SSTI Digest

The majority members of the House Science Committee released an analysis of the President's R&D budget request. Overall, the report recognizes the real increase in non-defense R&D spending; however, it is critical of the increase being funded by uncertain tax increases. Some of the major conclusions from the report are:

The report finds that except for FY1999, real spending for total R&D investments is less than FY1998 levels in all other years (FY2000-2003). In terms of actual dollars, spending increases significantly in FY1999 and then dips before recovering in FY2002.

In terms of real dollars, there is an increase every year in non-defense R&D. However, there is a decrease in real dollars every year in defense R&D. It is projected that for the first time non-defense R&D will surpass defense R&D by FY2001.

The South Carolina Technology Advisory Council (SCTAC) has released a technology strategy for the state. Creating South Carolina's Future Through Technology: Strategies for Developing a Knowledge-Based Economy grew from a 1995 strategic plan for economic development, Approaching 2000: An Economic Development Vision for South Carolina.

The technology strategy builds on the state's successes in attracting capital investments and jobs from large manufacturing companies. The plan is designed to increase the wealth-generating capacity of South Carolina's economy by making the state more competitive in supporting and expanding its base of high-growth technology companies, new knowledge-based start-up companies, and world-class scientific and engineering operations.

As a result of a recent study on the federal role in economic development, the U.S. Economic Development Administration (EDA) is concerned that the current federal statistical system is not meeting the needs of economic development practitioners. EDA has commissioned a web-based survey to assess the usefulness of the data.

The National Academy of Public Administration (NAPA), in a report commissioned by EDA, noted that state and local development agencies rely heavily on data generated by federal statistical agencies, and by state employment agencies following federal methodologies.

The report suggests that a long-standing lack of coordination among federal agencies, recent cutbacks in funding for federal statistical programs, and the low priority placed on regional data has resulted in a data collection system that cannot supply usable, reliable data of a region's economic activity.

Price Waterhouse recently announced that venture capital investments hit an all-time record in the fourth quarter of 1997. Total investments exceeded $3.7 billion, eclipsing the previous high of $3.5 billion reported in the third quarter of 1997. Compared to the fourth quarter of 1996, investments increased 50%. These findings were released in the Price Waterhouse Venture Capital Survey, a quarterly report of venture capital investments throughout the United States.

The following table shows the amount of venture capital dollars invested by state in the fourth quarter of 1997:

The National Science Foundation (NSF) has released an assessment of its Engineering Research Centers (ERC) Program. The two-part study looked at two key aspects of the ERC program: ERC- industry interaction and effectiveness of former ERC graduate students in the workforce.

The ERC-industry portion of the study found that the benefits received by member companies is directly related to the length and level of involvement in a center. The longer a firm participates and the more direct personal interaction there is between corporate and center personnel, the more direct benefits the firm will have received and the greater the impact on company competitiveness.

The study cited three factors in promoting industry participation: (1) the existence of a champion for the ERC within the company; (2) the receptivity of company technical staff to ERC ideas and results; and (3) management support for the ERC partnership within the company.

The R&D Credit Coalition recently released a report that concludes the federal R&D tax credit would pay for itself by boosting productivity and economic growth. According to the report, making the R&D tax credit permanent would stimulate an additional $41 billion in R&D activity by U.S. companies between 1998 and 2010.

The coalition sponsored a study prepared by Coopers & Lybrand's Tax Policy Economics Group. The study examined both the cost of the tax credit to the Treasury and impact of the provision on the economy.

The R&D Credit Coalition is comprised of approximately 1,000 companies and trade associations and supports efforts to make the tax credit a permanent part of the tax code. Currently, the R&D tax credit is considered temporary and is scheduled to expire June 30, unless Congress votes to extend it.

Other benefits cited by the report include:

A recent study found that students are performing at higher levels in mathematics and are taking more higher-level math and science courses in the majority of the 40 states that participated in a recent study of U.S. mathematics and science education.

The findings come from State Indicators of Science and Mathematics Education, 1997. This study, the fourth in a biennial series on the condition of K-12 science and math education, was funded by the National Science Foundation (NSF) and prepared by the Council of Chief State School Officers (CCSSO) with cooperation from the state departments of education and the National Center for Education Statistics.

The CCSSO study focused on student achievement in mathematics and science, mathematics and science content and instruction, and teacher preparation, supply, and conditions. Major findings include:

Industry associations are expressing concern that the diversion of user fees from the U.S. Patent and Trademark Office (PTO) is adversely affecting the speed of innovation. The PTO receives no taxpayer dollars and is supported entirely by user fees; however, for the last several years, most of those user fees have gone to the government's general fund to help balance the budget rather than to support PTO operations.

Under the Clinton Administration's 1999 budget proposal, $119 million in user fees would go to the general fund. This amount is up from $92 million in FY1998 and $54 million in FY1997.

Several professional associations and trade groups, including the National Association of Manufacturers, have argued that if PTO were able to retain more or all of its user fees the PTO would be able to cut its backlog of pending patent applications and speed the process of bringing new products to market.

Joel B. Russ was recently named the new president of the Maine Science and Technology Foundation (MSTF). Prior to accepting this position, Russ served as the President and CEO of the Chamber of Commerce of the Greater Portland Region, as well as serving as a member of the MSTF's Board of Directors. MSTF is a state-chartered, non-profit organization whose mission is to stimulate science and technology-driven economic growth in Maine.

Dr. Jack Gibbons, the President's science advisor and the director of the Office of Science and Technology Policy, announced late last week that he will resign effective March 15. Dr. Neal Lane, the director of the National Science Foundation (NSF), has been nominated by President Clinton to replace Gibbons. Replacing Lane at NSF will be Dr. Rita Colwell, the president of the University of Maryland Biotechnology Institute. Colwell was nominated earlier this year to become deputy director of NSF. Indications are that Dr. Joseph Bordogna, who has been acting deputy director, will continue in that capacity for the near term.

Lane has a Ph.D. in physics from the University of Oklahoma. He has been the director of NSF since 1993. Prior to that, he served in a variety of academic positions at Rice University and the University of Colorado.

Pennsylvania Governor Tom Ridge recently announced the release of The Technology 21 Report — The Keystone Spirit: Putting Technology to Work. Commissioned by Ridge and the Ben Franklin/IRC Partnership Board, the Technology 21 initiative is an industry-led project that will implement a comprehensive technology policy for Pennsylvania.

The Tech 21 report calls for:

The Washington Technology Center (WTC) is seeking an Executive Director. WTC is the state of Washington's enterprise for joint industry-university technology development partnerships. The Center supports technologies for industry application for Washington companies in the areas of advanced materials and manufacturing, biotechnology/biomedical devices, computer systems and microelectronics.

The Executive Director has overall management and administrative responsibility for four research areas/programs and a ten person staff. The Executive Director serves as the primary WTC representative with industry, university and government leadership, responsible for long range planning, major facilities planning, development and implementation of WTC policies and procedures.