SSTI Digest

Atlanta, Georgia 

A task force for the biotech industry is underway in the metro Atlanta region. The Metro Atlanta Chamber of Commerce announced the task force would be co-chaired by Dr. Michael Johns, executive vice president for health affairs and director of the health sciences center at Emory University, and Parker Petit, chairman, president and CEO of Matria Healthcare. With business and academic leaders, public health organizations and researchers, the task force is meeting monthly to develop a long-range strategy and five-year business plan to position the region as a center for biotech innovation, capital, talent and business. Implementation of the Atlanta region strategy is expected to begin later in 2002.

With disaster comes opportunity for dramatic changes to occur through the healing and rebuilding processes. Floods, hurricanes and tornados have helped to energize devastated areas into becoming more vibrant communities. The deep recession of the late 80s and restructuring of many key industrial sectors ushered in many state tech-based economic development programs, the benefits of which are being felt more than a decade later. 



In The Future of the Tech Savvy City, Joel Kotkin, a senior fellow at the Center for an Urban Future, argues that the need to rebuild New York City with the World Trade Center attacks and its aftermath can be the impetus to strengthen the city's position in a knowledge-based future. 



After explaining the importance of high tech, its positive and negative role in changing the cities, and the threat or challenges posed by aggressive "second tier" cities — all from the perspective of an urban geographer — Kotkin encourages New York and other large, older cities to pursue developing grassroots-driven economies based heavily on entrepreneurship, small business growth, "knowledge value neighborhoods," quality of life issues, and a strong, distinctive sense of place. 



Kotkin concludes, "In the end, cities, and most particularly New York, will prevail by becoming more decentralized and multi-polar, and fundamentally more human." 



The report is available for download from the Center for an Urban Future website:

http://www.nycfuture.org/econdev/futuretech.htm [expired]

larta has issued its 2002 Federal Technology Funding Guide, a survey of federal funding sources for technology firms. The sixth edition of the guide provides information on more than 90 regularly scheduled programs, hundreds of links to resources on the Web, and a special section funding for technologies to fight terrorism. An index identifies program by technology area or funding emphasis. 



larta is one of three regional technology alliances established and funded by the Division of Science, Technology and Innovation in the California Technology, Trade and Commerce Agency. The full guide is available for $39 from larta; an abbreviated, downloaded version is available at http://www.larta.org 

Two reports released during this past week examine state fiscal conditions for FY 2002 and a slowing national economy following the terrorist attacks on Sept. 11.



State Fiscal Outlook for FY 2002: October Update

State Fiscal Outlook for FY 2002 offers a look at the fiscal condition of all 50 states, based on information collected from legislative fiscal directors in mid to late October. A comprehensive survey conducted by the National Conference of State Legislatures (NCSL), the report covers the revenue and expenditure situation through the beginning of FY 2002, state plans to address budget shortfalls and the budget forecast for the remaining fiscal year.



Some highlights included in the report:

Philanthropic individuals and foundations are increasingly vital contributors for tech-based economic development, particularly for "big-ticket" initiatives. Most gifts, such as that covered in the second item below, are tied to a specific relationship with a university or field of research, working independently of the strategies or programs developed by state or local tech-based economic development organizations. The continuing work of the Heinz Endowments in Pittsburgh and single large donations, such as the $1 billion Stowers gift announced last Spring (see the May 18, 2001 issue of the SSTI Weekly Digest), are noticeable exceptions.



The series of sizable gifts made by the Lilly Endowment, including the latest donation described below, also are an exception in that they collectively could influence the state's S&T strategy where single gifts would have less of an impact.



Purdue Gets $26 M from Lilly for TBED

The Lilly Endowment has awarded Purdue University a grant of almost $26 million for its new Discovery Park, a complex for advanced interdisciplinary research, education, and entrepreneurship. The gift brings the Lilly Endowment's total recent donations toward improving Indiana's competitive position in research and tech-based economic development to more than $250 million. In September, Pervasive Technology Labs at Indiana University received a $30 million grant from the Lilly Endowment to launch three new laboratories dedicated to researching diverse aspects of computing (see also the Oct. 15, 1999 edition of the SSTI Weekly Digest)



Purdue will leverage the new grant and state funding with existing university funds, private donations and federal research support to create the $100 million park. Initial plans for the 40-acre site on the west edge of campus call for centers to house research in nanotechnology, bioscience/engineering and e-enterprises. Groundbreaking on the first of those buildings, the $51 million Birck Nanotechnology Center, occured in September.



The park also will include an entrepreneurship center to help transfer research findings into products and services. It will be the home of:

Nearly every state legislature annually appropriates some level of funding to support research and development activities in the state's nonprofit, university, and industrial research communities. Few, though, have developed long-term, systematic attempts to measure the impact of those investments. Following a nearly ten-fold increase in the state's investment in research and development over the past six years, Maine legislators requested that the Maine Science & Technology Foundation (MSTF) conduct such an impact assessment.



MSTF has until July 2006 to answer three questions posed by the state legislature:

With almost every state seeing declining revenues in light of the recession and Sept. 11 attacks, projections from the Center for Budget and Policy Priorities that the economic stimulus package passed by the House on Wednesday could further reduce states’ revenues by as much as $5 billion for each of the next three years may further exacerbate the problem. The Center, releasing its analysis of the House stimulus package on Monday, suggests the losses in revenues could compel states to institute still-larger program cuts or tax increases that would partially offset and thereby weaken the federal stimulus goals. 



The single biggest tax-cut item in the Ways and Means bill is a provision that allows brief expensing of business investments. This provision would allow firms to subtract immediately 30 percent of the cost of new investments in equipment or similar business property, rather than depreciating the costs of these investments over a number of years as under current law. 



Most states use federal rules on expensing and depreciation in the calculation of their own state corporate and other business income taxes, the Center explains. Of the 45 states that have corporate income taxes, 44 – all but California – conform to the federal rules. As a result, 44 states and the District of Columbia would experience revenue losses averaging $5 billion per year if this provision becomes part of federal law. 



Some states would lose additional revenues, the Center points out, because their tax systems conform to federal treatment of net operating losses and/or levy a corporate Alternative Minimum Tax (AMT) that piggy-backs on the federal corporate AMT. The House bill makes net operating loss provisions more generous and repeals the corporate AMT. 



States also are preparing for the first impacts of the tax cuts passed earlier in the year by Congress. The combined revenue loss to states as a result of the phase-out of the credit for state estate and inheritance taxes will be approximately $1.9 billion in federal fiscal year 2003 and $3.5 billion in 2004, according to the Center. 



More information is available at: http://www.epn.org/whatsnew/full_cite/1471.html 

The Pittsburgh Technology Council's State of the Industry Report shows the region's technology sector, while continuing its growth, has become a significant driver of southwestern Pennsylvania's overall economy. 



Conducted by Carnegie Mellon University's Center for Economic Development, the report measures the six-county Metropolitan Statistical Area that encompasses Allegheny, Beaver, Butler, Fayette, Washington and Westmoreland counties. The report also includes separate data for the entire 13-county southwestern Pennsylvania region. 



Examining the economic impact that has been created by the region's core technology clusters – information technology, biomedical and biotechnology, advanced manufacturing, advanced materials, and environmental technology – the report assesses the overall sector, considering indicators such as venture capital investment and research and development activities. 



Key findings in the report include: 

The Army Research Office (ARO) recently created an initiative – a University Affiliated Research Center (UARC) to be known as the Institute for Soldier Nanotechnologies – to develop nanometer-scale science and technology solutions for soldiers. 



Through competition for the center, ARO will award a single non-fee-bearing contract at an estimated base cost of $50 million. The contract, to be presented during the third quarter FY 2002 with an initial performance period of five years, will include provisions for task orders for additional effort estimated to reach $20 million over the five-year term. The contract also will have a ceiling of $125 million to allow for capitalizing on opportunities which may result. 



A single university will host the UARC, which will emphasize revolutionary materials research toward an advanced uniform and protective ensemble concept. The center, in turn, will work closely with industry, the Army's Natick Soldier Center, the Army Research Laboratory and other Army Research Development and Engineering Centers pursuing the Army's goals. 



The objective of the program is to enable a revolutionary advance in soldier survivability through the development of novel materials for integration into the Objective Force Warrior system. Research, therefore, will integrate such functionalities as multithreat protection against ballistics, sensory attack, chemical and biological agents, climate control, biomedical monitoring, and load management. 



Effective research solutions will be compatible with complicating factors, including soldier mission requirements, limited energy resources, communications needs, and rugged insensitivity or adaptive responsivity to extremes of temperature, humidity, storage, damage, and soilage. 



Proposals, which may be submitted by degree-granting universities in the U.S., are due by 2:00 p.m. ET on January 3, 2002. The broad agency announcement for this program is located at the ARO website: http://www.aro.army.mil/soldiernano/ 

Meeting Challenges in the New Economy, recently released by the Oklahoma Center for the Advancement of Science and Technology (OCAST), presents a comprehensive look at Oklahoma's position in science and technology. 



In the report, an advisory team of 14 individuals suggests future initiatives and action in areas critical for Oklahoma's progress in economic growth. Longitudinal databases are used to provide insight and monitor progress in the areas, which are arranged in the following categories: Funding In-Flows, Human Resources, Capital Investment and Business Assistance, and the Technology Intensive Business Base. 



The team selected three areas of emphasis under most categories and compared Oklahoma's national ranking in 1997 (most current data available) with the rank they believe needs to be attained by 2005. Among the team's projections, some admittedly generous in likelihood, are the following: 

Venture capital invested during the past three decades created 7.6 million U.S. jobs and more than $1.3 trillion in revenue as of the end of 2000, according to an economic impact study released Monday by the National Venture Capital Association (NVCA). 



The research shows that $273.3 billion of venture capital created companies were responsible for 5.9 percent of the nation's jobs and 13.1 percent of the U.S. Gross Domestic Product in 2000. Venture investment most frequently led to job and revenue creation in the computer, consumer, and medical health sectors, followed by the communications, industrial energy, electronics and biotech. 



The new figures are substantially higher than preliminary numbers released this past Spring (see the May 4, 2001 issue of the Digest ) as they include not only independent venture-backed enterprises but also those venture-backed companies that have been acquired. 



The NVCA also released data that details venture-backed job and revenue creation by state. Topping both lists are California, Texas, Pennsylvania, Massachusetts, New York, and Washington. 



The study shows there was an unprecedented geographical diversification of venture capital during the past five years. While states such as California, Massachusetts and New York have consistently been national hotbeds

for venture investing, other states showed considerable growth and promise, including Maryland, Minnesota, Georgia, Oregon and Colorado. 



More information, including the state-by-state statistics, is available at: http://www.nvca.org/ 

A national conference since 1997, the RuralTeleCongress (RTC) has transformed into a national organization devoted to rural telecommunications. RTC, which held its inaugural session October 14-16 at the Aspen Institute in Colorado, has launched a redesigned website as part of its transformation. 



RTC is expected to serve five functions: an educator, convener, facilitator, and discussion forum; a catalyst for rural-based research; a disseminator of information; a way to dispel rural stereotypes; and an instrument for sharing and leveraging limited resources. 



The purpose of RTC is to be a convener of rural interests in rural telecommunications policy and its implications for rural consumers, with participants including citizens, small businesses, practitioners, industry representatives, federal and state and regulatory bodies, and representatives from other organizations. 



RTC's redesigned website will allow new members to register online and, supporting the creation of state chapters, will encourage the sustainability of seven areas of interest within each state and nationally. Initially, RTC will focus on seven areas related to rural telecommunications: