In the February 16, 2001 Issue:

Copyright State Science & Technology Institute 2002. Information in this issue of 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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Australia Announces $2.9 B Innovation Package
Imagine President Bush using his entire State of the Union Address to present a $23 billion five-year strategy to encourage research, innovation, and entrepreneurship in the country. While it has not received much press in the United States, the equivalent happened when Australian Prime Minister John Howard gave his annual Federation Address on January 29.

Backing Australia’s Ability: An Innovation Action Plan for the Future is the Howard government’s comprehensive strategy to strengthen the Commonwealth’s position in the global economy. The five-year price tag to the government for the new initiatives is 2.9 billion Australian dollars (US equivalent is $1.56 billion). An additional $6 billion ($3.23 billion US equivalent) in private investment is expected to be generated from the plan. In 2000-01, the country of only 19.3 million people spent $4.5 billion ($2.43 billion U.S. equivalent) on research and innovation programs.

For comparison, the $2.9 billion increase is the equivalent in US dollars of committing $81 per person in new funding for tech-based economic development initiatives over the five-year period. Highlights of the Innovation Action Plan (all figures in Australian dollars) include:

Industrial R&D and Innovation Programs

University R&D and Innovation Programs

Tax Credits, Rebates and Modifications
Streamlining and increasing tax concessions and rebates for businesses’ R&D expenditures ($818 million forgone revenue cost to national government):

The plan, Prime Minister Howard’s speech, and additional background materials on each initiative are available at http://www.innovation.gov.au/iap/

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Competitiveness Council Sees Regional ED Efforts Playing Important Role
The past decade’s economic boom has masked some serious cracks in the foundation of U.S. competitiveness– and it will take a strong policy of local and regional “innovation stimulus” to get the country back on track, says the Council on Competitiveness in U.S. Competitiveness 2001: Strengths, Vulnerabilities and Long-term Priorities.

The report, co-authored by Michael Porter, a Harvard Business School professor and leading proponent of cluster-based economic development strategies, and Debra van Opstal, senior vice president at the Council, is one of a growing number to recognize the important role regional development organizations must play in future national innovation and competitiveness policy.

While the report highlights the role of innovation as a source of U.S. competitive advantage and a driver of productivity and growth, it warns of the implications of the drop in public investment in research and innovation as a share of national wealth during the past decade.

At the press announcement, Porter pointed out, that even while the country enjoyed the longest economic boom in its history, the continued widening of the gap between rich and poor household in the country was “especially troubling,” attributing the problem to the poor lacking the skills and education to participate fully in the economy. “Lack of educational opportunity further contributes to skills shortages in the workforce, especially in science and engineering,” Porter said.

The report identifies long-term policy priorities in three areas needed to ensure global leadership and a rising standard of living:

U.S. Competitiveness 2001: Strengths, Vulnerabilities and Long-term Priorities is available for download at: http://www.compete.org

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Tech to Take Hit in First Bush Budget?
President Bush is expected to release his first budget at the end of the month, and a published report indicates at least one tech program might be slated for significant cuts. The Wall Street Journal in a February 16 article ("Bush Aims to Reduce Digital Divide Funds") reported that their sources indicate the U.S. Department of Commerce's Technology Opportunities Program (TOP) may be slashed 65 percent from $42.5 million to $15 million.

Established in 1994, TOP promotes the widespread availability and use of digital network technologies in the public and non-profit sectors. As part of the Department's National Telecommunications and Information Administration (NTIA), TOP gives matching grants for model projects demonstrating innovative uses of network technologies. Recipients include state, local and tribal governments, health care providers, schools, libraries, police departments, and community-based non-profit organizations

More than 800 people attended the program's three technical assistance workshops held during the last two weeks in preparation for the FY2001
solicitation cycle. In FY 2000, TOP only had enough money to fund five percent of proposals received.

More information on the program can be found at: http://www.ntia.doc.gov/otiahome/top/index.html

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Industry Commits $45 Million to NY Photonics Center
In what could be the largest private sector commitment yet to a single industry/university research center, Corning, Kodak ,and Xerox have combined to pledge a staggering $45 million toward establishing a Center of Excellence in Photonics and Optoelectronics in Rochester, N.Y. The three corporate giants also committed to help raise another $30 million from other private sector companies for the new partnership involving New York State, higher education, and private enterprise. University partners include the University of Rochester, the Rochester Institute of Technology, the University at Albany, Rensselaer Polytechnic Institute, Alfred University, and Cornell University.

The public, academic, and industry partners hope that the new center can position New York as a national leader in optoelectronics-related R&D and job growth, emulating Silicon Valley’s emergence as a hub for the semiconductor industry. More than 91,000 New York residents already are employed in the optoelectronics and imaging industry fields, about 13 percent of the national total.

The center will focus on creating technology transfer and pilot fabrication facilities for high resolution imaging and ultra-fast communications devices that can be shared by Center partners to accelerate product development. The use of light to transfer energy and information is making ever-faster and smaller devices possible, with wide applicability from medicine to telecommunications.

As part of his 2001-02 Executive Budget, Governor Pataki proposed $283 million over five years to provide state support and matching funds to critical private sector and federal investments in emerging high technology fields such as photonics. The state funds are expected to leverage approximately three times their value in federal and private funds. The specific level of state funding the new Rochester center of excellence would receive was not announced.

The state’s Centers of Excellence plan is intended to provide a job-creating bridge between the New York State Office of Science, Technology and Academic Research's (NYSTAR) long-term research programs, such as the Strategically Targeted Academic Research (STAR) Centers, and the business community.

More information on New York’s S&T efforts can be found at http://www.nystar.state.ny.us/home.htm

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San Diego Examines the Digital Divide
Even tech hot spots like San Diego are finding they are not immune from the Digital Divide. In fact, a new report from the San Diego Regional Technology Alliance (SDRTA) finds that the region suffers a wider Internet access divide between Caucasians and Hispanics than the nation as a whole. With Hispanics representing 25 percent of the area’s population, the issue will have future economic repercussions in tech-based entrepreneurship and increasing shortages of workers with tech skills.

Mapping a Future for Digital Connections: A Study of the Digital Divide in San Diego County, released earlier this month by SDRTA, is the first in-depth examination of the extent of the Divide within the community. In some respects, the area is in much better shape than the rest of the country. Seventy-three percent of all San Diego households have computers compared to the national average of only 51 percent. And while computer ownership was 20-30 percentage points higher than the national average for every San Diego ethnic group, African-Americans and Hispanics remained twice as likely not to own a computer as Caucasians and Asians.

While the study identified the extent of the challenges facing the region, it found the financial and technical support infrastructure to address the Divide is beginning to take shape. The significant role of technology to the San Diego economy may have helped the region to start to tackle the issue earlier than many other areas of the country. Through its Community Development Program, SDRTA has been providing direct outreach and technical assistance to local community centers working to address the Divide.

The report closes with several specific recommendations for community leaders to consider:

The full report is available at the SDRTA website: http://www.sdrta.org

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MTI Launches $3 Million Cluster Initiative
Over the next three years, Minnesota Technology, Inc. (MTI) will invest $3 million to support the development of existing and emerging technology-focused industry clusters. The new program is designed to increase collaboration between groups of tech business and the state’s nonprofit research, federal lab, and academic research communities. By focusing on the near-term technology needs of Minnesota businesses, MTI expects the program will lead to increased technology commercialization and high tech employment by the cluster businesses.

MTI anticipates making three to five investments each year, with awards
reaching $300,000 to $500,000 for qualified cluster proposals. Cluster projects must involve a minimum of four companies and at least one outside research resource, such as a local academic partner, federal lab or private, nonprofit R&D facility.

More information on the new program can be found at http://www.minnesotatechnology.org/

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People

Alan Balutis, director of the Advanced Technology Program (ATP), is leaving the agency at the end of the month to take over leadership of the Federation of Government Information Processing Councils.

Dr. Frederick Humphries, president of Florida A&M University and SSTI Board member, has announced he will retire this summer from the university.

Rex Pelto has left the Advanced Technology Program to take the position of Director of Federal R&D & Business Development for Virginia's Center for Innovative Technology.

Stefanie Sanford has joined Texas Governor Perry's office as Policy Director for Technology & Telecommunications

Tom Unruh has announced he is leaving the National Governors' Association Center for Best Practices.

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