SSTI Digest

While the Presidential election takes center stage on November 4, voters in several states also will cast their votes on statewide ballot issues affecting the TBED community. In addition to the 11 gubernatorial races and more than 5,800 state legislative seats up for grabs, voters across the nation will consider measures to provide funding for public education, expand investment in alternative and renewable energy, lift restrictions on stem-cell research, and eliminate income tax and state spending caps. Following is a summary of selected ballot issues from across the nation.

How should states determine the focus and location of significant investments into academic research? The process can easily become politicized when more than one research institution, sizable metropolitan area or major industry exist in the state. On occasion, geographic and political influences trump more rational factors, resulting in the “peanut butter effect” of dollars and activities being spread evenly across a state or across institutions at the possible detriment to having a meaningful impact.

Though the state of Florida has aggressively pursued research investment over the past few years, particularly in the life science, a new report finds the state is still struggling to build a sufficient pool of highly-skilled workers for its high-tech companies. The study, which was conducted at the behest of 19 local economic development organizations, finds the state has not yet made a complete transition from an agriculture- and real estate-based economy to one built on high-tech industry and innovation. Interviews with statewide stakeholders also confirmed there is a continuing need in the state to support innovations-based entrepreneurs through economic development organizations.

Complete descriptions of these opportunities and others are available at http://www.ssti.org/posting.htm.

Gov. Charlie Crist signed the fiscal year 2008-09 budget into law last week, allocating nearly $79 million for energy-related projects to increase research and stimulate development and commercialization of alternative and renewable energy sources throughout Florida.
 
The Energy Diversity Package approved by lawmakers is significantly different from the $200 million proposal outlined by Gov. Crist earlier this year, with only a few of the original proposals left intact (see the Feb. 6, 2008 issue of the Digest). However, the appropriation is welcome news for the state’s technology-based economic development strategy, as Florida is one of many states facing a decline in revenue. Last week, Gov. Crist ordered all state agencies to reduce spending by 4 percent in the coming fiscal year.
 
Lawmakers appropriated funding for the following projects under the Energy Diversity Package:

Florida Gov. Charlie Crist paid a visit to Wall Street last week to celebrate the signing of a new law that will increase the state retirement fund's investment in high-tech industries. Under the new legislation, the Florida State Retirement System will dedicate up to 1.5 percent of the system's trust fund to technology and growth investments. The Miami Herald estimates that this could provide nearly $2 billion for high-tech industries in the state.
 
The new legislation also will double the number the number of non-pension state dollars that may be used for alternative investments in venture capital firms, hedge funds and direct investments in portfolio companies. This will make $18.4 billion available for initiatives like the Florida Opportunity Fund, which was approved last year.
 
Florida's $130 billion retirement system is one of the largest public pension systems in the country. State Senate Commerce Committee documents cite the largest system, the California Public Employees Retirement System (CalPERS), as a model of a pension fund that has successfully employed economically targeted investments as a part of the state's economic development strategy. In 2002, CalPERS dedicated 17 percent of its funds into economically targeted private equity investment, according to the document.
 
In Florida, these economically targeted investments will have to offer similar returns to other pension activities, but also offer economic benefits such as job creation or new tax revenues. The bill specifically defines technology and growth industries in this case to mean alternative investments in business sectors, including space technology, aerospace and aviation engineering, computer technology, renewable energy, and medical and life sciences. Alternative investments will be limited to 10 percent of overall investments.
 
The bill also sets aside $20 million in state funds for a competition based on the Ansari X PRIZE program. That program offered a $10 million award to the team that could design the best reusable spacecraft capable of safe and affordable commercial flights. The state of Florida will award $40 million, half from the state and half from private sources, to the company or individuals who produce the most significant advancement toward designing and building a reusable space vehicle between 2009 and 2014. Florida's lieutenant governor will chair the programs, which is intended to spur competition on entrepreneurial investment in the space industry following the close of NASA's space shuttle program.
 
Read the governor's press release on the new pension strategy at: http://www.flgov.com/release/10027

Since the inception of the HOPE scholarship program in Georgia 15 years ago, the number of state-sponsored merit-based scholarship initiatives to increase the number of students attending in-state colleges and universities has increased throughout the country. One such statewide initiative, Florida’s Bright Futures Program, was established in 1997 and has since become the second largest merit-based scholarship program in the U.S. At the recent annual forum of the Association of Institutional Research held in Seattle, Dr. Shouping Hu of Florida State University presented a paper examining the possible unintended consequences for student bachelor degree enrollment in the STEM fields before and after the implementation of Florida’s program.
 
The research finds in the two years before Bright Futures was introduced, enrollment in the STEM degree programs was at 48.0 percent of total baccalaureate enrollment in 1995 and 47 percent in 1996. In the two years after the program was started, STEM enrollment dropped to 39.2 percent in 1998, then to 37.7 percent in 1999. This represents a nine percentage point decline when comparing the two-year intervals, even though the total number of students in the STEM fields were “essentially stable” over the entire period.
 
Additionally, students receiving Bright Futures scholarships from the state were more likely to be enrolled in a STEM degree field than non-recipients, especially for the students that were provided the highest level of the Bright Futures Scholarships, according to the paper. For example, in 1999, the research found 45 percent of Bright Futures’ full-tuition scholarship recipients were enrolled in the STEM fields, compared to 34.2 percent STEM enrollment for partial-tuition scholarships and 29.3 percent STEM enrollment for students who did not receive any scholarship. When controlled for factors such as gender, race and participation in free and reduced lunch programs, this pattern of STEM enrollment between scholarship recipients continued.
 
Even though this research found participants in Bright Futures were more likely to choose STEM degrees than non-recipients, there was a “substantial and significant” decline in the overall STEM enrollment rates before and after Florida began the scholarship initiative. Hu contends one plausible explanation for the decrease in STEM enrollment rates is the need for students to maintain or ameliorate their class grades in order to continue receiving funds or to increase their eligibility for a larger award. Fields perceived to be more difficult to attain higher grades may be avoided.
 
The paper, Merit-Based Financial Aid and Student Enrollment in Baccalaureate Degree Programs in Science and Engineering: What Can Florida’s Bright Futures Program Tell Us?, is not yet available online, but the author can be contacted via: shu (at) coe.fsu.edu.

Offering customized workspace such as wet laboratories and specialized research equipment is one of the many benefits provided by technology-focused incubators. Access to university research, business mentoring and administrative support services often accompany the reduced rent facilities with the goal of growing technology companies into successful, self-sustaining enterprises. Following are select announcements of recently launched incubators and partnerships from across the nation. 
 
GateWay Community College recently received a recommendation from the Phoenix Parks, Education, Bioscience and Sustainability subcommittee of the Phoenix City Council to enter into an intergovernmental agreement with the college to build a bioscience incubator laboratory with wet lab space, the Arizona Republic reports. The wet lab would be a minimum of 5,000 sq. ft. and located near the Phoenix Biomedical Campus.
 
Colorado’s first aerospace business incubator will provide services, less the office space, for companies involved in space technology and resource development. The 8th Continent Project at the Colorado School of Mines announced a $150,000 grant from the Colorado Economic Development Commission will be used to serve 14-15 start-up companies per year. Funding from the commission is being matched two-and-a-half dollars for every one dollar through cash and in-kind contributions from 8th Continent’s founding partners.
 
Enterprise Florida, a public-private partnership serving as the state’s primary organization devoted to statewide economic development, announced last month the new Florida Institute for Commercialization of Public Research will be based at the Florida Atlantic University Research & Development Park. Created by the legislature last year, the institute is a “one-stop shop” to facilitate new venture creation and showcase technology and product development growing out of research from Florida’s public universities.
 
The Tavistock Group announced plans to build a $50 million, 100,000-square-foot wet lab and biotech incubator facility in Lake Nona, situated near the University of Central Florida College of Medicine and the Burnham Institute for Medical Research, reports the Orlando Business Journal. Construction is expected to begin in 2009.
 
An initial $1.15 million grant from the Indiana Economic Development Corporation will provide start-up costs related to The Hammond INnovation Center, an 8,200-square-foot incubator designed to support high tech start-up companies. Purdue University-Calumet will manage the facility. 
 
Purdue Research Park broke ground last month on its third building, a 105,000-square-foot technology incubator dubbed Purdue Technology Center II. The Purdue Research Foundation hopes to attract businesses in the fields of life sciences, information technology, and advanced manufacturing and logistics. A $3 million donation from a Purdue University alumnus is helping to finance the $14.5 million project, according to the Journal and Courier.
 
The University of Kansas Medical Center will build a regional wet lab incubator for life sciences start-up companies with help from a $3 million federal grant, according to the Kansas City Business Journal. The planned 40,000-square-foot incubator will house companies started by faculty researchers from universities in the region and entrepreneurs who license locally generated research, the article states. The Kansas Bioscience Authority and Kansas University Medical Center announced they will finance the remaining cost, which is expected to be another $3.25 million.
 
To accelerate Baltimore’s bioscience industry, an agreement was signed earlier this year by the developer of Baltimore BioPark and Baltimore City’s technology incubator, the Emerging Technology Center (ETC), to coordinate incubation and leasing activities for early-state bioscience companies. The new BioInnovation Center provides flexible, modular lab suites with wet lab and office space. Under the agreement, ETC will provide business mentoring and incubation assistance to early-stage life science and bioscience companies. In return, Bio Park will promote ETC services to tenants and prospects and offer laboratory space to tenant companies, according to a press release.
 
The new Business Engagement Center at the University of Michigan (UM) opened earlier this month. The center shares 17,000 sq. ft. with the recently relocated UM Office of Technology Transfer. The two offices will work together to strengthen UM ties to business and community partners.
 
Missouri Gov. Matt Blunt announced a North Kansas City nonprofit organization was approved for $150,000 in tax credits through the state’s Small Business Incubator Program. The facility will provide incubator services for businesses in technology and life sciences. In collaboration with the University of Central Missouri Innovation Center and the Small Business Technology Development Center, the new Avvio Center will provide training, workshops and seminars to tenants.
 
Farleigh Dickinson University in New Jersey launched a business incubator last month focusing solely on sustainable start-up and early-stage companies in alternative energy, the environment, waste reduction, urban agriculture, transportation, and business information.
 
A new round of federal funding earlier this year prompted construction of a new technology incubator at SUNY Fredonia State College. Previously operating within a temporary facility, the $150,000 earmark enables construction of the new 21,000-square-foot incubator in Dunkirk, reports Buffalo Business First. An extension of the university’s main campus in Fredonia, the incubator will house approximately 30 start-up companies within varied technology sectors. Completion is slated for next year.
 
A new 300-acre corporate campus being developed by Triangle North in partnership with Vance-Granville Community College will include a biotech incubator for start-ups in the biotechnology industry. 
 
Clemson University received final approval from the State Budget and Control Board on its request of $5 million to begin construction on a new Innovation Center at the Clemson University Advanced Materials Center. The 28,000-square-foot facility will house Clemson University spin-off companies, entrepreneurial start-ups and larger companies relocating to South Carolina that focus on advanced materials, nanotechnology and biomaterials.
 
Marshall University and the Huntington Area Development Corporation entered into an agreement last month to build a new biotech incubator, reports The State Journal.  Located near the university’s Forensic Science Center, the incubator will serve biotechnology spin-off companies that originated at Marshall University.
 
University Research Park in Madison, Wis., announced in March plans to build a new, 65,000-square-foot accelerator building to house life sciences companies that have moved beyond early-stage development. The building will be located south of the MGE Innovation Center, a larger incubator facility designed for early-stage companies.

Beginning in 2003 with its $510 million investment to lure the Scripps Research Institute (see the Oct. 31, 2003, issue of the Digest), the state of Florida has drawn national attention over the past few years for its aggressive pursuit of major life science research institutions. This year, however, it looks like that strategy will have to be put on a temporary hiatus.
 
After extended debate about broadening the sectors that benefit from the Innovation Incentive Fund (IIF) – the source of money used to bankroll the post-Scripps package of incentives available to these institutions – the Florida legislature has decided not to replenish the fund altogether. Though funding may resume in future years, the fund is currently depleted and state leaders are considering reprioritizing their economic development initiatives in light of changing economic conditions.
 
The IIF was established in 2006 to lure larger R&D projects and to take advantage of opportunities to improve the state's innovation economy. Since that time, the fund has mostly been used to attract branches of some of the world's most recognizable life science institutions including the Burnham Institute for Medical Research, SRI International, the Max Plank Society, the Torrey Pines Institute for Molecular Studies, and the Vaccine and Gene Therapy Institute. The fund also provided $80 million for the Miami Institute of Human Genomics.
 
Part of the rationale for the investments targeted to a single sector was to develop a life science cluster in the state. While the original facilities of many of the induced research institutions reside in close proximity to each other in Southern California, Florida’s cluster is taking on a more dispersed shape. Click here to view a map of Florida's six life science investments through the IIF and the Scripps deal.
 
That support, however, was costly. From Scripps through the final deal of the IIF, the state has invested nearly $1 billion. The fund was initially seeded with $200 million in 2006 and renewed with $250 million in 2007. Though Enterprise Florida proposed another $250 million investment this year, the state's overall revenue shortfalls prevented even a $25 million proposal from passing.
 
Scripps and the six IFF organizations have promised to create a total of 1,693 direct jobs. The state is counting on much more than that being created by ancillary and other indirect jobs, as well as additional life science businesses wanting to locate in the area given the concentration of bioscience research centers.
 
While the state's Quick Action Closing Fund will receive another $45 million for the year – and bioscience deals are eligible for those funds along with any other potential relocation – it appears Florida will have to slow the pace of its long-term biotech strategy.

The end of the space shuttle program in 2010 has many state and local governments uncertain about the future of the aerospace industry. A recent NASA report estimated that as many as 10,000 contractor jobs could be lost at spaceflight centers across the country by the time the program ceases operation. Florida's John F. Kennedy Space Center would be the hardest hit, with as many as 80 percent of its current workforce lost in the next 2-3 years. To prepare for that loss, the state has begun a campaign to reorient its aerospace industry by supporting companies focused on the next generation of spaceflight technologies. This will include leveraging Florida's significant presence in life sciences research to support the development of technologies that will be particularly vital with the rise of private, manned space launches and space tourism.
 
Last week, Florida Governor Charlie Crist announced a new partnership between the state and SPACEHAB Inc., a leading provider of commercial space services such as satellite launch processing and the design of modules that improve living conditions on spacecraft. SPACEHAB will collaborate with the state to support a new space-based, biotech corridor anchored at the Space Life Science Laboratory at Kennedy Space Center. The first priority of the new corridor will be to develop a space-based infectious disease model to help ensure the health and safety of space travelers.
 
Space Florida, a special district created by the state legislature in 2006 to promote the state's aerospace industry, will provide capital investment to support the new initiative and will give companies access to research facilities at the Space Life Science Lab. The agency also will help companies enter the aerospace/biotech market by facilitating partnerships with other companies and government agencies and other types of business assistance. SPACEHAB has active agreements in place with many international space organizations, such as the Japan Aerospace Exploration Agency, which Florida hopes to use to provide markets for these new companies and increase the state's profile as a global aerospace and biotech leader.
 
This latest effort will leverage Florida's substantial investment in the life sciences sector over the past few years. In addition to high-profile recruitment of the Scripps Research Institute, the Max Planck Institute of Bioimaging, the Torrey Pines Institute for Medical Studies, and the creation of the Miami Institute for Human Genomics, the state has also been increasing its investment in life science research at its universities. In 2007, the University of Florida received a record $583 million in research funding, including a 92 percent increase in state funding. Much of this new funding was directed to the university's Health Science Center, which has helped to expand the state's life science research presence into the central and northern areas of the state.
 
The new aerospace/biotech initiative also will complement Space Florida's ongoing effort to attract private aerospace companies to the state. Earlier this month, Governor Crist announced that the agency was aggressively pursuing more than 50 space-related firms for the state's commercial space market, particularly the Space Coast. Though many of these companies develop technologies for space launch and vehicle design, the agency is now targeting companies involved in space-related services, products and technologies for improving living conditions in space.
 
Find out more about these initiatives at: http://www.SpaceFlorida.gov

Gov. Charlie Crist outlined several new alternative and renewable energy initiatives aimed at diversifying the state’s economy and creating high-wage jobs in his fiscal year 2008-09 budget recommendation. Many of the new proposals would be financed by tapping into the state’s budget reserves and relying on casino and lottery revenues.

 

The governor’s proposal invests $200 million in energy-related research and commercialization projects, along with rebates and tax credits for consumers, that build on the policy framework of the Serve to Preserve Climate Change Summit held last summer. Funding is directed to implement new research priorities for the state, including:

Gary Margules was appointed vice president for research and technology transfer at Nova Southeastern University.