SSTI Digest

A minimum $500 million 10-year investment to encourage biotech and entrepreneurship may soon become a reality for Kansas. With Gov. Kathleen Sebelius' approval of the Kansas Economic Growth Act, Kansas will set in motion a variety of new programs to encourage research, innovation and technology commercialization. Much of the state's multimillion-dollar initiative is carried by its biotech element. A newly-created Kansas Bioscience Authority will oversee and administer the investment, with the goal of recruiting 25 eminent and 35 rising star scholars at state universities. The independent public agency also will provide funds for developing lab space and equipment to conduct biosciences research. Other programs to be run by the Authority include a research incentive program pairing bioscience companies with Kansas universities, a technology transfer program, and a program to identify patents with commercial potential. In addition, the Kansas Economic Growth Act includes several tax proposals to encourage the growth of bioscience firms (see the Jan. 30, 2004, issue of the Digest). Funding for all…

SSTI looks at paper on research parks Last week's issue of the SSTI Weekly Digest included a brief review of a report which, in our opinion, included the use of statistics to potentially advance the discussion of what comprises effective tech-based economic development (TBED). Perhaps econometricians and other academic researchers may take issue with particular elements of the Milken Institute's approach, data set, equations or conclusions, but the model makes sense logically even to those of us without advanced degrees in statistics. This week, SSTI turns its editorial attention to a recent working paper by Scott Wallsten and issued jointly by the American Enterprise Institute (AEI) and the Brookings Institute,Do Science Parks Generate Regional Economic Growth? An Empirical Analysis on their Effects on Job Growth and Venture Capital. This paper in our opinion represents how statistics and evaluation can result in faulty conclusions from a poorly structured model. The paper provides several lessons in what not to do when attempting to evaluate the effectiveness of TBED programs. After…

With its economy already outpacing the average growth for the member states of the Organisation for Economic Co-operation and Development (OECD) for the past five years, the Czech Republic is injecting 348 million euros ($417.6 million US) into several tech-based economic development (TBED) initiatives. CzechInvest will coordinate development of strategic components of the nation's business environment including: the development of science and technology parks, incubators and technology transfer centers; subsidies for applied research projects undertaken by companies of any size; and a wide range of support for small and medium enterprises. Based on the Czech Republic's population of 10.2 million people in 2003, the country's commitment on a per capita basis would be the equivalent of the U.S. making an $11.8 billion investment in state and local TBED. Using Ireland and Spain as models, the Czech Republic's focus with the funds is to further develop its overall business infrastructure and build key sectors, including the life sciences, microelectronics and semiconductor industries. The…

When first proposed in 2000, the concept was radical, controversial and expensive. Simply give a wireless laptop to all seventh and eighth grade students and teachers in the entire state of Maine. The problem of expense, initially estimated to be $50 million for 35,000 laptops, took on greater significance as the state's revenues began to decline. Former Governor Angus King persisted and, 16 months later, a scaled back $30 million program allowed seventh-graders to use the computers in class and sign them out for use at home. The following year, the program was expanded to include eighth-graders. As those students, who have now used laptops for two years of instruction, Internet research and homework, move into ninth grade, the State Board of Education has unanimously endorsed a statement urging the state legislature to expand the computer program into the high schools. But is the state's investment making a difference, even with the attractive $300 price negotiated with Apple for each laptop? The anecdotal evidence regarding decreased absenteeism, increased student…

Plagued by job loss and fierce global competition over recent years, several new reports indicate the manufacturing sector is beginning to see a revival as the industry continues to undergo long-term restructuring. Brief summaries of each report are provided below: Manufacturing’s Performance and Prospects Manufacturing has lost approximately three million jobs since 1998 due to structural changes in productivity and overseas competition, according to a report by Mark Zandi of Economy.com. Commissioned by the National Governors Association, Manufacturing’s Performance and Prospects examines the state of manufacturing in the U.S., the impact of productivity and global competition on manufacturing jobs, and the prospects for growth. According to Zandi, the worst of the downturn is over as several industries such as computer hardware and software, transportation, and distribution that were previously struggling are now expanding and demand for manufactured products is rising. While the free fall in manufacturing is over, the report indicates, it will continue to be a weight…

SSTI looks at Milken's State Technology & Science Index During a presidential election year, perhaps more than any other time, the public is bombarded with statistics: voter surveys, polls, budget deficits, climate change, changes in employment or stock markets or trade, and others. It becomes difficult to determine which figures are true and which have been spun or manipulated for a particular purpose. The value of a statistic should be directly related to its quality. Unfortunately, how widely particular statistics are disseminated and repeated more often determines their acceptance or "truth." Numerous statistics and rankings are often used in the marketing and promotional efforts of state and local economic development agencies and regional chambers of commerce. As a result, an observer has to look closely at what is being measured when multiple states or communities proudly claim to be first in something. They obviously are not all number one, unless, for instance, City A's claim is on an absolute basis, City B tops the list on a per capita basis, and City C has looked at the data as a percent…

The launch of a targeted small business development program designed to foster the success of new high growth, high-tech firms in Vermont was announced last month at a press conference by Sen. Patrick Leahy, Gov. James Douglas and University of Vermont (UVM) President Daniel Fogel. The Vermont Center for Emerging Technologies (VCET) is a key component of Gov. Douglas’ strategy to support business innovation and growth in Vermont. Since the governor has taken office, $500,000 in state funding has been appropriated to support incubator initiatives and an additional $125,000 in the fiscal year 2005 budget has been requested specifically for VCET. VCET is intended to bring together the resources of existing and planned business incubators in Vermont. The center will tap the technology potential in Vermont and transform that into jobs, Sen. Leahy said. Also benefiting from the initiative is UVM’s research and development department, which has experienced a steep rise in federal funding in recent years. With the VCET structure in place, research at the university could present significant…

Hydrogen and fuel cell technologies in Illinois could produce sustainable economic growth and environmental benefits for years to come, suggests a report recently released by the Illinois Coalition. Prepared by the Illinois 2 H2 Partnership, The Hydrogen Highway: Illinois’ Path to a Sustainable Economy and Environment looks to establish the state as an international leader in the fuel cell industry. A true hydrogen economy for Illinois may be years into the future, the report explains, but incremental steps taken today may accelerate and define that future, specifically the hydrogen highway. An area of approximately 120 miles along interstate 90, the hydrogen highway would be a corridor of hydrogen energy demonstration projects with a fueling station situated about every 20 miles. The highway's purpose is twofold -- stimulate the economy while protecting the environment. Illinois already possesses some advantages over technology-driven states such as California, Connecticut, Michigan and Ohio, the report argues. For example, Illinois has utilized its universities, federal labs, nonprofit…

The jury's still out on the appropriate role or effectiveness of most tax credits to encourage tech-based economic development (TBED), but most politicians and economic development practitioners believe their state is at a competitive disadvantage without at least a few breaks. With Gov. Bob Wise's recent signature on two bills, West Virginia becomes the latest state to add two tax credits of potential value for the state's growing tech community. Both the High Growth Business Investment Tax Credit and the Strategic Research and Development Tax Credit offer incentives for investment in growth-oriented research and development (R&D) businesses and assisting R&D companies in the early stages of operation. Guidelines for the High Growth Business Investment Tax Credit include: Individuals or businesses investing in other businesses eligible for the Strategic R&D Tax Credit may receive a credit of up to 50 percent of their angel or seed investment. Unused credit may be carried forward for up to four years after the initial investment. Investors or investor groups…

Separate reports from the Foundation Center and The Chronicle of Philanthropy indicate that foundations will continue to see their assets recover in 2004. The studies provide differing views on estimated growth in giving for the upcoming year, however. A notable increase in funding will be seen as foundations’ assets recover, according to the Foundation Center’s annual report, Foundation Growth and Giving Estimates 2003 Preview. The persistent decline of the stock market in 2002 and into early 2003 is cited as a central reason why foundation giving experienced by an overall 2.5 percent decrease in 2003. However, the percentage decline in giving was less than expected considering the loss of more than 10 percent in foundation assets between 2000 and 2002. The center's study indicates that independent foundations, including family foundations and new health foundations, comprise the vast majority of funding. Their total giving declined by an estimated 3.3 percent in 2003, following a 7.6 percent drop in independent fund assets in 2002. Corporate foundations, the next largest sector to provide…

America loves lists of the top "fill in a number" for almost anything. When the almost anything is actually useful information, then a community or state's ranking can help guide public policy discussion toward moving up or down the list as would be deemed most desirable. Some rankings, however, tend to serve the lists' developers more than public good (such as those based on ad sales in magazines or poorly constructed samples, formulae or data). Other rankings, because of their wide distribution or coverage in the media, can have unintended negative consequences for policy development. AEA's Cyberstates report is perhaps a good example of how, for many, the definition of high-tech is now limited to or synonymous with businesses in information and communications technologies. The "Most Unwired Cities and Colleges" lists developed by Intel Corp., makers of the Centrino™ mobile technology, seems to cross list types. Wireless Internet accessibility does allow greater freedom for communication and web-based productivity, but it also requires currently the purchase of broadband service, a router…

Best practices and a how to guide written by real practitioners of angel financing are just two of the new resources available through the Angel Capital Association (ACA). The following papers for understanding and growing a local seed capital activity within a region are available through the association's website: Business Angel Groups Growing in North America - white paper establishing trends, organizational structures and general best practices for operating angel groups, established as a result of Angel Organization Summit I. Angel Investing Group Best Practices - Managing Members, Guiding Presentations and Finding the Right Deals - white paper produced as a result of Angel Organization Summit II. Primer for Angel Investment in Canada - National Angel Organization (NAO), led by Chair Henry Vehovec - project compiling best practices, research and ideas intended to encourage competitiveness on Canadian angel investors. Published by NAO with financial support from RBC Financial Group. In addition, ACA provides a number of tools to guide communities as they develop local angel…