SSTI Digest

Industrial research expenditures in the U.S. had a record single-year decline in 2002, according to the latest National Science Foundation (NSF) Survey of Industrial Research and Development. An inflation-adjusted decline of $8.6 billion was the largest-ever reported since the survey began in 1953. The 2002 tally, when measured in current dollars, also wins the ignoble distinction of reflecting the largest single-year absolute and percentage reduction at $7.7 billion and 3.9 percent, respectively. A 4 percent constant dollar increase in research spending by nonmanufacturing industries moderated the 11.7 percent drop posted by the manufacturing sectors. The dismal 2002 results follow record-high expenditures set as recently as 2000. The NSF Issue Brief presenting the first look at the survey results is available at: http://www.nsf.gov/sbe/srs/infbrief/nsf04320/start.htm

One of the most critical elements needed for a tech-based economy is a strong higher education system that supplies a source of research ideas, new technologies and a skilled workforce. Studies have shown that individuals with college degrees earn more money, obtain better jobs, pay more taxes, and are more apt to perform volunteer work. Given higher education's important role, several states have been re-examining how higher education can play a larger role in their economy. SSTI highlights some of those efforts below. Colorado Colorado enacted a higher education initiative earlier this month, becoming the first state to offer college vouchers. Gov. Bill Owens signed Senate Bill 189 into law, which provides individual vouchers of $2,400 per year for Colorado students to attend public colleges and universities beginning in the fall of 2005. The bill also offers up to $1,200 for low-income students to attend one of three non-public institutions in the state. Recent reports from the Associated Press, however, indicate that budget restraints may force the amount to be cut to from $2,400 to $…

To encourage innovation in health care and speed the development of new medical technologies, the Department of Health and Human Services (HHS) announced last week it is forming an internal task force to weigh new ideas and promote new solutions. The task force will involve HHS’ Centers for Disease Control and Prevention, Centers for Medicare & Medicaid Services, Food and Drug Administration and National Institutes of Health. Department Secretary Tommy Thompson has charged the task force with developing steps to speed the availability of new medical technologies such as drug and biological products and medical devices. “This task force will look for opportunities across the department to promote speedier access to new innovative medical technologies that can improve people’s health and save lives,” Secretary Thompson said. “Often, a new technology must clear several hurdles in different parts of HHS before it can reach consumers. By better coordinating this process across HHS, we can streamline the way we do business and make safe, effective medical technologies more quickly and readily…

Advocates for deregulating Kentucky's broadband industry argued doing so would result in increased rural access to high speed Internet services. They'll have the chance to prove it with Gov. Ernie Fletcher's signature this week on deregulation legislation, HB 627. The governor has promoted the rural broadband initiative since taking office in December. According to the Progressive Policy Institute, Kentucky currently ranks 41st in the nation in broadband deployment. Improving broadband access also has been a priority of connectKentucky, a three-year-old public-private policy partnership between the Kentucky Office of the New Economy, private industry, Kentucky's universities, and the Center for Information Technology Enterprise. Along with the bill signing, BellSouth Corp., whose president serves as co-chair of connectKentucky, announced it was expanding DSL Internet service to 59 more Kentucky communities between now and the end of the year. "Broadband is essential to building a more competitive local economy," Gov. Fletcher said. "In this bipartisan effort to encourage…

Financial success for any start-up tech firm more often depends on adequate financing and proper management than the specific technology, experts say. Two tech-based economic development organizations in Pittsburgh have formed a new alliance to offer entrepreneurial life science firms with an eye toward greater sustainability and profitability. The Pittsburgh Life Sciences Greenhouse (PLSG), a partnership to put the region's life sciences industry on a fast track for growth, and Idea Foundry, a nonprofit organization that helps entrepreneurs transform their ideas into sustainable businesses, entered into a joint funding agreement for early stage medical device companies. Under the agreement, PLSG will participate in Idea Foundry's transformation fellowship application process to jointly determine if start-up company applicants are viable business ideas for the partnership. Upon approval, PLSG and the Idea Foundry will jointly fund and provide complimentary development assistance. The Greenhouse will provide its funding through its affiliate, the Pittsburgh Biomedical Development…

Concerns for wheat and organic markets remain, however While state governments across the country are overwhelmingly in favor of health-related biotechnology, agricultural biotechnology has received a somewhat less enthusiastic reception. That may be changing - however slowly - according to new information released last week by the Pew Initiative on Food and Biotechnology. The group finds state legislatures in 2003 considered significantly more legislation in support of ag biotech than in the entire 2001-2002 legislative session. This increase appears to mark a shift away from efforts to curb violent destruction of field crops and test sites – the topic that dominated the last legislative session. At the same time, the Pew Initiative analysis finds resistance to ag biotech in the Northern Plains States (including Montana, North Dakota and South Dakota) where some growers are concerned that wheat markets may be negatively impacted by the introduction of genetically modified (GM) wheat. In the Northeast (including Maine, Massachusetts and Vermont), state legislators have sought to protect…

Defense 2003 SBIR Phase II Awards The Department of Defense (DoD) distributed $766.9 million in awards under fiscal year 2003 Phase II Small Business Innovation Research (SBIR) Program competition. A total of 1,080 awards averaging more than $710,000 were made. California led all states, landing 235 awards worth $166.8 million. As a share of the nation's total, California captured 21.7 percent of all FY 2003 Phase II SBIR funding issued by DoD. Massachusetts secured $114.1 million through 153 awards, or 14.9 percent of the U.S. total. Only one other state, Virginia, had $50 million or more in awards. West Virginia, with five awards totaling $6.2 million, had the highest average award at $1.24 million. Hawaii's two awards also were above the $1 million average award mark. SSTI has made available a listing of FY 2003 Phase II DoD SBIR awards at http://www.ssti.org/Digest/Tables/052404t.htm. For each state and the District of Columbia, the number of awards, award total, average award size and ranking are shown. SSTI thanks Christine Villa of BRTRC for supplying the…

Sixty-two organizations in 44 states and the District of Columbia will receive a total of $3.5 billion in tax credit allocations through the second competitive round of the New Markets Tax Credit (NMTC) Program, the Treasury Department recently announced. Several of the selected organizations have a national market perspective. Established by Congress in 2000, NMTC attracts private-sector capital investment into urban and rural low-income areas to help finance community development projects, stimulate economic opportunity and create jobs in the selected areas. The NMTC Program permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). Substantially all of the taxpayer's investment must in turn be used by the CDE to make qualified investments supporting certain business activities in low-income communities. The credit provided to the investor totals 39 percent of the initial value of the investment and is claimed over a seven-year credit allowance period. …

A new economic development council formed in South Carolina has been charged with two objectives: help reshape the state’s economy and raise its per-capita income. Members of the South Carolina Council on Competitiveness, a group of business, academia, government and economic development leaders, were announced earlier this month. During an events session in Columbia, co-chairs Gov. Sanford and Ed Sellers, the chairman and chief executive officer of Blue Cross Blue Shield, met with the council members, asking them to advance the goals of a report that grew out of the South Carolina Competitiveness Initiative. The Initiative was a collaborative effort including individuals from the Palmetto Institute, the South Carolina Department of Commerce, the Palmetto Business Forum, the South Carolina Chamber of Commerce, the South Carolina Department of Parks and Recreation, and the University of South Carolina and managed by the Monitor Group. The report, prepared by the Monitor Group, includes recommendations to raise income levels and make the state more economically competitive: Enhancing the…

A new report from the Advanced Technology Program (ATP), A Toolkit for Evaluating Public R&D Investment, provides useful information to anyone interested in evaluating publicly-sponsored research and development (R&D) programs. While the report focuses on more than 40 evaluations that have been performed for ATP, it offers one of the most comprehensive and understandable overviews of evaluation methods and applying those approaches. In one section, the authors provide a general framework for evaluation, discussing evaluation fundamentals, including the objectives and steps of evaluation, and choosing various methods of evaluation. The advantages and disadvantages of a variety of approaches, including surveys, case studies, bibliometrics, historical tracing and expert judgment, are described. The bulk of the report is focused on how the evaluation methods have been applied to ATP, drawing on various studies commissioned by ATP between 1990-2000. Technology-based economic development practitioners will be able to use this section to consider how ATP's experience may be applied to their…

Community colleges can play an important part in shaping the workforce in the science and technology (S&T) sector. For example, with the growth in biotech, there is an increasing need for technicians in the biotech field and workers are finding that they can prepare for these jobs rather quickly in community colleges. Technicians in biotech manufacturing facilities generally have two-year specialized training or an associate degree from a technical or community college, according to the U.S. Department of Labor. With overall employment expected to increase, particularly in biotech, the field is attracting more displaced workers. North Carolina community colleges are embracing this new role as they prepare for the development of six new biotech centers to be hosted within the state’s community colleges. Earlier this month, the North Carolina State Board of Community Colleges accepted recommendations to distribute $4.4 million in grant awards to the centers. According to the North Carolina Community College System, all of the centers will help develop expertise, curricula and specialized…

The Department of Defense (DoD) distributed $152.9 million in awards under its fiscal year 2003 Phase I Small Business Innovation Research (SBIR) Program competitions. A total of 1,882 awards were selected from a pool of more than 15,000 proposals across all states and the District of Columbia. DoD's SBIR Program provides up to $850,000 in early-stage research and development (R&D) funding directly to small technology companies. Between SBIR and the department's Small Business Technology Transfer Program, which supports small companies working with researchers at universities and other research institutions, DoD funds more than $1 billion annually in early-stage R&D projects. States were able to compete for DoD SBIR funding twice in 2003 through two competitive solicitations. California led all states with nearly $33 million and 403 awards. Massachusetts followed with $23.7 million and 290 awards, but converted on more of its proposals than the leader, at 16.5 percent. South Carolina, winning 11 awards through 50 proposals, had the highest conversion percentage of all states,…