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SSTI looks at Milken's State Technology & Science Index

The Bush Administration's first budget request offers a mixed bag for state, local, and non-profit practitioners and policymakers in tech-based economic development. In research categories, the budget reflects the Administration's research emphasis in defense, biotechnology, and life sciences. The budget also reorganizes the nation's energy research priorities. Most other research categories were held at FY 2001 funding levels or received modest increases or cuts.

Research funding levels, with the exception of $150 million in Congressional earmarks, remain relatively flat between FY 2001 appropriations and the President's FY 2002 request. Economic development and Digital Divide programs, on the other hand, take several hits. Selected agency program highlights include:

The total agency budget request is $4.8 billion, $300 million less than the FY 2001 appropriation level. The majority of the reduction is absorbed by elimination of new project funding for the Advanced Technology Program, a 67 percent cut or $30 million for the Technology Opportunities Program, and a $77 million cut in Economic Development Administration programs. Selected Commerce program highlights include:

The Administration budget request calls for a $2.6 billion increase for missile defense alternatives and new technology development. The President plans to increase military research by $20 billion over the next five years. Research, Development, Testing & Evaluation (6.1, 6.2, and 6.3 spending categories) would grow by only two percent in FY 2002, however. The American Institute of Physics reports the final Defense budget request will be released on May 15.

The agency's total FY 2002 budget request of $19.2 billion reflects a drop of 2.3 percent. The DOE science budget would increase to $3.16 billion, representing an increase of one-tenth of one percent. Shifts within the R&D budget reflect the President's priorities in fossil fuel research: $150 million in new matching federal funds will support the Clean Coal Power Initiative. Funding for Biological and Environmental Research, on the other hand, falls by more than eight percent.

The Administration's FY 2002 budget request of $7.3 billion is $56 million, or 0.08 percent, higher than the FY 2001 appropriation. Funding for EPA science programs would be cut by $27 million or nine percent. Highlights of specific programs within the science budget include:

The Administration’s budget request includes a 13.8 percent increase of $2.8 billion in biomedical research within the National Institutes of Health. Not to be outdone, the Senate has already passed a budget resolution calling for an additional $700 million in NIH funding for FY 2002.

Total funding for the Community Development Block Grant (CDBG) program is reduced by $9.7 million or 0.3 percent over FY 2001 levels. A new $80 million Community Technology Centers initiative within the CDBG program budget will provide competitive grants to support the development and expansion of technology centers in high poverty urban areas. The budget request says the new centers will enhance the Dept.

The Administration's $14.5 billion request for NASA reflects an increase of just under two percent over the FY 2001 appropriations. While funding for the Science, Aeronautics and Technology unit of the budget would grow from $7.067 billion in FY 2001 to $7.192 billion in FY 2002, the distribution of funding across areas within the unit shifts:

NSF would receive $4.47 billion dollars in FY2002, up $56.1 million (or 1.3 percent) from FY2001 under the President’s budget request. S&T highlights are:

The Administration's budget request eliminates the New Markets Venture Capital Program, the New Markets and the Venture Capital Technical Assistance Grants. The programs are designed to increase access to equity capital and technical assistance to women, minorities and to businesses located in low- and moderate-income rural areas and inner cities.

The FY 2002 budget for Transportation proposes $59.5 billion, the highest funding level in the Department’s history. A summary of research and technology related programs follows:

Shortly after a General Assembly vote last week, Pennsylvania Gov. Ed Rendell announced the bipartisan approval of the remaining components to the state’s economic stimulus package. The governor's plan is intended to fuel major new investment in communities across the state.

Legislation to create investment tax credits and a technology commercialization grant and loan program was approved by the Wisconsin Assembly just before the close of the legislative session. Intended to encourage high-tech industry and entrepreneurship in the state, Senate Bill 261 is designed to create approximately $62 million in new funding for start-ups.

Increased financial support for start-up companies and the research sector has the attention of Canadian Minister of Finance Ralph Goodale. In the Minister's 2004 budget report, released last month, venture capital (VC) initiatives totaling $270 million (CAN) are targeted for investment. Combined with private sector investments, total VC funding is expected to amount to $1 billion.

Although Massachusetts' universities may be at the fore of nanotechnology research and development (R&D), they must continue to win on research for the state to stay competitive for federal funds, suggests a recent report by the Massachusetts Technology Collaborative (MTC) and the Nano Science and Technology Institute (NSTI).

A significant reduction in employment among southwestern Pennsylvania's technology industries in 2002 was not enough to offset signs of a turnaround, according to new data released by the Pittsburgh Technology Council (PTC). Over the second half of the year, a turnaround began to emerge and technology companies accounted for nearly 17.5 percent of the region’s workforce, PTC's annual State of the Industry Report shows.

The Howard Hughes Medical Institute (HHMI) announced last month a partnership with the Loudoun County, Va., school district to donate $1 million per year to establish a biotech magnet program for area high school students.

President Bush is nominating Floyd Kvamme as co-chair of the President's Committee of Advisors on Science & Technology (PCAST). Mr. Kvamme is a Partner with Kleiner Perkins, a high-tech venture capital firm based in California.