SALT LAKE CITY — It isn't the first time Utah's research-focused economic development program has been faced with the question of whether it will live to fight another day.
The Utah Science, Technology and Research initiative, USTAR for short, has been subject to question and criticism essentially from its inception in 2005 by then-Gov. Jon Huntsman Jr., who predicted the program would make Utah a "haven" for forward-thinking researchers and create a system of returns that would expand with each year.
On Tuesday, a Utah legislative committee is scheduled to hear a proposal that may decide the initiative's long-term fate. Possible outcomes include allowing the agency to continue to exist as a stand-alone effort focused on supporting entrepreneurial efforts and associated economic development, with a science innovation focus; downsizing the agency and shunting remaining programs under the umbrella of another state-run economic development agency; or eliminating USTAR entirely, though that appears to be an unlikely outcome.
Sen. Dan Hemmert, R-Orem, co-chairman of the Legislature's Business, Economic Development and Labor Appropriations Subcommittee, said his committee has been exploring questions surrounding the initiative's efficacy, and potential future, since the beginning of the summer.
"Really, what's at question here is are we making the highest and best use of these public dollars," Hemmert said. "Is the way we've been spending the $20 million or so that's been budgeted the best way to support applied scientific research?"
How and where the initiative spends money has been under a microscope for some time now, particularly after the scathing results of a 2013 audit that uncovered issues with reporting practices, including inflated performance numbers, and led to a wholesale recalibration of the agency overseen by former Lt. Gov. Greg Bell.
That effort was widely seen as a positive reset, but the agency has been under steady fire throughout interim meetings over the past summer, in spite of a positive, third-party assessment that was concluded in early August.
One of the outcomes of that tension has been the resignation of USTAR's executive director, Dr. Ivy Estabrooke. In her resignation letter, Estabrooke noted one of the issues that pushed her to leave the agency was what she saw as an inappropriate politicization of discussions surrounding the initiative's fate as an economic development engine.
In an interview with the Deseret News, Estabrooke said as a scientist, researcher and former U.S. Department of Defense employee, she was most accustomed to, and comfortable with, data-based decision-making versus what she saw as a process being driven by overt political pressures.
"After four years, I had done what I felt what I could do to right the ship at USTAR," Estabrooke said. "Implementing the programs, ensuring that the returns on the programs were good and that we were exceeding our metrics.
"I truly believe that, as much as possible, the fundamental processes of discovery, invention and innovation should not be politically driven. I think we've seen the outcomes of innovation efforts being driven by politics without expertise to screen and guide it and they are the Solyndras and perpetual motion machines of the world."
In its earlier iteration, and with annual budgets of $20 million to $30 million, the initiative would recruit "rock star" academics and place them at the state's top two research institutions, Utah State University and the University of Utah, and provide funding to fast-track research with commercial potential. It would also create a system of grants to help accelerate entrepreneurial pursuits with science innovation at their core — an area, because of its long development arcs, routinely shunned by private capital markets.
That mission was scaled back by legislation in the 2018 session, sponsored by Hemmert, that included slashing the initiative's budget by over a third and severing the agency from its long-running connection to, and support of, high-caliber researchers at both the U. and USU.
While Hemmert's SB239 won the support of Utah legislators, a number of well-known voices have sung praises for the program, including Zions Bank President and CEO Scott Anderson; Spencer P. Eccles, co-founder and managing director of investment firm The Cynosure Group, and former executive director of the Governor's Office of Economic Development; and Mitt Romney, former Massachusetts governor and current U.S. Senate candidate for Utah. At an event this summer, Romney highlighted the importance of the initiative's support of science-based technology innovators and entrepreneurs.
"We've been fortunate with Silicon Slopes that we've attracted businesses in the areas of software and services that have been instant successes and are growing like crazy," said Romney, who spent decades working in the equity investment industry.
"But there are also, if you will, deep technology innovators that also need to be attracted to our state. You might say, 'Well, the venture capital guys will take care of that.' Well, about 90 percent of venture capital in our state over the last five years has gone to software and service businesses. Very little actually gets into some of the deep technologies that are so essential to our long-term growth."
"And, these technologies typically take a long time to generate the kinds of returns that venture capitalists often want," he said. "And that's, of course, where USTAR fits in."
Bell, who previously headed up the program's post-audit turnaround, has been meeting with board members from both the Governor's Office of Economic Development and Utah Science, Technology and Research, along with members of Gov. Gary Herbert's economic development team in an effort to hammer out a "consensus plan" for the initiative's future, the featured agenda item on Tuesday's meeting of the interim committee.
Herbert spokesman Paul Edwards said, as of last Friday, work was ongoing and questions were still being asked. He noted that one of the biggest challenges was assessing the economic development impacts in an area where the timelines on seeing returns are much longer than other tech endeavors.1 comment on this story
"The governor has been consulting with a number of his close advisers about how best to move forward with technology-based economic development programs in the state," Edwards said. "USTAR underwent some pretty significant changes following the audit … and preliminary data coming looks quite good for that reinvention. But there are also some areas for significant improvement."
The findings of a third-party assessment, completed on Aug. 1 by Teconomy Partners LLC, noted the initiative had achieved five-year performance goals, established by the Legislature in just two years time. The report also described the Utah Science, Technology and Research initiative as "a lean, effective, and outcomes-driven organization."