In the June 1, 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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Findings Suggest Digital Divide Efforts Should Focus on Cities
Nearly all public schools in the U.S. are connected to the Internet, according to a survey published by the National Center for Education Statistics (NCES). The survey, Internet Access in U.S. Public Schools and Classrooms: 1994 – 2000, shows that 98 percent of public schools had access to the Internet by the fall of 2000, representing a 3 percent increase over 1999 and a 26 percent increase since 1997.

The survey also shows the number of public schools with instructional rooms possessing Internet connections is on the rise. Seventy-seven percent of such rooms were connected to the Internet in the fall of 2000–a notable increase over the 63 percent in 1999. During this time, the ratio of students to instructional computers in public schools decreased to 5 to 1, while the ratio of students to instructional computers with Internet access improved from 9 to 1 in 1999 to 7 to 1 in 2000.

Schools of different settings–city, rural, town and urban fringe–demonstrated little difference in general Internet accessibility. Of all the types, however, town schools were most likely to have Internet connections in instructional rooms, at 87 percent, and city schools were the least likely, at 66 percent. Rural and urban schools fell at 85 percent and 78 percent, respectively.

In most cases, a gap in Internet access existed between schools with a high concentration of students in poverty and those with a low concentration of poverty. Similarly, a gap existed between schools with high and low minority enrollments. However, in schools with the highest concentration of students in poverty, instructional rooms with Internet access increased by 58 percent between 1999 and 2000 to 60 percent. Sixty-four percent of instructional rooms in schools with the highest minority enrollment had Internet access, an increase of 49 percent from a year earlier.

Other findings in the survey were:

For Internet Access in U.S. Public Schools and Classrooms: 1994 – 2000, nearly 1,000 schools were surveyed about their Internet access and connections. To conduct the survey, NCES used the Fast Response Survey System (FRSS)–a system designed to gather small amounts of data within a short timeframe, placing little or no burden on its respondents. Visit the National Center for Education Statistics at http://www.nces.ed.gov to view a report on the survey.

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 Spillovers from Academic and Industrial R&D Examined
Is a strong university research component critical to local tech-based economic development? Many argue this position, including SSTI (Using Research and Development to Grow State Economies). Using data on royalties, licenses, and job creation figures, others have demonstrated the economic contributions of university R&D. (See for instance, the annual licensing survey from the Association of University Technology Managers.)

But can strong research universities contribute more to local technological innovation than large industrial research laboratories – or can communities achieve the same degree of success in building tech-based economies by concentrating resources toward attracting industrial research laboratories?

At issue, are the local “spillover” effects of industrial and academic research. Spillovers may include, for example, new company formations, job creation, increased research contracts, etc. Which type of research on average, industrial or academic, results in more spillovers to the local economy? John Adams, with the Department of Economics at the University of Florida, explores the issue in Comparative Localization of Academic and Industrial Spillovers, one of the latest Working Papers released by the National Bureau of Economic Research.

Using data from a sample of R&D labs owned by U.S. manufacturing firms, Adams finds the spillover effects of academic research to be more localized than industrial R&D on average. He concludes from his analysis that "localized academic spillovers reflect open science and the industry-university cooperative movement, which encourages firms to work with local universities, so that localization coincides with the public goods nature of science. This situation contrasts with relations with other firms, where contractual arrangements are needed to access proprietary information, often at a considerable distance.”

The policy implications for state and local tech-based economic development efforts, while not addressed in Adams' paper, may be interpreted as supporting efforts to 1) increase academic research activity within local universities, and 2) encourage industry-university collaborative partnerships, which many states do through their centers of excellence and university-industry research grant programs.

Adams concludes that industrial firms tend to turn to local universities more often for applied research, technical assistance, and students/employees. In contrast, industrial partnerships are more selective and more driven by “personnel movements and collaborative ventures.”

Other conclusions in the paper would lend support to tech-based economic development strategies of attracting more federal R&D grants in local academic institutions, stressing investment in basic or early stage research, and encouraging more university patenting. Adams reports the greater the amount of federally supported university R&D near a firm drives localization of academic spillovers and, subsequently, industrial spillovers.

Spillovers from university patenting also was found to be more localized than industrial patenting. The paper also suggests “spillover from new products, although weaker than patent spillovers, are still more localized” for universities than industrial product development.

Adam's last point suggests that state and academic policies and programs that encourage faculty tech-based entrepreneurship and technology commercialization may prove particularly beneficial for building local tech-based economies.

Comparative Localization of Academic and Industrial Spillovers (NBER Working Paper No. 8292) can be purchased online from NBER for $5.00 at: http://www.nber.org/papers/w8292

[Editor’s note: For much of the econometric literature, an acceptable distance for “localization” can be as much as 100-200 miles of the university or industrial plant. Readers should not think spillover effects are limited only to those communities in which the institution or research lab is located.

While much has been written on understanding and measuring spillovers, additional research exploring which policy and public program approaches were most successful in encouraging academic research and the resulting spillovers would be a useful next step toward refining public tech-based economic development strategies. Policy analysis into those public programs which increase the localization of industrial R&D spillovers also would be beneficial.]

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 State & Local Round Up

Arizona
In spite of a tight budget resulting in cuts of $600 million, the Business Journal reports the Arizona state legislature has appropriated $3 million to launch implementation of the strategic plan developed by the APNE, the Arizona Partnership for the New Economy (see the Jan. 26, 2001 issue of the SSTI Weekly Digest for a story on the plan). The funds, to be focused primarily on rural telecom initiatives, will be administered by the Department of Commerce. For more information on APNE see: http://www.commerce.state.az.us/neweconomy/APNE.htm

Colorado
The 12-year-old Boulder Technology Incubator has changed its name to the Colorado Technology Incubator. According to an article in the Daily Camera, the new name better reflects the non-profit's existing presence in Boulder and Longmont and a planned third branch to be located elsewhere in the state this year.

Nampa, Idaho
A nearly $2 million grant from the Economic Development Administration is paving the way for construction of a 40,000 sq. ft high technology business center, called the Technology and Entrepreneurial Center. In addition to offering incubator space for up to 20 companies, the center will link faculty and students at Boise State University's Canyon County campus to the young tech firms for product development and business planning assistance.

Iowa
Efforts to implement cluster initiatives stemming from work of the state's New Economy Council are temporarily stalled after the state Senate failed to vote on the Council's $5 million plan before recessing. According to the Des Moines Register, all but $100,000 of the budget was to be reallocated from other sources. The Iowa House of Representatives passed the measure unanimously, the paper reports.

Columbia, South Carolina
Today's issue of The State reports the city of Columbia will be hiring consultants in the next 30-45 days to flesh out an outline developed by the city's Technology Advisory Board to make the region a research and technology center. Currently, the paper reports, the objectives are to increase research activity at the University of South Carolina, attract tech companies to the downtown area, and continue to to grow the USC Technology Incubator.

Memphis, Tennessee
Baptist Memorial Heal Care Corp. is donating property valued at $40 million for the creatin of a University of Tennessee-Baptist Research Park. The Commercial Appeal reported last Sunday that, to help fill the park, the Memphis Biotech Foundation is attempting to raise $10 million locally to leverage $40 million in federal funds to support biotech start-ups.

Fort Worth, Texas
Standing-room-only attendance at its first two meetings have convinced leaders of the Fort Worth Chamber of Commerce that their decision to create a Technology Business Council last month was the right one, according to Dallas Morning News. The tech council's mission is to build and attract new tech companies. The city already is home to more than 100 tech firms.

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People

President Bush has announced his intention to nominate the following people to positions within the federal government that affect state and local tech-based economic development:

Mark Lang, CEO of the Ben Franklin Technology Partners of Northeastern Pennsylvania for the past 14 years, has announced his resignation.

Lu Cordova is the new President of the Colorado Technology Incubator.

The Center for Environmental Enterprise (CEE) in South Portland, Maine announced the hiring of a new executive director. John Ferland assumed leadership of CEE in late April.

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Funding Opportunities, Inventions & SBIR Special Issue
Due to length considerations, this week's Funding Opportunities Supplement to the SSTI Weekly Digest was sent separately.

During the past two weeks, the federal register has announced 15 federally owned inventions that available for licensing from the Army, Navy, National Institutes of Health and the Department of Energy. The full text of the announcements, including descriptions of the inventions in many cases, can be found at: http://www.ssti.org/Digest/Tables/060101t.htm

A Special Issue of the SSTI Weekly Digest focusing on the SBIR and STTR programs will be released early next week. The issue will include comments on the SBIR Policy Directive from SSTI and three outside exports and other timely items related to FAST, ROP, and several individual agency programs.

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