In the September 1, 2000 Issue:
- Mississippi S&T Policies Taking Shape
- HP Selecting Three “Digital Villages” to Receive $15 Million
- Recent Reports & Studies
- Nominations Sought for NSF’s Highest Honor
- Conference Sponsor Profile: Advanced Technology Program
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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Mississippi S&T Policies Taking Shape
Unprecedented Goals, Unparalleled Progress, a report released in early August by Mississippi Governor Ronnie Musgrove, calls for the state to address several issues to better position the state to compete in the New Economy. Elements of the plan affecting the state’s science and technology base include:
- making best use of knowledge-based resources through Mississippi by making the ‘University Connection’ through a cluster approach to economic development and university research in areas such as biosciences, engineering, supercomputing and polymers
- enhancing the information infrastructure to support community and capacity building by hiring a chief technology officer within the Mississippi Development Authority (formerly the Mississippi Department of Economic and Community Development) to explore methods to broaden access to the state’s telecommunication backbone
- matching incentives and innovations to the needs of the New Economy, including having the Mississippi Development Authority serve as a conduit to connect venture capital resources with university-based R&D and start-up opportunities for commercial ventures
- creating an office in Washington DC to pursue and secure federal research dollars
A cluster study completed for the plan by Dr. Michael Porter of the Harvard Business School was funded in part by the state’s new lead organization for science and technology, Mississippi Technology, Inc. Currently seeking its first CEO, MTI has received $1.5 million as seed funding from the state to promote technology-related economic development.
In presenting the plan on August 7, Governor Musgrove called for a special session of the state legislature on August 28 to pass "Advantage Mississippi," a package of economic development initiatives intended to make Mississippi “America’s State of Promise.” This past Wednesday, the state legislature approved much of the package, which created tax credits for new job creation in less developed and rural areas, authorized regional economic development partnerships across state lines, and permits the reorganization of the Mississippi Development Authority along a cluster approach.
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HP Selecting Three “Digital Villages” to Receive $15 Million
Through its Digital Village Program, Hewlett-Packard is providing up to $15 million in products and resources over a three-year period to three communities who need assistance to participate fully in the New Economy. East Palo Alto, CA already has been designated as a Digital Village; the remaining two will be selected through a competitive process.To be considered, an applicant must meet the following criteria: 1) be an underserved community - facing geographic, technological and/or economic barriers to achieving the desired community vision, 2) have a population of no more than 50,000 residents, and 3) the applying community partnership must include: local school district(s); a local or nearby community college or four-year institution; and a public agency, community college, four-year college or university, or private nonprofit 501(c)(3) organization.
The program was established to make information broadly accessible in communities facing barriers to communication and also to provide assistance in the development of high-tech skills to the people living there. The components of the HP Digital Village program include initiatives targeting K-12 students at school; Neighborhood Community Centers where adults and kids can receive help before and after school exploring via the Net; and, home-based access to Internet tools and information to help families learn together.
Proposals, to be submitted on-line, are due November 8, 2000. Applicants must register their intent to submit a proposal by September 29. Decisions will be announced next February.
Applications will contain the following six parts: general project information; community partnership information; community vision; community demographics; community and technology assessment; and a project plan. To download the application or to find out more about this opportunity, visit http://webcenter.hp.com and click on Hewlett-Packard Philanthropy.
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Conference Sponsor Profile
The Advanced Technology Program
The Advanced Technology Program (ATP), part of the National Institute of Standards and Technology, Technology Administration, US. Department of Commerce, partners with the private sector to spur research on to the development stage and into the market. ATP’s early stage investments accelerate the development of innovative technologies that promise significant commercial payoffs and widespread benefits for the nation.A number of factors distinguish ATP from most other government R&D programs:
- ATP projects focus on the technology needs of American industry, not those of government. ATP research priorities are set by industry, based on their understanding of the marketplace and research opportunities.
- For-profit companies conceive, propose, co-fund, and execute ATP projects and programs in partnerships with academia, independent research organizations and federal labs.
- The ATP has strict cost-sharing rules. Joint Ventures (two or more companies working together) must pay at least half of the project costs. Large, Fortune 500 companies participating as a single firm must pay at least 60 percent of total project costs. Small and medium-sized companies working on single firm ATP projects must pay a minimum of all indirect costs associated with the project.
- The ATP does not fund product development. Private industry bears the costs of product development, production, marketing, sales and distribution.
- The ATP awards are made strictly on the basis of rigorous peer-reviewed competitions. Selection is based on the innovation, the technical risk, potential economic benefits to the nation and the strength of the commercialization plan of the project.
The ATP’s support does not become a perpetual subsidy or entitlement – each project has goals, specific funding allocations, and completion dates established at the outset. Projects are monitored and can be terminated for cause before completion.
Companies of all sizes, universities, and non profits all are eligible to partner with ATP. More than half of the program’s 460 projects have had a university partner and a majority of ATP awards have been made to small businesses or to a joint venture led by a small business.
Pending Congressional appropriations action, the 2001 competition will open this fall.
As a sponsor of Beyond the Hype: Tools for Building Tech-based Economies, ATP will have space in the conference exhibitor’s area. Until then, more information can be found on the program’s website: http://www.atp.nist.gov
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Recent Reports & Studies
Gans, Hsu & Stern: When does Start-up Innovation Spur the Gale of Creative Destruction?
Why do some start-up technology businesses choose to directly commercialize their innovations, taking on the industry titans as is common in the electronics industry, while other new tech firms, such as those involved in biotechnology, choose a path of cooperation with the industry leaders, commercializing through licenses, joint ventures, and outright acquisition? The answer(s) should help economic development practitioners and science and technology policy makers design the most effective strategies for technology-based entrepreneurial assistance.Joshua Gans, David Hsu and Scott Stern set out to define the discerning factors or determinants for choosing each path in When Does Start-up Innovation Spur the Gale of Creative Destruction?, an August 2000 Working Paper from the National Bureau of Economic Research (NBER Working Paper #7851). Gans, of the University of Melbourne, Australia, and Hsu and Stern, both of the Sloan School at MIT, work to test how three factors --- intellectual property protection, transactional costs for partnering (including expropriation of the technology), and incumbent sunk costs for production, manufacturing and distribution --- "affect the relative attractiveness of cooperation versus competition."
The authors found that each of the factors is associated with a greater probability to cooperate with competitors for commercialization. Their findings include:
- companies with intellectual property protection are 23 percent more likely to cooperate with competitors than are non-patent holders
- start-up firms with limited or little control over production assets are 18.4 percent more likely to cooperate with competitors
- on average, venture financing increases the relative attractiveness of cooperation with more established firms by reducing transaction costs
- smaller firms are more likely to cooperate, perhaps due to limited availability of capital
- businesses led by their founder are disproportionately more likely to retain control over commercialization, even at the cost of lower profits
As a result, the authors conclude that failures within the "market for ideas," such as high initial production costs or weak patent protection, may be the drivers for the industrial upheaval or creative destruction recorded when technological advances allow small, innovative companies to replace giant corporations as the industry leaders (e.g. electronics, software, and industrial equipment).
The authors work with a data set compiled from surveys of strategic choices made by 55 companies that had received venture capital investments and 86 firms that had won funding from the federal Small Business Innovation Research Program after each company had successfully developed and commercialized a prototype technology. The final sample size, after eliminating responses with missing data points, was 118 start-up businesses. One third of the sample had pursued commercialization through cooperation.
The full paper can be purchased from NBER at: http://papers.nber.org/papers/W7851Return to the top of this page
COGR: Tutorial on Technology Transfer
University-centered technology transfer is not new; however, research institutions have been thrust to the center of much of the discussion for building tech-based economies. A Tutorial on Technology Transfer in U.S. Colleges and Universities, a new paper by the Council on Government Relations (COGR), provides a good primer on the subject from the perspective of the academic institution.The document provides the historical and political framework for university involvement in technology transfer as well as advice on establishing an intellectual property policy and managing IP assets. The majority of the 20-page paper provides detailed steps for transforming an idea generated on a campus into a commercial product or service. Software and web-based products also receive treatment. The paper closes with a discussion on addressing the risks or costs of academic technology transfer, including institutional and personal conflicts of interest.
The paper is intended for member institutions of COGR, however the organization encourages the use of its materials by others through linkages to the COGR homepage: http://www.cogr.edu. Look for the Tutorial and other relevant papers under “publications.”
Commercializing university-developed technology will be a major focus of Beyond the Hype: Tools for Building Tech-based Economies, SSTI's Fourth Annual Conference.
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Nominations Sought for NSF’s Highest Honor
Since its inception in 1975, the Alan T. Waterman Award remains the highest honor awarded by the National Science Foundation. The award is conferred annually to the young researcher who has demonstrated exceptional individual achievement in scientific or engineering research of sufficient quality to place them at the forefront of their peers. The awardee receives a $500,000 nonrestrictive grant over a three-year period for continued research.The deadline for nominations for the 2001 award is December 31, 2000. Candidates must be U.S. citizens or permanent residents, and either be 35 years old or younger or not more than seven years beyond receipt of their Ph.D. More information on the Waterman Award, including past recipients is found at: http://www.nsf.gov/nsb/awards/waterman/
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