In the September 20, 2002 Issue:

Copyright State Science & Technology Institute 2003. 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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Milken Releases California Tech & Science Index
"California must continue to increase funding for science and technology in its university systems or risk losing one of its most important comparative advantages," warns the Milken Institute in the State Technology & Science Index: Comparing and Contrasting California.

Commissioned by TechVentures Network and the California Technology Trade and Commerce Agency's Division of Science Technology and Innovation, Milken set about to develop a series of indicators to measure the performance of California’s high technology-based economy against the rest of the country.

The result is a set of 73 indicators arrayed across five composites: R&D inputs; risk capital and infrastructure; human capital investment; technology and science workforce; and technology concentration and dynamism.

Based on the aggregate scores, the Milken Institute reports Massachusetts, Colorado and California are in the best position to succeed in the technology-led information age. California's success at attracting scientific and technology talent from other regions of the country help offset a "comparative weakness" in the human capital composite, the report concludes.

The balance of the top 10 states are: (4) Maryland, (5) Virginia, (6) Washington, (7) New Jersey, (8) Connecticut, (9) Utah and (10) Minnesota.

Despite the dot-com meltdown and the slowdown in the technology sector in the past two years, the study shows that high-tech is as crucial as ever to economic growth in California.

“The demise of far-fetched Internet businesses hardly refutes the fact that new technology is changing the rules in many sectors of the economy,” the report says. “Science, technology and knowledge-driven innovation are critical to job and wealth creation in the new economics of place.”

In conducting the research, Institute economists found a strong connection between science and technology investment and personal income gains, as well as overall state economic growth. More than three-fourths of personal income growth can be tied to increases in technology output, researchers found.

The study offers a detailed look at California’s technology position among the other 49 states. While not part of the published report, a separate set of Institute rankings for all 50 states shows the inventory of each state’s technology and science assets.

The full 119-page report for California is available for download at no cost on the Milken Institute website. The set of 30 pages in supporting 50-state indices is available for $195. More information is available at: http://www.milkeninstitute.org

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High-Tech Growth In Low Wage Countries: Size and Effect
The relaxation of international trade barriers and increased emphasis on globalization have had significant effects on the world's high-tech manufacturing industry. Two recent papers look at the phenomenon. An Infobrief from the National Science Foundation focuses on the growth of high-tech manufacturing in Latin America and a working paper released by the National Bureau of Economic Research considers the changes in the composition and character of the U.S. manufacturing industry in light of globalization. Brief summaries and links to download each report follows below.

Latin America: High Tech-Tech Manufacturing on the Rise, But Outpaced by East Asia
High-tech manufacturing has grown substantially over the last decade in Latin America according to an August 2002 InfoBrief by Derek Hill for the National Science Foundation. Latin America: High Tech-Tech Manufacturing on the Rise, But Outpaced by East Asia states that the combined high-tech manufacturing production of seven Latin American countries has increased 93 percent between 1991 and 2000 to a total of $52 billion by the end of the century.

The study attributes much of this rise to a tremendous increase in foreign direct investment (FDI) to the entire region. FDI has increase from $11 billion in 1991 to $67 billion in 2000. Brazil and Mexico received a combined 60 percent of all FDI in the region in 2000. Hill reports FDI was predominantly in manufacturing in the early 1990s, but, because countries liberalized opportunities for investment in service industries, FDI shifted quickly away from manufacturing. Manufacturing, which captured a majority of FDI in Mexico and Brazil in the mid 1990s, still snared, respectively, 46 percent and 24 percent of the countries' FDI in 2000.

While 90 percent of the region's total high tech manufacturing takes place in Argentina, Brazil and Mexico, the sector is most prominent for Costa Rica's economy. The InfoBrief reveals Costa Rica has Latin America's highest ratio of R&D to gross domestic product.

The international pharmaceutical industry accounts for the largest share of total high-tech production in Latin America with the aircraft sector holding the smallest. The communications equipment sector grew by 48 percent in the region between 1991-2000.

Hill points out that, while there has been a tremendous increase in high-tech manufacturing in Latin America, it has not kept pace with many East Asian economies. The most pressing issue for Latin America is whether or not they can continue to progress and compete in the global marketplace. The InfoBrief outlines three keys for Latin America economies:

The full InfoBrief can be found at: http://www.nsf.gov/sbe/srs/infbrief/nsf02331/start.htm

Survival of the Best Fit: Competition from Low Wage Countries and the (Uneven) Growth of U.S. Manufacturing Plants
In a related NBER working paper, Survival of the Best Fit: Competition from Low Wage Countries and the (Uneven) Growth of US Manufacturing Plants, Andrew B. Bernard, J. Bradford Benson, and Peter K. Schott analyze the effect that competition from low-wage countries, such as those identified in the above paper, has had on the industrial make-up of the U.S. economy over the past three decades.

The authors state that as imports from low-wage companies increase, U.S. manufacturers have been forced to restructure toward more capital intensive and skill intensive industries, at times changing product mixes or complete sectors. Successful firms switch to industries that are more capital and skill intensive to move away from products that are being produced and imported from the low wage countries.

Manufacturers in the lowest skill, lowest wage industries have been hit the hardest; global low-wage imports have forced the closure of many of the most labor-intensive manufacturing facilities across the country. "Relative to the average plant, a 10 percentage point rise in low wage import shares decreases employment and output growth by 1.3 and 1.6 percentage points per year respectively."

The study emphasizes that this is just introductory research in this area. Further research needs to be conducted investigating items such as U.S. firms' responses to this competition in the way of investment, workforce upgrading, and product innovation.

The full paper can be found at: http://papers.nber.org/papers/W9170

Editors' Note: Many states and communities have grappled with the economic ramifications of manufacturing's transformation. The NBER work provides a strong rationale for public tech-based economic development policies to increase the affordability with which manufacturers can make the transition to more capital intensive sectors, to enlarge the high-skill workpool available for skill-intensive industries, and to help firms adopt leaner manufacturing practices, processes and technological advances.

The growing educational and technical sophistication of lower-wage nations brought about in part from the successful infusion of FDI as described in the NSF InfoBrief and through broader diffusion of information and communication technologies, suggests pressure on skill-intensive industries will increase as these nations are able to offer competitively lower wage employment pools.

Technological advances in broad fields like nanotechnology and biotech add additional pressures on the U.S. manufacturing's competitive posture.

What then, given these factors, will be the character of U.S. manufacturing, and subsequently the entire economy -- in 20 years? What should state and local technology-based economic development officials be doing now to be competitive in 2022?

Several sessions at SSTI's 6th annual conference will encourage forward-looking discussion of these and related policy questions. More information is available at: http://www.ssti.org/conference02.htm [expired]

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Biology Majors Need More Than Biology to Succeed
Many states and communities are working to be leading participants in the rapidly growing biotech industries. Investments in academic research facilities and college scholarships to encourage more students to pursue biology and science degrees are among the strategies states are pursuing.

A report released last week by the National Research Council (NRC) suggests significant changes are needed to overhaul biology education, however, in order to ensure majors in these disciplines are prepared for the new demands of biotech.

Bio 2010: Undergraduate Education to Prepare Biomedical Research Scientists reports a better understanding of DNA, new laboratory techniques, and greater computer power have revolutionized the field of biology in recent years. This revolution has also changed the way biologists work, forcing them to develop know-how in other scientific disciplines. Math and computer models, for example, are crucial when trying to decipher the role played by a single gene among hundreds of thousands, and laser beams are being used by biologists to manipulate molecules.

The NRC found undergraduate biology education, however, has not kept pace with these changes. To better prepare students for careers in biology, especially biomedical research, colleges and universities should re-evaluate their curricula and teaching approaches for biology majors, the report asserts.

Mathematics, physics, chemistry, computer science, and engineering should all be incorporated into biology courses and lab experiments to the point that "interdisciplinary thinking and work become second nature [for biology students]." Laboratory courses and experiments should likewise be as interdisciplinary as possible.

The NRC acknowledges that incorporating other disciplines into a biology class is not easy, especially for professors who are not well-versed in other topics. To overcome this, school administrators, funding agencies, and professional societies should work together to develop new teaching materials and to encourage collaboration among professors from different disciplines. Also, faculty development opportunities must be provided to improve the interdisciplinary knowledge and teaching capabilities of biology professors.

Sponsored by the National Institutes of Health and the Howard Hughes Medical Institute, the report includes 12 case studies highlighting innovations in undergraduate biology education. It is available online at: http://www.nap.edu/catalog/10497.html?onpi_newsdoc09102002

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Useful Stats: Employed Doctoral Scientists & Engineers by State: 1997-1999
The National Science Foundation recently released the latest edition of Characteristics of Doctoral Scientists and Engineers in the United States, which reports characteristics for 1999. Valuable data is presented in the report on the demographic and employment characteristics of doctoral scientists and engineers in the US. The goal of the publications is to provide policymakers and researchers quality data in regards to the educational attainment and career patterns of doctoral scientists and engineers.

The National Science Foundation performs this survey biennially and is a longitudinal survey conducted since 1973. Current and past reports can be found online at http://www.nsf.gov/sbe/srs/cdse/start.htm

SSTI has prepared a table comparing the percent change from 1997 to 1999 by employer location and broad occupation for doctoral scientists and engineers in the United States. Each state’s percent increase or decrease in employment for these individuals in various occupational categories is calculated. The states are ranked from highest to lowest in percent increase or decrease for overall employed doctoral scientists and engineers. Thirty-five states are increasing the number of total doctoral scientists and engineers in their regions while the other fifteen states’ numbers are decreasing. For all locations, the largest increase has been in computer and information scientists with a 26.17 percent increase. The slowest growing occupation for the nation is mathematical scientists at 1.29 percent. This data presents a unique geographic view of the spatial distribution of US doctoral scientists and engineers. View the table to see where your state stands in employment growth for doctoral scientists and engineers.

The SSTI employment table is available at: http://www.ssti.org/Digest/Tables/092002t.htm

SSTI has also prepared a table concerning the median salary of these professionals by location. The table presents the percent change in each state’s median salary from 1997 to 1999 for doctoral scientists and engineers. Once again the states are ranked from highest to lowest in terms of percent increase for overall employed doctoral scientists and engineers. Each broad occupational category is provided as well. Only three states have median salaries that have decreased. (Note this data has not been adjusted for inflation.) From 1997 to 1999, median salary for all locations together has increased 7.69 percent with computer and information scientists leading the way with an increase of 11.11 percent. Mathematical scientists are experiencing the slowest growth of median salary across all regions at only 3.39 percent. This data can be of use to see where your state stacks up against the rest and against the nation as a whole in salary growth.

The SSTI median salary table is available at: http://www.ssti.org/Digest/Tables/092002t2.htm

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SSTI Conference Sponsor Profile
The Advanced Technology Program
Are you looking for funding for high-risk research? The Advanced Technology Program (ATP), part of the National Institute of Standards and Technology, bridges the gap between the research lab and the marketplace stimulating prosperity through innovation. ATP’s mission is to accelerate the development of innovative technologies through partnerships with the private sector.

Program Impact
ATP fills a gap between invention and innovation not substantially funded by private investors. About 80 percent of ATP funded projects have brought, or are soon bringing, one or more new products or processes into the marketplace. Eighty new products or processes are in the marketplace or expected soon. ATP accelerates technology development. Approximately 86 percent of 673 organizations in 347 projects reported that they are ahead in their R&D cycle as a result of ATP funding. Fifty-three percent said that they are ahead by one to three years. ATP fosters collaboration.

Almost 85 percent of ATP projects engaged in collaborations with other companies, universities, federal laboratories, and non-profits. Over 60 percent indicated they would not have done so without ATP funding. ATP awards lead to a “Halo Effect" All else being equal, a firm that wins an ATP award is more successful in securing additional funding from non-ATP sources that are non-winners.

Program Outcome
Since 1990, ATP has selected 602 projects for its public-private partnerships including 414 single company projects and 188 joint ventures. Through ATP partnerships a total of $3.65 billion of advanced technology research has been funded with over 50 percent of the funding being provided by ATP. Small businesses have led 62 percent of all projects and have received $920 million in federal funding. Over 160 universities have participated in ATP projects and have received an estimated $154 million through STP grants.

ATP Selection Criteria
ATP splits their selection criteria for awards between two categories weighted equally. The first criterion is on the scientific and technical merit consisting of the innovative technology, high technical risk & feasibility, and quality of R&D plan. The second criterion is broad-based economics benefits consisting of economic benefits, need for ATP funding and pathway to economic benefit.

ATP Headlines
ATP awarded $53.9 million in ATP funding with industry matched funding of $40.6 million in June of 2002. The amount was spread among 21 awards selected from proposals submitted to the ATP 2001 competition.

NIST will accept proposals for the 2002 competition until Sept. 30, 2002. All proposals received before the Sept. 30 deadline will be evaluated and considered for future funding. This year, for the first time, NIST is offering all ATP applicants the option of submitting proposals electronically through digitally signed documents.

Dow Chemical Company recently received the US National Medal of Technology for its innovation in the fabrication of high performance integrated circuits. Dow, in partnership with IBM, received a cost share award from ATP for its work in the semiconductor industry.

ATP is a gold sponsor of SSTI's annual conference, Building Tech-based Economies: From Policy to Practice, on October 2-3, 2002. To learn more about ATP, visit its exhibit and attend its session at the conference or check out its website: http://www.atp.nist.gov/

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SSTI Conference Sponsor Profile
Office of Energy Efficiency and Renewable Energy (EERE)
Do you have a great idea for a new industrial product or process that can help save energy, reduce emissions, and/or provide clean manufacturing? If so, then you will want to look to the Department of Energy's Office of Energy Efficiency and Renewable Energy for possible financing. Several programs provide finance solutions through grants and seed money to help companies get energy ideas off the ground.

Mission
The EERE mission is to strengthen America’s energy security, environmental quality, and economic vitality in public-private partnerships that enhance energy efficiency and productivity; bring clean, reliable and affordable energy technologies to the marketplace; and make a difference in the everyday lives of Americans by enhancing their energy choices and their quality of life.

Partnering
EERE is strengthening its partnerships with other government entities and the private sector to better leverage the Federal investment in research, development and deployment (RD&D) of new technologies. These partnerships involve other components of the Department of Energy (the Offices of Fossil Energy, Nuclear Energy, and Science) and other Federal agencies. EERE also has begun to establish a much closer working relationship with State organizations pursuing energy technology R&D.

Organizations can partner with EERE (and DOE in general) through a variety of mechanisms. A few examples of the types of partnerships that EERE is currently involved in are: Million Solar Roof Initiative, EnergySmart Schools and Clean Cities.

Solicitation
Much of the funding available to EERE is distributed to private firms, educational institutions, nonprofit organizations, state and local governments, Native American organizations, and individuals through competitive solicitations.  EERE is strongly committed to partnerships to help ensure the eventual market acceptance of the technologies being developed.

Information regarding funding can be found through a variety of resources such as the National Renewable Energy Laboratory and the Oak Ridge National Laboratory. Also information can be accessed directly through partnership programs such as the Federal Energy Management Program, Inventions and Innovations Program and Partnership for a New Generation of Vehicles among others.

EERE News
On September 10th, 2002, Secretary of Energy Spencer Abraham welcomed 14 teams of college students to the “Solar Decathlon." Each team will transport a solar powered home to Washington DC and have 6 days to construct it. The teams will be judged in a number of categories and when finished the “Solar Village” will be on display on the National Mall.

EERE is a gold sponsor of SSTI’s annual conference, Building Tech-based Economies: From Policy to Practice, on October 2-3, 2002. To learn more about EERE, visit its exhibit and attend its session at the conference or until then check out its website: http://www.eren.nrel.gov/

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Washington Tech Center Seeks Manager, Statewide Programs
The Washington Technology Center (WTC), based in Seattle, WA, is searching for a person to fill the newly created position of Manager of Statewide Programs. This person will design and develop a statewide network of programs, services and connections to serve companies and entrepreneurs across Washington State. The person stepping into this position will lead the state's efforts to drive innovation and technology into economic growth through partnerships with local technology, economic development and research organizations.

The Statewide Program Manager should be someone with a technology and business background that is exceptional at:

More complete information is avaiable on the WTC website: http://www.watechcenter.org
The Statewide Program Manager position is posted now through October 4.

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