December 12, 1997 -- SSTI Weekly Digest

Copyright State Science & Technology Institute 2002. Information in this issue of the SSTI Weekly Digest was prepared under a cooperative agreement with the U.S. Department of Commerce, Economic Development Administration. Redistribution to all others interested in tech-based economic development is strongly encouraged — please cite the State Science & Technology Institute whenever portions are reproduced or redirected. Any opinions expressed in the Digest do not necessarily reflect the official position of the U.S. Department of Commerce.

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VENTURE CAPITAL INVESTMENTS AT RECORD LEVEL FOR SECOND STRAIGHT QUARTER

Price Waterhouse recently announced that venture capital investments hit an all time record in the third quarter of 1997. Total investments exceeded $3.5 billion, eclipsing the previous high of $3.2 billion reported in the second quarter of 1997. Compared to the third quarter of 1996, investments increased 75%, the largest percentage increase measured by the survey. These findings were released in the Price Waterhouse Venture Capital Survey, a quarterly report of venture capital investments throughout the United States.

A total of 675 companies received financing in the third quarter compared to 443 companies in the same period last year which is a 52% increase.

Technology-based companies also set a record in the third quarter. As a group, companies in the classifications of Biotechnology, Communications, Computers & Peripherals, Electronics, Environmental, Medical Instruments, Semiconductors, and Software & Information captured $2.25 billion, or 63% of all dollars invested and 68% of all companies.

The following represents the amount of venture capital dollars invested by region in the third quarter:

Region	Investment Amount	Percentage of Total
Silicon Valley	1,088,611,500	30.5%
Southeast	333,540,000	9.3%
New York Metro	319,032,000	8.9%
New England	296,159,000	8.3%
Midwest	252,737,000	7.1%
LA/Orange Co	250,709,000	7.0%
Texas	246,977,000	6.9%
Northwest	190,029,500	5.3%
DC/Metroplex	125,517,000	3.5%
San Diego	104,348,000	2.9%
Southwest	95,613,000	2.7%
Colorado	91,175,000	2.6%
Philadelphia	70,532,000	2.0%
North Central	37,752,500	1.1%
South Central	29,550,000	0.8%
Upstate NY	26,475,000	0.7%
AK/HI/PR	15,400,000	0.4%
Total	$3,574,157,500	100%

Silicon Valley: N CA, Bay area and coastline
Southeast: AL, FL, GA, MS, TN, SC and NC
NY Metro: Metropolitan NY area, N NJ, and Fairfield Cnty, CT
New England: ME, NH, VT, MA, RI, & CT (excluding Fairfield Cnty)
Midwest: IL, MO, IN, KY, OH, MI, and western PA
LA/Orange Cnty: Los Angles, Ventura, Orange, & Riverside Counties
Northwest: WA, OR, ID, MT, and WY
DC/Metro: Washington, D.C., VA, WV, and MD
Southwest: UT, AZ, NM, and NV
Philadelphia Metro: Eastern PA, Southern NJ, and DE
North Central: MN, IA, WI, ND, SD, and NE
South Central: KS, OK, AR, and LA
Upstate NY: Northern NY except Metro NY City area

More information on the survey results can be located on the web at http://www.pw.com/vc.

R&D EXPENDITURES TOP $200 BILLION IN 1997

Research and development expenditures in 1997 are expected to reach $205.7 billion, a 6.5 percent increase over 1996's $193.2 billion in spending. Since 1994, R&D spending has been increasing at a rate of more than 5 percent a year, according to a recent National Science Foundation Data Brief.

The federal share of the nation's R&D expenditures is expected to continue declining -- to 30.5 percent of R&D expenditures. The federal share of the nation's R&D funds first fell below 50 percent in 1978 and was consistently between 44 and 47 percent from 1980 to 1990. Since then, the federal share has dropped steadily.

Industry has provided the greatest share of total support for R&D since 1980 and will continue to do so in 1997. Expenditures by industry are expected to reach $133.3 billion (64.8 percent of all expenditures). Of that total, virtually all (97.9 percent) of the funds are used by industry. The remainder goes to academic institutions and other nonprofit organizations.

The remaining R&D expenditures are made by academic institutions, state and local governments, and other non-profit institutions.

Of the $205.7 billion in R&D expenditures in 1997, 15.2 percent ($31.2 billion) is expected to be spent on basic research, 22.5 percent ($46.2 billion) on applied research, and 62.4 percent ($128.3 billion) on development.

Copies of the Data Brief (NSF 97-328), "R&D Exceeds Expectations Again, Growing Faster than the U.S. Economy during the Last Three Years," can be found on the National Science Foundation's Division of Science Resource Studies' website at http://www.nsf.gov/sbe/srs/databrf/db.htm.

NAVY COMMITS $10 MILLION TO NATIONAL OCEANOGRAPHIC PARTNERSHIP PROGRAM

The Office of Naval Research has announced that approximately $10 million is available for projects in two topic areas under its National Oceanographic Partnership Program. The program is open to academia, industry, and government proposers. Teamed efforts involving performers from at least two of the three sectors are encouraged.

The first topic area is the development or demonstration of coastal and open ocean observational technologies to establish the means for continuous, high-resolution measurements. Examples include next generation reporting drifter buoys and low-cost autonomous vehicles. The Navy is also interested in the development and demonstration of components for these systems. Approximately $6 million is available to support four to six projects.

In addition, efforts to develop sensors and instrumentation packages that are compatible with these systems are solicited. The Navy anticipates two to three awards in the range of up to $250,000 per year for two years for these smaller projects.

The second topic area is the development and exploitation of regional scale coastal and open ocean prediction systems. These systems must integrate existing military and civilian observing and prediction services including networked sensor systems. The Navy's goal for this topic area is cutting edge "4-D nowcast" and forecast systems for the open ocean and coastal ocean. Approximately $4 million is available for two to four awards.

Project proposals are due January 27. Additional information can be found at www.onr.navy.mil/sci_tech/ ocean under "Additional Points of Interest" or by calling Brian Glance at the Office of Naval Research, 703/696-2596.

TRANSPORTATION SCIENCE AND TECHNOLOGY STRATEGY RELEASED

The National Science and Technology Council (NSTC) report, Transportation Science and Technology Strategy, has been released. The Strategy was written to aid Congress, the White House, and federal Agencies in establishing national transportation R&D priorities and coordinating research activities. The report highlights ongoing federal research efforts in transportation science and technology and identifies areas of new opportunity and gaps for federal support.

The report found that understanding the transportation infrastructure of the nation from a global perspective is essential to the ability of the United States to compete effectively in the future as well as to support domestic commerce. Transportation R&D must focus on innovations to help the nation cope with an expanding world population, urbanization, a rising volume of air passenger and air freight trips, growing marine traffic, and an increasing automobile population.

The report focuses on transportation technologies designed to improve safety, enhance information and computer technologies, optimize energy-efficient technologies, and improve physical infrastructure and freight movement through international and domestic gateways.

The comprehensive strategic plan developed by the NSTC's Committee on Transportation Research and Development was the result of an inter-agency team representing the Departments of Transportation, Defense, Energy, and Commerce, the Environmental Protection Agency, the National Aeronautics and Space Administration, the National Science Foundation, and the White House.

Copies of the Strategy are available from NSTC by calling 202/456-6100, or via the web at http://scitech.dot.gov under "What's New."

As a result of the release of this report, a special session on the Transportation S&T Strategy and Deployment Activities will be held as part of the Transportation Research Board Meeting. The session will be held on January 12, 1998 in Washington, D.C. Deputy Secretary of Transportation, Mortimer Downey, senior White House officials, and Federal program managers will be presenting. Contact Fenton Carey for more information at 202/366-4434 or by e-mail at Fenton.Carey@RSPA.Dot.Gov.

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