Sunday, March 5th
The Oklahoman
Carl Gibson
By G. Carl Gibson
Now that we know the fate of the General Motors plant in Oklahoma City, I propose we take the generous offer for a $200 million bond issue ($91,000 per local GM job) to retool the Oklahoma City plant and apply it to a model that has proven successful in generating excellent-paying jobs and boosting a long-term, viable industry for Oklahoma.
I'm sure most remember in 1991 when our state and Oklahoma City were locked into a escalating bidding war against other states to attract a United Airlines maintenance center. At one point, the bidding rose to about $120 million, equating to paying more than $24,000 for each job the new plant was projected to employ. Unfortunately for the winning city in Indiana, the plant never reached the 5,000 employee promise.
As we know, this momentary setback led to a greater result: the MAPS program, which after 10 years now boasts a return of $2.5 billion in local economic development on an investment of $300 million. Now we once again have the opportunity to make this kind of investment in an already proven economic engine for the state.
Five years ago, a few forward-looking foundations like the Presbyterian Health Foundation, the Noble Foundation and the Oklahoma Medical Research Foundation pooled their money to create the Oklahoma Life Sciences Fund. The OLSF finances early stage Oklahoma-based technology companies built on the intellectual property coming from our outstanding state research institutions, instead of licensing the patents and sending profits and revenue to out-of-state companies.
Today, the $5 million invested by OLSF in these companies has attracted more than $96 million in additional capital (most from out-of-state venture capital firms). These five companies employ 190 highly educated employees with a $65,000 average salary (which translates into $26,000 per job). Even better, these companies are still growing and adding jobs. In economic development metrics, these are real successes.
Assuming the previous results would scale to a $200 million investment, in five years we would theoretically have the following:
$3.8 billion in external capital invested in the state.
7,600 high-tech jobs.
A diversified mix of 200 companies.
These results, based on scaling a proven in-state model, would deliver to the state the equivalent of nearly four GM plants. I believe it's time to look at the opportunities in the state, investing in our own people and expand on proven economic models.
Creating a public/private early stage investment fund using a combination of private equity and public investment funds would have significant state economic impact. The model is proven; we now need to scale it.
Gibson is chief financial officer of Ekips Technologies Inc., a biotechnology company in Norman, and is chairman of Oklahoma Venture Forum, a statewide nonprofit corporation that works to help expand new and existing business ventures.
