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SSTI Analysis: Tech Councils Adapt with Economic Times

April 05, 2002

[Note: SSTI defines a technology council as a regional entity that is membership-based and independently funded with science and technology-based economic development as one of its primary goals. National trade associations and government-created technology councils which serve in an advisory or policy role are excluded from this discussion.]

The economic climate of the past year has created financial challenges for several regional technology councils and local industry associations. While a few of the 200+ councils around the country have received brief funding from state or local governments, most are dependent on membership dues and fees for a significant portion of their revenue base. For many small businesses, outlays for membership dues, conference fees, and subscriptions are reduced as revenues decline.

The dot-com crash, with the resulting bankruptcies, closures, mergers and consolidations of IT companies, shrank the market of potential council participants in several localities. Particularly hard hit, obviously, are the IT-related technology councils. For example, California's Computer & Electronics Media Association is gone. The three-year-old Ann Arbor IT Zone is laying off its four part-time staff and subletting its office space this month and becoming an all volunteer organization. The New York New Media Association has seen its membership decline from 8,200 to 6,300, according to a recent New York Times article. The article also says efforts over the past four years to brand a New York City district as Silicon Alley are dead.

Consolidation is the key to survival for some technology councils. The Miami Internet Alliance, founded in 1999, and the Technology Forum of South Florida, established in 1997, are merging to become the South Florida Technology Alliance. The Western Massachusetts Software Association went through two iterations before merging with the IT/Communications Cluster of the Regional Technology Alliance to become the broader Technology Entrepreneurship Council.

To cut costs, the Northeast Ohio Software Association (NEOSA) is spinning off its angel network activities. Supported originally by a $150,000 grant from the state, funding for the angel network and its two full-time staff would have become the responsibility of NEOSA, an IT trade association.

All news is not bad on the tech council front. Regional technology councils and the role these non-governmental organizations serve in tech-based economic development continues to flourish across the country, and new technology councils have been established recently, including an information technology council in Greensboro, North Carolina, and the East Central Technology Council in North Dakota. The 150-member East Tennessee Technology Council is on stronger financial footing since it secured its first corporate sponsor last week, with an undisclosed contribution from Compaq.