In the October 18, 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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Michigan Life Science Initiative Threatened at Ballot Box
A ballot proposal being put forth by Citizens for a Healthy Michigan would reduce funding for Michigan Life Sciences Corridor sponsored projects by nearly $50 million annually, estimates a report released by the Michigan Economic Development Corporation (MEDC).  The annual reduction includes both the cut in direct funding and required matching funds for Corridor funded projects. It also takes into account the loss in expected yields from the Corridor’s loans, equity stakes investments and direct investments in venture capital funds.

"Within the past six months, many states have announced that they have eliminated or significantly curtailed their life sciences initiatives," Doug Rothwell, chairperson of the Life Sciences Corridor Steering Committee, said in a press statement. "Michigan, on the other hand, has received national acclaim for its continuing commitment to the program and the positive results that have been achieved. Approval of this ballot proposal would significantly reduce funding for the Life Sciences Corridor and associate Michigan with other states that are pulling back, rather than moving forward, in this important industry sector."

The Citizens for a Healthy Michigan initiative diverts more than $300 million annually from the state’s budget. Under the initiative, the Life Sciences Corridor would receive 13 percent of the state’s tobacco revenue settlement dollars, including an estimated $42 million in FY 2003 funds — a reduction of about $3 million from FY 2002. In FY 2004, the funding amount would be reduced to about $37.8 million, an estimated $12 million reduction.

The state of Michigan has committed $1 billion over 20 years from its tobacco settlement money to energize the life sciences industry. About 300 life sciences businesses are located in the state, with more than 16,500 workers and $1.6 billion in annual sales. In 2001, Michigan welcomed at least 22 new life sciences start-up companies. Private and public investment in life sciences activities exceeded $2.9 billion in the state, creating more than 2,000 new jobs since the inception of the program.

Since its creation in 1999, the Life Sciences Corridor Fund has invested $145 million in 78 awards. This includes assistance to 16 early stage life sciences companies to help further their growth plans. The assistance also has impacted about 200 employees funded directly through Life Sciences Corridor awards.

Michigan voters will decide to accept or reject the ballot initiative on November 5. If approved, the proposal would end the Michigan Merit Award for students statewide. It also would change Michigan's constitution requiring the majority of the funds to be set aside for health care programs.

Evaluation of Impact of Tobacco Funding Ballot Proposal on Michigan Life Sciences Corridor, a PowerPoint presentation of the MEDC report, is available as a PDF at: http://medc.michigan.org/news/reports/economic/

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New ATP Awards Announced
The Advanced Technology Program (ATP) has announced 40 awards potentially totaling $101.6 million in ATP funding matched by an industry cost-share of $92 million if carried through to completion. These awards were selected from proposals submitted to 2002 competition.

Managed by the National Institute of Standards and Technology, ATP provides cost-shared funding to industry-led teams which can include non-profits and universities to help advance particularly challenging, high-risk research and development projects that have the potential to spark important, broad-based economic or social benefits for the U.S. The program supports projects that industry cannot fully fund on its own because of significant technical risks.

ATP awards are made on the basis of a rigorous competitive peer review process that considers scientific and technical merit of each proposal. In addition, awards are based on potential for broad-based economic benefits to the nation, the need for ATP funding, and evidence of a clear commercialization pathway and broad diffusion. ATP accelerates enabling technology research but does not support product development work.

A listing of the 2002 ATP award-winners is available at: http://www.atp.nist.gov/awards/02announce.htm

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SBA Awards FY 2002 FAST Winners
The Small Business Administration (SBA) recently named 27 states winners of the second Federal and State Technology Partnership (FAST) awards. At $100,000 each, the awards totaled $2.7 million. Created in December 2000 legislation that reauthorized the Small Business Innovation Research (SBIR) Program, FAST provides matching funds to enable states to augment or expand their tech business assistance and SBIR outreach efforts. The FY 2002 winners are:

Arizona – Arizona Dept. of Commerce – $100,000
Arkansas – U. of Arkansas at Little Rock – $100,000
California – Division of Science, Technology and Innovation - Calif. Technology, Trade and Commerce Agency – $100,000
Delaware – Delaware Small Business Dev. Center Network – $100,000
Georgia – U. of Georgia Small Business Dev. Center – $100,000
Hawaii – High Technology Dev. Corp. – $100,000
Iowa – Center for Advanced Technology Dev., Iowa State U. – $100,000
Louisiana – Louisiana Business & Technology Center, Louisiana State U. – $100,000
Maine – Maine Technology Institute – $100,000
Maryland – Maryland Technology Dev. Corp. (TEDCO) – $100,000
Minnesota – Minnesota Project Innovation, Inc. – $100,000
Mississippi – U. of Southern Mississippi – $100,000
Missouri – U. of Missouri Outreach Extension, Missouri Small Business Dev. Centers – $100,000
New Hampshire – New Hampshire Small Business Dev. Center – $100,000
New Mexico – Technology Ventures Corp. – $100,000
New York – New York State Office of Science and Technology and Academic Research (NYSTAR) – $100,000
North Carolina – U. of North Carolina Small Business & Technology Dev. Center (SBTDC) – $100,000
North Dakota – Center for Innovation – $100,000
Ohio – Ohio Dept. of Development's Technology Division – $100,000
Oklahoma – The Okla. Center for the Advancement of Science and Technology (OCAST) – $100,000
Pennsylvania – Innovation Philadelphia – $100,000
Puerto Rico – Inter American U. of Puerto Rico, Puerto Rico SBDC Network – $100,000
Texas – Northwest Texas Small Business Dev. Center, Texas Tech U. – $100,000
Vermont – Vermont Small Business Dev. Center – $100,000
Virginia – Virginia's Center for Innovative Technology (CIT) – $100,000
West Virginia – State of W.Va. Small Business Dev. Center – $100,000
Wisconsin – U. of Wisconsin Extension, Wis. Small Business Dev. Center – $100,000

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Central Tennessee Gets New Life Science Campus
Construction is underway for the Cool Springs Life Sciences Center (CSLSC), a $74 million biomedical research facility planned for Franklin, TN, 15 miles south of Nashville. When completed, the 10-acre center will be home to life sciences-focused R&D facilities for biotech, pharmaceutical and medical device companies.

A $464,218 Tennessee Industrial Infrastructure Program (TIIP) grant awarded to the City of Franklin earlier this year is helping to fund CSLSC. With the creation of an estimated 600 direct and indirect jobs at build-out, the center is expected to generate more than $15 million in spendable payroll and $1.2 million in annual local tax revenue for Williamson County and the City of Franklin.

"The economic impact of this project is huge for Williamson County," Rogers Anderson, Williamson County Executive, said in a press statement. "This Center will help put Williamson County at the center of the state's efforts to recruit more technology-based businesses and truly make Tennessee the technology state."

Last week, the three charter tenants of CSLSC placed their company's "markers" on a six-foot DNA replica to signify the start of construction of Building One, a 32,000-square-foot facility with laboratory and administrative space. The markers were placed by Dr. Samuel Lynch, coordinator of the project and CEO of BioMimetic Pharmaceuticals, Inc.; Lee Limbird, Ph.D., Associate Vice-Chancellor for Research, Vanderbilt University Medical Center; and R. Stephen Porter, Pharm.D, FCP, Chairman, President, CEO, VDDI Pharmaceuticals.

In all, CSLSC will consist of three buildings totaling approximately 134,000 sq. ft., being situated in the Cool Springs area of Franklin. Building One will be occupied by two biotechnology firms and a Vanderbilt University biotech business incubation facility.

The center is part of ongoing efforts by Williamson Works to establish Williamson County as a national leader in research and technology businesses. Williamson Works, a nonprofit organization dedicated to promoting economic development, also has plans for a 500-acre research and technology park. In March 2001, a study conducted by the Williamson County Economic Development Council estimated the park would have an economic impact of $10 billion over a 25-year build-out period.

CSLSC is a regional initiative of BioMimetic Pharmaceuticals, Inc., Vanderbilt University Medical Center, Tennessee Biotechnology Association (TBA), Tennessee State Office of Economic & Community Development, Tennessee Technology Development Corporation, Middle Tennessee State University, Nashville Health Care Council, Tennessee Valley Authority, City of Franklin, and Williamson Works.

Construction of the first CSLSC building is expected to be complete by mid-2003 with total build out expected within five years. The center was designed by The CFP Group architects. Project developer is Noblegene Development Co. of Franklin, Tenn.

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NCOE Report Provides Policymakers with a New Vision of the Economy
The National Commission on Entrepreneurship (NCOE) has released the American Formula for Growth – Federal Policy and the Entrepreneurial Economy, 1958-1998, a report that provides an extensive review of the role of public policy during the “entrepreneurial revolution” of the past 40 years.

A two-year compilation of data and personal interviews with veteran venture capitalists, lawyers, accountants, educators and entrepreneurs, American Formula for Growth poses upcoming policy challenges that America must address to sustain continued innovation and prolong prosperity. The report recommends that policymakers execute an action plan to address specific issues that will expand and extend the entrepreneurial economy.

Along with the foundation of our constitutional and legal system, the report focuses on five key areas of public policy that contribute to the American formula for growth:

American Formula for Growth is available in its entirety at http://www.ncoe.org/research/4367_NCOE_AMERFORM.pdf. An executive summary of the report is separately available at http://www.ncoe.org/research/4367_NCOE_AMERFORM_EXEC.pdf.

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Information Technology and the Labor Market
In the 1990s, the dialogue on information technology (IT) centered on dot.coms and e-commerce, and little focus was placed on the effect of IT on the labor market. Richard Freeman addresses this issue in The Labour Market in the New Information Economy, an NBER working paper released this month.

Freeman relates that employment in IT-producing industries has grown from 3.3 percent of total employment in 1992 to 4.3 percent in 2000. The earnings of these workers, he notes, have risen 1.65 times the earnings of workers throughout the economy in 1992 and 2.11 times the earnings of all workers in 2000. The use of computers and the Internet at work also has risen. In 1984, 25 percent of workers ages 18-65 used a computer at work, and in 2001 that percentage rose to 56 percent. Internet usage rose from 17 percent in 1997 to 41 percent in 2001.

The communication and information technologies have changed and will continue to transform the labor market in many significant ways. Freeman associates the effect of IT and the Internet to several relationships in the labor market. First, his analysis reports a primary link between computer use and hourly earnings for the early 2000s and discovers a similar positive connection between Internet use and hourly earnings. Unfortunately, computer use also correlates well with a 5-6 percent increase in the number of hours worked at the traditional workplace. Second, the author predicts that with the increased usage of the Internet as a job search and employee search instrument that better matches between company and prospective employee will occur. The changing use of the Internet by unions and how they operate is the third relationship. Unions can now reach out in different ways to workers outside of the traditional workplace environment and communicate with employers without media intervention among other things.

Freeman foresees that while IT and Internet induced changes in the labor market have been substantial, they will continue to grow in importance as computerization and Internet access increase over time. These increases will cause even more transactions in the labor market to occur over cyberspace and provide a medium for unions to address workplace problems. The labor market will indeed progress even further into cyberspace just as other economic markets have. The complete article can be found at: http://papers.nber.org/papers/W9254

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Classified Research at MIT Should Be Off Campus, Panel Recommends
A Massachusetts Institute of Technology faculty committee has suggested that the university provide off-campus facilities to help faculty perform classified public service or research involving the nation’s security. In the Public Interest, a report of the Ad Hoc Faculty Committee on Access To and Disclosure of Scientific Information of MIT, presents recommendations for the university in handling classified work in the wake of the September 11 attacks.

Appointed by Provost Robert A. Brown and Professor Stephen C. Graves, the panel stresses that MIT is firmly committed to it long-standing policy of the intellectual openness of the campus. The panel expresses concern that allowing classified research on university grounds would create two classes of individuals and would restrict faculty and student interaction on campus. It also states that students should not be required to have security clearance for thesis research.

The team proposes that MIT provide nearby facilities off campus for faculty to work on classified national security matters. They also recommend that MIT not provide storage on campus for any classified material. Use of the campus and its resources for a short-term response to a national emergency should be allowed, according to the group.

The panel presents 12 findings ranging from classified research occurring on MIT’s campus and faculty participation in that research to relationships with other research laboratories involved in national security research.

In the Public Interest is available in its entirety at: http://web.mit.edu/faculty/reports/publicinterest.pdf

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Tech-based ED RoundUp: New Beginnings
The economic downturn and continuing state and local fiscal problems are not stopping most efforts to develop tech-based economies. Here are a few examples of recent groundbreakings from around the country.

NASA Helps Launch Education Center in Phoenix
Astronaut Carlos Noriega and Estrella Mountain Community College President Homero Lopez recently announced the creation of the NASA Center for Success in Math and Science in Phoenix. Sponsored by NASA's Office of Equal Opportunity Programs and located on the Avondale, AZ, campus of Estrella Mountain Community College, the newly dedicated student academic support center is expected to help students take part in Arizona's knowledge economy. The center was established to inspire and support socially and economically disadvantaged students in their pursuit of higher education in science, technology, engineering and math disciplines. More information is available at: http://spacelink.nasa.gov/NASA.News/NASA.News.Releases/02-10-04.Phoenix.Education.Center.Opens

OTCC to Have New Home in Oklahoma City
The Oklahoma Technology Commercialization Center (OTCC) will relocate to the Oklahoma City Enterprise Center once the renovation of a former bank is completed for the new center, The Saturday Oklahoman reported. OTCC and several partners are meeting the $375,000 match requirement in the $1.5 million Economic Development Administration grant that is helping convert two floors of the bank into a business incubator. Considered one of the city's most significant structures, the banking hall will retain 11,000 sq. ft. as public space. OTCC will occupy 2,000 sq. ft.

Regional INEEL Research Office Opens in Northern Idaho
An extension office of the Idaho National Engineering and Environmental Laboratory (INEEL) has opened at the University of Idaho Research Park in Post Falls, ID. The short-term plan for the new INEEL office is to rotate researchers and technical staff to assess the type and amount of demand for agency programs in northern Idaho. INEEL, which is based in Idaho Falls, spends about $1.4 million annually on economic development.

Case Western Reserve Creates MBA for Bioscience Entrepreneurship
The Weatherhead School of Management at Case Western Reserve University has launched a new MBA specialization in Bioscience Entrepreneurship to respond to the industry's need for managers with a combination of scientific background and business expertise. One of the first such programs in the U.S., the program will focus on product development, joint venturing, managing strategic alliances, intellectual property law, and financial deal-making. An advisory board comprised of numerous bioscience industry leaders is expected to help ensure the program remains highly relevant.

Hartford, CT Expands Manufacturing Tech Park
Officials in New Britain, CT, have approved a 5-acre expansion of the city's SMART Park to attract more high tech businesses, according to The Hartford Courant. With the expansion, the 14-acre park is expected to create more jobs and broaden the tax base. Incentives such as tax abatement, tax credits and work force training will help draw the technology companies, the article stated. The $2.9 million project is partly being funded by an $875,000 EDA grant. The city also has applied for nearly $1 million in state grants.

Purdue Set to Break Ground for $7M Entrepreneurship, Tech Transfer Center
The Burton D. Morgan Foundation will fund the Burton D. Morgan Center for Entrepreneurship that is being built in Purdue's new $100 million Discovery Park. The $7 million, 31,000-square-foot building will be a two-story facility designed to connect with overhead walkways to future adjacent Discovery Park buildings. The center will include a 72-seat lecture room, a presentation room and several conference and break-out rooms for use by park occupants. Construction on the center is scheduled to begin before the end of 2002.

Also, Phase II development of a $2.2 million development of land earmarked for high tech companies is underway for the Purdue Research Park. As part of an economic development partnership between Purdue University, the Purdue Research Foundation and the City of West Lafayette, 50 acres will be readied for market by extending Win Hentschel Boulevard and providing the infrastructure necessary for 10 commercial lots.

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NASA Funds Workforce Development Projects
NASA has selected 45 consortia in the National Space Grant College and Fellowship Program (Space Grant) to receive funding for aerospace workforce development. A total of $3.56 million is being awarded in response to the proposals submitted by the state organizations to NASA's Education Division in the Office of Human Resources and Education at Headquarters in Washington.

NASA received 51 proposals under competition for the Space Grant awards. The proposals were reviewed using criteria that included innovation, connections with NASA Centers, faculty and curriculum development, student research, and effective evaluation methods. The awards ranged from $20,000 to $100,000 and averaged approximately $78,000.

The consortia were selected based on a competitive evaluation of their plans to enlarge and enhance the "pipeline," or resource pool, of higher education graduates and faculty who stay connected to or become involved with NASA as employees, contractors or principal investigators. In support of the new NASA Vision and Mission, the program will increase the number and diversity of highly qualified individuals knowledgeable of and experienced in NASA's research mission.

The National Space Grant Program, mandated by Congress in 1987, consists of 52 State Consortia in the 50 states, the District of Columbia and the Commonwealth of Puerto Rico. All carry out programs in education, research and public service.

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People

Peter Jobse has been named executive vice president and chief operating officer of Virginia's Center for Innovative Technology.

Patrick Jones, executive director of the Biotechnology Association of the Spokane Region, has been named executive director of Eastern Washington University's new Institute for Public Policy and Economic Analysis.

Dennis Lower of the Biomedical Research Foundation of Northwest Louisiana is the new leader of the Louisiana Economic Development Council.

Judy McKinney-Cherry is the new director of the Delaware Economic Development Office.

Carl Russell has resigned as president and CEO of Tucson Technology Incubator Inc. Bo Statham, a consultant to UniSource Energy Corp. on new business development and a client adviser at the incubator, has been named interim president.

Dr. Melvyn Schiavelli, senior program officer for the Harrisburg Polytechnic Development Corporation, has been named acting president and CEO, succeeding Dr. Charles Clevenger.

Lt. Gov. Gary Sherrer has left his position as secretary of the Kansas Department of Commerce and Housing to become executive vice president with GoldBanc Corp. Sherry Brown, who had retired from the department, will return to serve as interim secretary.

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