An initiative on the Nov. 2 ballot, if passed, will allow universities for the first time to own shares of a company in exchange for research.
Proposition 102 would exempt universities from a clause in the Arizona constitution that prohibits state government, including universities, from becoming a shareholder or joint owner in private businesses.
The initiative would create high paying jobs in Arizona and benefit universities, according to ASU lobbyist Scott Smith.
"Proposition 102 will benefit the lives of all Arizona citizens and is critical to Arizona's future economic growth and competitiveness," Smith said.
Currently, state universities can't take equity in companies as an option for payment for the sale of technology or intellectual property created by the University.
The initiative has received bipartisan support from Arizona leaders such as Sen. John McCain, R-Ariz., Gov. Janet Napolitano, a Democrat, and at least 70 state lawmakers.
Smith said the measure would create jobs by keeping the business activities of technologies developed in Arizona's university system in the state by allowing universities to better partner with local companies.
It will also enhance the ability of small and start-up businesses to acquire technology rights from university research, he said.
But a critic of the initiative, Mark Bronvich, director of the Center for Constitutional Government for the Goldwater Institute, said Proposition 102 supporters have to show why a change in the constitution is necessary.
"There is a reason why that clause is in there," Bronvich said. "We don't want public resources squandered on speculated prospects."
Smith said Proposition 102 only permits universities to accept stock in exchange for the rights to technology developed at the university.
The measure doesn't allow the universities to invest university monies in stocks, or play the stock market, Smith said.
"Proposition 102 amends the Arizona Constitution to provide the university system the mechanisms necessary to compete in the knowledge economy against the many states that already have this economic development tool available," Smith said.
He said the development of Google.com at Stanford University and the drug Taxol at Florida State University are two examples of universities benefiting from the commercial sale of their technology or research.
Sen. Jim Waring, R-Phoenix, said changing the state constitution would reflect the changes universities have recently gone through.
"Changing the constitution is a little bit tricky, but it was written nearly 100 years ago when [the authors of the constitution] didn't really envision the kind of enterprise universities have become," Waring said. "Other states have reaped the benefits from similar arrangements."
Rep. Mark Thompson, R-Tempe, said Proposition 102 would dramatically change the interaction between ASU and the state. He said the initiative would provide incentives for faculty members to stay with the university to provide research and benefit from the rewards of their inventions.
"It will make the universities less reliant on state-appropriated dollars," Thompson said. "Anything that can do that will keep the pressure from increasing tuition rates."
Reach the reporter at laosamoa.poasa@asu.edu.
