It was not a shock when Gov. Greg Abbott announced last week that he wants to shutter the Emerging Technology Fund administered out of his office. He had campaigned for months that the state shouldn’t pick “winners and losers” with incentive grants to businesses.
But it was a pleasant surprise to hear what Abbott proposed for a portion of any money still available in the fund: a new recruiting initiative to bring the world’s most eminent researchers to Texas universities. That theoretically could make progress toward Abbott’s goal of lifting Texas universities to the top of consensus rankings of the nation’s elites.
Some critics of higher education in Texas have taken gratuitous swipes in recent years at university research activity. It’s good to see Abbott has not been sucked into all that. Research is the lifeblood of industrial innovation. The concentration of brains at elite schools near Silicon Valley is the reason a torrent of venture capital flows there and brings so many revolutionary products to market.
The best way to understand the Texas Emerging Technology Fund is to watch the popular TV show Shark Tank. That show features Mark Cuban and other super-rich investors listening to pitches from inventors and other entrepreneurs who offer equity stakes in their businesses. The extra capital, they hope, will help them become the Next Big Thing.
The Emerging Technology Fund makes grants in different areas, including for recruitment of university faculty and researchers. The biggest focus is Shark Tank-like speculating in startups or early-stage businesses — albeit on a sophisticated plane — and taking an ownership stake.
The tech fund has paid out more than $400 million in grants since 2005, most of them to commercialization ventures. That’s given the taxpayers of Texas equity stakes in companies specializing in biotech, aerospace, energy and computer technology, among others.
Abbott clearly has no enthusiasm for his office continuing to manage that portfolio of investments or taking responsibility for making more of them. As he proposes, the portfolio would be better managed by professionals in the comptroller’s office. That makes sense.
As for the governor’s proposed recruiting fund for superstar researchers, he’s got to convince budget writers in the House first. The House’s preliminary two-year spending plan provides only enough money for the tech fund to make good on past commitments.
Anything more depends on convincing Speaker Joe Straus and budget writers that incentive funds out of the governor’s office meet higher levels of accountability and transparency. That would include the deal-closing Texas Enterprise Fund, used to lure new businesses to Texas.
Calls for tighter controls have echoed through the Capitol over the years, along with revelations of loose grant-making and standards bent for political cronies.
The House is right to set a higher bar. Abbott is right to covet research talent for Texas.
The trick is to find a balance and avoid the kind of embarrassing stinkers that viewers have seen laughed off of Shark Tank.
Abbott’s plan for luring tech minds
The Emerging Technology Fund made 197 awards, worth $433 million, from its inception in 2005 through August 2014. Of that, 144 awards, worth $204 million, were for commercialization ventures. Abbott proposes to:
•Abolish the Texas Emerging Technology Fund
•Transfer the ETF’s portfolio of investments to the state comptroller’s office
•Reallocate $55 million, or half the fund’s remaining resources, to lure elite university researchers; the Legislature would have to authorize the money
•Reallocate the other half of the ETF to the Texas Enterprise Fund, used to lure or expand businesses; the Legislature would have to authorize the money