SSTI Digest

Aiming to close a $1.7 billion budget shortfall in the current fiscal year and address a projected $13.7 billion deficit in FY10, New York Gov. David Paterson yesterday unveiled a deficit reduction plan as part of his FY 2009-10 executive budget request. The combined executive budget and deficit reduction plan propose consolidating the state's three economic development agencies and redirecting funds to support a new grant and loan program for targeted investments in select industries.

Investment by angel groups declined at least ten percent this year, according to the Angel Capital Association's (ACA) annual survey of angel group leaders. In January and February, about 55 percent of these leaders predicted that both their number of deals and total invested dollars would increase in 2008. Half of them now admit that their predictions for the year were overly optimistic. Still, many investors reported healthy activity during the year and many expect better results next year.

ACA estimates average angel group investment in 2008 to be $1.72 million, down from $1.94 million last year. The average number of closed deals shrunk 16 percent from 2007 to 6.1 per group. Meanwhile the average deal size grew to $280,936, up six percent. The change mimics the increasing preference for fewer and larger deals among venture capital firms.

It won't have smokestacks or be pushing automobiles or computer chips off an assembly line, but the $550 million plum that landed in East Lansing, MI last week is similar in size to many industrial recruitment/retention deals sought by conventional economic development efforts. This one, though, could have a longer lasting and higher quality economic impact compared to conventional recruitment/retention deals.

The Department of Energy announced it has chosen Michigan State University (MSU) as the future home of the next big thing in nuclear physics, a $550 million Facility for Rare Isotope Beams (FRIB).  FRIB research will involve experimentation with intense beams of rare isotopes-short-lived nuclei not normally found on earth. That research is expected to advance critical applications in the areas of materials science, medicine, and stockpile stewardship.

The University of Texas System Board of Regents recently approved $15 million in funding for three programs that will support innovation and extraordinary effort among its faculty. Two of these programs will make awards for teaching excellence, one for faculty at the University of Texas at Austin (UT Austin) and the other for teaching at the system's other eight universities. The third program will support a Center for Technology Commercialization at UT Austin to accelerate technology transfer and new venture creation. Each of these programs will receive $1 million annually for the next five years for awards and operations.

The two awards programs will recognize faculty for outstanding contributions to undergraduate education and will serve as an incentive compensation program to improve instruction. These one-time awards will range from $15,000 to $30,000. The Board plans to recognize at least 30 faculty members each year.

The Scottish Government announced last month a funding plan for the university system that directs more than 10 percent of current funding into a new Horizon Fund created to make targeted investments in research, technology transfer, and entrepreneurial development.

The funding proposal is part of an overall plan to expand the role of universities in helping the country recover from the current economic downturn. The plan was based on recommendations from a joint university taskforce established last year by the Cabinet Secretary for Education and Lifelong Learning.  The Future Thinking Taskforce set forth challenges for both the Scottish Government and Universities Scotland, which represents the country's 20 institutions of higher education.

In the "TBED People and Organizations" column of the Dec. 10 Digest, Oklahoma Gov. Brad Henry was incorrectly identified as the new chairman for the Southern Growth Policies Board.  Mississippi Gov. Haley Barbour serves as chairman for the organization and will host the 2009 annual meeting June 7-9 in Biloxi, MS. More information is available at: http://southern.org/conference/conf.shtml. SSTI apologizes for the error.

As governor of one of only a handful of states to project a surplus for the upcoming fiscal year, Gov. John Hoeven outlined additional funding for several initiatives supporting North Dakota's TBED strategy in the FY 2009-11 biennium. Investments centered on diversifying the state's economy through agricultural and energy research, 21st century workforce training, and higher education support in Science, Technology, Engineering and Mathematics (STEM) fields are prominent in the governor's budget recommendations.

This week, the Department of Homeland Security released its environmental impact statement comparing several locations nationwide regarding the future site of the National Bio and Agro-Defense Facility (NBAF).  After considering factors such as environmental, economic, technical, security and safety concerns, the preferred site is situated on the campus of Kansas State University in Manhattan, Kansas.

Despite projected deficits in several Western and Great Plains states, governors in Montana, South Dakota, and Wyoming recently unveiled budget proposals for the upcoming fiscal year, providing level or increased funds for research priorities and workforce training central to each state's economic vitality. The following is an overview of the budget recommendations outlined by the respective governors. Montana

Last week, Indian Prime Minister Dr. Manmohan Singh announced that the country would form a quasi-independent panel modeled on the U.S. National Science Foundation (NSF) to promote research in science and engineering. The new National Science and Engineering Research Board (NSERB) would make decisions regarding research funding and the creation of research centers around India.

The new board will oversee the distribution of funds associated with an unprecedented boost in Indian funding for scientific research. Prime Minister Singh announced that the country would double its investment in research from one percent to two percent of India's gross domestic product (GDP).

Two weeks ago, SSTI reviewed the TBED strategies states are advised to pursue as presented in the 2008 State New Economy Index released by the Information Technology and Innovation Foundation (ITIF) and the Kauffman Foundation (see the Nov. 19, 2008 issue of the Digest). The report compares numerous indicators that concentrate on the economic structure of states and the characteristics of new waves in the economy, opposed to measuring only state economic performance or state policies. As in previous editions of the Index, the measures are divided into five categories: knowledge jobs, globalization, economic dynamism, the digital economy, and innovation capacity.

The U.S. Census Bureau has released a new data series tracking employment changes at the establishment level. This data allows users to track the expansion and contraction of employment within existing businesses and creation and destruction of jobs through the birth and death of firms. In addition, the Census Bureau has broken down the data by firm size, age, sector and state.