SSTI Digest

Pennsylvania has been a leader in tech-based economic development for more than two decades. With more than $208 million for tech-based economic development initiatives, the 2001-02 Budget Request submitted by Governor Tom Ridge this week shows why the state remains at the forefront of the field. Coupled with the $61 million in education technology, "Brain Gain," and digital divide initiatives proposed (see Pennsylvania's entry under this week's Tech Talkin' Govs article below), the state is developing a cradle-to-grave strategy for competing in the New Economy.  The technology-based economic development proposals include:  $56.4 million to be provided through a proposed Ben Franklin Technology Development Authority Fund that would merge the four regional Ben Franklin Technology Centers and the Pennsylvania Technology Investment Authority.  Use part of a one-time tobacco settlement surplus to make a new investment in Pennsylvania's health -- a statewide BioTech Greenhouse program to be patterned after the Pittsburgh Digital…

In a follow-up to Maine Governor Angus King’s call for every 7th grader to have a laptop computer that they would use in school and could take home, the Task Force on the Maine Learning Technology Endowment has recommended that every student and teacher in the 7th through 12th grades be provided with computers that would be wireless and portable. The computers could be used in the classroom and, pending school district permission, be taken home.  Last year, Governor King proposed spending $50 million to purchase laptops for every 7th grader. In response, the Legislature created a $50 million endowment and created the Task Force to make recommendations for how learning technology could be better incorporated in the classroom.  The Task Force report outlines a phased-in strategy that would start with the 2002-2003 school year. The initial phase would target the 32,500 students and 2,330 teachers at the 7th and 8th grade levels. Expansion to grades 9-12 would be dependent on third-party fundraising or improved revenue and cost projections. Students and teachers…

The Washington DC metro area is widely recognized as one of the country’s technology hubs. Unlike the country’s other major tech centers, however, which have been heavily focused on computer technology for several decades (see Annalee Saxenian’s Regional Advantage for a discussion of Silicon Valley and Route 128, for instance), the nation’s capital region went through a significant restructuring during the 1990s as a result of the New Economy and federal government downsizing.  The tech-based boom of the New Economy has not been shared evenly across the metro area, however. A recent study revealed that, during the seven years of 1993-2000, the region enjoyed a growth of 379,500 jobs – with more than 23 percent of those jobs being in the technology industry. The District of Columbia employment base, though, shrunk by nearly 47,000 jobs during the period. The city lost 79,200 government jobs over the seven years, more than two-thirds of them in the federal sector.  Such a substantial transformation in so little time presents new challenges…

Editor's Note: The sixth and final installment in our review of the Governors' inaugural addresses, state of the state addresses, and budget messages for 2001. Previous weeks' installments are available on our website http://www.ssti.org/Digest/2001/headlines01.htm  Alabama  Governor Don Siegelman, State of the State Address, February 6, 2001  http://www.nga.org/governors/1,1169,C_SPEECH^D_684,00.html Requests an appropriation of $10.3 million to create the Alabama Virtual High School, to continue funding the Virtual Library, and to train teachers in technology to provide students with computer skills and information to compete in the 21st century.  Pennsylvania  Governor Tom Ridge, Budget Presentation and supporting press releases, February 6, 2001  http://sites.state.pa.us/PA_Exec/Governor/Speeches/010206-add.html  Budget in Brief at http://sites.state.pa.us/PA_Exec/Governor/budgetadd.html A large number of tech-based economic development initiatives and…

In light of major economic changes due to technological transformation, increased globalization, and changing demographics over recent years, and the resulting effects of rising workforce insecurity, the Office of Workforce Security in the Employment and Training Administration of the U.S. Department of Labor (DOL), will hold its first national research conference.  The conference will focus on issues related to impacts, trends, and challenges of the macro-economy to workforce development, the significance of recent changes in workforce development, workforce competitiveness in global economy, workforce security in the New economy, and major policy options to promote economic opportunities for the workforce.  The office has issued a call for papers to be presented at the event. Papers selected for the conference also will be published as part of the Office of Workforce Security Occasional Paper Series. Travel and accommodation expenses for invited presenters will be paid by the Office of Workforce Security.  Papers…

The Office of Technology in the Utah Department of Community and Economic Development seeks an Assistant Director for the Centers of Excellence Program. The position's responsibilities include promoting the development of new and established Centers that will assist the state economy to expand in focused technology areas. Deadline for application is February 23, 2001. More information on this and additional career opportunities in tech-based economic development can be found at the S&T Job Corner: http://www.ssti.org/posting.htm 

Two new programs from the U.S. Small Business Administration are designed to infuse new capital into economically disadvantaged rural and inner city areas and strengthen existing businesses through technical expertise and mentoring. The New Markets Venture Capital program (NMVC) is anticipated to spur as much as $15 billion in economic development in distressed areas, while BusinessLINC (Learning, Investment, Networking and Collaboration) is designed to assist small firms by providing access to technical assistance, business advice, market knowledge and contracting opportunities that come from relationships with larger companies. The NMVC program will provide $150 million in government guaranteed funds for investment by 15 to 20 VC companies to be selected competitively by the SBA. The venture capital companies will be community-based for-profit organizations with management that has proven track records of investing capital in small businesses for the purpose of community development. The companies must raise at least $5 million in…

Editor's Note: The fifth installment in our review of the Governors' inaugural addresses, state of the state addresses, and budget messages for 2001. The first four articles in the series were over the past four weeks. Those issues of the SSTI Weekly Digest and all other previous editions are available on our website: http://www.ssti.org/Digest/2001/headlines01.htm Massachusetts Governor Argeo Paul Cellucci, Budget Recommendations, FY 2002, January 24, 2001 http://www.state.ma.us/bb/fy2002h1/default.htm Office of Business Development - $4,538,898 for the operation of the Massachusetts office of business development, including funding for statewide technology related grants, with a limit of $536,000 for the Massachusetts international trade council. An increase of $1,113,466 over last year’s recommendation. Biomedical Initiatives - $400,000 for a contract with the Massachusetts  biotechnology research institute; provided, that the institute submits a plan for financial self-sufficiency by July 1, 2002. A decrease of $100,000 from the FY01…

With President Bush announcing the creation of the White House Office of Faith-Based and Community Initiatives, some analysts and practitioners are pondering the implications for economic local and state development efforts. Do faith-based organizations have a role in ED? One doesn’t have to look too far for evidence that some faith-based groups already are actively supporting the push for local tech-based ED. The National Congress for Community Economic Development’s 1998 national census of community development corporations (CDCs) shows 14 percent (about 500) of all CDCs across the country identified themselves as "faith-based organizations." The NCCED provides resources and support for faith-based economic development efforts. The website is http://www.ncced.org In fact, the 2000 Guide to Religious Community Development Investment Funds  reports that religious organizations have invested $900 million in low-income communities. While the vast majority of faith-based activities are oriented to social and health services, there are some significant exceptions. In Los…

There is so much happening in state and local tech-based economic development across the country that we’re adding a new Digest feature: the Regional Roundup. Our goal is to provide 1-2 sentence coverage of news stories, reports and resources demonstrating the variety of activities underway to build a stronger tech-based economy. Of course, whenever possible, we’ll include a link or contact for more information. If you have news you think others in the field should know, add us Digest@ssti.org to your media and newsletter distribution list. Alaska The Alaska High-Tech Business Council <http://www.ahtbc.org&gt; and IT Careers Consortium have released a draft comprehensive "IT Career Pathway Model" for developing Alaska's information tech workforce. The pathway is a blueprint for generating interest in IT careers and providing key competencies to students to ready them for a long-term career in the industry. Arizona The Greater Flagstaff Economic Council <http://www.gfec.org&gt; is opening a new technology incubator serve…

It is widely argued in the tech-based economic development community that New Economy businesses, specifically computers and information technology, account for the tremendous economic growth of the last half of the 1990s. But does the data support this? A look at productivity growth may help to answer the question. Productivity growth is seen as a measure of progress: increases in productivity are often associated with improvements in the nation’s economy and society’s general welfare. William Nordhaus, Professor of Economics at Yale University, has written a series of three papers exploring the measurement of productivity and growth, with particular attention to the contributions of the New Economy sectors. In the first, Alternative Methods for Measuring Productivity Growth, Nordhaus argues the link between productivity growth and economic welfare is not clear. Traditional measures of productivity growth do not reflect improvements in the economic welfare of society. He breaks down the current economic formulae used for measuring productivity growth and closes with an alternative…

Many tech-based economic development programs recognize the importance of having seed and venture capital accessible to their start up tech firms and entrepreneurs. Some practitioners, though, see a challenge in encouraging equity investment in more conservative, risk adverse regions and localities. The dot-com “correction” of last year probably did not help. Accurate estimates of the average return on venture capital investment (VC) may help to open the purse strings of hesitant angel and seed funding sources. But what is a valid estimate of the return on individual venture capital investments? Obtaining an answer to that question has not been easy in the past. In the new working paper, The Risk and Return of Venture Capital, John Cochrane, Professor of Finance with the Graduate School of Business of the University of Chicago, takes on the issue. Attempts by economists in the past have been plagued by a lack of accurate data on the market value of individual VC deals between initial investment and disposition through an initial public offering (IPO), acquisition/merger, or failure…