SSTI Digest

Amid criticism from taxpayers, legislators in Hawaii agreed to renew the widely debated bill that extends high-technology tax credit for another five years, without a provision requiring the disclosure of companies that receive the credits, the Honolulu Advertiser recently reported. Act 221 was first enacted in 2001 to encourage high-tech business in Hawaii and to diversify the state’s economy away from tourism and the military. Based on a survey of businesses that claimed the credits, the state Department of Taxation says the tax credits helped generate at least 600 new jobs in 2002, with an average salary of $46,000. Hawaii taxpayers grew upset when they learned that credits from the bill were being used to finance one-shot movie deals, the Honolulu Advertiser reports. The bill, which allows for confidentiality of companies involved, investors and the amount of credits claimed, makes it difficult to verify actual benefits of the program. Under the renewed bill, companies will now be required to disclose more information to the Department of Taxation, but not to the public. Gov. Linda…

Competition for state, federal and industrial funding to support university research is increasingly fierce in the U.S. Growing interest in developing academic research capacity, eroding state support for higher education and federal R&D budgets barely keeping pace with inflation, let alone absorbing the growing percentage dedicated to Congressional earmarks, are some of the reasons. Universities or investigators able to claim being the "best" based on some sort of respected ranking could help influence state legislators, reviewers in a federal competition, or decision makers within industrial R&D facilities. New Zealand is about to launch an alternative, and radical in U.S. terms, approach to allocating federal research support to its universities, the $18 million Performance-based Research Fund (PBRF). Universities that previously received funding allocations according to student enrollment  -- similar to how most U.S. states support higher education -- will now see funding disbursed through PBRF, which grades the quality of research produced within each institution. Quality of teaching is…

Washington State remains poised to capture more benefits from its technology-driven economy, according to the Index of Innovation and Technology released last month by the Washington Technology Center (WTC). As the state's lead organization to support science and technology, WTC publishes the Index to provide the state's decision makers with annual benchmarks for setting policy and  public investments to promote technology-based economic development. The fourth annual provides analysis of more than 40 statewide measures and 12 regional indicators for evaluating the state’s economic growth with respect to technology industries. Innovation capacity, new company creation, company closings, patent generation, top technology patent areas, patents by industry, federal funds for research and development, and research and development (R&D) expenditures are all assessed. Young companies and emerging technologies continue to be primary drivers of Washington's potential, the report shows. The state ranks eighth nationally in innovation capacity. Patent generation also continues to be strong, up 10…

The National Business Incubation Association (NBIA) recently held its 18th International Conference in Atlanta, honoring excellence in business incubation programs, graduates and client companies. NBIA, a nonprofit organization, works to advance incubation and entrepreneurship. This year’s recipients include: The New Century Venture Center (NCVC) of Roanoke, Va., a nonprofit mixed-use incubator, was awarded the top honor, the Randall M. Whaley Incubator of the Year award. NCVC has assisted more than 75 technology and service companies since 1996, and its 25 graduates have created nearly 200 new jobs in the Roanoke region. The University of Central Florida (UCF) Technology Incubator was named Incubator of the Year in technology. During the incubator's four years of operation, client companies have created more than 400 jobs and generated $140 million in revenues. The Howard County Economic Development Authority of Columbia, Md., received the Incubator Innovation Award for its Sustainable Business Excellence process, which provides quantitative measures of business…

Cleveland Fed: "Innovation, Growth, and Economic Policy in an Environment of Change," At a time when manufacturing jobs are relenting to the pressures of an expanded service sector, foreign competition and productivity growth, the idea of economic prosperity has a renewed urgency with innovation as the greatest strength and flexibility the greatest asset, argues a new report from the Federal Reserve Bank of Cleveland. In the 20-page essay portion of its 2003 annual report, Growth and Economic Policy in an Environment of Change, the fourth federal reserve bank district sets forth to answer, “What is the source of economic prosperity?” The report examines innovation's role in economic development, reviewing the theories that have shaped the nation's economic history with an eye on current and future challenges. The Federal Reserve Bank of Cleveland 2003 Annual Report is available at: http://www.clevelandfed.org/Annual03/index.cfm Women Entrepreneurship Special Focus of May '04 Minneapolis Fedgazette Higher levels of confidence, the desire for independence, and…

The Department of Commerce is accepting nominations for the 2005 National Medal of Technology awards, the nation’s highest honor awarded by the President to America's leading technological innovators. The Medal was first awarded in 1985 following its creation in 1980 by Congress. It is given annually to individuals, teams or companies for accomplishments in the innovation, development, commercialization and management of technology, as evidenced by the establishment of new or significantly improved products, processes or services. Past awards have been made in five main areas: technology product and process; technology management and policy; technology concepts; technology and technological manpower development; and environmental technology. The deadline for submitting 2005 nominations is July 28, 2004. Nomination forms and guidelines may be downloaded from the National Medal of Technology website at http://www.technology.gov/Medal/Nomination.htm.

Cutbacks in service loom after 63 percent budget reduction The Manufacturing Extension Partnership (MEP) is one of 15 finalists for the 17th Annual Innovations in American Government Award. Administered by the Ash Institute for Democratic Governance and Innovation at Harvard University's Kennedy School of Government in partnership with the Council for Excellence in Government, the award recognizes creativity and excellence in public sector service delivery. MEP is the only economic development program included among this year's finalists, selected from more than 1,000 applications. MEP, a state-federal partnership, supports a network of more than 1,400 professionals in more than 300 locations around the country providing technical assistance, support services, engineering services, and business advice to small manufacturers. Five of the award's finalists will be selected to receive one of five $100,000 prizes in July. The cash is something MEP sorely needs right now. After seeing its budget cut 63 percent this year, MEP program administrators are still figuring out how to maintain the program's…

With only two months to go in the 2004 fiscal year for most states, 32 are projecting small surpluses in the end - a sharp contrast to the situation they faced a year ago - according to a new report by the National Conference of State Legislatures (NCSL). At this time last year, states were still struggling to close a cumulative $21.5 billion budget gap. Now, they are working to close a total gap of $720 million, according to State Budget Update: April 2004. The surpluses are not large. And they did not accumulate painlessly, the report points out. These projected surpluses are the result of improved collections in major revenue categories and the difficult paring of programs. Nine states expect surpluses below 1 percent of their general fund budgets. In Florida, Nevada, Oklahoma, South Dakota and Wyoming, the surpluses are larger than 5 percent. But this breathing room comes after three consecutive years of fiscal crisis, when states had to cut funding in such core areas as education, healthcare and corrections. Some states tapped rainy day funds, increased fees or raised taxes on…

He may be more traditionally associated with gas-guzzling Humvees than anything remotely environmental, but Gov. Arnold Schwarznegger has become a big believer in alternative energy vehicles. The governor's recent call for creating a "Hydrogen Highway" by 2010 is, perhaps, the country's boldest commitment to getting hydrogen fuel cell vehicles on America's roadways anytime soon. It provides an example of how public-private partnerships, with the government serving as an early adopter of a potentially disruptive technology, could produce positive economic results for the state. The goal of the California Hydrogen Highway Network initiative is to catalyze a rapid transition to a clean hydrogen transportation economy through strategic placement of fueling stations and public investment in fuel cell vehicles, primarily businesses and light duty vehicles. An early network of 150-200 hydrogen-fueling stations throughout the state (approximately one station for every 20 miles on the state's major highways) would make hydrogen fuel available to the vast majority of Californians, the California Fuel Cell…

The U.S. Department of Homeland Security (DHS) recently selected Texas A&M University and the University of Minnesota to lead the second and third Homeland Security Centers of Excellence (HS-Centers). The department anticipates providing Texas A&M University, the University of Minnesota and their partners with a total of $33 million over the course of the next three years to address security in two key agricultural sectors -- foreign animal diseases and food security. The selections were made from 23 proposals submitted in response to a December 2003 broad agency announcement by DHS' Science and Technology Directorate. Site visits were conducted for  seven finalists before selecting the two new HS-Centers. Texas A&M University and its partners are expected to receive $18 million for the study of high consequence foreign animal and zoonotic diseases. Additional university partners include the University of Texas Medical Branch, the University of California at Davis, the University of Southern California and the University of Maryland. With $15 million of DHS funding, the…

Studies have shown a strong correlation between high-wage economic growth and university research activity. Examination of nearly every strong regional technology center across the country will reveal at least one research university within its boundaries. As a result, many state and local technology-based economic development (TBED) efforts strive to increase the quantity and quality of university R&D undertaken within their boundaries. One need look no further than the local cineplex to see an analogy for the rationale of one particular TBED strategy. Hollywood knows adding a well known actor to a movie's lineup guarantees some level of ticket sales at the box office. Similarly, many state and local TBED programs are financially supporting the recruitment and retention of exceptional academic researchers through endowed chairs, faculty positions or eminent scholars. Federal research grants, industrial R&D collaborations, exceptional graduate students and faculty, scientific community awareness, and patent filings are among the benefits a university or college expects to gain by enticing…

A study released last week by the Economic Development Administration (EDA) and Carnegie Mellon University's Center for Economic Development finds that, within a region, universities are best able to affect the growth of young, emerging clusters. The study, Universities and the Development of Industry Clusters, concludes a "university must have a large base of research and development in order to significantly impact a cluster..." For a university to have the maximum benefit for local cluster development, the institution must align services and community involvement with regional interests and industry clusters across a broad spectrum, not just in terms of technical knowledge and R&D. In other words, the university needs to actively address business, workforce and community issues in addition to developing an exceptional research capacity. Industry clusters occur when the markets interconnect a number of companies in a geographic region they serve and products they produce, according to the study. Efforts to support the growth of industry clusters are known as cluster development. "…