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Orin Herskowitz publishes "Washington threatens NYC's burgeoning tech economy" in Crain's
Published: July 27, 2017 - 12:01 am
Should anyone doubt that we are living through a unique moment in New York’s economic development, take a look at the proliferation of exciting young companies transforming formerly underused warehouse and office spaces into thriving startup incubators and research centers.
A firm called Sapience, based in Scarsdale, has developed a novel chemical compound that could eradicate a type of brain cancer with a three-year mortality rate of 97%, a disease once again in the news because of Sen. John McCain’s diagnosis. Another company named Schrodinger, located in midtown Manhattan, has developed software for developing candidates for testing next-generation, lifesaving drug therapies prior to human trials, with the goal of delivering cures to patients more quickly and less expensively.
And a Brooklyn-based startup, Epibone (slogan: “grow your own bone”), uses a patient’s own stem cells and advanced scan technology to create superior bone grafts that avoid rejection, accelerate bone regeneration and shorten recovery times. This pioneering technology, relevant to 900,000 people who undergo bone-related surgeries annually, emerged from Dr. Gordana Vunjak-Novakovic, one of the world’s foremost biomedical engineers who years ago emigrated from Serbia.
In these and many other cases, the basic science giving rise to the invention was federally funded by the National Institutes of Health, the National Science Foundation or another agency. And the underlying scientific breakthroughs behind Sapience, Schrodinger and Epibone occurred in a Columbia University research lab. (Columbia has license agreements in place with the three companies, which include equity in the company and payments based on the development and sale of the products.) These successes are emblematic of the tried-and-true benefits to society that come from the partnership of great research universities, a thriving regional entrepreneurship ecosystem and a federal government supportive of science-based, commercial innovation.
As head of intellectual property and tech transfer at Columbia, I have had a front-row seat for observing the remarkable impact of startups on the local economy when the conditions for such success are properly nurtured. The wellspring of innovation provided by world-class research institutions such as Columbia, New York University and CUNY is an important part of this story. In New York, we also benefit from access to venture capital and the presence of established industry players seeking lucrative partnerships. And we have a governor and mayor who each recognize that strengthening the nexus between applied science and commerce leads to more jobs, tax revenues and neighborhood revitalization—not to mention products that improve and save lives.
Yet, for all of these assets and reasons for optimism, shifts in federal policy could slow our progress. Perhaps the most ominous indication of Washington’s diminished support for entrepreneurship and startups is the Trump administration’s reversal on the International Entrepreneur Rule as it was to go into effect earlier this month.
The rule, one of President Barack Obama’s final acts in office, provides so-called “startup visas” long sought by Silicon Valley. It is narrow, allowing foreign entrepreneurs to live in the United States for 30 months while building their companies. To qualify, applicants must show that they have reputable investment in their company of no less than $250,000 and the potential for a positive impact on economic growth and job creation. The rule has now been delayed until next March, and the Department of Homeland Security has given notice that the administration will propose rescinding the program before then.
The cost of this reversal is obvious to every New Yorker familiar with the entrepreneurial engine of the city’s current economic growth, particularly to those of us working in university environments where innovation is inseparable from the free flow of ideas and people across national borders. What sense does it make for the next Dr. Vunjak-Novakovic to end up doing her research and launching her companies in Montreal instead of Manhattan?
There are other storm clouds on the horizon. The president’s proposed budget reduces funding for basic science. And the legal playing field is beginning to tilt against innovators, most dramatically through a retreat from the respect for patent protection recognized by our Constitution more than two centuries ago as a bulwark of our economy. The former director of the U.S. Patent and Trademark Office, David Kappos, points out that a series of court decisions have rendered many biotech and software inventions un-patentable or at best uncertain in the U.S., causing the abandonment of promising research, or the repositioning of that research overseas to China, where affirmative steps have been taken to strengthen patent protection.
At a time of sharp political division, one thing most Americans can agree on is that we want to have the world’s most dynamic economy, one that creates new businesses and good jobs by harnessing technology. Fortunately, we know the recipe for sustaining such economic progress. During a conversation earlier this year with Bill Gates at Columbia, Warren Buffet offered this typically straightforward wisdom: “How do you encourage innovation? You have a market system that provides rewards for it. And we have it. We have an incubator for innovation in the United States. Our system is just designed for it. And that’s why we have the kind of prosperity we have.”
So much can be achieved when government helps to marry cutting-edge science with economically productive ventures. All of us with a stake in the economy must work to preserve the mix of longtime federal policies that support technological innovation and the economic growth it drives. Our future depends on it.
Orin Herskowitz is Columbia University’s senior vice president of intellectual property and technology transfer, and executive director of Columbia Technology Ventures.
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