would soon be posted on their website for public comment, and would ultimately be presented at the Leadership Summit.  They were including OCKED’s recommendations and inviting OCKED members to the Summit for breakout presentation sessions. He concluded with the hope that everyone could attend. 

Chair Alley noted how pleased he was that Duncan as well as others had helped to make the message unified, rather than fragmented, which would help focus the Legislature’s priorities in the near future.  Mr. Wyse then added that there would be three regional meetings being held Medford on Sept. 27, Portland on Oct. 8^th, and one in Eugene on a date to be determined. He invited everyone present to come participate in looking at specific key issues of each region, and thanked the committee for their time.

Chair Alley then proceeded to the committee reports, calling first upon Jim Johnson, chair of the Technology Transfer/Research & Development Committee.  Mr. Johnson acknowledged the work of the committee and Pat Scruggs then proceeded immediately to review the committee’s three major recommendations for adoption by the Council. The first was directing the missions and functions of the Boards of Higher Education, Education and the Oregon Economic & Community Development Department to reflect the needs and mission of the knowledge economy. This included commercialization of research and technology. Second was supporting the establishment of “Signature Research Areas”,  (SRA) which included collecting and investing in a critical mass of research and companies, or the creation of a “complete eco-system”.  Finally, the committee recommended committed investment of the Higher Education Technology Transfer Fund.  Of the three, the SRA piece was a significant investment of $5-20 million dollars that could potentially be funded with federal and private dollars, but he stressed that it was up to the state to take the first step.  The first recommendation was especially attractive because it would be revenue-neutral, requiring only an altering of language in the mission and a refocusing of resources in the affected agencies.  

Chair Alley asked the group if they had any questions for Mr. Johnson.  Senator Hartung asked Mr. Johnson if he had been in touch with the new interim director of OECDD, Katy Coba.  Mr. Johnson said they were in the process of arranging a meeting, but that currently he had not had a chance to meet with her.  Senator Hartung encouraged him to do so, and said she brought a different kind of insight to the post, based on her work at the Department of Agriculture and knowledge of rural development. Vice Chancellor Vines noted that Ron Fox had already briefed Ms. Coba on much of OCKED’s activities. 

Scott Gibson wondered if the committee would consider including a change to OHSU’s mission statement as well within this recommendation.  He had already had conversations with President Peter Kohler, and OCKED’s inclusion of the University in the request to revise mission statements would add support to that dialogue.   Mr. Johnson agreed this was a good idea and said it would be added by the next meeting.  Chair Alley asked if they had looked at other models for the signature research area idea, and if from their research they could determine how they were typically cultivated.  Mr. Johnson responded that Adrian Roberts’ presence the committee was integral to this process, since his employer, Battelle, has been helping other regions do this for years.  He noted that places like Battelle had huge research capacity and databases to identify areas of potential critical mass. This process had already begun with Oregon, he added, citing the Oregon Opportunity as one potential candidate for growth.  The strategy was generally to invest in two to three areas and concentrate investment on the one to first reach critical mass. Chair Alley then asked a question about funding.  Are signature research areas always tied to universities, and how does that affect the investment potential?  Mr. Johnson clarified that SRAs were tied to research, which tend to be universities but could also extend to private research centers, such as Providence Health Care System.  “We’re not just doing research for research’s sake, but for the sake of commercialization and job creation in Oregon.”

Senator Deckert wondered about the physical presence of the center, such as where it would be located and under whose authority.  Mr. Johnson said that they hadn’t gotten that far, in an effort to take the emphasis off the political elements of place and administration and instead focus on making a firm commitment to creating a program that was “data-driven”. He also added that almost all the SRA’s were multi-institutional, and research to determine the best areas to invest in were determined not by each university, but on a faculty level. There would be a physical core, but other institutions would have to participate to make it successful.  Representative Tom Butler asked how the committee saw private higher education institutions participating in this process.  Mr. Johnson responded that the statewide inclusive nature of the selection process would make it possible and even necessary for the smaller institutions to participate; Oregon’s relative size means it has to take advantage of partnerships and location. Vice Chancellor Vines interjected that the research instrument used by the Lab would note what research was being undertaken by private institutions, so they would be invited to participate from the outset.  Ann Bunnenberg added that it also would uncover private research and development, which would not be at the same level, but would still add to the cluster.  She also noted that part of the difference is the cost; some sectors require more specialized instrumentation or a physical core.  All these things would have to be taken into account, which is why they had started with such a broad range of possibilities. 

Chair Alley asked how far the committee envisioned fleshing out the idea for the purposes of the report.  Mr. Johnson responded that he wanted to see a preliminary selection made for a proposal to the Governor and Legislature along with a budget request, then giving the reins to the identified leading institution to begin creating the center.   Chair Alley wondered if the time frame was long enough, as the report would be submitted in December.  Vice Chancellor Vines noted that Adrian was working on the research right now. Mr. Johnson added although the work being done was perfunctory, given the critical timing of a new legislature, he felt it was more important to act now than to wait for a longer analysis. He also noted that other SRAs would be developed in the future, so the selection of one wasn’t of as much importance as if it was the only one to be considered. “Versatility and diversity were important for the sake of economic growth, but starting on one now was key.” Chair Alley then asked how the committee would proceed in terms of selecting and recommending areas.  Mr. Johnson responded that it had yet to be defined, but would be very quickly with the help of the Council staff and his committee. Facilitator Pat Scruggs asked that the subcommittee do their work and have recommendations prioritized for the November meeting so that the Council could have a discussion and vote on it at that point. Mr. Johnson agreed that they would aim for this. 

Mr. Gibson asked if the committee saw any obvious constraints, such as only being able to build upon current “steeples” of excellence to decrease expenditures. Mr. Johnson noted that these were primary factors, and that they would likely be willing to develop an existing core of industry, or “pre-cluster”.  Senator Deckert noted that this  because of the time frame, and the importance of the first selection, it was critical to select one with a high probability of success.   Vice Chancellor Vines added that the institutions were excited to have their strengths built upon and would be very cooperative in the selection process. President Risser noted that the public higher education institutions were currently working on streamlining processes for technology commercialization; he felt this committee’s report would be very helpful in encouraging that development.

Chair Alley thanked the committee, then asked Scott Gibson to present the recommendations of the Business & Capital Formation Committee.  Mr. Gibson thanked the committee and specifically Ann Bunnenberg, Frost Lee, Tom Butler, Bill Newman, Derek Ridgely, Ron Fox, and Pat Scruggs for their exemplary work.  The committee’s primary strategies included how to simultaneously attract specific people to Oregon, while mobilizing people currently in Oregon to invest in research.  The committee looked at some “audacious” proposals to attract people to Oregon, creating incentives beyond Oregon’s highly regarded quality of life.  He characterized the recommendations as broken down into “carrots and sticks”.  The first “carrot” was to increase the amount of big venture capital.  Recognizing that new funds probably wouldn’t be started in Oregon in this climate, the committee focused on targeting already established firms to convince them to locate seasoned partners to Portland.  The “stick” category consisted of coordinating existing resources in the state, such as investment funds from OHSU, private foundations and the public state retirement funds.  They already invest a substantial part of their corpus in venture capital, so they should be encouraged to coordinate efforts to make Oregon an attractive place for seasoned venture firms to come.  Another element was creating a “tax-free” system for a few hundred individuals, both in terms of an income tax clause to eliminate capital gains, and a deferral of income tax around clear and restrictive criteria, e.g. must be a partner of a top tier firm with at least a million dollars of investable funds.  “Now we have the greatest livability in the country, and the greatest tax system for the very people who can create jobs, fund signature research, and birth successful companies with successful individuals who live and invest in Oregon.”  Mr. Gibson noted that Representative Butler had drafted a bill that had reached the hearing stage that week, showing the viability of this plan even in the preliminary stages.  The committee determined that the time was not right to lobby for passage, but it was a good way to get visibility for the next session, but it was encouraging to see.  He added that the bill initially excluded Oregonians from receiving these benefits to avoid any accusations of self-interest, however it was determined Oregon tax law did not permit that this.  As a result, the committee would be working to narrow the criteria for qualification down even farther, so that only a handful of people would be eligible.  He concluded by encouraging the group to read the rest of the recommendations on their own. 

Chair Alley opened the floor for questions and comments.  Mr. Johnson commended the committee for their creativity and drive in creating such exciting and purposeful recommendations.  Chair Alley added special commendation for Representative Butler, who took up the mantle with his crafting of the legislation and brought much-needed insight from beyond the Willamette Valley.  He then recounted his own experience as a partner with a venture firm relocated to Michigan at the state’s behest. His presence was instrumental in getting a seed fund started there that is now very successful.  He also recalled one of his former partners who had located his permanent residence to Florida, where there was no state income tax.  

Representative Al King noted that although a work in progress, the bill going through the special session was a critical trial run, and indicated the importance of strategic support from the Governor and key members of the Legislature.  Many of the people in his caucus initially characterized this bill as a “tax giveaway”, which was not warmly received given budget situation of the state.  Having dialogue with people early on mitigates misperceptions, as the tax breaks would come to funds that wouldn’t have been in Oregon to be taxed in the first place. Chair Alley suggested that staff look at his own experience with Michigan and others to develop a white paper for distribution, providing necessary back up that proves how well this process can work for the state.    Senator Deckert cautioned that this should be presented as a campaign, as he had already had colleagues and people in the media asking questions that didn’t sound positive. It would need to be presented as something solid and tangible with quantifiable results.  Chair Alley agreed, and hoped the legislators would be able to lend their expertise to help do that. 

Representative Butler added that it was a great opportunity to get the bill drafted and heard before Representative King’s committee.  There weren’t a lot of hearings due to the political atmosphere, but in the process the criteria for qualified individuals was well honed and tested. He also noted that Representative King’s caucus brought a bill forward with inserted language in it to help universities attract top-notch researchers, to bring the same kind of competitive advantage to help foster the entrepreneurial climate for OUS.   He was confident that in the regular session they would have great prospects for getting the process through.  He encouraged members to provide additional feedback.

Dwight Sangrey wondered if there were some additional recommendations that might be possible to set up in the short term given the fact that the climate was shifting for them to implement the priority recommendations.  Mr. Gibson noted that the power of their recommendations were in the details, and saw encouragement in the concept of establishing campaigns.  He hoped that this particular bill would be able to be passed through, comparing it to the tax reform that brought the semiconductor industry there in the 80’s.  Mr. Sangrey responded that the principles were very attractive, and he hoped that the Council and emissaries didn’t get bogged down in the tactics.  Mr. Gibson hoped that there would be bipartisan leadership and sponsors to speak about this on a higher level, thus avoiding unnecessary conflict. 

Representative King added that although it was possible during last special session to have had some hearings, but that with ongoing questions about refining the message, they felt that it was important to bring it back to the Council.  He cautioned against a series of subcommittee bills, stressing the importance of a unified message.   The timeline was a short as November, with the meeting of the Committee of the Whole, and the master strategy with the subcommittee report. 

Ms. Bunnenberg offered similar sentiment from a business perspective, adding that the Bioscience Association had been helping the Portland Development Commission and the OECDD with business recruitments. Many of their prospects were lost because of Portland’s current poor proximity to investment. If the state would get behind a creative strategy such as this, it would provide the incentive to convince business they could succeed in Oregon. Chair Alley agreed, that what these partners and venture firms could produce in terms of jobs and creating GDP needed to be articulated. He cited the National Venture Capital Association could provide quantified analysis supporting this.  Mr. Gibson added that the PSU School of Business might have of MBA candidates who could use this for a project.  Mr. Gibson added that the current structure required certification by OECDD and re-certified every year, with a fee instituted to pay for administrated. If someone comes with good intentions and fails to deliver, they can be de-certified which is the beginning of a workable checks and balances system that pays for itself. 

Chair Alley thanked Mr. Gibson and the Committee and moved the agenda on to the Workforce Development Committee.  Cam Preus-Braly, staff to the committee and Commissioner of Community Colleges and Workforce Development, would be making the presentation in the absence of committee chair Jill Kirk.  Ms. Preus-Braly began by recalling that if the Council were recommending recruitment of venture capitalists to invest in companies and signature research centers to develop companies, it was critical to also think about providing a skilled workforce to be employable in those companies. The priorities of the committee are issues that aren’t being addressed or were not looked at on the same level by other organizations, although they did hope that the Council would support recommendations passed by ETIC and other groups. She then moved onto the first priority to enhance the skill level of  incumbent workers. She commented that Oregon still has one of the nation’s highest unemployment rates, and is still recruiting elsewhere for to fill high tech positions.  This points to a need for knowledge-based skills. To this, the state has yet to develop a strategy on how to fill that present gap.  Therefore the committee recommended a study to identify upcoming gaps, where those needed workforce skills are being developed, at what rate, and how the process can be improved.  She noted that Oregon had experience with this, since Oregon’s statewide workforce investment board addressed the shortage of health care workers and nurses, providing a model for both public and private partners. The second recommendation was a no-cost policy alteration, which would enhance numbers and availability of degrees though full articulation.  Some of this was already happening--in a community with a community college, a high schools and a university there might be good relations--but many areas needed reform. The Council would ask the Joint Boards of Education to turn their focus to more clear articulation policies.  Once the policy is established, the committee recommended funding to regions that have developed superior models.  The third recommendation was to increase currently existing incentives to encourage science and technology training and student interest in these fields.  Specific proposals included increased funding for teams to attend the was the International Science and Technology Fair.  The last time it was held Oregon sponsored one team; in 2004, they want 12.  They were working with OMSI and Saturday Academy on sponsorship and to help develop public awareness. The final recommendation was to enhance the capacity of teachers to use technology in classrooms and to raise current math, science and technology standards.  This included a scholarship fund for training teachers and finding a funding source to provide a continuing investment.  Stressing the importance of dual focus on both the incumbent worker and the student, she concluded and asked fellow committee members for comment. Carl Talton added that the committee had looked at a lot of structures put in place for capacity building in Oregon, but wanted to see this made relevant for all communities in Oregon.  “It’s important to work through teams from different communities, so they can energize and get some vision internally.  We can’t look so much at the short term.  In order to gain the Legislature’s support, we need to make sure all its members feel as though we are included their communities’ interest.”  Pat Scruggs noted that from the Council on the occupations was an interest in looking at occupations that cut across the state, so it included technology in a variety of fields, like agriculture and forestry.  She also noted the committee had also targeted 60 percent of teacher training for distressed communities. 

Mr. Gibson commented that one thing he had noted from working with engineers over the year was the lack of business acumen engineers often had.  There were a few online joint MBA/Engineering Degree programs offered in the state; he thought it would be excellent if it could be added statewide.  Mr. Johnson believed the committee’s recommendations were too focused on K-12 development and not enough on higher education.  He believed doubling the number of engineers, building a top tier school in engineering, and adequately funding higher education should all be equally high or higher priorities, since it would translate into jobs more effectively in short term.  He commended the committee’s support of the ETIC recommendations, but the lack of higher education recommendations would not have much impact on the state. Senator Deckert responded the committee had a similar discussion and it was resolved that because of ETIC and the last session’s initiatives to double the number of engineers and fund a top tier engineering school, it would be redundant to recommend them again. It was decided that there needed to be at least some emphasis on pre-K-12 education, knowing that most of the Council’s and other groups’ foci would be on higher education.   Ms. Bunnenberg responded big initiatives like engineering do need to keep being emphasized, for fear the business community would lose credibility if it was perceived to be “hopping” from one priority to another. She would be more comfortable leading with the priority established as the lead priority last session, believing it wouldn’t detract from the K-12 recommendations.

Representative King acknowledged the Legislature will run into problems without those recommendations, as the constituency of the state is very focused on k-12.  While OCKED’s message should be focused on higher education, K-12 recommendations would be more palatable to voters and a good strategic choice in lean economic times. Mr. Gibson recalled his experiences and noted that many people still saw higher education as an elitist forum, and with tax breaks it would seem even more elitist.  While the quickest effects would come from higher education recommendations, long-term recommendations were also needed, so that those with the aforementioned concerns would not reject the them as a whole.  Mr. Sangrey responded that the workforce development committee sympathized with these thoughts and their report reflected support for other efforts such as ETIC.  He asked the Council to imagine a list of additional explicit endorsements of ETIC and other recommendations.   Mr. Johnson  said that he was more concerned with more explicit mention being made in the executive summary, likely the most visible element of the Council’s work.  Chair Alley believed the committee still supported the efforts many participated in with the Legislature a few years ago, and thought they were still valid. Consistency of purpose is important, and he worried that a lot of inconsistent and uncoordinated voices for technology were going to be present in the next session. He hoped this committee would help do unify the message, and believed they were on a good start with their joint efforts with the OBC.  He then offered adding a recommendation to the other recommendations to note support of these proposals from last session.  He also noted that teacher training should consist of more than just classroom learning, but of private sector internships as well.  He then opened the floor up for discussion. 

Ms. Prues-Braly responded that the committee had discussed all of these things and were looking for a way to endorse the work of others without being redundant.  The committee was amenable to adding to the list to preserve its place.  She also agreed with Mr. Gibson, that the knowledge worker was not just an engineer, it was everyone who needs to gain a greater comfort level with technology.  To focus on engineers would be seen as elitist.  She and Pat then proposed to combine the third and fourth recommendations for students and teachers into one, then add as a fourth recommendation the endorsement of these already existing efforts of ETIC and similar groups.  This would ensure that those only reading the executive summary would know past efforts were still important.  Chair Alley recommended that this priority was put at the top of the list.  Mr. Gibson noted that there was certainly a way to tie efforts between creating engineers and providing measures for K-12 that complemented each other. Most of the people in the Legislature and those who vote have kids; it was a way to speak to everyone.  He was sure it would be possible to make the message consistent and appealing to the public, couching the K-12 recommendations as a pathway to encouraging involvement in higher education.   Gordon Hoffman added that most of the people who come to Oregon for high tech jobs want a good public k-12 education system for their kids. This was even more important to them than tax breaks.  With that, Chair Alley concluded the committee reports and moved onto the next item.

Chair Alley asked for the priorities to be approved as amended based on the Council’s discussion.  Mr. Gibson made the motion, Jim Johnson seconded, and approval was unanimous.  At this point, Representative King noted that as the Council looked to the next legislative session, it would be helpful for the legislators to come together and put together a request to Legislative Counsel to get any potential legislation into proper format and answer questions.  All these recommendations would take time to incorporate. The sooner we got started, the better off the Council’s recommendations would be.  Vice Chancellor Vines noted in the last session OECDD was very helpful to efforts in getting bills written through Legislative Counsel, and she was pleased to report that Doris Penwell of that agency had agreed to help them again for the upcoming year. 

Mr. Gibson asked how the Council should begin thinking about a campaign for specific initiatives. Vice Chancellor Vines noted this was an excellent transition into the Council’s next agenda item on legislative and community outreach.  Senator Deckert recalled that all involved with the Tier One and Double Engineers initiatives learned a great deal from the last session about building broad support beforehand and finding unlikely allies, as well as the importance of thinking about the end in mind before we begin.

Chair Alley then called on Ms. Scruggs to present the preliminary outreach plan.  Ms. Scruggs noted that from today’s approved recommendations a draft summary would be developed and circulated among different groups. It would also be posted on different websites, including OECDD, the universities, the OBC and the Council’s own site.  She encouraged Council members with other professional affiliations to volunteer presenting to those groups and soliciting feedback.  She also noted they would be developing handout material for distribution and referral. Within the following weeks staff would work to determine what recommendations were best developed as legislation.  A sign-up sheet was distributed with OUS Town Halls and the OBC regional forums, as well as the meeting with Sens. Wyden and Smith on December 9^th.  Having OCKED members at all of these meetings were very important. She noted especially that educating the incoming Legislature was very important, and encouraged people to talk to their representatives and senators. OCKED staff would be pulling together a public relations kit in two phases; one before, and one after the November meeting.  She encouraged members to read the outreach plan, and added that they would be looking for a public relations firm to work with them, hopefully pro bono.  Vice Chancellor Vines noted that at some point it should be determined if the Council should have a pro bono firm doing PR or if they should find the money to pay a professional.  Randall Edwards asked if it was wise to set up a subcommittee to think through strategy before the launch.  He also noted that the gubernatorial candidates needed to be engaged as soon as possible to get the recommendations on their radar.  He volunteered to strategize about candidates and also suggested going to editorial boards and other opinion leaders that could drive public opinion.  The four legislators volunteered to join Treasurer Edwards on that committee.  Representative Butler pointed out that with representation from all four caucuses on the Council these issues should be made caucus priorities so the leaders could advance that agenda on the floor.  He also recommended inclusion of some additional groups, such as Harvey Matthews from Associated Oregon Industries, so they could assist in getting the message out to their stakeholders.  Vice Chancellor Vines suggested Duncan Wyse of OBC, Jim Craven of AEA, and Lynn Lundquist of the Oregon Business Association.

Ms. Scruggs noted that two processes had evolved, one on a legislative level and one on a public opinion level.  They were parallel processes, but spearheaded by people with differing expertise.  Ms. Bunnenberg noted that these efforts would need raw material, “compelling stories to help sell this not just to the Portland metro area but all around the state.”  She encouraged people in the business community to think about examples out there that could make good representations of what these recommendations could help.  Chair Alley asked if this was going to be underway before the next meeting. Vice Chancellor Vines noted it would have to be. 

Chair Alley then moved onto the next meeting date. It was planned for Oregon State University on November 18, 2002.  Chair Alley thanked the group for their energy and creative recommendations. 

The meeting adjourned 3:35 PM.