SSTI Digest

Innovation Philadelphia (IP), the public-private partnership dedicated to enhancing the global innovation economy of Philadelphia through technological leadership, received on Monday a $442,500 investment from the U.S. Department of Commerce's Economic Development Administration.

With a goal of developing a coordinated technology-based, cluster-driven, economic development strategy for the Greater Philadelphia Region, the investment will support a series of studies of the Knowledge Economy that will focus on new approaches, relationships, methods and technologies, including: cluster analysis, innovation diagnostics, nanotechnology and life science research and workforce development, university and industry technology consortium, angel investment, and knowledge partnership for student engagement and retention.

Universities and the investment they pour into R&D are "major factors" that contribute to a region's economic growth, concludes a recent report funded by the Ewing Marion Kaufman Foundation, NCOE and the U.S. Small Business Administration (SBA). The report's results show the growth occurs in less time than traditionally has been noted and that small firms innovate at a rate almost twice that of large firms.

The continuing layoffs of thousands of workers, particularly in the information and communication tech sectors, creates significant hardships for the affected local and regional economies. For instance, a recent Federal Reserve Bank report noted office vacancy rates in Silicon Valley hovering around 40 percent.

Fortunately, highly skilled labor does not tend to stay unemployed too long. If these people cannot find work, they make it by launching their own innovative businesses.

The tech-based economic development community can do a lot to encourage tech firm start-ups in a down economy.  Understanding the entrepreneurial mindset, explored from two different perspectives in the following papers, is critical for ensuring support programs address the entrepreneurs' needs.

Leslie McGranahan, in Unprepared for Boom or Bust: Understanding the Current State Fiscal Crisis, highlights the problems that are inherent in state policy when dealing with the cyclical behavior of the economy. The article released in the 2002 3rd quarter edition of Economic Perspectives, a publication of the Federal Reserve Bank of Chicago, identifies the common problem of states cutting taxes and increasing expenditures during boom times only to be faced with revenue shortfalls during recessions.

NASA has announced the Langley Research Center in Hampton, VA, will team with the National Institute of Aerospace Associates (NIAA), Reston, VA, to create the National Institute of Aerospace (NIA) to perform aerospace and atmospheric research, develop new technologies for the nation and help inspire the next generation of scientists and engineers.

Locating the NIA at the Langley Research Center will facilitate the institute's involvement in agency sponsored research programs and foster collaboration with NASA, including access to its research facilities.

The Association of American Universities has posted the text of a September 17 letter written by Rita Colwell, Director of the National Science Foundation (NSF), that outlines the Bush Administration's opposition to S. 2817, a bill to double the size of the NSF budget over a five-year period. A similar effort has been introduced in the House by Science Committee Chairman Sherwood Boehlert (R-NY) and co-sponsored by members of both parties (see May 10, 2002 SSTI Weekly Digest).

The Colwell letter was sent to Senator Ron Wyden (D-OR), chair of the Subcommittee on Science, Technology, and Space, Senate Committee on Commerce, Science, and Transportation. In it, Director Colwell states:

The future of Virginia's Center for Innovative Technology (CIT) became clearer on Wednesday with Governor Mark Warner's release of Commonwealth of Virginia Strategic Plan for Technology for 2002-2006. CIT has a lead position for half of the eight initiatives outlined in the 129-page document.

Highlights of "One Virginia," CIT's portion of the plan, call for:

Following President Bush's call for the nation to "be aggressive about the deployment of broadband," the Technology Administration within the U.S. Department of Commerce recently issued Understanding Broadband Demand — a 25-page paper examining the state of broadband demand and usage in the U.S. and identifying successes, challenges and actions to promote more aggressive uptake.

After several expert roundtables, TA concluded that, while significant supply side issues such as regulatory considerations remain, "(T)he factor most likely to accelerate broadband demand is the creation and deployment of easily understood, value-adding business and consumer applications at prices that meet the needs of the market."

Joined by actor Christopher Reeve and several of California's leading biotech researchers, Governor Gray Davis Sunday signed legislation designed to promote stem cell research in California.

"Stem cell research is responsible research that could potentially save millions of lives," said Gov. Davis. "With world-class universities, top-flight researchers and a thriving biomedical industry, California is perfectly positioned to be a world leader in this area. I am determined to keep California at the forefront of medical research and scientific innovation."

On Thursday, Illinois Governor George Ryan announced nearly $3 million in state grants for eight Illinois Technology Enterprise Corporation (ITEC) centers, quadrupling the number of ITECs. Funded by the Illinois Department of Commerce and Community Affairs (DCCA), the centers assist technology-based start-up businesses and serve as incubators for the new ventures.

The grants announced for the centers will continue to fund operations at Northwestern University in Evanston and the University of Illinois in Champaign and support six new centers in Chicago, Naperville, Lemont, Peoria, Carbondale and Springfield.

A $500,000 state grant approved Thursday by South Dakota Governor Bill Janklow will help create a center in Sioux Falls for fledgling technology businesses.

The center — termed the technology business accelerator project — is being developed by Forward Sioux Falls, a joint-venture economic development partnership between the Sioux Falls Area Chamber of Commerce and the Sioux Falls Development Foundation. The center will offer leased space and provide business development services such as accounting, legal assistance and business planning.

To date, Forward Sioux Falls has raised approximately $2.5 million for the project. The funding includes the new state grant, a federal grant of $800,000 and $1.2 million of Forward Sioux Falls IV funds. The state grant comes from the South Dakota Future Fund.

Cluster-based economic development policy has gained wide acclaim in recent years as interest has grown in utilizing “cluster theory” in economic development. Some have found this idea to be appealing while others have been a bit less receptive of its ideas. Three recently released papers address cluster-based economic development from different angles. The first article explores options for utilizing cluster-based economic development in less advantaged regions. The second examines into evaluation techniques of cluster policy, while the third addresses concerns about “cluster theory” in general. Each is summarized below.