Midwest states put competition aside for joint high-tech venture

These are supposed to be the days of hot interstate competition, when states try to outshine one another to get ahead in economic development and trade. So what are nine Midwestern states doing suddenly setting forth on a united technology research-and-trade venture?

Bucking the trend, to be sure. But they are acting on the premise that they can make gains cooperatively that they could never make individually.

The focus of the teamwork is the largely invisible but profitable area of trade involving technology.

``Governors tend to think about trade more in terms of products, such as automobiles, orange juice, and wheat,'' says Ed Hunter, president of Minnesota Wellspring, a public-interest group of top education, labor, business, and government leaders in that state.

`There's been a failure to recognize that there's a tremendous market not only for the exchange of technology but for obtaining some participation in the application of that technology in other countries,'' he says.

The idea for a cooperative effort came from Minnesota Wellspring member William Norris, chairman of Control Data Corporation. Just two years back he played a key role in launching a highly successful Texas-based cooperative research effort involving 18 computer and semiconductor companies, known as the Microelectronics Computer Consortium (MCC).

His own company has gained access to $120 million worth of research results through MCC -- ``not a bad bargain for us or the nation,'' Mr. Norris says.

His newest proposal was recommended by Minnesota Wellspring to Minnesota Gov. Rudy Perpich, who promptly put it before the 13-state Midwestern Governors' Association, which he chairs. The plan calls on states to unite under the auspices of the Midwestern Technology Development Institute, a nonprofit policy and planning organization incorporated last December. Each member state appoints four leaders, including educators and businessmen, to the institute's board of directors and contributes $50,000 to its founding. The institute is now searching for a president.

Within the year the interstate consortium is expected to help establish a for-profit group of companies called the Midwest Technology Trading Corporation and later a Midwest Cooperative Technology Development Consortium, which would link the resources of state universities and corporations in the region.

Not everyone, of course, has rushed to join up. The four holdouts so far are Iowa, Kentucky, Michigan, and Missouri. Most of them say money is at issue.

``We have a constricted state budget and decided it wasn't worth our while,'' says Susan Neely, a spokeswoman for Iowa Gov. Terry Branstad (R).

On the other hand, Gov. Robert Kerrey (D) of Nebraska became so personally interested in the project that he appointed himself to the institute's board.

While the Midwest is no Silicon Valley of concentrated high-tech development, its research institutions are breaking new ground in every field, from polymers to supercomputers. And Mr. Norris, chairman of the new institute for the first year, says he has long felt that US technology has been shared too cheaply.

``Often a university needs cash and gives away the store,'' explains Mr. Hunter of Wellspring, a Minnesota planning official who testified on behalf of the measure just this week at a North Dakota budget committee hearing.

He says the new trading company may help universities get a fairer return in dollars, access to overseas technology, or some guarantee of participation in application of the technology.

``You need to be big and visible enough in the marketplace to drive a better bargain,'' Hunter says.

Many experts say such regional economic cooperation tends to increase when economic times are toughest.

``The governors realize that at some point they'll have to go back to individual competitiveness, but they're willing now to take more risks in this area,'' says William Bechtel, former federal chairman of the now-defunct Upper Great Lakes Regional Commission.

``We tend to want to join forces when we're losing, but when we're prospering, we want to be individuals,'' comments Louis Masotti, a professor of management and urban affairs at Northwestern University.

``Some of the states in the Midwest, such as Michigan, have been showing some real signs of recovery, and I think the consortium idea is one whose time may have passed.''