In the November 17, 2000 Issue:

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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$40 Billion Payoff from Academic Research Reported
The commercialization of academic research in 1999 resulted in more than $40 billion in economic activity that supported more than 270,000 jobs, according to a survey released Tuesday by the Association of University Technology Managers (AUTM). The 1999 AUTM Licensing Survey reports that business activity associated with sales of products from academic research last year is estimated to have generated $5 billion in tax revenues in the U.S. at the federal, state, and local levels.

AUTM's ninth licensing survey on technology transfer activities among academic institutions in the U.S. and Canada found:

Responding to the survey were 139 U.S. universities (including 94 of the top 100 research universities), 29 U.S. teaching hospitals and research institutes, 20 Canadian institutions, and one patent management firm. The full report, available for purchase from AUTM, includes 27 tables presenting the results by several categories and by responding institution.

For the first time, the 40-page Survey Summary is available online on the AUTM website: http://www.autm.net/

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MoneytreeTM Finds VC Slip in 3rd Quarter
Venture-based investments in the third quarter of 2000 reached $17.6 billion, a decrease of 12.5 percent drop from the record $19.8 billion reported in the second quarter of 2000, according to the latest PricewaterhouseCoopers MoneyTreeTM Survey results. Investments, however, are still nearly double the $8.9 billion reported in the third quarter of 1999. The MoneytreeTM figures correspond with declines reported by other quarterly venture capital surveys compiled by the Venture Economics and the National Venture Capital Association.

Most of the 12.5 percent decrease in activity between the two most recent quarters is accounted for by a $1.9 billion drop in investments in Internet-related companies. The number of Internet-based companies receiving funding, however, only declined by 5 percent for the period. Survey analysts at PricewaterhouseCoopers report VC shifted significantly from website development, content and B2B/ecommerce to more tangible tools, networking, equipment and applications. Regionally, declines in total investments were reported in New England, the Southeast, and Texas while Silicon Valley and Metro New York remained relatively level.

A trend in fewer deals getting larger investments continues to be reflected in the latest MoneytreeTM results. Average funding per company has increased 55 percent since last year.

To assist Digest readers wanting to review the data on a state level, SSTI has prepared the accompanying table presenting the 3rd quarter results on a state-by-state basis. Links to the state distribution for previous quarters can be found at the bottom of that webpage or in the Digest Subject Index [discontinued] under "Venture Capital."

Complete MoneyTreeTM survey results can be found at: http://www.pwcmoneytree.com

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SSTI Receives EDA Award to Support Digest
The SSTI Weekly Digest has a new sponsor, making the publication free to any and all parties interested in tech-based economic development. The Economic Development Administration, U.S. Department of Commerce, selected SSTI as one of three awardees in a competitive solicitation for national information dissemination projects. SSTI proposed dramatically expanding the content and distribution of the Digest and establishing a web-based resource center.

The new cooperative agreement, potentially renewable for two more years, permits SSTI to do several things to enhance the value of the Digest for tech-based economic development professionals, particularly those working at local, regional, and state levels. Beginning with this week's "telco hotels" story, look for expanded coverage of local and regional issues in science, technology, and R&D. Occasional special Digest issues will focus on specific themes and elements of tech-based economic development.

Additionally the EDA award will allow SSTI to create a web-based resource center tailored to economic development practitioners in distressed areas as a freely-accessible section of the SSTI web site. The site will contain an overview of tech-based economic development with sections addressing each of the elements necessary for a thriving tech-based economy. Look for announcements of these additions over the next few months.

If others on your staff, colleagues, board members, and other organizations may benefit from receiving their own copy of the SSTI Weekly Digest, please encourage them to sign up for a free subscription at: http://www.ssti.org/Digest/digform.htm

SSTI is grateful to EDA for the award. We also want to thank the Digest readers who provided feedback and constructive suggestions during the past four years -- it was your efforts and support that made the Digest worthy of EDA's consideration. We're counting on you, too, to help the Digest evolve into an even better tool.

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Growing Pains for Cities Appear as New Economy Matures
Downtown office vacancy rates are at all-time lows, leasing rates are rising, and your city is increasingly a hub for business activity. Even the old, historic structures have been rehabbed and are at capacity. Sounds like dreams for most urban economic developers, right? For a growing number of communities, however, meeting these goals is leading to “New Economy ghost towns” devoid of the foot traffic, night life, and other human activity necessary for a thriving community. Retail, service and even private parking garages are complaining that the New Economy is killing their businesses.

During the past two years, buildings dedicated almost entirely to housing the telecommunications infrastructure critical for the New Economy have appeared everywhere. Commonly called “telco hotels,” these facilities serve as shared warehouses of fiber-optic cable and telephone wiring for co-locating telecommunications, data firms, Internet service providers, Internet incubators, and other dot coms.

Older, often-historic structures seem to be especially appealing sites for telco hotels because of their sturdy brick/concrete construction, high-ceilings, and central location in the heart of a region’s power grid. Closed shopping malls and movie theaters also seem to hold a special charm for being transformed into telcos because they can handle the heavy switching equipment. These same structures are present in large numbers in the urban core of most American cities and have been difficult for many urban economic developers to refill. As a result, the initial reaction of many local governments and media has been enthusiastic. Building owners are also thrilled because most telecom space rents at the same rates as prime class A office space and, although they are called telco hotels, most telecom tenants plan to stay for a very long time. Some examples of the growth:

Because telco hotels require very few people, though, most problems arise when there are too many occupying prime downtown office space or clustered together into several blocks of “virtual wasteland.” Space occupied for telco hotels in Los Angeles has grown from 700,000 sq. feet in 1998 to 1.9 million in 1999 and nearly twice that figure estimated for 2000. Half of LA’s telcos are downtown, creating problems for the urban economic developers trying to increase foot traffic in the area to support restaurants, theaters, stores and services.

Some cities are beginning to respond with zoning and use restrictions. For example:

While a glut of telecom space is expected to occur eventually, the current market leaves real estate analysts seeing no near-term end to the explosive growth of telco hotels, meaning more local economic development officials across the country may be facing the same issues in the near future.

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Recipients for National S&T Medals Announced
The recipients of the 2000 National Medal of Science and National Medal of Technology, the nation's highest science and technology honors, were announced this week. The National Medal of Science, established by Congress in 1959 and administered by the National Science Foundation, honors individuals for contributions to the present state of knowledge across a variety of science frontiers. Ten of the twelve researchers received NSF support for portions of their academic careers or research and two of the medalists are Nobel Prize winners. The recipients of the 2000 National Medal of Science are:

Established in 1980 and administered by the Department of Commerce, the National Medals of Science and Technology recognize technological innovation and advancement of the nation's global competitiveness benefiting society and contributing to the national standard of living. The individual National Medal of Technology winners are:

The team medal was awarded to Corning Glass researchers Donald B. Keck, Robert D. Maurer, and Peter C. Schultz. The IBM Corporation and Louis V. Gerstner, CEO, received the company medal.

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Funding Opportunities

U.S. Department of Energy
The Energy Efficiency and Renewable Energy Office will release a solicitation later this month for grants and cooperative agreements for information dissemination, public outreach, training, and related technical analysis and technical assistance activities involving renewable energy and energy efficiency. Eligible applicants for this solicitation are profit organizations, non-profit institutions and organizations, state and local governments, universities, individuals, Native American Organizations, and Alaskan Native Corporations. It is anticipated that FY 2001 funding under renewable energy programs will be approximately $2 to $3 million and approximately $3 to $4 million under the energy efficiency programs. Applicants are encouraged to submit a pre-application not longer than two pages no later than 11:30 pm (EST) on December 1, 2000. Application due dates for the various program areas will be staggered throughout January 2001. The formal solicitation will be disseminated electronically as solicitation number DEPS01-01EE10781 and will be available at the Industry Interactive Procurement System homepage located at http://doe-iips.pr.doe.gov

The Office of Energy Efficiency and Renewable Energy, State Energy Program (SEP), has issued a notice for 2001 State Energy Program Special Projects. State energy or other agencies responsible for administration of a state’s Energy Program (in the 50 states, the District of Columbia, Puerto Rico, or other U.S. territory or possession) are eligible to apply for an estimated $14.8 million in financial assistance funds for FY 2001. The goals of the program include: accelerate deployment of energy efficiency and renewable energy technologies; facilitate the acceptance of emerging and underutilized energy efficiency and renewable energy technologies; and, increase the responsiveness of federally funded technology development efforts to private sector needs. Complete information about this program, including phone numbers for the State SEP offices and a question and answer forum is available at http://www.eren.doe.gov/buildings/state_energy/fy01/sepsp01-forum

The National Energy Technology Laboratory has released a solicitation for “Infrastructure Reliability for Natural Gas” with the goal of maintaining the integrity and efficiency of the gas infrastructure. DOE is requesting proposals which support technology developments in the areas of both natural gas transmission and distribution infrastructure, specifically development of technology to: ensure the integrity and reliability of the design, construction and operation of the natural gas transmission infrastructure; ensure the integrity and reliability of the design, construction and operation of the natural gas distribution infrastructure; and, which may crosscut the areas listed above. It is anticipated that approximately $10 million will be awarded through this solicitation. There is a minimum 35% cost share for proposals funded. Proposals are due January 9, 2001. The solicitation is available at http://www.netl.doe.gov/business

Department of Health and Human Services
The Administration for Children and Families, Head Start Bureau has funds for two priority areas: University-Head Start Partnerships and Graduate Student Head Start Research Grants. These two areas will support research activities in infant and toddler development within the cultural context, school readiness, mental health and field-initiated research which will increase knowledge of low-income children’s development for the purpose of improving services or adjusting policy. Eligible applicants are institutions of higher education on behalf of graduate students at both the Master’s and Doctorate levels. There are no matching requirements; the maximum federal share of project costs will range between $10,000 and $20,000 for the first-year budget and a maximum of $40,000 if a two-year period is requested. The application and all necessary forms can be downloaded from the Head Start web site at http://www.acf.dhhs.gov/programs/hsb The closing date is February 7, 2001.

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Tech Transfer Opportunities
During the past few weeks, the Department of the Navy, National Institutes of Health, and the Department of Commerce have announced the availability of 22 inventions for license. Descriptions and contact information for each invention/patent are presented on the accompanying SSTI webpage

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