- Federal R&D Funding Out of Sync with Economy, MTC Finds
- Study Looks at High-Tech Metro Areas
- Five NSF S&T Centers Funded
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.
Subscription to the SSTI Weekly Digest is free. If you are reading a forwarded copy of this issue and would like to receive your own copy each week directly, please subscribe at: http://www.ssti.org/Digest/digform.htm Requests to unsubscribe should be sent to sstiwd@ssti.org
Federal R&D Funding Out of Sync with Economy, MTC Finds
There is potential trouble ahead for R&D and those states with relatively low levels of federal support will be impacted most severely, according to the Massachusetts Technology Collaborative's Analysis of the Impact of FY 2000 Federal R&D Investment Scenarios on Economic Growth.This report, the second conducted by MTC, looks at five funding scenarios currently under consideration by Congress and their effect on the economies of states receiving varying levels of federal R&D support.
Among the reports' conclusions are:
The caps on discretionary spending mandated by the 1997 Balanced Budget Agreement continue to impose severe constraints on proposed R&D investments; without extra-ordinary actions (such as lifting the caps, raising revenues, or shifting funds from other accounts) the federal science programs will face substantial cuts in FY 2000.
Federal support of R&D — measured as a percentage of Gross Domestic Product (GDP) — would resume a downward path in FY 2000 under the President's budget submission and under the budget resolutions approved by the House and Senate (absent an extraordinary effort to shift funds into R&D, away from other discretionary items.)
Strong investment by industry in applied research and in development-related research is expected to keep the total level of investment in R&D at high levels.
Funding for basic research, 55 percent of which is funded by the federal government, has fallen (as a percentage of GDP) and is projected to continue to fall unless a strong commitment is made to sustained expansion of the federal science portfolio.
States that receive the least federal R&D funding, including the 18 EPSCoR states, have the greatest stake in the federal R&D debate because the impact of cuts will be felt more severely in their economies.
MTC's new report updates last year's analysis of the most important proposals on scientific research now before Congress and shows how each would affect the overall level of federal research funding that would flow to the states. (Analyses for all 50 states and the District of Columbia are available as a PDF file on the Collaborative's website at http://www.mtpc.org)
In addition, the report projects the impact of R&D funding scenarios on specific academic and non- profit institutions in New England and at the national level. The report addresses the impact of federal funding decisions on the total level of R&D conducted in the United States and on the mix of basic research, applied research, and development.
The analysis was based on five distinct scenarios that it was felt bracket the range of possible outcomes. Scenarios were chosen that allowed for the development of projections for the next five years and which define distinctly different strategies to federal investments in R&D.
These scenarios were:
President Clinton's FY 2000 Budget Submission (proposing initial decreases and level-funding through FY 2004, utilizing a balanced budget that includes tobacco tax offsets)
The FY 99 Proposal to Double the National Institutes of Health Budget by FY 2003
S. 296 B The Federal Research Investment Act (also known as Frist/Rockefeller, calling for Federal non-defense science budgets to be doubled over eleven years) [Editor's NOTE S. 296 passed the Senate unanimously last week and now moves to the House where its passage is seen as unlikely]
Frist-Rockefeller plus a 5% Department of Defense Science and Technology Increase (as recommended by the Defense Science Board)
President Clinton's FY 2000 Budget Submission minus Tobacco Tax Offsets (as required by Congressional 302(b) Allocations)
A copy of the MTC Analysis of the Impact of FY 2000 Federal R&D Investment Scenarios on Economic Growth can be obtained from the MTC website: http://www.mtpc.org
Study Looks at High-Tech Metro Areas
Technology-based economic growth can be extremely beneficial to metropolitan areas, but comes with risks, according to America's High Tech Economy: Growth, Development, and Risks for Metropolitan Areas. The report was prepared by the Milken Institute, a non-profit economic think tank founded by Michael Milken.Among the report's findings are:
A concentration of high-tech output does not guarantee continuing high-tech growth,
Technology-based economic growth is causing greater income disparity, reducing job security and job tenure, and increasing the risk of unemployment for workers in their 50s,
High-tech manufacturing industries are among the most volatile in the economy, and
The high-tech sector has grown on average four times faster than the overall economy during the 1990s.
Using a series of applied econometric approaches, the Milken Institute examined the role of high technology industries in explaining the relative economic growth of metropolitan areas. They found that high-tech activity (measured by movements in the relative metro real high-tech output index and the 1990 location quotient in high-technology activity) can explain 65 percent of the growth differential between metros in the 1990s.
The authors also developed a composite, standardized measure of high-tech spatial concen-tration combining the location quotient with the metro area's share of the national high-tech output. The result was the identification of "Tech-Poles" — metro areas that have some degree of relative technology gravitational pull or attraction.
The top ten Tech-Poles and their composite index scores were:
1. San Jose/Silicon Valley, CA (23.7)
2. Dallas, TX (7.06)
3. Los Angeles, CA (6.91)
4. Boston, MA (6.31)
5. Seattle, WA (5.19)
6. Washington, D.C. (5.08)
7. Albuquerque, NM (4.98)
8. Chicago, IL (3.75)
9. New York City, NY (3.67)
10. Atlanta, GA (3.46)Smaller high-tech clusters were among the fastest growing. The top ten and their relative high-tech real output growth rate during the 1990s were:
1. Albuquerque, NM (4.37)
2. Pocatello, ID (3.08)
3. Boise, ID (2.93)
4. Cedar Rapids, IA (2.68)
5. Harrisburg, PA (2.58)
6. Columbus, GA (2.39)
7. Merced, CA (2.23)
8. Richland, WA (2.02)
9. Yuma, AZ (1.95)
10. Austin, TX (1.92)Of particular interest and potential value to economic development policy makers are a dozen variables identified as influencing the development or regional high-tech industries. The variables are divided among three groups: public policy, compara-tive location benchmarking, and social infrastructure development.
Research centers and institutions were found to be "undisputably the most important factor in incubating high-tech industries." The federal government was found to have "had an unintended impact on the formation of high-tech clusters around the county through its location of research centers and allocation of grants." Other positive factors included access to venture capital, presence of an educated workforce, and climate and quality of life factors.
Proximity to suppliers and regions offering initial low-costs, on the other hand, were found not to provide a sustainable comparative advantage in high-tech industries.
The report is available from the Milken Institute's website http://www.milken-inst.org
Five NSF S&T Centers Funded
The National Science Foundation (NSF) has committed almost $94 million over the next five years in matching funds for five new Science & Technology Centers (STC). The new centers join 23 existing centers that were selected in 1989 and 1991. (Two more original STCs cease to exist.)The STC program funds academic-industry-government partnerships in specific technology areas for fundamental research activities that create educational opportunities. The centers also encourage technology transfer and innovative approaches to interdisciplinary research projects.
The five new centers are:
Science and Technology Center on Nanobiotechnology (Lead institution: Cornell University)
Science and Technology Center for Adaptive Optics (Lead institution: University of California at Santa Cruz)
Science and Technology Center for Behavioral Neuroscience (Lead institution: Emory University, Atlanta)
Science and Technology Center on the Sustainability of Water Resources in Semi-Arid Regions (Lead institution: University of Arizona)
Science and Technology Center for Environmentally Responsible Solvents and Processes (Lead Institution: University of North Carolina, Chapel Hill)
NSF expects to announce a new Science and Technology Centers: Integrative Partnerships competition in FY 2000.
More information on the new centers and the STC program can be obtained from http://www.nsf.gov/od/oia/stc/start.htm
Return to the top of this page
State Science & Technology Institute
5015 Pine Creek Drive
Westerville, OH 43081
Phone: (614) 901-1690
Fax: (614) 901-1696
Email: ssti@ssti.org© 2002 State Science and Technology Institute. All rights reserved.