When Ted Haggart talks about fertilizing, it has nothing to do with Kansas agriculture.

On Friday, Haggart will begin a one-year term as chairman of the Kansas Technology Enterprise Corp., the state’s largest organization devoted to helping high-tech business grow in the state.

“Other people plant the seeds for high-tech businesses, but we fertilize them,” said Haggart, who also is president and CEO of Douglas County Bank. “What KTEC is really about is providing the support services for fledgling, high-tech companies as they prepare to graduate to the big bad world.”

As chairman of the 20-member board, Haggart will oversee state funding of nearly $11.5 million, a network of seven seed capital funds, and investments in five centers of excellence that conduct research at universities across the state. Haggart was appointed to the board by Gov. Bill Graves nearly three years ago. He will succeed Jim Dahmen of Columbus Telephone Co. as chairman.

Haggart, who has been president and CEO of Douglas County Bank since April 2001, said it was a role he’s looking forward to.

“I’ve always been a big believer in the importance of having strong, internal economic growth,” Haggart said. “I think there is a growing recognition that most new jobs are created by small businesses. And I think a lot of people are realizing that many times the best career opportunities are homegrown ones.

“This is a niche that a traditional chamber of commerce doesn’t typically fill. Their focus is on expanding existing businesses and attracting businesses from out of state to locate here. That’s important work, but it’s not what KTEC is doing. We want to help people grow their own businesses.”

The Lawrence outlook

Haggart said there would be plenty of seeds to tend in Lawrence. With the Higuchi Biosciences Center and the Information and Telecommunication Technology Center, Kansas University is the only school in the state to have two centers of excellence.

“We have very, very strong research at KU,” Haggart said. “We’ll have lots of opportunities in the future to spin off university research into new business ventures.”

Haggart said he also felt better about the system Lawrence has in place to help that spin off happen. Historically, the role of helping university researchers and area entrepreneurs connect to form new technology businesses has been played by the Lawrence-based Kansas Innovation Corp., a KTEC-sponsored commercialization center.

The corporation recently changed its name to the Lawrence Regional Technology Center under a new director, Matt McClorey, hired earlier this year. Haggart said the name change was done in part to give the center a new start after being criticized by some in the area technology community for not doing enough to capitalize on KU research.

“We know we have to do a much better job of communicating what the center’s mission is and how it can help the Lawrence economy,” Haggart said. “In the past, maybe that wasn’t as well articulated as it possibly could have been.

“Putting a new name on the center is an effort to put some of the past associations behind us.”

Haggart said the community also had a great opportunity to become part of the Kansas City area’s Life Sciences Initiative, which is an effort to create a hub of biotechnology and other related companies in the Kansas City area.

“There are some very important things going on in the Kansas City area, and we are close enough that we can take advantage of some of that,” Haggart said. “But our proximity to Kansas City can be both a blessing and curse.

“It gives us a chance to be synergistic with the metro area, but it also is so close that it can be a strong lure for some of our existing, growing businesses.”

The money challenge

Lawrence saw an example of that last week when Lawrence-based LaGarde, a software development firm, announced it was moving its headquarters and about 30 jobs to Olathe.

And it wasn’t the first time a Lawrence-grown firm left the city. CyDex Inc., one of KU’s more successful spin-off companies, chose the Kansas City metro area over Lawrence as its main location, even though much of the research the company uses was conducted at the Higuchi center.

Haggart said he didn’t know the specifics of why those companies left Lawrence, but he knows what drives many companies to look elsewhere  money.

“It’s unfortunate but true that as a company grows larger and needs more money, there is generally an expectation that the company will have to go to where the money is,” Haggart said.

Today that means companies pack up and head to Kansas City because there are more high-tech investors in the metro area than in Lawrence.

“Providing better access to investment capital is real important for Lawrence,” Haggart said. “If we could draw investment capital back in here, from say KU alumni, that would be a big step in the right direction.”

No simple solution

But there is no simple solution for how to get venture capital dollars flowing into Lawrence. Instead, Haggart said it would take lots of hand-shaking and lots of touting the community to people in a position to invest.

“It’s really a networking thing,” Haggart said. “Money tends to go where the greatest opportunity is perceived to be. We have to get information out about the opportunities that are here and be very aggressive in doing that.”

Haggart pointed to efforts under way by Lawrence investor Sam Campbell and his partners to develop a life sciences business park around the former Oread Labs campus in west Lawrence. Such efforts will help keep promising high-tech companies in town.

“Projects like that will allow us to create some clusters of high-tech companies,” Haggart said. “That’s important because if there are clusters of these companies, we have a much better chance of getting them here and keeping them here. It’s a great project. We just need to do more of them.”

Haggart said he was pleased with the work Lawrence has done to create a high-tech economy, but stopped short of saying the community has done everything it needs to.

“It’s hard to assess how well we’ve done,” Haggart said. “I think anybody would say that we could do more and have more success, but I think there are lots of university communities that would love to have the success we’ve already experienced.

“But its hard to put on a scale. Have some university communities done a better job? Sure. Have some done less? Absolutely.”

Must do more

What’s critical, he said, is that Lawrence and the state do more.

“I really believe that creating a high-tech economy for the entire state is exceedingly important,” Haggart said. “We’ve known for some time that our traditional ag-based economy is under pressure.

“More importantly, the future of our national economy is so technology driven. We have to move in that direction.”

Otherwise, Haggart said, the state will continue to see an outmigration of many of its brightest minds.

“What’s really at stake is the brain drain,” Haggart said. “We will see our bright young people leave the state to find those high-tech, high-paying jobs.”

The positive news is that the state is in a better position than it was when KTEC was formed in 1987.

“We now have the system in place,” Haggart said. “There are a lot of states that don’t even have anything like KTEC. We’ve made great progress since the late ’80s.

“I’m convinced that we would have had a larger outflow of capital and people if we hadn’t taken the steps that we have. We’ve done a lot things right.

“That’s good because it means we’re not dead in the water. Now we just have to run faster.”