SSTI Digest

Stressing partnerships and flexibility, seven regional and national organizations have drafted an action agenda for the federal government to use to strengthen local and regional economic development efforts. After a brief introduction to the New Economy and its implications for local economic development, Partnership for Prosperity: A Federal Economic Development Policy Agenda includes several specific recommendations of interest to Digest readers:

Imagine President Bush using his entire State of the Union Address to present a $23 billion five-year strategy to encourage research, innovation, and entrepreneurship in the country. While it has not received much press in the United States, the equivalent happened when Australian Prime Minister John Howard gave his annual Federation Address on January 29.



Backing Australia’s Ability: An Innovation Action Plan for the Future is the Howard government’s comprehensive strategy to strengthen the Commonwealth’s position in the global economy. The five-year price tag to the government for the new initiatives is 2.9 billion Australian dollars (US equivalent is $1.56 billion). An additional $6 billion ($3.23 billion US equivalent) in private investment is expected to be generated from the plan. In 2000-01, the country of only 19.3 million people spent $4.5 billion ($2.43 billion U.S. equivalent) on research and innovation programs.

The past decade’s economic boom has masked some serious cracks in the foundation of U.S. competitiveness– and it will take a strong policy of local and regional “innovation stimulus” to get the country back on track, says the Council on Competitiveness in U.S. Competitiveness 2001: Strengths, Vulnerabilities and Long-term Priorities.



The report, co-authored by Michael Porter, a Harvard Business School professor and leading proponent of cluster-based economic development strategies, and Debra van Opstal, senior vice president at the Council, is one of a growing number to recognize the important role regional development organizations must play in future national innovation and competitiveness policy.



While the report highlights the role of innovation as a source of U.S. competitive advantage and a driver of productivity and growth, it warns of the implications of the drop in public investment in research and innovation as a share of national wealth during the past decade.

President Bush is expected to release his first budget at the end of the month, and a published report indicates at least one tech program might be slated for significant cuts. The Wall Street Journal in a February 16 article ("Bush Aims to Reduce Digital Divide Funds") reported that their sources indicate the U.S. Department of Commerce's Technology Opportunities Program (TOP) may be slashed 65 percent from $42.5 million to $15 million.



Established in 1994, TOP promotes the widespread availability and use of digital network technologies in the public and non-profit sectors. As part of the Department's National Telecommunications and Information Administration (NTIA), TOP gives matching grants for model projects demonstrating innovative uses of network technologies. Recipients include state, local and tribal governments, health care providers, schools, libraries, police departments, and community-based non-profit organizations

In what could be the largest private sector commitment yet to a single industry/university research center, Corning, Kodak ,and Xerox have combined to pledge a staggering $45 million toward establishing a Center of Excellence in Photonics and Optoelectronics in Rochester, N.Y. The three corporate giants also committed to help raise another $30 million from other private sector companies for the new partnership involving New York State, higher education, and private enterprise. University partners include the University of Rochester, the Rochester Institute of Technology, the University at Albany, Rensselaer Polytechnic Institute, Alfred University, and Cornell University.

Even tech hot spots like San Diego are finding they are not immune from the Digital Divide. In fact, a new report from the San Diego Regional Technology Alliance (SDRTA) finds that the region suffers a wider Internet access divide between Caucasians and Hispanics than the nation as a whole. With Hispanics representing 25 percent of the area’s population, the issue will have future economic repercussions in tech-based entrepreneurship and increasing shortages of workers with tech skills.

Over the next three years, Minnesota Technology, Inc. (MTI) will invest $3 million to support the development of existing and emerging technology-focused industry clusters. The new program is designed to increase collaboration between groups of tech business and the state’s nonprofit research, federal lab, and academic research communities. By focusing on the near-term technology needs of Minnesota businesses, MTI expects the program will lead to increased technology commercialization and high tech employment by the cluster businesses.



MTI anticipates making three to five investments each year, with awards

reaching $300,000 to $500,000 for qualified cluster proposals. Cluster projects must involve a minimum of four companies and at least one outside research resource, such as a local academic partner, federal lab or private, nonprofit R&D facility.



More information on the new program can be found at http://www.minnesotatechnology.org/