SSTI Digest

Because knowledge-based services can be supplied anywhere across the world due to increased international investment in IT infrastructure, future U.S. competitiveness hinges on diversification and broadening of the technology-based manufacturing sector, according to NIST Senior Economist George Tassey.



Tassey's lastest report, R&D and Long-Term Competitiveness: Manufacturing's Central Role in a Knowledge-based Economy, lays out the critical role manufacturing and manufacturing R&D plays in the U.S. economy, presents the dire forecast for low-R&D intensive manufacturers, and presents a framework for analyzing federal R&D investment strategies consistent with a national innovation system.



Tassey also argues that the zeal or enthusiasm for information technology that dominated policy discussion during the past few years and overshadowed and "induced and unbalanced perspective" on the appropriate strategies to secure economic competitiveness.



Manufacturing accounts for 17 percent of U.S. gross domestic product (GDP) through nearly $1.5 trillion in profits and wages and salaries for 20 million workers. The report points out, though, that manufacturing's importance for future economic competitiveness is more evident when looking at the nation's R&D investments: Industry conducts 75 percent of all U.S. R&D and the manufacturing sector accounts for more than 70 percent of all industrial R&D and much of the economy's technology, including information technologies.



While the geographic barriers of most knowledge-based services can be overcome by investments in the IT infrastructure, co-development of critical technologies by manufacturing and service firms, especially through partnering, is aided by geographic proximity and access to the same technical infrastructure.



The report further identifies that, because private sector R&D investment has become more driven toward short-term goals, "traditional funding gaps found in the early phases of R&D are magnified." The result, Tassey says, is that the level of U.S. R&D investment is "too low in most industries and too concentratred geographically to spawn enough economic clusters to achieve high, long-term national growth rates and thereby maintian corporate profit growth and consistently raise real income of workers." He also suggests R&D funding must target longer-term, higher-risk research activities.



"Thus, overall economic growth requires a diverse and competitive manufacturing sector...(T)echnology-related policies need to be continually examined and adjusted to provide an environment in which private sector incentives to invest in technology are strong," Tassey concludes.



R&D and Long-Term Competitiveness is complete with useful tables and graphs and is available at: http://www.nist.gov/director/prog-ofc/report02-2.pdf

To shed light on the strengths and weaknesses of the region's biotechnology cluster, Carnegie Mellon University's Center for Economic Development (CED) has published A Biotechnology Action Plan for Southwestern Pennsylvania. The CED report says the Pittsburgh biotechnology cluster largely depends on the amount of available venture capital and the development of new technologies and that total funding levels must be increased to continue biotech development.



Dividing the biotechnology/biomedical cluster into three sub-clusters — pharmaceuticals, instruments and devices, and tissue engineering — the report draws a comparison with other regions, including Boston, Philadelphia, San Jose and Chicago, and observes that Pittsburgh ranked 165th nationally in 1998 in biotechnology patents per biotechnology employee.



One of the region's strengths, the report says, is the high level of Small Business Innovation Research (SBIR) awards in biotechnology received from the U.S. Department of Health and Human Services, including the National Institutes of Health. Between 1993-1998, these agencies accounted for 32 percent of all SBIR awards made to firms in the region, including nearly $7.3 million in 1998.



Among the region's weaknesses, according to CED, is a level of biotechnology venture capital investment too low to support "a robust biotechnology cluster." Out of more than $1 billion in such funding nationally in 2000, Pittsburgh's biotech firms received only $1.9 million. This level of funding showed an increase over the previous year but reflected a 68 percent decrease from 1998-2000, the report states.



CED suggests two keys to success will be experienced managers for the region's biotechnology workforce and university technology transfer policies that could make the region a center of biotechnology. The region's Life Science Greenhouse initiative, which will receive about $30 million in state funding, is one effort underway to help ensure that success. (see related Digest article at http://www.ssti.org/Digest/2001/051101.htm)



A Biotechnology Action Plan for Southwestern Pennsylvania is available in its entirety at: http://www.pghtech.org/advocacy/clusterbio.pdf

President Bush has nominated Elias Zerhouni, executive vice dean of the Johns Hopkins University School of Medicine, as the new director of the National Institutes of Health.



San Diego Community College Chancellor Augie Gallego has been selected as the new chairman of the American Council of Education, only the second community college executive to hold the position since the organization's founding more than 80 years ago.



Rod Linton has been tapped to lead Utah's new Office of Science & Technology within the Dept. of Community & Economic Development. Mike Keene is the new State Science Advisor and Director of the Centers of Excellence Program.



Shaye Mandle has resigned as president of the Illinois Coalition to accept a position as the new executive director of the East West Corporate Corridor Association in DuPage County.



George Newstrom was sworn in as the Virginia Secretary of Technology. Newstrom succeeds Don Upson, who is returning to the private sector for technology consulting.



Gov. Don Siegelman has named Anne Payne to director of the Alabama Department of Economic and Community Affairs. Payne has been serving as ADECA's assistant director since last August.



Stan Sokul has been named executive director of the PCAST, the President's Council of Advisors on Science & Technology. Sokul formerly served as a lobbyist on Internet policy issues.



Tracy Taylor has been named to serve as CEO for the Kansas Technology Enterprise Corp (KTEC). Taylor fills the position vacated by Rich Bendis.



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President Bush has nominated Elias Zerhouni, executive vice dean of the Johns Hopkins University School of Medicine, as the new director of the National Institutes of Health.

San Diego Community College Chancellor Augie Gallego has been selected as the new chairman of the American Council of Education, only the second community college executive to hold the position since the organization's founding more than 80 years ago.

Rod Linton has been tapped to lead Utah's new Office of Science & Technology within the Dept. of Community & Economic Development. Mike Keene is the new State Science Advisor and Director of the Centers of Excellence Program.

Shaye Mandle has resigned as president of the Illinois Coalition to accept a position as the new executive director of the East West Corporate Corridor Association in DuPage County.

George Newstrom was sworn in as the Virginia Secretary of Technology. Newstrom succeeds Don Upson, who is returning to the private sector for technology consulting.

Gov. Don Siegelman has named Anne Payne to director of the Alabama Department of Economic and Community Affairs. Payne has been serving as ADECA's assistant director since last August.

Stan Sokul has been named executive director of the PCAST, the President's Council of Advisors on Science & Technology. Sokul formerly served as a lobbyist on Internet policy issues.

Tracy Taylor has been named to serve as CEO for the Kansas Technology Enterprise Corp (KTEC). Taylor fills the position vacated by Rich Bendis.

With one of the country's largest concentration of industrial and academic scientists and engineers, it is only fitting that Michigan hosts SSTI's Sixth Annual Conference, October 2-3, 2002.



Led by the Michigan Economic Development Corp. (MEDC), Michigan has consistently been among the leading states for implementing innovative programs and policies to create tech-based economies: the life sciences corridor and billion biotech investment, automation alley, fuel cell commercialization, broadband deployment, university tech transfer, and the list goes on. MEDC, the host sponsor for SSTI's 2002 conference, is itself a product of innovative thinking in 1999 that privatized most of the state's economic development and worker training programs. More information about MEDC's tech initiatives can be learned by visiting its website: http://www.michigan.org