SSTI Digest

With the passage of HB 675, the FY 03-04 Capitol Budget Bill, the Ohio Legislature approved funding for a $100 million Innovation Ohio Revolving Loan Fund and a second $50 million installment for the Wright Brothers Capital Fund. Both measures are key components of Ohio's $1.6 billion 10-year Third Frontier Project — the state's largest-ever commitment to expanding high tech research capabilities and promoting start-up companies to build high wage jobs. The revolving loan program is intended to benefit Ohio companies in such sectors as advanced materials, biosciences and information technology, financing up to 75 percent of a total project. Ranging from $250,000 to $5 million, the loans will fund fixed assets including machinery and equipment, building or leasehold improvements, computers and software. Companies doing business outside of Ohio that agree to locate within the state also will be eligible to receive assistance. The Wright Brothers Capital Fund received its first $50 million allocation from the Ohio Legislature in July 2002. Under the program, competitive grants will be awarded…

Nearly $1.5 million in grants from the OneGeorgia Authority will go toward specific initiatives promoting technology-based economic development in Georgia. The awards are part of almost $7.5 million in grants and loans being awarded to 16 of the state's most economically distressed communities. Among the $1.5 million awarded was a $499,910 grant to the Georgia Medical Center Authority for the development of a 14,820-square-foot Life Sciences Incubator. Located in one of Georgia's premier medical research zones and partnering with the Medical College of Georgia, the incubator is expected to create up to 75 jobs within five years by spinning off entrepreneurial start-up medical companies to Tier 1 and 2 counties located in this economically depressed region. Additional grants of $500,000 and $499,243 were made to other regions for the construction of two technology centers. The centers will nurture start-up technology companies with high growth potential. All of the awards were made possible through Georgia's Equity Program, which helps communities and regions build the necessary…

Since reaching a high point of almost 27,300 in 1998, the number of science and engineering (S&E) doctorates has dropped by 7 percent to just over 25,500 in 2001, reports a 2001 nationwide survey conducted for the National Science Foundation (NSF). The decline since 1998 has led to a rollback of total Ph.D.s to pre-1994 levels, the report states. The data from NSF's Science and Engineering Doctorate Awards: 2001 are a compilation of detailed statistical tables derived from the nationwide Survey of Earned Doctorates, a report of data collected on doctorates conferred in all academic fields at 416 universities. NSF, the National Institutes of Health and the Department of Education are the primary funding agencies for the survey, with support from NASA, the National Endowment for the Humanities and the Department of Agriculture. The 2001 survey of doctorates reveals the number of total Ph.D.s awarded by U.S. universities dropped to below 41,000 for the first time in nine years. Since 1995, the numbers of non-S&E Ph.D.s awarded have remained nearly constant, staying at just over 15,…

Cluster-based economic development has grown in popularity, but this has not always translated well for rural regions. Many rural areas do not possess the infrastructure necessary for many high-technology industries, and most areas face two major disadvantages — an inability to achieve economies of scale and possess or create a specialized division of labor; and the relocation of the labor force away from rural areas. Emphasizing local knowledge is a key in developing rural clusters, posits Rural Knowledge Clusters: The Challenge of Rural Economic Prosperity, a report released by the Hubert H. Humphrey Institute of Public Affairs at the University of Minnesota. The report explores rural knowledge clusters as a model for rural economies, and while the idea of rural clusters may seem a bit inconsistent, there is evidence that these clusters do exist. Rural clusters differ from industry clusters in that they focus on knowledge, according to the report. The metropolitan industry cluster concept includes knowledge but also focuses on agglomeration, scale economies and interindustry…

Many organizations are wondering if, when and how severe their budgets could be impacted by the economy and the continuing fiscal crises in the states. While foundation endowments also have taken a hit by the stock market slump, several are increasing their contributions in building local or statewide technology-based economies. Two recent examples highlight the trend and point toward a funding path few TBED efforts have fully tapped. Danforth Foundation Commits $117 Million in St. Louis The St. Louis Post Dispatch reported in a Jan. 9 article that the Danforth Foundation, based in St. Louis, has set aside $117 million over the next two years to support regional economic growth in the plant and biomedical sciences. The story states the foundation's board is "soley dedicated to identifying opportunities and making grants that will further research, spin off commercial opportunities and create jobs." "If our region and state seize the opportunities, plant and life sciences can be the economic engine for St. Louis for decades to come," the foundation's chairman John Danforth…

The National Science Foundation (NSF) plans to fund $9 million in new FY 2003 awards under the Partnerships for Innovation (PFI) Program, according to the program solicitation's recent release. To promote PFI, NSF will sponsor 15-25 partnerships among academe, government and the private sector that explore new approaches to innovation. The purpose of the program, as defined in the PFI solicitation, is threefold: stimulate the transformation of knowledge created by the national research and education enterprise into innovations that create new wealth, build strong local, regional and national economies and improve the national well-being; broaden the participation of all types of academic institutions and all citizens in NSF activities to more fully meet the broad workforce needs of the national innovation enterprise; and, catalyze or enhance enabling infrastructure necessary to foster and sustain innovation in the long-term. Applicants are asked to focus on one or a combination of three activities: (1) research, technology transfer, commercialization, (2)…

SSTI continues a series begun in last week's Digest, highlighting key economic development and science & technology positions being filled by some of the nation's 24 new governors. Many of these individuals are expected to help set the state's tech-based economic development agenda and determine budget cuts, reorganization plans or program eliminations. In addition, President Bush has announced Charles McQueary of North Carolina will be his nominee to be undersecretary for science and technology at Homeland Security. Dr. McQueary is the retired President of General Dynamics and a former member of the Board of Directors of the National Defense Industrial Association. Alabama Neal Wade, vice president of economic development for a Florida real estate corporation, has joined the cabinet of Alabama Governor Bob Riley as director of the Alabama Development Office. Maryland Governor Robert Ehrlich, Jr. is appointing Aris Melissaratos to be the new secretary of the Maryland Department of Business and Economic Development. Melissaratos is a venture capitalist…

Annually, SSTI looks at the various addresses given by the nation's governors at the beginning of the year. Over the next several weeks, the SSTI Weekly Digest will profile the excerpts concerning programs, policies and issues immediately affecting the tech-based economic development community. The states are facing their worst fiscal crises in more than 50 years — the latest combined deficit figures were a whopping $90 billion. It should not be lost on the governors the important role tech-based economic development plays in strengthening state and local economies through higher wage jobs and more competitive businesses. Do their speeches bear that out? During the past 10 days, inaugural addresses were given in Arizona, California, Connecticut, Florida, Idaho, Maine, Massachusetts, Michigan, Minnesota, New Mexico, New York, Wisconsin and Wyoming. State of the State speeches were made in California, Connecticut, Idaho, New York, North Dakota, Virginia and West Virginia. Governors in Colorado, North Dakota, Virginia, and Wyoming delivered budget messages as they presented their budget proposals to…

The National Governors' Association (NGA) is urging leaders of the House and Senate Commerce-Justice-State (CJS) Appropriations Subcommittees "to maintain the federal government's share of support for the Manufacturing Extension Partnership (MEP) in the fiscal year (FY) 2003 appropriations." Governors Mike Johanns (R-NE) and James McGreevey (D-NJ), co-chairs of NGA's Economic Development and Commerce Committee, sent a letter on behalf of the nation's governors. They point out that MEP is a partnership supported by states, federal government and small manufacturers. "Each partner benefits from the partnership and has a responsibility to maintain it. Neither the states nor the small manufacturers are capable of replacing a loss in federal funding for MEP," the governors say. "As our economy struggles to recover, MEP is needed more than ever. It plays an important role in our state and national economies that no other entity is likely to fulfill." MEP is a national network of centers with 400 offices across the country and Puerto Rico that provide technical assistance and business…

If states are to emerge from the recession stronger than when they went in, state policymakers must make long-term investments in economic fundamentals such as a skilled workforce, technological capacities and quality amenities, reports the Corporation for Enterprise Development (CFED). They also need help from the federal government, according to the 16th annual Development Report Card for the States by CFED, a nonpartisan Washington-based think tank. CFED uses 71 measures to provide a relative, state-by-state assessment of economic development in three main areas — performance, business vitality and development capacity. Colorado, Connecticut, Massachusetts, Minnesota and Virginia were the top performers in 2002, all earning straight As. Seven other states – Delaware, Maryland, New Hampshire, New Jersey, New York, Utah and Washington – joined them on an honor roll with all As or Bs. Virginia is a new addition to the honor roll in 2002. Eight states got an F in at least one of the three categories. One of the longest running barometers of state economic development policies and…

Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP), an independent nonprofit economic development organization, has announced the Commonwealth of Pennsylvania's $2 million commitment to establish the Ben Franklin Investment Partners venture guarantee revolving fund. The fund is the first such development financing vehicle of its kind in the U.S. The multifaceted fund provides a guarantee of up to 25 percent of any loss experienced by a group of qualified private investors – angels – in seed investments made in technology companies located in southeastern Pennsylvania. The goal is to respond to the capital needs of these early-stage companies, most of which have experienced difficulties raising early stage risk financing and other challenges as a result of the economy's downturn. Over time, the Ben Franklin Investment Partners guarantee fund is expected to leverage up to $10 million of seed-stage investments from angel investors along with approximately $8 million of companion BFTP/SEP investments. Both BFTP/SEP and non-BFTP/SEP enterprises will have access to…

U.S. companies had $199.5 billion in R&D investment in 2000, a 9 percent increase over the 1999 total, according to the annual Survey of Industrial Research and Development published by the National Science Foundation (NSF). The survey data is presented in a recent NSF InfoBrief, which shows the total industrial R&D increase to be 7 percent after adjusting for inflation. Company funding of R&D rose from $160.2 billion in 1999 to $180.4 billion in 2000 – a 13 percent increase – and continued its steady climb since 1953, the report notes. Meanwhile, federal funding of industrial R&D contributed to the overall increase despite falling from $22.5 billion in 1999 to $19.1 billion in 2000, a 15 percent decrease. After adjusting for inflation, company-funded R&D experienced a 10 percent increase, and federal investment dropped 17 percent. Manufacturing accounted for the majority of company-funded industrial R&D in 2000, NSF reports. Sixty-one percent, or $110.8 billion, may be attributed to manufacturing industries, while 39 percent was accounted for by companies in…