SSTI Digest

Venture capital investment continued downward in the second quarter of 2002, according to the PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey. Total disbursements, which dropped to $5.7 billion and the lowest level since the third quarter of 1998, reflected an 11 percent decrease from the first quarter of 2002. A total of 819 companies received venture funding — a small change from the 826 companies the previous quarter. While the survey shows most industries continued declines evidenced in the first quarter, some industries improved. At $958 million, the second highest amount, the biotechnology industry showed a 15 percent increase in dollars invested. The medical devices sector also demonstrated growth over the previous quarter, with investment increasing 43 percent to $556 million. Overall, the life sciences industries accounted for 27 percent of all venture capital investing, the highest allocation in the last five years, according to the survey. Despite suffering a 16 percent decrease over the previous quarter, the software…

The legal ban on non-compete contracts may have played a role in and continues to affect the development of the high tech sector in California. This is the conclusion of Rob Valletta, Research Advisor, in the August 16, 2002, edition of the Federal Reserve Bank of San Francisco Economic Letter. The article, On the Move: California Employment Law and High-Tech Development analyzes the relationship between high tech development and states that do not legally allow non-compete contracts. Using at- least squares statistical analysis, Valletta concludes that when non-compete contracts are prohibited, employee mobility and knowledge transfer are enhanced. While employees may not be able to share specific trade secrets, general industry knowledge can be shared readily. This freedom can then play an important role in the advancement of innovating technology sectors. The precursor to the California law dates back to 1872 and current law still prohibits these types of contracts. Colorado is mentioned as another state that does not allow "non-competes" and as one with a robust tech sector. …

Arizona was one of the first states to embrace cluster-based economic development in the early 1990s. While the formal clusters have had varying degrees of success since then, one of the challenges of a cluster-based approach to technology-based economic development is the fractionalized focus across sectors. Because of this, clusters can end up competing against each other for limited public resources, making cross-sector strategies difficult to identify or implement. Research and studies also are usually concentrated on a particular sector rather than looking at the similar needs and issues that arise in several clusters or span many clusters. The University of Arizona released a study earlier this year that establishes for the first time in Southern Arizona baseline measurements for all six of the region's technology clusters: aerospace, bioindustry, environmental technology, information technology, optics/photonics, and plastics and advanced composite materials. By designing a study that examines all six clusters using a consistent methodology, the University's Office…

The Environmental Protection Agency has posted its selections for the FY 2002 Phase I solicitation of the Small Business Innovation Research (SBIR) Program. The Scientific Consulting Group, Inc., which provides contracted support for the EPA SBIR program, made available to SSTI the program's FY 2002 proposal statistics, allowing SSTI to generate a table presenting the state-by-state distribution of awards and proposals by number of each and number of firms. The statistical table presents how competitive the EPA SBIR program is — only 9.5 percent of the 370 proposals were selected for funding. SSTI's table is available at: http://www.ssti.org/Digest/Tables/081602t.htm The EPA award list is available at: http://es.epa.gov/ncer/sbir/sbirlist.html Please note: the link on the EPA site for the 2002 FULL LIST currently is linked to the 2001 page. The links for the six separate research topics correctly take the user to the 2002 subsections.

The Council on Competitiveness, a non-profit, Washington-based organization, is seeking an executive director for its new National Center on Regional Innovation and Competitiveness. The new center will identify and advance innovation-based regional development strategies, conduct regional workshops, and disseminate best practices in managing regional innovation. The successful candidate will have the vision and management experience to launch this new center. Responsibilities for the position will include setting agenda, overseeing funding, and working with a high-level advisory committee. Candidates should be able to interact effectively with private sector leaders and high-ranking federal, state and local officials. An advanced degree and a minimum of 10 years in economic development are preferred. Experience working with state and local government is a plus. Candidates should send a cover letter and resume to: NCRIC Search Committee, Council on Competitiveness, 1500 K Street NW, Suite 850, Washington, DC 20005.

Charlotte A. Hayes, president of DCTech, the Washington DC Technology Council, has resigned to return to the private sector. John Sanders has been named interim president, while the council seeks a permanent replacement. Jim Hayes is serving as interim president of the Economic Development Partnership of Alabama as the group works to fill the position. Hayes was a former director of the Alabama Development Office. William Parsons is serving as acting executive director of the Rhode Island Economic Development Corp. Parsons is the vice president of operations. Correction: Lara Vande Walle is the director of membership and business development for the Maryland Technology Council, not Maryland's TEDCO as was previously reported.

Charlotte A. Hayes, president of DCTech, the Washington DC Technology Council, has resigned to return to the private sector. John Sanders has been named interim president, while the council seeks a permanent replacement.

Jim Hayes is serving as interim president of the Economic Development Partnership of Alabama as the group works to fill the position. Hayes was a former director of the Alabama Development Office.

William Parsons is serving as acting executive director of the Rhode Island Economic Development Corp. Parsons is the vice president of operations.

Correction: Lara Vande Walle is the director of membership and business development for the Maryland Technology Council, not Maryland's TEDCO as was previously reported.

A draft report from the President's Council of Advisors on Science and Technology (PCAST) recommends the Department for Homeland Security include a centralized office for research and technology development and the senior-level position of undersecretary for science and technology, according to several published reports. The final version of Maximizing the Contribution of Science and Technology Within the New Department of Homeland Security, which was available on the PCAST website temporarily, is to be given to the President next week. News accounts indicate the PCAST recommendations will bring the Administration's position to reflect more closely the consolidated leadership structures proposed in separate Senate and House versions of Homeland Security legislation. PCAST calls for the under secretary for S&T to oversee a Homeland Security Advanced Research Agency (HS-ARPA), modeled after the Defense Advanced Research Projects Agency (DARPA). Both bills under consideration call for an undersecretary for science and technology, while S. 2452 also called for a Security Advanced Research Projects Agency,…

The St. Louis region lags behind a number of metropolitan areas including Austin, Portland, Atlanta, and Indianapolis in attracting 20- to 34-year olds to live and work in the region, according to a report released this month by the regional, nonprofit organization, FOCUS St. Louis. Preparing St. Louis for Leadership in the 21st Century Economy is the result of a year-long effort by a citizen-based FOCUS St. Louis task force. The 27-member group concluded the St. Louis region must be more effective in attracting and retaining young knowledge workers in order for the region to thrive and compete in the 21st Century economy. The task force report says citizens, employers, educators, and government and civic leaders must recognize the impending crisis and take steps to capitalize on, connect, and better market the area's resources to meet the needs of young knowledge workers. This includes, according to the report, increasing venture capital, expanding green space, creating a new, regional brand image targeted at young knowledge workers, and making St. Louis a vibrant region. More…