SSTI Digest

More than 100 technology clusters may exist in the Appalachian Regional Commission (ARC) area, but challenges to exploit and nurture the clusters still exist. A new report analyzes the ARC region's concentration of technology resources at a sub-regional level and uncovers localized technology strengths that might be promoted through concentrated economic development policy.

Regional Technology Assets and Opportunities: The Geographic Clustering of High-Tech Industry, Science and Innovation in Appalachia, written by Edward Feser, Harvey Goldstein, Henry Renski and Catherine Renault, shows the technology sector of the Appalachian region is small, yet expanding. In 1998, more than one million technology workers belonged to the 406-county ARC area. This represents an 11.2 percent increase since 1989 when 959,000 technology workers were present in the area.

Economic growth in a regional economy can be positively linked to an increase in intensity of industry R&D, according to recent research by Marios Zachariadis of Louisiana State University. R&D, Innovation, and Technological Progress: A Test of the Schumpeterian Framework without Scale Effects, released in September 2002, establishes a connection among R&D intensity, patenting, technological change and economic growth.

Zachariadis uses 2-digit SIC code industry data from U.S. manufacturing between 1963-1988. Defining R&D intensity as the fraction of output that is devoted to R&D expenditures, the research supports the position for a growth model in which policy decisions can have a positive impact on economic growth. Zachariadis' work also supports a direct and indirect relationship between R&D intensity and productivity growth.

Manufacturing jobs in rural Minnesota numbered almost 120,000 in 2000, a 25 percent increase since 1990, according to a recent study by the Center for Rural Policy and Development and Minnesota Technology Inc., two agencies dedicated to helping industry in Greater Minnesota. Meanwhile, manufacturing jobs in the state's metro area increased only 1.7 percent during the same period, the study shows.

The study was the third part of the 2002 Rural Minnesota Internet Study, an annual collection of surveys designed to monitor computer, Internet and broadband use. Part III examines the telecommunications needs of the state's rural manufacturing firms. A survey of 300 of these firms revealed factors contributing to why some use the technology and others do not.

Universities should revamp how they evaluate S&T teaching, report says

Because advances in science and technology have done much to fuel U.S. economic growth over the past 50 years, both the public and private sectors have invested heavily in university research. However, the evaluation of teaching in science, technology, engineering, and mathematics has been haphazard and less exacting, says a new report from the National Academies' National Research Council.

Two independent surveys of venture capital investments made during the third quarter of FY 2002 suggest the downward trends in the flow of money and number of VC placements will continue.

MoneyTree™ Survey

Venture capital continued its downward trend in the third quarter of 2002 with total investments of $4.5 billion into entrepreneurial companies, a decrease of 26 percent from the prior quarter, according to the PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey. Venture capitalists invested $6 billion in the second quarter and $6.4 billion in the first quarter. The last time quarterly venture capital investments were below $5 billion was the first quarter of 1998, when it totaled $4.2 billion.

Competition Canceled in Florida

The 2002 Florida 100, a competition meant for recognizing the state's fastest-growing private businesses, was canceled earlier this year due to a lack of program funding, the Sun-Sentinel reported. The competition is sponsored annually by the Warrington College of Business Administration at the University of Florida and administered by the school's Fisher School of Accounting. To qualify, companies must demonstrate an increase in sales revenues for the previous three years. Most of the program's private funding in the past has come from major accounting and law firms in Florida.

Employing more than two million workers in 2001 with an annual average wage of $47,700, the U.S. civil and commercial aerospace and aviation industry has a major economic and employment impact at the national, state and local levels in all 50 states, according to a report by the Commission on the Future of the U.S. Aerospace Industry. The industry also is a substantial force in civil, military, and space manufacturing and operations in nearly half of the nation's states, the report stated.

The Commission, a 12-member panel formed in 2001 by the President and the U.S. Congress, offers a picture of the industry in a national and state-by-state analysis entitled U.S. Aerospace and Aviation Industry: A State-by-State Analysis. Their 112-page statistical study examines the industry by direct employment, wages, establishments and payroll, providing comparative economic data for review.

Note: With this issue, the SSTI Weekly Digest is launching a new occasional "Programs with Results" series — articles profiling a variety of technology-based economic development programs that have been around many years and are yielding positive results. Our goal is to help answer the question "What Appears to Work?" with models that potentially could be duplicated in other states, regions or communities.

The California Technology Investment Partnership (CalTIP) provides matching grants of up to $250,000 to support California companies that receive competitively awarded federal research and development grants for projects in emerging technologies with the potential to be commercialized in the state. Begun in 1993 in response to federal defense conversion activities, CalTIP has evolved to focus almost exclusively on supporting small technology-based firms with financial awards and technical assistance through the state's six Regional Technology Alliances (RTAs).

Many states have made substantial strides in preparing students for college-level education, but widespread gains in the proportion of Americans going to college have not been made, according to Measuring Up 2002, a report released by the independent, nonprofit, nonpartisan National Center for Public Policy and Higher Education. The report finds that overall college opportunity in America also is at a standstill, remaining unevenly and unfairly distributed.

Following up on the previous, first-of-its-kind Measuring Up 2000, the new report measures the nation and each state's performance in providing education and training beyond high school by updating each state's performance and comparing each state's 2002 results with its results two years ago.

The federal laboratories and research facilities associated with nine federal agencies can serve as a treasure chest of technologies for commercialization, according to Intellectual Property: Federal Agency Efforts in Transferring and Reporting New Technology (GAO-03-47). The recent report by the General Accounting Office (GAO) discloses that in fiscal year 2001, nine federal agencies created 3,676 new inventions, issued 1,585 patents and received $74.5 million in licensing revenues.

Agencies included in the report were: the Agricultural Research Service (ARS), Air Force, Army, Department of Energy (DOE), National Aeronautics and Space Administration (NASA), National Institutes of Health (NIH), National Oceanic and Atmospheric Administration (NOAA), Navy, and U.S. Geological Survey (USGS).

In an era of tight public budgets, sources of seed funding for early stage and developmental research projects with potential for commercialization is getting harder to come by. Many state initiatives to support these endeavors are subject to the same budget cuts as other areas, and small firms' interests in the federal Small Business Innovation Research (SBIR) program are increasing pressure for these already competitive grants.

Using at least $15 million of a $20 million gift from the co-founder and chairman of Sycamore Networks, the Massachusetts Institute of Technology (MIT) has taken matters into its own hands for its faculity and students by launching Ignition and Innovation Program Grants through the new Deshpande Center for Technological Innovation. The $15 million is expected to be allocated to dozens of different projects over a five-year period.

Each year, the U.S. Department of Transportation's Small Business Innovation Research (SBIR) Program is one of the most competitive for companies seeking federal research funding. The FY 2002 Phase I solicitation proved to be no different as the agency made only 12 award recommendations from the pool of 202 proposals submitted — an award percentage of only 5.94 percent.