Jordan Welcomes S&T Engagements with Business Flavor

UNCLAS AMMAN 007726

SIPDIS

SIPDIS

STATE PASS TO National Science Foundation
STATE Interior for International/Senhadji
Commerce for NOAA/International/Ware-Harris, Child
Commerce also for NIST/International
EPA for International/Medearis

E.O. 12958: N/A
TAGS: TSPL BEXP SENV KTIA TBIO TPHY ETRD JO
SUBJECT: Jordan Welcomes S&T Engagements with Business Flavor

Ref: Amman 4527


1. Summary: Jordanian officials, academics and businessmen
welcomed progress on two major, parallel S&T projects during
late-September meetings with USG and private Americans: the
private-sector focused Jordan Science and Technology Initiative
(JSTI),and the government-to-government Science and Technology
Agreement. End summary.


2. Ken Ferguson, Middle Eastern Affairs Officer from the OES
Bureau's Office of Science and Technology Cooperation (OES/STC),
visited Amman September 16-22 as part of a public-private delegation
representing the Jordan Science and Technology Initiative (see
below). While in Amman, Ferguson undertook a round of separate
meetings with GOJ officials to discuss the proposed Science and
Technology (S&T) Agreement between the two governments.

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Minister Puts S&T on Agenda of Free Trade Meeting
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3. At the request of Jordan's Minister of Industry and Trade (MOIT)
Sharif Zu'bi, S&T cooperation was put on the agenda of the
U.S.-Jordan Free Trade Agreement (FTA) Joint Committee meeting on
September 17 although the subject does not fall in the purview of
the FTA. Zu'bi opened the segment on S&T by saying that the S&T
Agreement is "close to my heart." He said that the "important"
U.S.-Jordan S&T Agreement will "open the way" for the cooperation
and technology transfer that Jordan needs to move to a
technology-based economy.


4. In response to GoJ inquiries, Ferguson noted that S&T agreements
do not come with their own funding, but are rather a mechanism to
develop funding for particular projects. He stressed the need on
the U.S. side for C-175 interagency approval before negotiations
could begin, adding that the C-175 clearance process would start
soon and would take a minimum of several weeks. Noting his presence
in Amman as part of the Jordan S&T Initiative (JSTI) delegation,
Ferguson said that the JSTI is exactly the type of S&T cooperation
that we would hope for under the framework of the S&T agreement.

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Information and Idea Session on STA at Working Level
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5. On September 21, Ferguson had a follow-up meeting at the working
level with MOIT Director of International Trade Policy Maha Al-Ali.
Al-Ali was joined by a representative from the Higher Council for
Science and Technology. Ferguson and ESTH Officer outlined the
essential processes, players, and mechanisms of the process for
reaching an S&T agreement, including the need for C-175 interagency
consultation and approval, the need for legal scrutiny at each step,
and the fact that the agreement does not come with any dedicated
funding. In the absence of C-175 clearance, Ferguson emphasized
that the discussions were informal and general in nature.

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GOJ Has Done Interagency Coordination
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6. Al-Ali said that the GOJ has been coordinating internally on
preparations for negotiating the S&T Agreement. She said the
Ministry of Planning and International Cooperation will likely sign
and administer the agreement, that the Higher Council for Science
and Technology (HCST) would implement the agreement, and that the
Ministry of Industry and Trade would be the facilitator and point of
contact during the negotiations.


7. Al-Ali, in asking about financing, said that the GOJ doesn't
want to see the agreement "go on the shelf." Ferguson reiterated
that S&T agreements normally don't have funding, although the S&T
Agreement with India has an endowment that came as a result of
special circumstances. Trying to raise an endowment would slow down
the process of reaching an agreement, but management of an
endowment, he allowed, would not be difficult.

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Ideas on Possible Foci
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8. Ferguson noted the suggestion by HCST Secretary General

Shuraydeh of including language on innovation and entrepreneurship.
One possible focus of the U.S.-Jordan agreement could be technology
transfer and building relationships between the academic and
business communities. ESTH Officer also noted Jordan's regional
role, and suggested that perhaps this could be taken into
consideration in the S&T Agreement.

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JSTI Proposes Cooperation for Commercialization
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9. In parallel with a future S&T Agreement, the other major S&T
project discussed during Ferguson's visit was the Jordan Science and
Technology Initiative (JSTI). JSTI was initially supported by a
U.S. Trade Development Agency grant, and has been developed by the
IC-Squared Institute affiliated with the University of Texas at
Austin. Three representatives from IC-Squared (Sid Burback, Norman
Kaderlan, Jim Dukowitz) plus Ken Ferguson from OES/STC visited Amman
September 16-22, and had a series of meetings to outline JSTI's
business plan. Their meetings included MOIT Minister Zu'bi, Dean of
Science at the University of Jordan Dr. Hala Horani, Dr. Khaled
El-Shuraydeh from the Higher Council for Science and Technology, Dr.
Tarik Awad from the King Abdullah Fund for Development, Dr. Moayad
Samman from the King Abdullah Design and Development Bureau (KADDB),
and in-house meetings at the Embassy. Private sector meetings
included Omar Al-Masri from Edgo, Ghassan Nuqual of the prominent
Nuqul Group, and Dr. Zaki Ayoubi from the Jordan Chamber of
Industry.

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JSTI About Business, not About Science
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10. Throughout their meetings, the JSTI team emphasized that JSTI
is about business, not about science, and takes a market-driven,
practical perspective. JSTI started as the result of a conversation
between then-Secretary of Commerce Donald Evans and King Abdullah
about expanding the role of science and technology in the Middle
East. Development of the concept was supported by a grant from the
U.S. Trade Development Agency to the University of Texas. An
initial feasibility study was then followed by a business plan.


11. JSTI was developed by experienced businessmen who used
conservative estimates and clear metrics in developing JSTI's
business plan, said Burback. JSTI is a public-private partnership
that is complementary to, not competitive with, existing
institutions and programs. The project's goal is to create local
"ownership" of a mechanism that promotes and supports innovation,
and to lead to job creation, technology transfer, and Jordanian
competitiveness in high-technology sectors.

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Early Projects Will Help to Create 1,700 New Jobs
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12. According to JSTI's conservative estimate, the initiative, if
fully implemented, will create 30-40 new technology companies and
1,700 new jobs in its first five years, said Burback. JSTI has
several components, including addressing regulatory obstacles,
putting "gap" funding mechanisms in place, matching American
businesses with an interest in Middle East markets with Jordanian
partners, and coordinating among Jordanian stakeholders. Bringing
the private sector earlier into the R&D cycle is another goal, since
that will help accelerate development and commercialization.
"Mining and matching" interested U.S. firms to Jordanian companies
will help to "jumpstart" the JSTI process. Early projects are
likely to focus on existing skills, and tailoring existing products
to the regional market. These are projects with a fast turn-around
and a high probability of success.

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$7 Million Funding for First Two Years
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13. JSTI is a business venture to commercialize research, said JSTI
delegation head Sid Burback; it's not development assistance. JSTI
needs $7 million in funding for its first two years of operation.
Of that $7 million, $1.4 million will go to a "gap" fund to help
bring innovations to a prototype stage, at which point they'll be
more attractive to commercial funding. The remaining $5.6 million
will be for operating JSTI. Burback explained that there will

clearly always be a need for public funds in JSTI's budget, probably
about 30% of the budget. Incubators that are 100% private have been
problematic in the United States, said Burback. Fees and other
internally generated revenue should cover 70% of JSTI's budget. The
University of Texas team expects that its role will diminish over
time as JSTI starts up and local staff gains expertise. Burback
estimated that once the Jordanian side gives approval and funding to
JSTI, JSTI can be up and running in eight months, and working on 3-5
low-risk, initial projects.


14. JSTI will link into the technology sector in Jordan and hopes
to take advantage of both the U.S.-Jordan Free Trade Agreement and
the proposed U.S.-Jordan S&T Agreement. Dr. Khaled Shuraydeh,
Secretary General of the Higher Council for Science and Technology,

SIPDIS
suggested additional wording for the S&T Agreement that would note
its connection to innovation and entrepreneurship.

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When do We Start?
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15. The reception by the GoJ given to the JSTI proposal was very
warm. Minister of Industry and Trade Zu'bi said JSTI was
"fantasic," and is exactly what his ministry wants. He went on to
say that the process outlined by JSTI is "not a matter of choice,"
that Jordan cannot afford to remain focused on low technology
industry. Dr. Shuraydeh from the Higher Council for Science and
Technology offered his wholehearted support, and HCST resources such
as office space to get JSTI up and running ASAP. Both Zu'bi and
Shuraydeh asked, "What do we need to do next?" and noted their
willingness to proceed even before a formal agreement is reached.

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Organizational Meeting Suggested as Next Step
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16. Governance, credibility and Jordanian support for JSTI will be
critical, said Burback and Norman Kaderlan from the University of
Texas. JSTI will need a champion and a strong board, and funding,
of course. Shuraydeh and MOIT Minister Zu'bi agreed with the
delegation that an appropriate next step is to assemble a working
group that would develop a structure, resource commitments, and an
implementation plan for JSTI. Burback said that the delegation
would develop a short list of candidates for the proposed working
group.


17. This cable was cleared by OES/STC.

RUBINSTEIN