In the March 9, 2001 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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The Difficult Task of Clogging the Brain Drain 
Growing and keeping an educated workforce, one ready to help build a technology-based economy, is one of the greatest challenges even the most high-tech areas. The problem can be quite severe. For example, a new statewide survey of Florida college students, conducted by Leadership Florida and Nova Southeastern University, revealed that only 48 percent of the students plan to remain in Florida after graduation. (For a copy of the Florida survey report see http://www.leadershipflorida.org/survey.asp) 

Who Will Stay and Who Will Leave?, a forthcoming report from the Southern Technology Council (STC), provides one of the first in-depth looks at what factors influence graduate migration behavior after college. With emphasis on recent science and engineering graduates, STC identified several individual, institutional, and state-level predictors of student retention using a series of regression analyses of 44 different variables. 

While a few of the results are somewhat predictable, the report is full of surprises that may help policy makers in thinking and rethinking efforts to clog the brain drain. 

For example, one might expect high school students that stay in-state to attend college also will seek jobs in-state after graduation. STC’s statistical analysis of behavior patterns of 7,000 students bears this out but to the remarkable degree that generally in-state students are 10 times as likely to remain in-state as are out-of-state students. The policy implications of this single finding, then would support the efforts of many areas to provide scholarships to entice the best high school students to stay in-state for their college education. But, statistics from the Georgia HOPE Scholarship program, on which many other states’ efforts are modeled, revealed that while the Georgia program was celebrating its 500,000 recipient last Fall, six out of ten scholarship recipients once in college failed to maintain the B average required to remain in the program. Georgia HOPE program officials are exploring alternatives to correct the problem. 

A new University of Georgia study <http://www.terry.uga.edu/hope/hope.enrollments.pdf> showed the HOPE
scholarship program has been influential in keeping the state's brightest high school students in-state for college – a significant goal based on the STC findings regarding the likelihood of students remaining in-state after school. Three-fourths of high school students scoring over 1500 on the SAT now remain in state for higher education; only 23 percent stayed in Georgia prior to the creation of the scholarship program. Additionally, results showed 96 percent of the in-state students at the University of Georgia received HOPE scholarship funds. 

However, the STC analysis reveals that paying for all of its brightest students to attend college in-state may not necessarily help a state stop the brain drain, particularly if the state is trying to increase the number of science and engineering graduates. STC found that graduates are less likely to be employed in-state if they: 

In fact, 43.2 percent of individuals who obtain their high school degree in a given state will relocate out of state when they complete college, STC found. The range of retention rates for S&E grads was quite wide from an impressive 81 percent to a staggeringly low 18 percent. 

Graduates were more likely to stay in-state for employment after college if they are foreign students, majored in fields outside engineering and the physical sciences, were older than average for their class, attended a large college in a large metropolitan area, or attended college in a more populous state. 

STC suggests that “states may be well-served by lowering out-of-state tuition.” The authors contend graduates with science & engineering degrees who attended high school outside the state “are as important as” homegrown graduates and there is a “need to attract bright students from elsewhere to offset the inevitable loss of some homegrown students.” 

STC found students attracted to a state for college are 2.5 times more likely to remain in-state after graduation than are residents who left the state to attend college likely to return. 

Based on this report, policy makers may want to focus first and foremost on keeping high school students in state for college, and working hard to attract bright students in science and engineering who attended high school outside the state. For states with low retention rates, programs to recruit “arriving” students would seem more likely to bear positive results than efforts to entice former residents to return. 

The draft verion of Who Will Stay and Who Will Leave? can be downloaded from the Southern Technology Council website: http://www.southern.org/migration/migration.shtml 

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New Wyoming Laws Encourage Tech-based Economic Development 
The Wyoming legislature wrapped up its 2001 General Session on March 1. Several laws and supplemental appropriations were made that affect local efforts to grow a stronger tech-based economy. 

Senate Enrolled Act (SEA) 10 permits the Wyoming Business Council to use state funds to provide bridge financing to businesses, not to exceed 35 percent of the total cost of any particular project. 

SEA 71 creates a ten-year University of Wyoming endowment challenge program through which the state treasurer will match 1:1 each substantial private donation made to the university’s endowment fund. The legislature appropriated $30 million for the program in this year’s budget. 

House Enrolled Act (HEA) 32 repeals the sunset provisions for the University of Wyoming technology transfer center program, which without the law, would have terminated July 1, 2001. 

The legislature also provided $250,000 for the preliminary assessment, analysis, design and cost estimates for the University of Wyoming to establish a Wyoming technology business center. 

SEA 52 creates the Wyoming Energy Commission to facilitate the development, production, transportation, marketing and use of Wyoming's coal, hydro, ethanol, natural gas, oil, uranium, solar and wind resources. A portion of the Commission’s activities and a $1 million appropriation is to be dedicated to recommending research, development and demonstration projects and programs necessary to evaluate the availability and cost effectiveness of conservation and renewable resources in Wyoming. 

To increase access to capital, HEA 87 permits the state treasurer to invest up to $100 million in industrial development bonds and up to $55 million in small businesses through the purchase portions of federal SBA loan, FHA business and industry loans, and EDA loans. Prior to the bill’s passage, the ceiling for both investment activities had been limited to $35 million. The Wyoming Business Council administers the investment programs. 

To increase telemedicine opportunities and practices in the state, HEA 117 authorizes the department of administration and information to provide telecommunications services to private health care providers through the Wyoming equality network infrastructure. 

All of the bills mentioned above can be found at: http://legisweb.state.wy.us/2001/billsInfo.htm 

The Wyoming Business Council’s web address is: http://wyomingbusiness.org 

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NSF Partnerships for Innovation Opens 
Partnerships for Innovation (PFI), a National Science Foundation (NSF) program started just last year, has released its Program Solicitation for FY 2001. The program will support 10-15 new government-university-industry partnerships that explore new approaches to support and sustain innovation. An academic institution must be the lead for the partnership 

The program was designed to: 

Approximately $6.2 million is available for FY 2001 proposals. While partnerships must include academic institutions and private sector organizations, the involvement of state and local governmental entities is strongly encouraged. There is a ten percent cost sharing requirement for all selected projects. Letters of Intent are to be submitted by March 30, 2001, but are not required; proposals must be submitted via Fastlane by May 30, 2001. To download the solicitation, visit http://www.nsf.gov/cgi-bin/getpub?nsf.0179

Last year, NSF selected 24 unique partnerships averaging $600,000 in annual funding over the next two to three years. Awards generally supported two types of projects, those assisting communities in developing the necessary infrastructure to encourage innovation and those projects focused on a specific technology area. 

A full listing of FY 2000 winners can be found at http://www.nsf.gov/od/lpa/news/press/00/pr0068.htm and detailed abstracts can be found on Fastlane, at http://www.fastlane.nsf.gov under “Award Data” (select “List of Awards by Program” and then click on “List all NSF programs” follow the prompts to do a search for the Partnerships for Innovation program. 

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NCOE Explodes Myths of Entrepreneurship 
There is often a disconnect between government policies to encourage entrepreneurship and the actual practice of launching fast growing companies, according to the fourth major report from the National Commission on Entrepreneurship (NCOE). Five Myths about Entrepreneurs: Understanding How Businesses Start and Grow is being released to educate policymakers about the vitally different characteristics of entrepreneurs and traditional small business owners. The report also sets out key policy implications based on these different characteristics. 

NCOE argues many policies are based on misconceptions about entrepreneurship: 

While presenting the report at a Senate Small Business Committee forum last week, NCOE Executive Director, Patrick Von Bargen, noted there is a degree of confusion in the policy realm about the true characteristics of entrepreneurial growth companies, especially those in their early stages when they most resemble traditional small firms. This confusion, he said, tends to misdirect policy initiatives intended to aid entrepreneurs. 

Five Myths also discusses various policy ideas that emanate from these debunked myths, including education policy that fosters improved analytical skills necessary for entrepreneurial companies; policies that encourage the growth of employee stock option participation; an improved intellectual property protection system; expanded public investment in basic research; enhanced university-based tech transfer; policies to make government more entrepreneur-friendly; and policies to change security regulations to allow more individuals to invest in new companies. 

To obtain a copy of Five Myths, contact NCOE at 202/434-8066. The report soon will be available on-line at: http://www.ncoe.org/ 

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NREL Forms Alliance to Encourage Clean Energy Entrepreneurship 
The U.S. Department of Energy's National Renewable Energy Laboratory (NREL) has selected six more incubators to join the National Alliance of Clean Energy Business Incubators, formed by NREL in April 2000. Alliance member incubators will focus on accelerating the growth and development of U.S. technology-based start-up companies working on a broad range of clean energy technologies, including solar, wind, biomass, geothermal, microturbine, fuel cell, power quality, energy efficiency, alternative fuels and infrastructure, and information technologies. 

The Alliance teams NREL with the seven business incubators and a network of venture capitalists and energy industry leaders to provide business and financial services to clean energy entrepreneurs. Each selected incubator received a $1 million grant from NREL to support incubator operations. 

Participating incubators include: 

More information on the Network is available at: http://www.nrel.gov/technologytransfer/entrepreneurs/inc.html 

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Useful Stats: FY 2000 SBIR Phase I Awards by State 
The state-by-state results for the 2000 SBIR Phase I awards — as reported individually by the 10 participating federal agencies and compiled by SSTI --- are presented in the accompanying table. Totals may not reflect new awards or cancellations made by an agency after the initial selection announcements. Abstract information for funded SBIR projects may be obtained on each agency’s SBIR website. Easy links are available from the DOEd SBIR web side: http://www.ed.gov/offices/OERI/SBIR/links.html 

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For the “Oh, Yeah?” Department: More on Local Technology Incubators 
Editor’s Note: For the skeptical Digest reader that viewed our assertion in last week’s issue that there is an average of at least one incubator-related article published somewhere in the country each day. Since we have several clippings on hand, it is easy to provide more examples of the continuing explosion of communities and states using non-profit incubators as tools for developing and expanding tech-based economies. Due to space considerations, a list of 17 more local incubator stories published in the last nine days alone is provided on the accompanying web page.

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People 
President Bush has nominated Los Angeles resident Hector Barretto to serve as Administrator of the Small Business Administration. 

Philip Psilos is the new Director of Economic & Technology Policy for the National Governors' Association. 

Timothy A. Klein has been selected to become the Associate Administrator for Innovation, Research, and Education for the U.S. Department of Transportation. 

SSTI extends its congratulations to Bruce Gjovig, Director of the Center for Innovation in Grand Forks, North Dakota, for his induction into the North Dakota Entrepreneur Hall of Fame. 

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