Arizona as an Innovation Hub Update 9/10/19

By Mark Goldstein, International Research Center
markg@researchedge.com, http://www.researchedge.com/
See SlideShare at http://www.slideshare.net/markgirc
© 2019 - International Research Center (V01X - 9/10/19)
Arizona as an
Innovation Hub
Overview Presentation (Full)


Arizona as an Innovation Hub
• Arizona Commerce Authority (ACA)
• Arizona Technology Council (AZTC)
• Other Key Arizona Public Policy Players
• Arizona K-12 & Higher Education Investments
• Arizona’s Biotechnology & Healthcare Industry
• Arizona’s Aerospace & Defense Industries
• Arizona’s Cybersecurity Initiatives & Ecosystem
• Arizona’s Data Center Industry, Drivers & Incentives
• Enabling Arizona’s Gig Economy
• Arizona Smart City/Smart Region Initiatives
• Arizona’s Autonomous Vehicles Development & Deployment
• Arizona FinTech: Electronic Signatures & Regulatory Sandboxes
• Arizona Energy Blockchain Peer-to-Peer & Transactive Marketplaces
• Arizona Technology Industry & Workforce Statistics Appendix

• Angel Investment Tax Credits of up to $2.5 million annually for
qualified investments made in qualified small businesses.
• Refundable Research and Development Tax Credit provides Arizona
income tax credit for increased R&D activities conducted in the State.
• Arizona Innovation Challenge is Arizona's leading technology
commercialization competition awarding up to $1.5 million twice
yearly. 13 Challenges and more than 2K applicants since 2011 have
yielded 80 awards providing $18.5M in non-diluting capital.
• Coproduces Invest Southwest’s Venture Madness startup competition.
• Opportunity Zones & Quality Jobs/Facility Programs
• State Trade Expansion Program (STEP) assists Arizona small
businesses entering export markets or expanding into new markets.
https://www.azcommerce.com/
Autonomous Vehicles
Internet of Things (IoT)
Education Technology
Renewable Energy
Nanosatellites
Personalized Medicine
Telemedicine
Agricultural Technology
Fresh Water Science
Smart Materials
Big Ideas Shaping Arizona’s Future
https://investsouthwest.org/

• AZTC works to connect, empower, and engage technology companies
across the State of Arizona through educational seminars, business
legislative lobbying, and networking events encompassing a diverse
member community of over 850 science and technology companies,
professional service vendors, academic organizations, and nonprofits.
• Annual Public Policy Guide, Vote TechSmart election guide & lobbying
for State & Federal tech policy issues (https://www.aztechcouncil.org/public-policy/)
• SciTech Institute (https://scitechinstitute.org/) foundation produces:
• Arizona SciTech Festival now in its 8th year
• Chief Science Officer (CSO) Program
• Arizona Tech Connect Magazine (https://www.aztechcouncil.org/techconnect/)
• Fifteen working committees including Additive Manufacturing,
Cybersecurity, IoT, Law & Technology, MedTech & Optics Valley
https://www.aztechcouncil.org/ https://scitechinstitute.org/

Arizona Technology Council’s Public Policy Coverage
https://www.aztechcouncil.org/public-policy/

Other Key Arizona Public Policy Players
https://phoenixchamber.com/
https://phoenixchamber.com/policy-
advocacy/policyguide/
https://tucsonchamber.org/
https://tucsonchamber.org/legislative
-agenda/
https://www.gpec.org/
https://azgovernor.gov/ https://www.azleg.gov/ https://www.azcc.gov/
https://www.aaed.com/
https://www.aaed.com/group/
Governmental_Affairs
https://www.arizonatele.org/
https://www.arizonafuture.org/
https://aredf.org/
https://morrisoninstitute.asu.edu/
https://eller.arizona.edu/
https://www.azag.gov/
https://azchamber.com/
https://azchamber.com/policy-advocacy/

Arizona K-12 & Higher Education Investments
• Proposition 301 is a voter-approved sales tax passed in 2000 and
providing hundreds of millions of dollars annually in education
funding. Originally set to expire in 2021, but recently extended to 2041.
• The Arizona State Land Department (ASLD) derives revenue from the
sale of Trust Land and applies by formula to K-12 educational funding.
• Recent Arizona State budgets provide school district funding
supporting a 20% increase in teachers’ salaries over a 3-year period.
• Expanding Career and Technical Education (CTE) Programs
• With enabling legislation in 1994, there are currently over 500 charter
schools in Arizona, the most in the nation by any measure.
• The State has allocated $1B as an incremental investment in new
university research infrastructure & innovation at ASU, NAU & UA.
• ACC & Dept. of Education funds ($11M) were leveraged to fund $100M+
in rural fiber infrastructure for K-12 school & library broadband under a
special 2-year FCC e-rate program beyond annual e-rate support.
• Arizona Business & Education Coalition (ABEC, http://www.azbec.org/)
• Arizona Technology in Education Association (AzTEA, http://aztea.org/)
• Greater Arizona Educational Leadership (GAZEL, http://www.gazel.org/)

Arizona’s Biotechnology & Healthcare Industry
• Flinn Foundation Bioscience Roadmap produced by Battelle (≥ 2002)
• UA Medical School in Tucson & Phoenix + Other Physician Programs
• Significant biotech R&D at ASU, NAU & UA with licensing & spin outs.
• $120M support established TGen on a 13.5-acre bio-campus in
downtown Phoenix. Top program managers & scientists recruited.
• Dynamic, diverse & growing biotech and healthcare ecosystems.
• Telehealth friendly regulation & environment:
• Requires reimbursement parity for remotely-delivered services
• Arizona participates in a multi-state physician licensure compact
• World-Class UA Arizona Telemedicine Program (ATP)
https://www.azbio.org/ https://flinn.org/
https://www.tgen.org/
https://c-path.org/https://telemedicine.
arizona.edu/
https://medicine.arizona.edu/
https://biodesign.asu.edu/

Arizona Bioscience Roadmap & Ecosystem
Source: Flinn Foundation
https://flinn.org/bioscience/ari
zonas-bioscience-roadmap/
Roadmap Goals
Industry Segments

Arizona’s Aerospace & Defense (A&D) Industries
• Arizona’s favorable weather & open space are ideal for stargazing,
testing & flying, attracting numerous A&D industry giants such as
Raytheon, Honeywell, Boeing, Lockheed Martin & General Dynamics.
• Lower taxes, less burdensome government regulations, competitive
incentives packages, exceptional higher education A&D programs & an
educated, skilled workforce have led to Arizona’s top-10 rankings in
DoD contracts, A&D manufacturing & jobs plus steadily rising exports.
• Arizona has a dynamic and robust A&D ecosystem with >1,250 small,
medium & large-scale companies responsible for >54,000 direct jobs.
• Major military installations include Luke Airforce Base, the Yuma
Proving Ground & Fort Huachuca, a major UAS training facility.
• Substantial A&D & space exploration higher-ed programs & alliances.
• Emerging space & sub-space launch ports & capabilities.
• Strong optics cluster centered at the University of Arizona
(http://www.optics.arizona.edu/) complemented by AZTC’s Optics Valley.
• Robust astronomy presence protected by dark skies regulation.

Arizona’s Cybersecurity Initiatives & Ecosystem
https://www.azactic.
gov/
https://bc.azgovernor.gov/bc/
arizona-cybersecurity-team
https://azinfragard.
org/actra/
https://azinfragard.
org/
http://phoenix.issa.org/
https://www.azcyber
talent.com/
Sonoran Desert Security User
Group http://www.sdsug.org/
https://isc2chapter-
phoenix.org/
https://chapters.cloudsecurity
alliance.org/southwest/
http://www.southwestcybersecforum.com/
Cybersecurity
Committee
https://www.aztechco
uncil.org/get-
involved/committees/
https://www.azcwr.org/
https://ccofaz.org/
https://www.cyber
awareaz.com/
SDSUG

Arizona’s Data Center Industry, Drivers & Incentives
• Arizona tax advantages with exemptions granted to promote the
retention and expansion of enterprise and colocation data centers.
• Good, robust power grid with affordable power & renewable options.
• Excellent weather combined with a lack of natural disasters.
• Good workforce availability. Diverse & robust broadband access.
• Arizona is the fifth-largest market in the U.S. for existing data center
inventory moving to the third-largest within the next few years (CBRE).
• The Phoenix region remains the second most active data center
market in the U.S. for new construction with 41.6 megawatts of net
absorption in the second half of 2018 (CBRE).
• An unprecedented 1,200+ acres of land has been bought by data
center developers in metro Phoenix in the last 24 months, expected to
deliver well over 16 million square feet of new data center capacity.
640 acres in Pinal County under data center development as well.
• Advances in 5G, IoT, autonomous vehicles, smart cities, artificial
intelligence, distributed ledger technology, augmented reality & rich
mobile content delivery will drive edge computing deployment and
massive growth in data center computational and storage capabilities.

Enabling Arizona’s Gig Economy
• Enables ride sharing with Executive Orders & Legislation.
• Ride sharing generally enabled, followed by relaxed
special airport use rules.
• Established well-defined statewide regulatory &
insurance guidelines for rideshare vs. livery services.
• Bike and scooter sharing services common in urban
cores, communities & campuses.
• Enables house/residence sharing and short-term rentals.
• Ample coworking and start up incubation facilities options.
• Municipalities limited in prohibiting/regulating small
businesses located in private residences.
• Streamlined occupational licensing regulation & innovative
universal licensing regime for granting Arizona licenses to
individuals with comparable licenses in another state.

https://www.azidp.com/the-smart-region/
Center for Smart
Cities and Regions
(CSCR)
https://ifis.asu.edu/c
ontent/center-smart-
cities-and-regions
https://www.azidp.com/
Arizona Smart City/Smart Region Initiatives
Pima Association
of Governments
(PAG)
http://www.pagregion
.com/Default.aspx?ta
bid=1356
Intel Smart City
IoT Solutions
https://www.intel.com/
content/www/us/en/int
ernet-of-things/smart-
cities.html
Internet of Things
(IoT) Committee
https://www.aztechco
uncil.org/get-
involved/committees/
Smart Region
Consortium
https://smartchallenges
.asu.edu/
http://www.big
datasw.org/
https://www.a
zmag.gov/
https://www.azcom
merce.com/

Arizona’s Autonomous Vehicles Development & Deployment
• Executive Order allowed early testing of autonomous vehicles (2015).
• Executive Order allowed full deployment of autonomous vehicles creating an
environment supporting AV innovation while maintaining a focus on public
safety (2018). First AV fatality occurs in Tempe.
• Waymo currently deploying Tier 4 rideshare AVs with others to follow.
• Chandler changed zoning codes to be more favorable to ride sharing and
autonomous vehicles. Other Arizona cities following suit.
• Excellent weather combined with a lack of natural disasters.
• Availability of legacy & new automotive test tracks.
• Intel semiconductor fabrication facilities accompanied by their Autonomous
Vehicles Division and various R&D labs in Chandler including IoT.
• Further legislation enables autonomous package delivery from street vehicles
and sidewalk-travelling pedestrian-privileged autonomous delivery bots.
• Advanced vehicle manufacturing in Arizona: shuttles by Local Motors, EVs by
Lucid Motors & Ronn Motor Group, semi-trucks by Nikola & TuSimple, electric
commuter planes & UAS by Eviation Aircraft + many underlying technologies.
• Arizona Commerce Authority established the Institute of Automated Mobility
(IAM, https://azcommerce.com/iam/) to create the future of science, safety &
policies regarding autonomous mobility in Arizona & beyond.
• For more, see Mark Goldstein/IRC’s latest “The Autonomous Revolution of
Vehicles & Transportation” deck at https://www.slideshare.net/markgirc/.

https://www.nytimes.com/2017/11/11/technology/a
rizona-tech-industry-favorite-self-driving-hub.html

https://www.azcentral.com/story/money/business/tech/
2018/03/01/gov-doug-ducey-issues-order-keep-arizona-
capital-self-driving-cars/385812002/
https://azgovernor.gov/governor/news/2018/03/governor-
ducey-updates-autonomous-vehicle-executive-order

https://www.nlc.org/resource/autonomous-
vehicle-pilots-across-america

https://azcommerce.com/iam/
https://cspo.org/research/

Local Motors Olli (Chandler)
TuSimple (Tucson)Nikola Corporation (Coolidge)
Lucid Motors (Casa Grande)
https://www.tusimple.com/https://nikolamotor.com/
https://lucidmotors.com/ https://localmotors.com/
Advanced Vehicle Manufacturing in Arizona

Advanced Vehicle Manufacturing in Arizona
https://www.intel.com/content/www
/us/en/automotive/autonomous-
vehicles.html
https://www.mobileye.com/
Imagry Inc. (Israel
Based, Tempe U.S. HQ)
Ronn Motor Group Inc. (Scottsdale)
Hydrogen-Electric Vehicles
https://www.ronnmotorgroup.com/
Intel Autonomous Vehicles
Division (Chandler)
https://www.eviation.co/alice/
Eviation Aircraft (Israel Based, Prescott Mfg.)
Alice Commuter
carries 9 passengers &
2 crew up to 650 miles.
Orca UAS
https://aerospace.honeywell.com/en/pr
oducts/safety-and-connectivity/intuvue-
rdr-84k-band-radar-system
Honeywell Aerospace Radar
https://imagry.co/
3m long,
4.5m wingspan
500 mile range

FinTech: Electronic Signatures & Regulatory Sandboxes
• Early State legislation recognizing electronic signatures recorded on
blockchains & enabling validity of smart contracts. Subsequently
revised and refined. Arizona emerging as a choice location for
blockchain companies that develop apps based on smart contracts.
• Arizona’s Financial Technology (FinTech) Sandbox was the first in the
nation to create a state-level regulatory sandbox allowing limited
access to Arizona’s market for testing innovative financial products or
services under the purview of the Attorney General’s Office without
needing full state regulation. Seven current participating companies.
• Arizona’s Property Technology (PropTech) Sandbox signed into law
March 2019 to enable testing of residential real estate product &
service innovations (such as Offerpad, Opendoor & Roofstock).
• Municipalities are prohibited from regulating blockchain nodes &
mining in residential as well as commercial settings.
• Mature, versatile intrastate crowdfunding platform in place.
• Arizona Corporation Commission docket on energy & blockchain.
• Arizona Technology Council State FinTech Public Policy Positions
on: MTL Regulation, State Regulatory Reciprocity, Decentralization.

https://www.azag.gov/fintech/participants
Current Arizona
FinTech Sandbox Participants

https://blockchain.asu.edu/
https://health.asu.edu/center-
law-science-innovation
https://www.gpec.org/connected
-place/blockchain/
Energy and Society Group
https://sustainability.asu.edu/lightworks
/focus-areas/energy-society/
https://azblockchain.org/
http://blockchain48.com/https://www.meetup.com/
Desert-Blockchain/
http://desertblockchain.com/
Blockchain Connected Place
Arizona
Blockchain
& FinTech
Organizations
https://azbankers.org/
https://www.meetup.com/
Phoenix-Blockchain-
Meetup/http://energy-blockchain.org/
https://www.azcommerce.com/

https://www.coindesk.com/
arizona-smart-contract-
clarity-winning-startups/

https://www.americanbanker.com/
opinion/regulatory-sandboxes-
can-help-states-advance-fintech
…
…

https://cronkitenews.azpbs.org/2017/08/15/
arizona-edges-to-front-of-states-eyeing-
blockchain-technology/

Current Copy Available by Request from:

Energy Blockchain Peer-to-Peer & Transactive Marketplaces
Arizona Technology Council’s Policy Recommendations to the ACC
For Blockchain Use in Record Management & Energy Transactions
• Encourage the Arizona Corporation Commission (ACC) to work towards utilizing
blockchain for corporate records and filings initiating trials and pilots to develop
capabilities, gauge future direction, and, when appropriate, inaugurate full-scale
initiatives.
• Examine the potential to issue and trade securities on a blockchain platform.
• The ACC has opened a docket to examine the use of blockchain technology in Arizona’s
energy industry to help manage the distributed power generation and storage,
transactive energy, renewable energy credits, tokenization, IoT, cybersecurity, and other
applications for distributed ledger technologies on the grid.

Arizona Technology Industry & Workforce Statistics
• CompTIA - Arizona Cyberstates Snapshot 2019
• ALEC-Laffler Arizona Economic Competitiveness Index 2019
• AZTC Industry Impact Report Top-Line Results 2018
• Milken Institute - Phoenix-Mesa-Scottsdale Profile 2018
• Arizona OEO - Projected Employment Growth 2019-2020
• Arizona’s New Five Cs

https://www.cyberstates.org/
Cyberstates Snapshot

https://www.alec.org
/publication/rich-
states-poor-states-
11th-edition/

AZTC Industry Impact Report Top Tech Sectors (2018)

Source: Milken Institute’s
Best-Performing Cities 2018
https://www.milkeninstitute.org/
publications/view/955

By Mark Goldstein, International Research Center
markg@researchedge.com, http://www.researchedge.com/
See SlideShare at http://www.slideshare.net/markgirc
© 2019 - International Research Center
Arizona as an
Innovation Hub
Overview Presentation


Arizona as an Innovation Hub Update 9/10/19

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