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July 31, 1998

A Washington, D.C.-based think tank has issued a call for the creation of a $250 million fund to be directed to the states for Technology Innovation Challenge Grants. The fund would be used by the states to invest in university- industry and other technology and innovation network programs.

Under the Progressive Policy Institute (PPI) proposal, states would be required to match the federal funds at a ratio of at least one-to-one with industry required to match all public funds one-to-one. The net effect would be to leverage the federal money into at least $1 billion in funding.

The proposal is contained in a PPI Policy Briefing, "Innovation, Social Capital, and the New Economy: New Federal Policies to Support Collaborative Research," which asserts that investment in innovation is critical and the federal government must develop a targeted and expanded investment program for R&D of scientific and technological advances.

PPI contends that the federal government should modify and restructure its existing technology policy tools to promote the use of networks and consortia in order to connect firms to universities, national labs, and state and federal partnership programs. To achieve this, PPI recommends, in addition to the state fund, that:

  • Congress expand the existing research and experimentation tax credit to provide a flat, 20 percent credit for industry expenditures in research consortia and partnerships between industry and universities or federal laboratories.
  • Congress establish an Industry Research Alliances Challenge Grant initiative to co-invest with industry-led research alliances. Industry members would establish technology "roadmaps" and on the basis of these invest in research conducted at universities or federal laboratories.

It is unclear at this point if any member of Congress will introduce a bill to implement PPI's recommendations. Copies of the Policy Briefing can be obtained by contacting PPI at 202/547-0001.