SSTI Digest

Current trends presented in the 2010 edition of the National Science Board’s biennial Science & Engineering Indicators suggest as early as the 2012 edition, the U.S. will no longer leads the world for a key indicator: total R&D expenditures – unless corrective action is taken.

The bump in U.S. spending from the 2009 ARRA/Stimulus may delay the inevitable until 2014, however. Regardless, the overall tone of the report suggests the previous decade of flat spending and little coordinated national innovation policy has had the anticipated negative impacts relative to other countries.

"The data begin to tell a worrisome story," said Kei Koizumi, assistant director for federal R&D in the President's Office of Science and Technology Policy. “U.S. dominance has eroded significantly."

For instance:

Entering its tenth year covering governors’ State of the State, Budget and Inaugural Addresses, SSTI’s Tech Talkin’ Govs series highlights new and expanded TBED proposals from across the nation. The first edition includes excerpts from speeches delivered in the following states:

Arizona Gov. Janice Brewer, State of the State Address, Jan. 11, 2010

“… I am taking the following specific actions to make Arizona even more competitive in creating jobs.

First, I am announcing the formation of a Governor's Jobs Cabinet. This team of key state agency directors will cut through the red tape and the green tape to speed job creation.

“Second, I will be allocating a significant portion of remaining federal stimulus funds directly to bring new jobs to Arizona. Specifically, I am devoting $10 million in one-time federal stimulus funds for job training. …

In an effort to improve the percentage of city residents with college degrees, Philadelphia Mayor Michael Nutter announced his administration will be opening an office within City Hall to help potential students considering higher education. The “PhillyGoes2College” office will direct residents to assistance with filling out financial aid forms and applications, preparing for standardized admission tests, and writing college essays. In addition, the first-term mayor stated a goal of attaining up to 1,000 fully funded college scholarships for city students from the region’s universities by the end of 2012, according to the Philadelphia Inquirer. More details on the PhillyGoes2College initiative is available at: http://www.phila.gov/residents/education/fafsa.html.

The Baton Rouge Area Chamber (BRAC) has released the second and final component of its strategy advocating the need to advance a tech-based economy throughout Louisiana. The white paper focuses on the topics of entrepreneurship, workforce development, risk capital, and coordinating TBED efforts at the state level. For example, BRAC calls for all returns from state funds invested in venture capital firms to be reinvested, for regional angel networks to be supported, and for the state’s angel investor tax credit to be reinstated. The second part of The Innovation Economy in Louisiana is available at:

http://www.brac.org/research

The Los Angeles County Economic Development Corporation has approved what is being called the region's first consensus strategic plan for economic development. The plan includes support for local research and commercialization activities, sector-based worker training and placement programs and provides assistance to entrepreneurs. Read more at: http://www.lacountystrategicplan.com.

President Obama announced five new public-private partnerships to train more than 10,000 new math and science teachers over the next decade. The partnerships, part of the White House's "Educate to Innovate", represent a $250 million investment in STEM education. Read the announcement at: http://www.whitehouse.gov/the-press-office/president-obama-expands-educate-innovate-campaign-excellence-science-technology-eng.

Providing strong evidence for how public investments in research and TBED pay off even on a short time horizon, a recent impact analysis calculated the total impact from the first $19.9 million North Dakota spent over the past four years for the establishment of 20 Centers of Excellence across the state. The analysts from North Dakota State University reported a combined cumulative impact of $329.5 million for the 30 months ending June 2009. The total includes both direct reported results and estimates for indirect impacts. Already, the centers and their client businesses reported direct employment growth of 921.5 jobs. The centers also had captured $115.5 million in match and federal research leverage from the state’s initial investment. The analysis concluded because of the Centers, seven new spin-off companies were created, five companies expanded within North Dakota, and five companies expanded to the state. An additional $42.4 million has been disbursed to the centers or awaits future allocation by the state.

Since the start of the recession, the strongest performing metropolitan areas are located in the southern midsection of the U.S., especially in Texas, and around upstate New York and the Missouri River Valley, according to the most recent edition of the Brookings Institution’s MetroMonitor series. The brief examines each of the largest 100 metropolitan areas in the U.S. using 3Q 2009 data gauging changes in employment levels, unemployment rates, gross metro products, and housing prices. Brookings found only six metro areas, Albuquerque, Austin, McAllen, San Antonio, Virginia Beach, and Washington D.C. had regained their pre-recession peak of gross metro product by the end of the third quarter. The latest version of Brookings’ MetroMonitor is available at: http://www.brookings.edu/reports/2009/06_metro_monitor.aspx

U.S. venture capital fundraising and venture-backed exits improved marginally in the fourth quarter of 2009, despite having a very slow year overall, according to the National Venture Capital Association (NVCA). Venture fundraising increased to $3.8 billion in the last quarter, an 82.6 percent increase over the previous quarter but still far short of fundraising levels in recent years. While investors expect activity to grow in 2010, most predict that the industry will remain smaller than its scale in the 1990s and 2000s, with fewer firms and increasing focus on late-stage deals.

Overall, 2009 was the weakest year for fundraising since 2003. Investors committed only $15.2 billion to 120 funds last year, down from $28.6 billion in 223 funds in 2008, which was also a difficult year for fundraising activity. In 2007, investors committed dollars to 250 funds. Last year fewer funds were raised than any year since 1993. The NVCA report suggests that the decrease in the number of funds points to an industry that is rebuilding itself as a leaner, more efficient enterprise, with fewer firms and more experienced investors.

Give a star academic researcher a full year to reflect on what the world understands so far about regional innovation and city-region dynamics and to offer suggestions to guide future economic development initiatives to encourage growth and the results are valuable for both his homeland of Canada and its southern neighbor, the U.S. The Conference Board of Canada named University of Toronto professor David A. Wolfe its 2009 CIBC Scholar in Residence in May of 2008. His lecture and the resulting report, 21st Century Cities in Canada: The Geography of Innovation,  is enlightening, insightful, and frustrating – the final adjective because we should, but do not, have the same well grounded and succinctly articulated understanding of how American cities-regions function systemically to encourage or thwart innovation and competitiveness.

During the upcoming legislative session in Missouri, lawmakers will consider a proposal by Gov. Jay Nixon to create a funding source aimed at attracting top scientists, commercializing research, recruiting and building science infrastructure, and creating capital programs for early-stage technology companies. The Missouri Science and Reinvestment Act (MOSIRA) would dedicate an annual portion of new tax revenues generated by biotechnology companies to a newly-created state fund administered by the Missouri Technology Corporation. Funding would be reinvested in a wide-range of technology-based economic development programs designed to grow science and technology companies across the state. More information regarding MOSIRA is available from the governor's office. Read more...

Providing access to startup capital, promoting biotechnology, and investing in the green economy to create and grow jobs are among the priorities of Gov. Pat Quinn's Illinois Economic Recovery Plan presented during a speech in December. The governor's plan would establish an Angel Investment Tax Credit program to allow investors making an early-stage investment in a technology startup to receive a capped credit against their Illinois tax bill. The governor also will propose the creation of a state fund to provide matching grants for technology research companies competing for federal funding and explore the idea of establishing a venture capital fund of funds. Additional strategies to incentivize green manufacturers to retool existing operations also are outlined in the governor's plan, which is available at:  http://www.illinois.gov/publicincludes/statehome/gov/documents/Illinois Economic Recovery Plan Final.pdf.