updated 9/13/2007 3:40:35 PM ET 2007-09-13T19:40:35

A tax-supported research endowment envisioned as a way to diversify Oklahoma's economy has generated almost $6.8 million for research projects, but members of the fund's policy board are urging caution in deciding where the money should be spent.

The Economic Development Generating Excellence endowment was created last year following the recommendation of a task force that proposed a $1 billion endowment that would generate interest earnings for research projects in Oklahoma.

The EDGE endowment was initially funded with $150 million, but Gov. Brad Henry said it should be fully funded by the Legislature to achieve the goal of making Oklahoma the "research capital of the plains."

"This presents a historic opportunity for Oklahoma," Henry said at the inaugural meeting of the EDGE Fund Policy Board, which will decide how the fund's earnings are spent.

Modest returns on investments of a $1 billion fund would generate $50 million a year for research and produce spin-off companies and good-paying jobs, the governor said.

"I believe it is absolutely critical for Oklahoma's future to finish the vision," Henry said. "We have to expand our research capabilities."

State Treasurer Scott Meacham said the fund had produced earnings revenue of almost $6.8 million in its first year. Meacham recommended that the board make strategic investments and spend the revenue in key areas of the economy "that will pay us the biggest long-term dividends."

Legislation that created the fund requires that EDGE-supported research projects expand the number of researchers and technicians in the state, help secure federal or private grants or have the potential for creating high-technology companies and improving Oklahomans' health or quality of life.

But board members indicated they have a lot of work to do before they begin soliciting proposals for research grants and loans. Among other things, board members said they need to develop submission guidelines and allocation criteria before they begin spending research dollars.

"What we really have is a blank slate," said the board's chairman, Gene Rainbolt, chairman of Banc First.

Board members said a top priority in allocating revenue will be the potential for commercialization of products and services produced by research.

Meacham said the EDGE legislation recommends investment in areas where the state already has a competitive advantage, including agriculture, aerospace and aviation, biotechnology, weather science and telecommunications.

Henry said how EDGE revenue is spent by the board will have an impact on future generations of Oklahomans.

"Your task is an awesome one. You have great responsibility," Henry said. "I know you're up to the task."

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