August 24, 2001 -- SSTI Weekly Digest

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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Report Credits Worcester's Biotech Success to 1980s ED Policies
With the emphasis many state and local tech-based economic development organizations have placed on biotechnology over the past 12-18 months, few are far enough along in implementing their strategies to point to more than a handful of successes or new construction projects. The recent explosion in public investment of resources and policies toward developing local biotech capacity is largely based on the promise of anticipated economic gains in the near or not-so-near future.

Independent analysis of the long-term impact of specific state and local tech-based economic development policies are rare. Some programs launched in the 1980s that have commissioned outside impact studies, such as the Edison Technology Centers, the Ben Franklin Technology Partnership and Utah’s Centers of Excellence, have discovered strong returns for the public’s investment. (See the 12/20/96, 10/22/99, and 1/28/00 issues of SSTI’s Weekly Digest in our web archives for these stories.)

Reviews of localized impacts of state tech-based economic development policy are even rarer, which makes a recent study by Eric T. Nakajima and Robert W. Smith, two graduate students in City and Regional Planning at the University of California at Berkeley, so unique. The two sought to determine if any cause and effect could be discerned between a state’s economic development policy and industrial growth. They used Worcester, Massachusetts, for their case study partly because of its isolation from metropolitan Boston and the Route 128 phenomenon.

After several months of interviews and analysis, Nakajima and Smith concluded that today's vibrant biotechnology industry in Worcester is largely attributable to state economic development policies in place during the administration of Gov. Michael Dukakis (1983-1991).

Several specific initiatives are identified in their report for creating the climate to nourish the community’s current biotech concentration:

The authors point out both the presence of the University of Massachusetts Medical School in Worcester and the 250 percent increase in research funding the school has received since 1989 from the National Institutes of Health is most responsible for the region’s biotech strength. They note, however, the state’s participation in creating the Biotechnology Park allowed the economic development resulting from commercialization of UMass technologies and expansion of the schools biotech research capacity. During the 1980s, the school also focused on establishing its national reputation, while community leaders, most notably the Worcester Chamber of Commerce, centered on turning the community and region into a haven for the biotech industry.

More information, including a link to the paper, is available from the Center for Urban and Regional Policy at Northeastern University in Boston, Massachusetts: http://www.curp.neu.edu/pullspotlight073001.htm

Editor's Note: Gov. Dukakis currently serves as vice-chairman of the SSTI Board of Trustees.

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Positioning for the Nano Future: California's $350 Million Investment
While technological advancements occur every day, truly revolutionary technologies over the past three hundred years — those that promise so many diverse applications that they result in disruption and restructuring of several different industries — can be counted on one hand. The field of nanotechnology, with major implications for nearly every industrial sector, appears to be one of those once-in-a-lifetime breakthroughs.

At this point, only a few states are preparing on a large scale to capitalize on the research and resulting economic growth of this exciting field. A $350 million research institute taking shape in southern California at the universities of California at Los Angeles and Santa Barbara is one of the most aggressive investments to date.

The California NanoSystems Institute (CNSI), with 300,000 sq. ft. in two buildings on the two campuses, will house industry researchers, teachers, students and scientists. CNSI will facilitate the development of the science and engineering of integrated, macroscopic systems characterized by emergent behavior originating from the structure and organization of nanoscale components.

Among the institute's sources of funding are the federal government, which is providing $110 million, and the State of California, contributing $100 million. Another $90 million is expected from private donors, and $50 million will come from corporate donations, including more than 20 companies.

Martha Krebs, formerly the science director of the Department of Energy, is CNSI's founding director.

What is Nanotechnology Anyway?
Whether your state or community is prepared to invest as heavily into nano research as California, understanding the implications of nanotechnololgy will greatly improve the ability of your businesses, universities, technical colleges and tech-based economic development programs to benefit from and respond to the opportunities and challenges nanotechnology will bring.

To assist practitioners in gaining a foothold in the field, SSTI is offering an in-depth workshop on the technology as one of its pre-conference sessions, September 19 in Pittsburgh. Nanotechnology and Photonics: Waves of the Future is being held in partnership with the American Society of Mechanical Engineers. Dr. Mihail Roco, Director of the National Nanotechnology Initiative and John Mendel, Materials Commercialization Manager with Eastman Kodak Company will lead the discussion of what nanotechnology is and its diverse applications, the current state of development, the potential impact on the economy and our lives, and what the federal government is doing to support the development of the technology.

More information on CNSI is available at http://www.cnsi.ucla.edu/ To learn more about SSTI's nanotechnology and photonics pre-conference session and to register, visit http://www.ssti.org/Conf01/preconference.htm [expired]

President Nominates Bement as NIST Director
The President has nominated Arden Bement, Jr. to be Director of the National Institute of Standards and Technology at the Department of Commerce. Bement has been at Purdue University since 1993, where he is the head of the School of Nuclear Engineering. Bement is Chairman of the Advanced Technology Program's Advisory Committee, has served on the National Science Board, and was active with the Cleveland Advanced Manufacturing Program (CAMP), an Edison Technology Center.

From 1980 to 1993, he was with TRW, Inc., where he was Vice President for Technical Resources from 1980 to 1988 and then Vice President for Science and Technology from 1988 to 1993. A graduate of the Colorado School of Mines, Bement has received a Master's degree from the University of Idaho and a Ph.D. from the University of Michigan.

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Maryland Releases 2nd Innovation and Technology Index
With the completion of the 2001 edition of the Maryland Innovation and Technology Index, the Maryland Technology Development Corporation (TEDCO) is able to show state policymakers and tech community leaders graphically and statistically the state’s progress since the first Index was prepared two years ago.

Innovation indices or S&T report cards, as some states and communities refer to them, help identify areas of strength, weakness or underperformance. The first assessment undertaken, for Maryland in 1999, provides a benchmark for measuring future growth or progress. Subsequent indices can help tech-based economic development practitioners refine their efforts.

Comparing Maryland on 66 items to five other states – Massachusetts, New Jersey, North Carolina, Pennsylvania and Virginia – TEDCO concludes from the 2001 Index that “the report paints a picture of opportunities missed. Maryland is at best holding its own among competitor states, or worse, losing ground.”

While demonstrating Maryland’s overall improvement across most indicators, the Index helps identify those specific areas in which strategic public and private investment of time, energy, and financial resources can help the state’s business community be more competitive in a tech-based economy.

The indicators selected for inclusion in the Maryland index are distributed among three categories:

Areas singled out for improvement include achieving excellence in science and math education, commercializing university and federal laboratory technologies, strengthening tech-based start-ups’ success, and encouraging industrial research and development.

Copies of the 2001 Maryland Innovation and Technology Index are available from TEDCO under publications at http://www.marylandtedco.org

Conference Profile
Air Force Dual Use S&T Program
The Air Force Dual Use Science & Technology (AF DUS&T) Program is part of a congressionally mandated, tri-service program to cost-share research projects with industry for the development of a technology that has both military utility and sufficient commercial potential to support a viable industrial base. A main objective of the AF DUS&T Program is to obtain for defense procurements the economies of scale, accelerated product improvements, and increased sustainability inherent in the commercial marketplace.

From its inception in FY97, the AF DUS&T Program has initiated 121 projects totaling $476 million. These projects, being conducted outside the Federal Acquisition Regulations (FAR), are investment partnerships designed to allow more flexibility than the standard federal contract, which assumes a buyer-seller relationship. Hence, the AF DUS&T Program uses cooperative agreements and other transactions as funding instruments for the overwhelming bulk of its work. One major advantage of these instruments is the flexibility in dealing with intellectual property rights, thus helping attract firms that might not otherwise deal with the government.

Dual Use Industry Day Workshop
A one-day workshop meant to provide industry an up-to-date understanding of the risk-shared AF DUS&T Program is being held Sept. 27 at the Ohio Aerospace Institute (OAI) in Cleveland, Ohio.

The Air Force Research Laboratory (AFRL), OAI and the Society of Automotive Engineers (SAE) are hosting the Industry Day Workshop, allowing industry the opportunity to discuss approaches to AFRL's focus areas under the upcoming FY2003 solicitation and make recommendations for specific topics to be addressed in potential DUS&T awarded projects. This process will be accomplished via one-on-one dialog sessions with AFRL scientists and engineers.

An early registration fee of $25 covers the cost of breakfast, lunch, and handouts. For more information, including pre-registration benefits and workshop sessions, contact, Roxanne Summers at roxannesummers@oai.org or (440) 962-3113. To register for the workshop, visit www.oai.org/events/

Useful Stats: Taxes & Entrepreneurship
What impact do state taxes have on entrepreneurship?

The Small Business Survival Committee (SBSC) has released its sixth annual rankings of the states according to their respective policy climates for small business and entrepreneurship. In the Small Business Survival Index 2001, the D.C.-based organization combines the following 17 factors to develop the overall rankings: personal income taxes, capital gains taxes, corporate income taxes, property taxes, sales taxes, estate taxes, unemployment taxes, health insurance taxes, electricity costs, workers' compensation costs, crime rates, right-to-work status, number of government employees, tax limitation status, Internet taxes, gas taxes, and state minimum wages. The rankings received a fair amount of attention in the media.

Raymond Keating, the report’s author, states, "The best policy environment for entrepreneurship consists of low taxes, limited government, restrained regulation, and government protecting life, limb and property. States following such a governing philosophy will reap great rewards from America's entrepreneurs, including faster economic growth and increased job creation."

Is Keating correct? Do statistics measuring entrepreneurial activity support Keating’s assertion?

To assist interested parties in testing the hypothesis, SSTI has prepared the accompanying table presenting the SBSC’s overall state rankings compared to the Entrepreneurial Energy category of the Development Report Card for the States 2000. Prepared by the Corporation for Enterprise Development, Entrepreneurial Energy is defined by five indicators measuring new company formations, change in new companies, new business job growth, technology companies and initial public offerings.

Since the indicators in both the CED and SBSC rankings are standardized to allow comparisons among states, one might expect states’ rankings in both studies to be similar if Keating’s assessment on the best policy environment for entrepreneurship holds true. Alternatively, one may come to the conclusion that CFED's measures are not capturing entrepreneurial energy. SSTI leaves each reader to draw his or her own conclusions from the table.

The 14-page report from the Small Business Survival Committee can be downloaded from http://www.sbsc.org

Conference Profile
Sandia National Laboratories
As a national security laboratory operated for the U.S. Department of Energy by the Sandia Corporation, a Lockheed Martin company, Sandia’s science and technology competencies are leveraged to support several missions that are synergistic to its primary mission — to ensure the safety, security, and reliability of the nation’s nuclear weapons stockpile in the absence of underground testing, indefinitely. Indeed, Sandia designs all non-nuclear components for the nation’s nuclear weapons and works on assignments that respond to national security threats of both military and economic nature. Sandia's strengths are demonstrated in the following disciplines:

Advanced Manufacturing	Microelectronics & Photonics
Biotechnology	Modeling & Simulation
Computational & Info. Sciences	Nanotechnology
Electronics	Pulsed Power Sciences
Engineering Sciences	Surety Sciences
Materials and Process Sciences

Sandia also encourages and seeks partnerships with appropriate U.S. industry and government groups to collaborate on emerging technologies that support its mission. This was evidenced most recently when Sandia teamed with Los Alamos National Laboratory and the University of New Mexico to form the Nanoscience Alliance. An August 8 article in the Santa Fe New Mexican reports that Sandia and Los Alamos labs were chosen by the Department of Energy to create a new nanotechnology center based in Albuquerque and Los Alamos. Sandia's main facilities are located in Albuquerque, N.M., and Livermore, Calif.

Sandia, a gold sponsor of SSTI's fifth annual conference, will exhibit at the Pittsburgh event Sept. 20-21, 2001. To learn more about Sandia, visit http://www.sandia.gov/

Rural Business Incubation Focus of ARC Event
The Appalachian Regional Commission (ARC), the Tennessee Valley Authority, and the National Business Incubation Association are sponsoring a conference Oct. 21–23 in Chattanooga, Tennessee, to focus on the importance of business incubation to rural economic development and to share best practices by successful incubators across the nation.

More than 75 business incubators in Appalachia are helping rural communities create new companies, find innovative ways to take products to new markets, and increase the odds for new business success. The conference will seek to encourage the creation of more business incubators in the Appalachian Region.

More than 20 experts in rural business incubation and development finance will address the conference, including sessions on revenue generation strategies; marketing the incubator; employee and entrepreneurial training; incubator goals, mission, and outcomes; incubator systems; product development; marketing support for tenants; financing business growth; and others.

The registration fee is $95. For conference registration information, visit: www.arc.gov/infopubs/incubate.htm or contact Wilma Dantzler at 202-884-7751.

SSTI Conference News: Intro Sold Out, Room Block Extended
As with last year's conference, registration has been brisk for SSTI's 5th annual conference, Creating Opportunity: Tools for Building Tech-based Economies. To make sure the event is the quality and caliber expected of an SSTI event, we anticipate once again the event will sell out — possibly before the September 5 deadline for early registration. SSTI encourages interested parties to complete the registration form on their brochure or on the website at their earliest convenience. Please note, registrations are confirmed only after payment is received.

Registration for the annual pre-conference session, Growing Your Economy: An Intro to Tech-based Economic Development, is now closed to all but SSTI sponsors. Parties interested in a hands-on intro to tech-based economic development in practice are encouraged to sign up for the pre-conference Tech City tour.

Due to the overwhelming number of registrants for SSTI's annual conference, the Omni William Penn hotel has graciously agreed to increase the number of rooms available at the special discount rate of $138. The additional rooms will be available on a first-come, first-served basis until they are gone, until the hotel sells out, or until September 4.

Given the number of events occurring on the same days as the conference, the hotel anticipates booking all available rooms; SSTI conference registrants are encouraged to act quickly. The phone number for the Omni William Penn is 412.281.7100. Mention SSTI's annual conference for the special rate.

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