SSTI Digest

No region of the world encapsulates the aspirations of many metro and regional technology-based economic development programs as Silicon Valley, particularly to the benefits of having a cluster of technology companies feeding off of each other to the mutual benefit of all. The Valley was the global tech leader during the heyday of the IT boom, but is undergoing a tremendous structural shift since the dot-com bubble burst.

Area leaders point out the technology shift is just the latest chapter in the economic history of Silicon Valley — the move from defense business to integrated circuits in the 1970s, to personal computers in the 1980s, and to the Internet in the 1990s. As a result of the changes, Silicon Valley may become a model for other regions in how to prepare and negate the negative side of being cluster-dependent.

Central California's Regional Technology Alliance has changed its name to the Inland Empire techSOURCE.

Annually, SSTI looks at the various addresses given by the nation's governors at the beginning of the year. Over the next several weeks, the SSTI Weekly Digest will profile the excerpts concerning programs, policies and issues immediately affecting the tech-based economic development community.

The states are facing their worst fiscal crises in more than 50 years — the latest combined deficit figures were a whopping $90 billion. It should not be lost on the governors the important role tech-based economic development plays in strengthening state and local economies through higher wage jobs and more competitive businesses. Do their speeches bear that out?

Note: With this issue, the SSTI Weekly Digest is launching a new occasional "Programs with Results" series — articles profiling a variety of technology-based economic development programs that have been around many years and are yielding positive results. Our goal is to help answer the question "What Appears to Work?" with models that potentially could be duplicated in other states, regions or communities.

The California Technology Investment Partnership (CalTIP) provides matching grants of up to $250,000 to support California companies that receive competitively awarded federal research and development grants for projects in emerging technologies with the potential to be commercialized in the state. Begun in 1993 in response to federal defense conversion activities, CalTIP has evolved to focus almost exclusively on supporting small technology-based firms with financial awards and technical assistance through the state's six Regional Technology Alliances (RTAs).

Bay Area Regional Technology Alliance (BARTA) has been renamed the TechVentures Network as the Bay Area's leading source of access to financing, business data and services for emerging technology.

Joined by actor Christopher Reeve and several of California's leading biotech researchers, Governor Gray Davis Sunday signed legislation designed to promote stem cell research in California.

"Stem cell research is responsible research that could potentially save millions of lives," said Gov. Davis. "With world-class universities, top-flight researchers and a thriving biomedical industry, California is perfectly positioned to be a world leader in this area. I am determined to keep California at the forefront of medical research and scientific innovation."

True technology growth for Orange County hinges on a broader, more supportive infrastructure, argues the latest research report by the Los Angeles Regional Technology Alliance (Larta).

Raising the Curtain: The Technology Economy of Orange County examines the state of the region's health and stability, the obstacles that curtail its growth, and the strengths that will help move it forward as a leading economic and technology destination.

Backed by technology industries in electronics, computer hardware, bioscience, telecommunications and computer software, Orange County's diverse economy positions it "to be more stable and resilient than many other well known technology regions, such as Silicon Valley," the report states.

"California must continue to increase funding for science and technology in its university systems or risk losing one of its most important comparative advantages," warns the Milken Institute in the State Technology & Science Index: Comparing and Contrasting California.

Commissioned by TechVentures Network and the California Technology Trade and Commerce Agency's Division of Science Technology and Innovation, Milken set about to develop a series of indicators to measure the performance of California’s high technology-based economy against the rest of the country.

The result is a set of 73 indicators arrayed across five composites: R&D inputs; risk capital and infrastructure; human capital investment; technology and science workforce; and technology concentration and dynamism.

U.S. Commerce Secretary Don Evans has awarded a $6.44 million grant, the largest-ever economic development grant given by the Bush Administration, to Advancing California’s Emerging Technologies (ACET) to expand the Oakland Alameda Bio Tech Incubator to a 40,000-square-foot, state-of-the-art laboratory.

Once completed, the newly expanded building will be the largest of its kind west of the Mississippi, ACET director Sam Doctors said in a press statement. Housing nearly 40 high tech, biotechnology, environmental and energy start-up companies, the incubator will include fully equipped laboratory and office space, videoconferencing facilities, and other shared amenities.

Manufacturing is a robust driver of California's economy according to a Manufacturing Matters: California's Performance and Prospects, a new report prepared by the Milken Institute. The analysis was prepared for the California Manufacturing and Technology Association.

Milken found that the share of wages dependent upon manufacturing is above the national average. Average manufacturing wage and income was $54,600 in 2000 for California; the national average was only $43,400. Average California wages in computers and machinery is almost double the national average. Milken concludes these variances make California manufacturers targets for other state's industrial recruitment efforts.

The legal ban on non-compete contracts may have played a role in and continues to affect the development of the high tech sector in California. This is the conclusion of Rob Valletta, Research Advisor, in the August 16, 2002, edition of the Federal Reserve Bank of San Francisco Economic Letter. The article, On the Move: California Employment Law and High-Tech Development analyzes the relationship between high tech development and states that do not legally allow non-compete contracts.

Using at- least squares statistical analysis, Valletta concludes that when non-compete contracts are prohibited, employee mobility and knowledge transfer are enhanced. While employees may not be able to share specific trade secrets, general industry knowledge can be shared readily. This freedom can then play an important role in the advancement of innovating technology sectors.

Michael Anastasio is the new director of the Lawrence Livermore National Laboratory, effective July 1. He was serving as deputy director of strategic operations for the lab.