Forging the future.

• Author: Woodring, Jeannie

Alaska Science and Technology Foundation's Formula Business + Science = Economic Development

Alaska, 2010: The state's growing population thrives on a diversified economy based on new fishery and forest projects, high-tech companies and dynamic small businesses.

Or Alaska, 2010: The state's declining population struggles to hold on to a deteriorating economy based on dwindling natural resources and slow-growth, low-paying service-sector jobs.

Everyone wants the first vision to happen; most fear the second will occur. The question becomes: How does Alaska create a diversified economy when it's never had one?

"You cannot buy economic development. It's something you have to facilitate, to nurture," says Dr. John Sibert, executive director of the Alaska Science and Technology Foundation (ASTF).

In the last 20 years, more than 250 programs have popped up across America seeking to create economic diversity. Some blossomed into exciting opportunities; most failed.

To make it work in Alaska, the Alaska State Legislature created ASTF in 1988 and funded it with earnings from a $100 million endowment. The foundation's mandate was "to promote and enhance through basic and applied research: economic development and technological innovation in Alaska; public health, telecommunications; and sustained growth and development of Alaska science and engineering capabilities."

Or, as Sibert puts it, "We function as a catalyst for change."

With a board of directors made up of public and private-sector business experts--including two from Outside--Sibert set out to "not compete with past mistakes."

"We chose to keep the foundation small, focused, flexible and non-bureaucratic," he says. "We developed a long-range vision, one that focused on investment rather than immediate spending."

ASTF then established strict criteria for funded projects. "Start-up businesses require money, markets and management," Sibert says. "The focus is usually put on money, but the market and the management team are far more important."

Each funded project, therefore, had to show a clear benefit to Alaska, be technically sound, have an involved, competent project team and fulfill a proven market need.

ASTF also chose to work closely with each grantee. "You can't buy economic development by giving grants in isolation," Sibert says. "If you don't nurture the projects, nothing will come of them."

Every grant agreement became individually written and tied to measurable benchmarks. In...