The status of Arizona's effort to encourage the creation and expansion of high technology based on the discoveries and new knowledge developed at its research universities is discussed. The study of the University of Arizona and Arizona State University was recommended by the Arizona Board of Regents' Task Force on Excellence, Efficiency and Competitiveness. The application of academic research results to economic development is termed technology transfer. There are often concerns that a university engaging in technology transfer may experience a distortion or devaluation of its main mission, i.e., education and scholarship. This distortion need not occur if the academic community has appropriate administrative mechanisms in place. University technology transfer programs are explained, focusing on each university. The Arizona State University Research Park 5-year plan will contribute, it is hoped, to economic development in Arizona. Faculty and state participation in technology transfer are noted. Currently, most of the elements of a technology transfer program are in place in Arizona, but the program is very new and needs to mature. Five recommendations include: The Arizona Board of Regents and universities should streamline their procedures to be more responsive to faculty concerns and to develop greater faculty participation in technology transfer activities; both universities should evaluate their participation in private incubator organizations; and the Board of Regents should issue a formal statement on technology transfer which is less obtuse than its formal recommendations. (SM)