In the November 16, 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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TBED-related Federal Budget News 
More than 45 days into the new fiscal year, several budget bills have finally moved out of Congress. Representatives from nearly all of the programs highlighted below will be participating in SSTI's fifth annual conference, discussing their priorities, plans and funding cycles for FY 2002. An entire track of breakout sessions has been dedicated toward federal funding opportunities for tech-based economic development programs and their clients. 

FAST, ROP Take Hits in SBA FY 2002 Budget 
The Commerce-Justice-State FY 2002 appropriation bill, in which SBA's budget is included, received Congressional approval this week and moves to the President's desk for signing. Overall, the SBA took a cut of $113 million. The two federal programs specifically tailored to support state SBIR/STTR outreach and assistance efforts have been cut as well: 

During the Clinton Administration, SBA's approach for handling budget reductions in multi-year award programs was to reduce all awards by the same percentage (in this case, 15 percent for FAST; 67 percent for ROP) or to make varied levels of grants based on first-year results. Since SBA still wanted to fund each project, the latter approach resulted in some ROP awards of only $19,000. How SBA will handle the current cut is uncertain, but more information may be available during SBA's session at SSTI's annual conference on December 3-4. 

Separately, the budget for the Small Business Development Centers program was cut to $88 million, the Women's Business Centers received $12 million, and Microloan Technical Assistance $17.5 million. The SBDC appropriation contained two earmarks totaling $3 million for the defense transition program and the environmental compliance project. 

EDA FY 2002 Appropriation Cut $77 Million 
The FY 2002 appropriation for the Economic Development Administration will be $335 million, consistent with the President's request and $77 million lower than FY 2001. EDA supports efforts to retain and stimulate industrial and commercial growth in economically-distressed areas of the U.S. EDA is one of the only federal programs to regularly support technology incubators and research and technology development parks. EDA also provides the funding that allows free circulation of SSTI's Weekly Digest. 

The majority of the cuts requested were to be absorbed by the grants to support Public Works and Defense Economic Conversion. 

NIST Programs Intact After FY02 Budget Surfaces 
The Advanced Technology Program (ATP) will have $60.7 million available for new awards in FY 2002 as a result of the conference version of the Commerce-Justice-State FY 2002 appropriation bill. The balance of the program's $184.5 million appropriation will go to existing projects and administration. 

Overall, the National Institute of Standards and Technology received $674 million, $77 million more than FY 2001 and $186 million above the Administration's request. Restoration of the ATP budget accounts for a significant portion of the difference. 

The Manufacturing Extension Partnership received more than $106.5 million to remain available until expended. The level reflects a slight increase over FY 2001 levels. The program supports a nationwide network of more than 400 nonprofit centers whose sole purpose is to assist small and medium-sized manufacturers. 

The NIST appropriation did not escape Congressional earmarks. From the construction of research facilities line item, the following projects will be funded: $8 million to fund a cooperative agreement with the Medical University of South Carolina; $6 million for the Thayer School of Engineering for the nanocrystalline materials and biomass research initiative; $3 million for the Institute for Information Infrastructure Protection at the Institute for Security Technology Studies; $3.35 million for the Institute for Politics; $650,000 to the Mount Washington Technology Village; $6.5 million for a critical infrastructure project at the George Mason University School of Law; $3.7 million the Conservation Institute of the Bronx Zoo; $2 million for the Adolescent Mental Health Residential Treatment program at Bronx-Lebanon Hospital Center; $1.3 million for the Puerto Rican Historical, Cultural and Activities Center; $5 million for the National Infrastructure Institute; and $2 million for the University of South Carolina School of Public Health. 

More information is available in the conference report for the Commerce-Justice-State appropriation: ftp://ftp.loc.gov/pub/thomas/cp107/hr278.txt 

NSF Budget Increases 8.4 Percent in 2002 
The National Science Foundation (NSF) budget for FY 2002 will reflect an 8.4 percent increase over the FY 2001 funding levels, significantly above the 1.3 percent increase requested by the Bush Administration. Research and related activities total nearly $3.6 billion, an increase of 7.4 percent. Within that category, engineering research will see an 8.5 percent increase for an FY 2002 level of $467.5 million, and Mathematical and Physical Sciences will climb to $922.2 million. 

Of the $508 million appropriated for Biological Sciences, $75 million is to go toward a comprehensive research initiative on plant genomes for economically significant crops. 

The bill includes $26.61 million for the Science and Technology Centers and $4 million for the Rand Corporation's Science & Technology Policy Institute. The institute supports the White House Office of Science & Technology Policy. 

The conference agreement increases the budget request level for all directorates and provides specific increases of $25 million for information technology research, $25 million for nanotechnology, and $12.5 million for increased energy and fuel costs in the polar and ocean sciences as well as national facilities in physics and materials. The conference agreement also directs NSF to undertake a study to determine its appropriate role in support of regional innovation activities. 

For more information, see: http://thomas.loc.gov/cgi-bin/cpquery/R?cp107:FLD010:@1(hr272): 

DLT To Grow While USDA Budget Shrinks 
The downward trend on agriculture spending continues with the approval of the compromise version of the FY 2002 appropriations for agriculture, rural development, food and drug administration and related agencies. Congress approved total new obligations for USDA of $75.79 million, down from last year's $76.66 million. The Distance Learning and Telemedicine Program, however, bucked the trend with a significant increase. 

The conference agreement provides more than $49 million for the Distance Learning and Telemedicine Program, nearly twice the $25 million appropriated in FY 2001. The conference report includes language setting aside $22.5 million to finance broadband transmission and local dial-up service in rural areas, of which at least $12.5 million is to be made available for grants to carry out this program. 

The conference agreement also provides for an estimated loan program level of $300 million for distance learning and telemedicine loans and $80 million for broadband telecommunication loans. 

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Study Finds Maryland Incubators Have Big Impact 
The Maryland Technology Development Corp. (TEDCO), RESI (a regional economic studies institute at Towson University), and the Maryland Business Incubation Association (MBIA) presented on Thursday the results of the Maryland Incubator Impact Study — a first-of-its-kind study for the state by measuring the economic impact of Maryland's six public- and university-related high-tech business incubators on the state's economy. 

Maryland's incubators are a significant economic boon to the state of Maryland, the study shows, estimating that incubator tenants and graduates generate between $184 and $530 million in gross state product and between $31 and $96 million in taxes annually. 

The study also reveals the following: 

The Maryland Incubator Impact Study suggests that the state's successful technology incubators not only complement its federal research labs and facilities but "are vital to ongoing and future formations of technology clusters throughout the state's regions." The full report is available through TEDCO: http://www.marylandtedco.org/home.html 

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Indices Provide Insight into State Economies 
Innovation indices or S&T report cards can be useful tools for assessing the health and direction of a region or state's economy. The results can be helpful for determining appropriate policies and programs to affect change and measuring progress. Evolving over the past five years, many states, localities and national organizations have prepared indices. Links to past Digest articles covering these reports are massed on the following web page: http://www.ssti.org/Digest/Indices/indices.htm

The latest releases for Massachusetts, one of the forerunners using the tool, and Southern California are described below. The Mississippi Technology Alliance's new efforts also are highlighted. 

Massachusetts 
If the Commonwealth's Innovation Economy is to remain a major force in driving economic growth in Massachusetts, policy makers must continue to focus on attracting research and development funds, encouraging entrepreneurs and invention, and promoting the expansion of a highly educated and skilled workforce, according to the 2001 Index of the Massachusetts Innovation Economy. 

The new report, released Monday by the Massachusetts Technology Collaborative (MTC), is the fifth annual yardstick of the state's nine critical industry clusters and of the status of innovation throughout the entire state economy. 

The Index tracks 30 indicators affecting the clusters — Computers & Communications Hardware, Defense, Diversified Industrial Support, Financial Services, Healthcare Technology, Innovation Services, Postsecondary Education, Software & Communications Services, and Textiles & Apparel — which provide about 25 percent of all the jobs in Massachusetts. 

Comparing Massachusetts with the nation and other leading technology states, such as California and New York, the indicators tell how well innovation resources are being turned into tangible results for people and businesses. Copies of the 2001 Index of the Massachusetts Innovation Economy, as well as the first four indices, are available at: http://www.mtpc.org 

Southern California 
Built on the inaugural edition in 2001, the Southern California Technology Innovation Index 2002 compares the region to other leading technology sectors in the U.S., including Austin, the Bay Area, Massachusetts and New York Metro. 

Data on each region is derived from statistical indicators in such areas as economic vitality, educational resources and investments, and the regions are measured in their population, number of tech firms and number of tech employees. 

Among its highlights, the 2002 Index features "Weakness in Education: A Digital Divide," a section examining the efforts of the education system to close the digital divide. 

The authors of the index conclude that while issues posed by numerous variables — newer facilities, more teachers, higher teacher salaries, more support for highly credentialed teachers to work in urban areas, and new textbooks and supplies — have been overshadowed by Digital Divide issues in recent years, "examining these issues and determining the education reforms most effective for the building of a future technology workforce could be the most important public policy project at hand for the regional technology industry." 

An executive summary of Southern California Technology Innovation Index 2002 is available from larta's website. The full report is available for purchase from the organization. 

Mississippi 
The Mississippi Technology Alliance announced on Tuesday that the first-ever Mississippi Innovation Index will be published in 2002. 

The Index will be compiled annually to target technology-based economic development in Mississippi, using data from numerous state institutions and relating the data to that of other states. In 2002, the Index will center on priority indicators including Research Capacity, Technology Business Development, State/Federal Capacity Partnerships, Small Business Investment and Research, and Innovation and Commercialization. 

For more information on the Mississippi Innovation Index or the Mississippi Technology Alliance, visit: http://www.technologyalliance.ms/ 

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O'Keefe and Wu Tagged for NASA, TA Posts 
The President has nominated Sean O'Keefe to be Administrator of the National Aeronautics and Space Administration. O'Keefe replaces Daniel Goldin, who resigned last month. 

O'Keefe is currently the Deputy Director of the White House Office of Management and Budget. Previously he served as the Louis A. Bantle Professor of Business and Government Policy at the Syracuse University Maxwell School of Citizenship and Public Affairs. Additionally, he served as the Director of National Security Studies which provides executive education programs for senior military and civilian Department of Defense managers.

Before joining Syracuse University, O'Keefe was Professor of Business Administration and Assistant to the Senior Vice President for Research and Graduate Education at Pennsylvania State University. He received an undergraduate degree from Loyola University in New Orleans, Louisiana, and a Master's degree in Public Administration from The Maxwell School at Syracuse University. 

In other news, Tuesday's People Column for Technology Daily reported that Phil Bond, undersecretary for the Technology Administration in the Department of Commerce, has named Ben Wu to serve as deputy undersecretary. Wu has been serving as counsel at the House Science Environment, Technology and Standards Subcommittee since 2000. Before joining the subcommittee, Wu served on the House Y2K Task Force and on the staff of Rep. Constance Morella, R-Md. 

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State and Local Tech-based ED RoundUp 

Fresno, California 
The Valley Angels Investment Network soon will be administered by San Joaquin Venture Partners, a venture capital fund created in June, and California State University, Fresno, according to a recent article published in the Fresno Bee. Already, the network has nearly 20 prospective angels and 20 service providers and is set to help IQ Biometrix, a computer software company. Next to the Sierra Angels, the Sacramento Angels, the North Bay Angels, and the Tech Coast Angels, the network stands to be one of several such groups in California. Investors interested in becoming angels must have a net worth of $1 million or more or have earned at least $200,000 in each of the past two years. More information is available at: http://www.sjvp.org 

Des Moines 
A new partnership, the Technology Commercialization Acceleration Program (TCAP), was established Thursday by the Iowa Department of Economic Development and Iowa State University, the Associated Press reported. TCAP will foster the development of 15 new tech-based businesses in Iowa within three years and will serve to increase tech transfer. As part of its role, ISU will assist with the testing and marketing of new technology, developing commercially viable products. More information may be obtained by visiting ISU or the Iowa Department of Economic Development. 

Nashville 
Over a year in the making, the new angel investor network for Middle Tennessee, the Nashville Technology Funding Alliance (NTFA), had its first meeting earlier this month. Four companies — American Graduate School of Management, Cybera Inc., E.cropolis, and QualTalk.com — presented their business plans to the assembled angel investor group, whose membership has 55 investor members. Townes Duncan, Chairman of the NTFA, said the group's goal is to make it easy for entrepreneurs to find the right local investors and for investors to find business investment opportunities that meet their criteria. To submit business summaries to the NTFA or to obtain more information, visit the website: http://www.technologycouncil.com/ntfa

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Useful Stats: 3rd Quarter VC Stats by State 
PricewaterhouseCoopers has released the detailed data for the third quarter results of its Moneytree™ survey. The survey found a total of $6.5 billion was invested in 601 financing rounds — a 23 percent decline in dollars and a 16 percent decline in rounds compared to last quarter. SSTI has prepared a table presenting the state-by-state results. 

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NOTE: SSTI will be closed November 22-23 for Thanksgiving. The next issue of the Digest will be published Friday, November 30. 

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