SSTI Digest

Congratulations to Steve Zylstra, his staff and the 1,500-plus members of the Pittsburgh Technology Council as they celebrate the organization's 20th anniversary.

Rhode Island, like nearly every state in the country, is facing a projected budget deficit in FY 2004. To deal with a $175 million or 6.6 percent shortfall, 21 agencies are facing budget reductions in Governor Don Carcieri's first budget request to the Rhode Island General Assembly. However, demonstrating his commitment to "make strategic investments to promote job growth," Gov. Carcieri calls for increased support for several tech-based economic development initiatives. Topping the agenda is doubling funding for the Slater Centers of Excellence program to $5 million in FY 2004. Gov. Carcieri also proposed eliminating the state's graduated licensing fees to help Rhode Island start-up tech firms and spending $800,000 to jump-start two biotech initiatives.

Three-quarters of the nation's cities surveyed by the National League of Cities (NLC) report they are less able to meet their financial needs this year than they were a year ago. This is a sharp increase over the 55 percent of cities that said they were less able to meet financial needs in last year's survey by NLC, the oldest and largest national organization for American cities. The preliminary survey results are based on initial responses from officials in 145 cities to NLC's State of America's Cities Survey on Fiscal Conditions, conducted in February 2003.

Factors contributing to the worsening financial picture in cities include a decrease in aid from state governments. More than one-third of the surveyed cities (36 percent) said the decrease in state funds is the largest source of revenue decline in their cities. At the same time, most cities (81 percent) report they increased spending on public safety in 2003.

Washington State still ranks first nationally in the creation of new companies, according to the third annual Index of Innovation and Technology released by the Washington Technology Center (WTC), a state-funded organization that fosters technology employment growth. The Index also shows the number of patents earned by Washington inventors increased by 11 percent from 2000 to 2001.

WTC's Innovation Index considers more than 40 key indicators to characterize the health of the state's innovation economy. Growth, financial capacity, human potential, competitiveness, quality of life, and innovation capacity in Washington all are assessed.

Minnesota manufacturers are cutting payrolls, bidding low and scrambling to compete with the giant threat of cheap labor and enhanced manufacturing facilities offered in China, according to a recent survey of Greater Minnesota manufacturing companies.

Funded by Minnesota Technology, Inc. (MTI), the state's lead technology-based economic development organization, the survey finds that most of Minnesota's outstate manufacturing companies are facing increased competition, specifically from Chinese manufacturers. Half of all respondents said that Chinese competition is hurting their business, and others suggested manufacturers have yet to see the benefits of trade with China touted by many free marketers. Of those who said Chinese manufacturing had hurt their business:

Around the country, the current funding climate is forcing some technology groups to explore new relationships with each other, including consolidation. In other cases, it just makes good sense. For example, two of Maine's environmental and energy technology organizations are joining forces with the goal of advancing job growth, R&D and new product commercialization within their overlapping industries.

The Environmental Business Council of Maine (EBCM) and the Maine Environment & Energy Center (Maine E2 Center) are combining to create the Environmental & Energy Technology Council of Maine (E2 Tech Council). The new organization will service an industry sector that includes more than 200 companies and nonprofit organizations employing approximately 4,000 workers.

Encouraging innovation is an important part of the bottom line for many state and local technology-based economic development programs. The advantages or "spillover effects" of growing localized knowledge economies or concentrations of researchers and technology firms has been studied by academia for more than two decades. Much of the attention of that analysis and of subsequent public policy has been on the knowledge or process side of innovation.

Knowledge in the "knowledge economy" can be an extremely difficult entity to measure with any consistency. Innovation and technological change, both key drivers of economic growth, are elusive to grasp and even harder to measure reliably in geographic terms. Patent activity, however, has long been considered an important measure of innovation in the New Economy. Patents are seen as an insightful proxy to help measure and understand economic growth through technological change and for research on the economics of innovation.

The National Science Foundation (NSF) has announced it intends to award approximately $30 million in FY 2005 funding under the Science and Technology Centers (STC): Integrative Partnerships program. NSF is encouraging proposals for high quality innovative research projects that undertake investigations across or within disciplines.

The STC program invests federal funds in areas consistent with NSF's goals to enable the nation's future through discovery, learning and innovation. STCs conduct research in partnerships among academic institutions, national laboratories, industrial organizations, and other public-private entities. Their benefit to society is accomplished via a three-pronged approach:

To better formulate technology and telecommunications policy, U.S. Secretary of Commerce Don Evans has proposed merging the Department's Technology Administration (TA), the National Telecommunications and Information Administration (NTIA), and the e-commerce policy functions of the International Trade Administration (ITA) into a single agency. The merger is intended to complement the recent convergence in the private sector of technology and communications companies.

Secretary Evans is proposing to reorganize departmental personnel and management to facilitate coordination in domestic and international policy development. Under Secretary of Technology Phil Bond would oversee the new agency that would focus on such issues as technical standards, spectrum management, and technology and e-commerce policy issues.

In these tight state fiscal times, many government functions would view level funding with the previous year as very good news. Since tech-based economic development (TBED) programs are investments toward economic prosperity, conventional wisdom would hold that legislatures would shield these types of investments from deep cuts. The current discussions to eliminate the Colorado Governor's Office of Technology and the entire Texas Department of Commerce, however, suggest that the jury is still out on how future-looking state budgets will be for next year.

Minnesota Governor Tim Pawlenty recently unveiled a plan to help make Minnesota a leader in biosciences. Governor Pawlenty says the state's history, expertise and economic infrastructure make it better prepared than most other states to capitalize on the bioscience industry.

Presenting his ideas to the Minnesota Biotechnology Industry Organization (MNBIO) last week, Governor Pawlenty said bioscience advances represent the next frontier and that they will "revolutionize big parts of (the state's) economy within the next two decades."

The governor's proposal includes the following: