SSTI Digest

The Oklahoma Center for the Advancement of Science and Technology (OCAST) has provided the state an 8:1 return on its $78 million investment since 1993, according to From Concept to Commercialization, a new OCAST impact report, and accompanying press release. The state's leading organization for building a tech-based economy finds its client companies also have enjoyed a 90 percent survival rate. Formed in 1987 by state government leaders, OCAST nurtures start-up companies in the biotechnology, telecommunications and manufacturing industries through a spectrum of financial and technical assistance programs that ranges from early research through commercialization. The center's impact report highlights the successes of some of these programs. Since 1993, OCAST has funded 815 projects that have attracted more than $700 million in federal and private dollars through various programs, the report states. Roughly 46 percent of these projects is in the biotech sector, and 28 percent is in the telecom industry. Also, 10 percent is in advanced materials and chemical research, 9 percent in…

No region of the world encapsulates the aspirations of many metro and regional technology-based economic development programs as Silicon Valley, particularly to the benefits of having a cluster of technology companies feeding off of each other to the mutual benefit of all. The Valley was the global tech leader during the heyday of the IT boom, but is undergoing a tremendous structural shift since the dot-com bubble burst. Area leaders point out the technology shift is just the latest chapter in the economic history of Silicon Valley — the move from defense business to integrated circuits in the 1970s, to personal computers in the 1980s, and to the Internet in the 1990s. As a result of the changes, Silicon Valley may become a model for other regions in how to prepare and negate the negative side of being cluster-dependent. The continuing but evolving work of Joint Venture: Silicon Valley provides an example. The group recently published the 2003 Index of Silicon Valley, the eighth annual report on 37 indicators or measures of the region's health. The indices have been helping the…

Massachusetts Governor Mitt Romney recently announced a plan to spur job growth in the state by tapping the expertise of area business, community and education leaders through Regional Competitiveness Councils. Six such councils will represent the Berkshires, Cape and Islands, Central, Northeast, Pioneer Valley and the Southeast regions of the state. The Greater Boston area, due its size and diversity, will be approached on a cluster basis by working through existing technology-focused organizations, such as the Massachusetts Biotechnology Council. Each of the six councils is comprised of about 25 members from fields ranging from financial services and health care to manufacturing and tourism. In addition, key elected officials have been named as ex-officio members. The councils have been charged with a set of first tasks to perform, including: Conducting an in-depth analysis of their region's economic climate; Assessing local abilities to attract new companies; Identifying which companies and jobs are currently at risk; and, Devising a strategy to turn a region's…

Community buy-in to building a technology-based economy is vital for TBED success. Establishing a strong private sector commitment to science and technology can make a significant difference, particularly as elected officials are deciding what to cut or trim from the budget. TBED organizations use different approaches to get the buy-in. In states such as Massachusetts (see story in this Digest), the top-down direction from the Governor could provide the group critical access. Mississippi's grassroots approach to building tech councils, on the other hand, is designed to infuse a science and technology mindset throughout the state at the very local level — with a little financial and technical assistance from the state's lead TBED organization. Since Fall 2001, the Mississippi Technology Alliance (MTA) has awarded more than $90,000 in grants to communities around the state to establish tech initiatives. MTA provides business and industry support for cluster development organizations to help foster technology expansion in the state. Communities can receive a $1,500 grant to start up a technology…

More than $4.7 billion of venture capital was invested in 524 private companies, according to Growthink Private Equity Funding Reports for the Fourth Quarter 2002. Companies securing investments numbered 30 less than the previous quarter. Among major metropolitan areas, the San Francisco Bay Area continued to lead the nation with $1.43 billion in investments, or 30.5 percent of the nation's total, the Growthink data shows. Boston followed with $460.6 million (9.8 percent) and 58 deals, and Washington D.C., with 27 deals, was next at $274.3 million (5.8 percent). Dallas was the fourth leading metro area, where 15 companies raised $204.5 million. Along with Dallas, the Minneapolis/St. Paul metro area (eighth) moved into the top 10 with $141.5 million in VC investments. Chicago and Los Angeles both dropped out of the top 10, which totaled 67.6 percent of the nation's total fourth quarter activity. San Diego, New York City, Orange County (CA), Seattle and Research Triangle (NC) were the other leading metro areas. Growthink reports only private, U.S.-based companies that receive…

The U.S economy experienced a turbulent year in 2001. However, small businesses demonstrated resilience and strength according to the Small Business Economic Indicators for 2001, a report released by the SBA Office of Advocacy. The February 2003 report states that although economic activity was sluggish in the months leading up to September 2001, economic output grew for the year as a whole. In comparison to 2000, small businesses seemed to hold steady in 2001. The levels of employer firms and the self-employed were relatively consistent with previous year totals. While employer firm births showed a slight downward movement during the year and firm closures increased slightly, the most alarming number was the rise in business bankruptcies. SSTI has prepared a table presenting "business churning" statistics and rankings for all 50 states and the District of Columbia over a four-year period from 1998-2001 using data from the SBA indicator report. Business churning is a measure of new firm births and existing firm deaths as a share of total firms. This churning increases as the number…

Congress Finished FY 2003 Budget Last Night Congress wrapped up the Omnibus Appropriations Bill last night before recessing for the holiday weekend. The timing of the document's online release did not allow a complete review of the impact for tech-based economic development groups for today's Digest. Thanks, though, to assistance from the American Society of Mechanical Engineers, Association of American Universities and the Modernization Forum, SSTI does have numbers for selected elements of the Department of Commerce and the Small Business Administration. The figures below do not reflect the 0.65 percent across-the-board cut Congress imposed to limit the size of the bill's contribution to the national deficit. The complete budget document is available at: http://thomas.loc.gov/home/approp/app03.html and http://www.house.gov/rules/108_hjres2cr_text.htm Economic Development Administration — $320.765 million The level is $30 million below the President's FY03 request and $15 million less than the FY02 appropriations. The cut appears to be borne entirely by the…

Within the past hour, SSTI has learned that Congress zeroed out the $3.5 million for two programs that supported state SBIR/STTR technical assistance efforts. The omission of any mention in the FY 2003 Omnibus Appropriations Conference Report of funding for the Federal and State Technology Partnership (FAST) and Rural Outreach Program (ROP) was not a mistake in the draft as originally thought by the programs' proponents.   In FY 2002, FAST provided $100,000 matching grants to 27 state SBIR outreach and assistance programs. The ROP, which is targeted to those states that historically have under performed in the SBIR program, has provided support to 25 states since its creation only three years ago. Lists of recipients for both programs are available at: http://www.sba.gov/sbir/indexfast.html Although both programs comprise a small pool of money, each have proven critically important financially for state efforts to help small businesses in funding research and commercializing technology. In many cases, the federal funding made the difference between having at least one full-time person in the state committed to small tech firm assistance. The…

In SSTI's final look at the 2003 State of the State Addresses and Inaugural Addresses, we find the importance of building technology-based economies continues to be emphasized by governors across the country, despite – or because of – the down economy. Below are excerpts from speeches given in Michigan, Minnesota, Oklahoma, Rhode Island and Texas. Michigan Governor Jennifer M. Granholm, State of the State Address, Feb. 5, 2003 "To this end, I have committed my Administration to create a Technology Tri-Corridor. We will position Michigan to lead the world in the development of the technology-based industries likely to dominate the world economy in this new century. The Corridor will focus new technology business recruitment and development in three critical areas: the life sciences, the automotive industry and the emerging homeland security sector. "Already, our Life Sciences Corridor has nurtured the development of cutting edge bio-technology firms and made our state a leader in this important new field. The same emphasis can help us build on our automotive…

State budget gaps have grown by 50 percent in the last two months and state policymakers will work to resolve unprecedented budget shortfalls for the next 15 months, according to findings from the latest budget survey released by the National Conference of State Legislatures (NCSL). Based on information collected from legislative fiscal directors in late January 2003, NCSL reports that two-thirds of the states must reduce their budgets by nearly $26 billion between now and June 30, which ends the current fiscal year in most states. In November, when NCSL issued its last report, states projected a cumulative gap of $17.5 billion. States already had addressed a $49.1 billion shortfall as they crafted their fiscal year 2003 budgets. State legislatures face a minimum $68.5 billion budget shortfall for FY 2004, and with a third of the states unable to provide estimates for the NCSL survey, next year's cumulative budget deficit could rise significantly. Thirty-three states estimate budget gaps in excess of 5 percent, with 18 of those facing gaps above 10 percent. Sluggish revenues are…

With nearly $1 billion in federal R&D funding proposed for the new Department of Homeland Security, many states, universities and companies are exploring ways to be actively involved as R&D partners. Already home to several military and intelligence research activities, with proximity to Washington, D.C. in its favor, Virginia recently announced an effort to further strengthen its competitive position in the funding race. Last Friday, Governor Mark R. Warner announced the creation of the Virginia Institute for Defense and Homeland Security (IDHS), a university and industry research consortium dedicated to delivering solutions to support U.S. homeland security and defense objectives. More than 20 companies have already signed on as founding members to work with the 12 Virginia universities in the consortium. The Virginia IDHS will conduct research, education and technology transfer at member institutions and firms with an emphasis in the fields of telecommunications, biodefense, sensor systems and risk management. Additionally, industry consortium members will commercialize…

Governor Tom Vilsack has announced a plan to invest $50 million into the creation of a life sciences initiative to help establish Iowa as a leader in the life sciences. Developed with the Regents Universities, Iowa Business Council and leaders in Iowa's biotechnology industry, the biotech plan's success hinges on a three-part strategy: A New Mindset: creating a stronger and coordinated state approach for entrepreneurial ventures in biotechnology-related industries in Iowa. This will also include better coordination among the Iowa Department of Economic Development (IDED), Iowa Regents institutions, and private sector business leaders to attract economic opportunity that will help transform Iowa's economy. A Regulatory Framework: establishing a state regulatory framework that minimizes risks associated with bioengineered products, ensures safety, and maintains public confidence. This includes adopting a clear framework for crop producers who choose to invest in the production of transgenic crops aimed at pharmaceutical and enzyme development. Innovative Support for Start-…