SSTI Digest

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:

The Wisconsin Venture Network (WVN) in Milwaukee has folded into the Wisconsin Innovation Network (WIN) Foundation in Madison, and the combined WIN entity has become a subsidiary of the Wisconsin Technology Council.

Members of both the WVN and WIN approved the merger in separate votes last week. The merger means WIN now is formally a part of the Tech Council and there are two WIN chapters — one in Milwaukee and another in Madison.

The Madison WIN will be administered through the Tech Council, but the Milwaukee chapter will retain a local board of directors and control of its monthly programs. Over time, WIN hopes to form chapters in other Wisconsin cities where technology-based economic development is a priority.

A higher rate of entrepreneurial activity is strongly connected with faster growth of a local economy, the U.S. Census Bureau reports in Endogenous Growth and Entrepreneurial Activity in Cities. The recent working paper, prepared by the Bureau's Center for Economic Studies, examines the connection between knowledge spillover and economic growth in a regional economy. The study concludes that variation in the level of entrepreneurial activity, a diverse mix of industries, and the amount of human capital are positively correlated to growth rates.

Three major findings are presented:

Despite an economic slowdown, the Twin Cities is more competitive than it was a year ago, according to a study released by the Great North Alliance, a regional civic leadership organization. Conducted annually, the Great North Opportunity Forecast uses regional productivity and innovation to predict future competitiveness and opportunity.

The 2002-03 forecast measures 58 key indicators of the regional economy of the Twin Cities and divides the indicators into four areas — current performance, development capacity, innovation capacity and resource flow. Innovation capacity, for example, includes 18 indicators measuring inspiration, invention, and entrepreneurial development. In each area, the Twin Cities' performance is compared against 11 similar sized high-growth regions around the U.S., including Atlanta, Austin, Boston, Chicago, Dallas, Denver, Orange County (CA), Phoenix, Raleigh, Salt Lake City and Seattle.