SSTI Digest

Within two years, Indiana's agency for promoting economic development will become a quasi public-private partnership similar in concept to the Michigan Economic Development Corporation. While in Minnesota, an agreement that resolved the budget impasse gives the state's lead science and tech organization a 12-month timeline to fully privatize from the state's support. Indiana's and Minnesota's are the latest moves to test the largely uncharted waters of privatized public technology-based economic development, moves that stem, in part, from governors and state legislatures trying to maintain momentum in the knowledge economy without identifying alternate revenue sources within state government. Indiana Legislation passed this spring will take much of the activity within the $83 million Indiana Department of Commerce, fold in a half dozen other state agencies, including the $37.5 million 21st Century Research and Technology Fund, and create the quasi-public Indiana Economic Development Corporation (IEDC) before the end of FY 2005. The two-year time frame…

The Army last week announced the creation of a $25 million Venture Capital Initiative (VCI) to satisfy a critical Army technology requirement — obtaining lighter, more efficient power sources for individual soldier systems. "Power and energy technologies are an opportune area for Army investment, particularly because the Army's interests parallel those fueling the commercial market," emphasized Dr. A. Michael Andrews, Army Chief Scientist. The goal of the VCI is to jump-start promising technologies in the area of portable power and energy to lighten soldiers' loads as they operate worldwide, often in extreme environments and under austere conditions. It will focus its investment activities on innovative technology companies, including those that may not normally do business with the Army. The VCI will be managed by a nonprofit corporation modeled on the Central Intelligence Agency's venture capital initiative and funds will be provided from basic research and applied research accounts. The Army selected OnPoint Technologies, Inc., of Maitland, Fla., to manage the VCI. …

A 19-year veteran of the technology-based economic development field has co-authored a guide that outlines strategies for growth in the knowledge-based economy. The Keys to Growth in the New Economy:Investing in Discovery, Engineering, and Entrepreneurship draws on the experiences of John Ahlen, who has led the Arkansas Science and Technology Authority (ASTA) since 1984. The report is co-authored by Mark Diggs, Chairman and CEO of Maryland-based Ontology Works, Inc. Drawing on Arkansas' experience, Keys to Growth serves as a technology-based economic development handbook for policy makers and community developers who are looking for an approach to economic growth that does not rely on industrial recruitment. Technology-based economic development offers a model for growth, Ahlen and Diggs argue. They outline five specific results that emerged from ASTA's experience: Investment in research infrastructure leads to greater returns as scientists convert small grants into major awards from federal agencies. Ahlen and Diggs report a return of $7 for every dollar invested.…

Royalties on product sales from technology developed by Canadian and U.S. academic research institutions jumped to $845 million in 2001, up 12 percent from the previous year, according to the AUTM Licensing Survey: FY 2001. Gross licensing income received from licenses and options, however, declined from $1.26 billion in FY 2000 to only $1.071 billion in FY 2001 as 7 percent fewer new licenses and options were executed. Prepared annually by the Association of University Technology Managers (AUTM), the survey is a comprehensive report featuring data about technology licensing activities collected from a record-high 198 U.S. and Canadian universities, teaching hospitals and research institutions. Technology transfer of academic research is receiving considerable attention by state and local technology-based economic development officials based on the anecdotal success and profits earned at a handful of universities. Columbia University alone, for instance, earned nearly $130 million in royalties in FY 2001. Visions of licensing income ever generating substantive income relative to the…

Initial public offerings (IPOs), the darlings of the dot-com boom, would be put on the endangered species list if they were a plant or animal — based on how few have been seen in the past year. Investor sentiment toward IPOs has been almost as negative since the bubble burst as the IT hype was positive before. But is the aversion to IPOs warranted? Have IPOs really become more risky than they were in years past? Stavros Peristiani of the Federal Reserve Bank of New York takes on the issue in his recent report, Evaluating the Riskiness of Initial Public Offerings: 1980-2000, and concludes yes, IPOs are more risky, but the blame cannot fully lie with the information and telecommunication technology explosion. Also, and perhaps more surprising for the tech-based economic development community, Peristani's models suggest "companies taken public by top-tier underwriters or funded by venture capital exhibit higher relative volatility and a lower likelihood of survival." Peristani employs two approaches to investigate the post-issue riskiness of IPOs for the 1980-2000 period. First, he…

A bill that includes $20 billion for state fiscal relief was to be voted on by U.S. senators Thursday, according to the Federal Funds Information for States (FFIS), a joint subscription service of the National Governors' Association and the National Conference of State Legislatures. Half of the $20 billion State Fiscal Relief Fund would come through an increase in the federal share of Medicaid. The remainder would be divided 60/40 between state and local governments if S. 1054, the Jobs and Growth Tax Relief Reconciliation Act of 2003, is enacted. The $20 billion in fiscal relief, to be spread over fiscal years 2003-2004, could go toward education or job training, health care services, transportation or other infrastructure, law enforcement or public safety, and other essential government services. Senate debate on the Jobs and Growth bill began Monday, May 12, after the House passed reconciliation legislation a week ago allowing for $550 billion in tax breaks. The Administration's request was for $726 billion. S. 1054 is available in its entirety at http://thomas.loc.gov…

Whether it is oil, gas, logging or fishing, only one other state in the nation, Alaska, is as dependent on natural resource extraction as Wyoming. Using tech-based economic development to diminish the impact of the boom and bust cycles experienced by all "colonial" economies to diversify the state's economy has been one of the goals of Alaska's gubernatorial leaders since 1988, with the creation and continuation of the Alaska Science and Technology Foundation (ASTF). The decision 15 years ago to provide ASTF with an initial $6 million appropriation and a $100 million endowment, which has generated more than $120 million in income, was significant and unique. It also was gutsy for a state that depends heavily each year on Congressional pork and doles out $1,500 dividend checks to each resident from the interest earned on the state's $24 billion permanent fund from oil sales. That strategy ends abruptly today, per Governor Frank Murkowski's request, as the ASTF endowment is shifted to the help balance the state's general fund. In a March 18 letter to its grantees, ASTF officials…

The continuous decline of venture capital investing persisted in the First Quarter 2003 with total investments of $3.8 billion, down from the prior quarter of $4.3 billion, according to the latest PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey. A total of 623 companies received funding in the first quarter compared to 726 companies in the fourth quarter of last year. Industry leaders cited the uncertainty associated with the war in Iraq and the lackluster economy as prime contributors to the cautious investment pace. Venture capital investing fell sharply starting in 2001 after the correction in the public markets and has steadily drifted downward ever since. In terms of dollars, investment in the first quarter of 2003 was the lowest since the third quarter of 1997. The number of companies receiving funding was the lowest since the third quarter of 1996. Tracy Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers, said, “The reality is that venture capital will not lead the economy out of…

To help build the state's technology sectors, Governor Jeb Bush and the State Board of Education have selected Florida's first three Centers of Excellence. The Centers are designed to foster innovative, cutting-edge technology research at Florida’s colleges and universities, develop commercially viable applications for that research, and recruit high-tech industries and thinkers to the state. The three projects are: Center of Excellence in Regenerative Health Biotechnology to be established at the University of Florida; Florida Photonics Center of Excellence at the University of Central Florida; and, Florida Center of Excellence in Biomedical and Marine Biotechnology at Florida Atlantic University. The Centers of Excellence program was enabled during the 2002 legislative session as part of the Florida Technology Development Act. This Act authorized the use of $30 million to fund up to five Centers of Excellence as recommended by the Emerging Technology Commission, also established under the Act. Each of the Centers will receive $10 million to spur new facilities,…

The National Association of Regional Councils (NARC) is holding on June 4 its fourth telecast on economic development. NARC is a nonprofit membership organization that assists regional councils and metropolitan planning organizations nationwide. Its telecast, "Three Rural Economic Development Strategies," will feature Dr. David Sampson, Assistant Secretary of Commerce, and Mark Drabenstott, Vice President of the Kansas City Federal Reserve to discuss economic development in rural areas. Ernesto Sirolli, founder of the Sirolli Institute, also will be discussing creative entrepreneur strategies. The telecast airs at 3 p.m. For more information, visit http://www.narc.org and click on Economic Development in the left frame.

Richard C. Atkinson, the president of the University of California system since 1995, will receive the prestigious 2003 Vannevar Bush Award from the National Science Foundation for lifetime contributions to the nation in science and technology. Mitch Daniels, the director of the White House Office of Management & Budget, has announced his resignation. Sylvia Goodman is leaving her position as director of technology and innovation at Louisiana Economic Development. Marc Holtzman, Colorado's former science and technology advisor, is taking the position as president of Denver University. The Board of Directors for Virginia’s Center for Innovative Technology (CIT) announced last week their selection of Peter Jobse as the new president of CIT. Jobse has been CIT’s executive vice president and chief operating officer since joining the organization in October 2002. Ed Linsenmeyer, with the Naval Surface Warfare Center, has been elected to serve as the Chair of the Federal Laboratories Consortium for Technology Transfer at the FLC's recent annual meeting. Larry…

Richard C. Atkinson, the president of the University of California system since 1995, will receive the prestigious 2003 Vannevar Bush Award from the National Science Foundation for lifetime contributions to the nation in science and technology.