Phoenix--State government has spent nearly $1 billion to lure biotech companies to Arizona and there is more to come, legislators say. But will all this money bring Arizona the luck of the Irish? A new report from the Goldwater Institute says it will take more than luck to find this pot of gold.
A number of Arizona lawmakers advocate taxpayer subsidies for the biotech industry. Citing Science Foundation Ireland as an example, the legislature provides taxpayer funding to Science Foundation Arizona. William C. Harris, the former chief executive of Science Foundation Ireland testified to the Arizona legislature that a government-backed bioscience push boosted Irelands economy, and in less than five years, made it the envy of Europe.
Miracle on Kildare Street: What Irelands Economic Revival Means for Arizona, examines the relationship between public funding of biotechnology efforts in Ireland and its recent stellar economic growth. Study author Benjamin Powell, assistant professor of economics at San Jose State University, finds that Irelands economic boom began long before substantial spending on biotechnology. The Irish government created Science Foundation Ireland in 2000. But by that time, the Tiger growth years of the 1990s were over.
Science Foundation Ireland played no role in Irelands dramatic economic growth, says Mr. Powell. Arizonas effort to model its public spending on biotech after Ireland isn't the key to economic growth, he said.
In the mid-1980s Ireland faced a serious fiscal crisis. In 1986 Irelands debt was 116 percent of GDP. To bring Irelands budget under control, government reduced spending, setting the stage for major income and corporate tax rate reductions. Those policy shifts, says Mr. Powell, were the genesis of the Celtic Tiger.
"If we want an Arizona Tiger, not a paper tiger, the lesson from Ireland is to keep cutting taxes and cut spending," says Darcy Olsen, president of the Goldwater Institute.
On March 28, 2007, the Goldwater Institute will host a policy discussion with Dr. Terence Kealey, Vice-chancellor of the University of Buckingham, and one of the world's foremost experts on state investment in science. For more information on this free event, visit www.goldwaterinstitute.org.
Read Miracle on Kildare Street: What Irelands Economic Revival Means for Arizona, or contact Jessa Haugebak at (602) 462-5000 or firstname.lastname@example.org to have a copy mailed to you. The Goldwater Institute is a non-profit research organization developing policy solutions that foster economic and educational freedom.