In the December 13, 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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S&T to Play Critical Role for Homeland Security Department
Participants of the Federal Biodefense Research FY 2003 Conference recently held in Washington D.C. were given the opportunity to see how the new Department of Homeland Security (DHS) will work. With its passage in November 2002 by congressional legislation, the Homeland Security Act that created DHS initiated the largest reorganization of the federal government since the 1950s. Now, several agencies and departments will be affected by DHS, and each figures to have an important role in the biodefense arena. Below are a few highlights of the conference, which was sponsored by the American Association for the Advancement of Science (AAAS), Research America, a nonprofit organization that promotes health and medical research, and The Scientist, an online news journal.

S&T Role
John Marburger, Director of the Office of Science and Technology Policy (OSTP) and Co-Chair of the President’s Council of Advisors on Science and Technology, gave the keynote on the first day of the conference, stressing the important role that S&T will play in both DHS and biodefense.

The structure of the newly created DHS includes a directorate of science and technology that will be headed by an under secretary for science and technology, Marburger noted. This under secretary will advise the DHS secretary on R&D efforts, priorities, goals, objectives and policies. With this type of involvement, Marburger said, OSTP and the S&T community will have a direct line in the creation of S&T functions within the DHS. One of the members of the presidential appointed transition team for DHS is from OSTP, he added.

The new department also calls for the creation of a 20-member Homeland Security Science and Technology Advisory Committee. With a goal of highlighting issues important to the nation's security, this committee will provide an annual report that will seek to shed light on critical research areas and other initiatives.

During his keynote, Marburger addressed The National Strategy for Homeland Security, which outlines six critical mission areas in which S&T will be vital: intelligence and warning; border and transportation security; domestic counterterrorism; protecting critical infrastructure and key assets; defending against catastrophic threats; and emergency preparedness and response.

Released in July 2002, the strategy also outlines 11 major initiatives specifically aimed at S&T:

The National Strategy for Homeland Security is available in its entirety at: http://www.whitehouse.gov/homeland/book/

Biodefense Budget
Kei Koizumi, Director of the R&D Budget and Policy Program of AAAS, provided an overview of the federal funding of biodefense research for FY 2003. Noting the amount appropriated for counter-terrorism in the President’s FY 2003 budget proposal, Koizumi said counter-terrorism research and development has become a main focus of federal research and development. He stated that the counter-terrorism effort, which dates back many years, is a multi-agency effort including 10 agencies.

While the Department of Defense (DoD) has always been the lead player in the fight against terrorism, focus has shifted some with the anthrax attacks in the fall of 2001. In the FY 2003 budget, $2.9 billion has been requested for counter-terrorism R&D, mostly for biodefense. This represents an increase of 150 percent from FY 2002 ($1.2 billion) and a tremendous increase from FY 2001 ($500 million).

Ten agencies will be involved in the effort but the largest amount of funding will be provided to the National Institutes of Health (NIH) at $1.7 billion. The breakdown of the $1.7 billion is approximately $977 million for bioterrorism research, $250 million for anthrax vaccine development/procurement, $150 million for extramural construction of new biodefense laboratories and nearly $400 million for NIH bio-defense related labs.

It appears that DHS may have a minimal impact on R&D funding. The bioterrorism portfolio will stay under NIH and other agencies, and DHS will mainly serve in a priority setting role. DHS will strive to cross barriers in regards to R&D and technology commercialization. One of the main goals of the new department will be to utilize R&D and move at a more rapid pace toward applications and final products.

The bad news concerning these increased funding levels is that the FY 2003 budget has not been passed. All departments except for DoD are operating under a continuing resolution at FY 2002 funding levels. Programs such as the NIH’s bioterrorism’s R&D expansion cannot occur until budgets are final; however, final budgets may not be passed until February or March of next year.

It was stressed that simply because a budget has not been passed, agencies and organizations seeking federal funding should not stop replying to requests for proposals (RFPs) and program announcements. Failure to respond to current and future RFPs may result in missing a round of funding.

The complete text of the Homeland Security Act of 2002 is available at: http://thomas.loc.gov/cgi-bin/query/z?c107:h.r.5005.enr:

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Governor's Economic Development Plan to 'Energize Indiana'
Indiana Governor Frank O'Bannon unveiled a plan earlier this week to "Energize Indiana" that relies heavily on tech-based economic development.  Gov. O'Bannon's Energize Indiana plan is a $1.25 billion, 10-year initiative that seeks to create high-skill, high-wage jobs in four industry sectors to which Indiana has a claim – advanced manufacturing, life sciences, information technology and 21st century logistics (high-tech distribution) – and to prepare the state's workforce to fill them.   Of the $1.25 billion, $610 million is directed toward supporting university research, university-industry partnerships, construction of university research facilities, and scholarships in targeted fields.

Energize Indiana will tap several financial sources to accomplish its goals, but not state tax money. The plan calls for the sale of bonds to generate money for these measures, using as collateral some of the future payments from the settlement of the nationwide lawsuit against the tobacco industry. It would use part of the money already on deposit in a tobacco settlement trust fund, or $195 million of the $277 million available, to pay off the bonds over time. Health programs presently supported by 60 percent of the tobacco payments would be left untouched; the other 40 percent goes into the trust fund.

The plan also calls for using federal economic stimulus money; encourages the Public Employees Retirement and the Teachers Retirement funds to invest in certain business ventures; and encourages the Indiana Port Commission to sell bonds to invest in companies in the four targeted industrial sectors.

Among other endeavors, Energize Indiana is expected to jump-start the 21st Century Research and Technology Fund. A total of $360 million is dedicated to the fund, which encourages technology transfer among the state's universities and businesses. The fund would receive $32 million in the first year of Gov. O'Bannon's plan and would taper to $18 million a year in the final year.

The governor's plan also provides $135 million for college scholarships for as many as 22,000 students who pursue studies or internships in the four targeted areas and who remain in Indiana after graduation. Up to $115 million is set aside for universities to build new research buildings and technology parks, as well.

Because many parts of Energize Indiana will evolve over 10 years and many of its initiatives will take many more years to be realized, it will be difficult to measure the success of the plan, proponents say. Using the experience of other states and other data, however, proponents hope the measures within the plan will create 200,000 new jobs in the four targeted sectors over the next decade; enroll 200,000 more students in higher education or credentials programs; and cause the state's per capita income to grow at a rate faster than the national average.

Links to the governor's speech on Energize Indiana and a booklet highlighting the plan's initiatives are available through the plan's initial Dec. 4 release at: http://www.in.gov/gov/energize/index.html

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Maryland Governor-elect Forms Commission to Promote Tech Business
Gov.-elect Robert Ehrlich has officially put forth his first economic development initiative for Maryland, according to recent press reports. His initiative, the creation of the Commission on Development of High Technology Business, is designed to encourage more technology business in the state.

The reports state Gov.-elect Ehrlich hopes to receive recommendations from the panel by July 2002 "on whether the state can change regulations to cultivate technology jobs." By the second year of his term, he plans to use their feedback to present a complete technology agenda to the State Legislature.

In a press statement, Gov.-elect Ehrlich said his "administration will strengthen investments in biotech incubators, streamline its technology funding programs, and help Maryland schools turn out the workers our hi-tech economy needs to thrive."

Ehrlich chose George Pappas, a local attorney, to chair the commission. Future commission members are expected to represent area businesses, venture capital firms and higher education.

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OCKED Charts Course for Making Oregon Economy More Competitive
The Oregon Council on Knowledge and Economic Development (OCKED) is set to present its official report to the governor and the 2003 State Legislature. Outlining several key economic development policy and funding recommendations, the council addresses several short-term and long-term strategies for enhancing Oregon’s economic competitiveness in a knowledge-based global economy.

In preparing its report, OCKED focused its efforts on three areas that drive quality job growth and economic development. These areas – research and technology transfer, capital and business formation, and knowledge and workforce development – entail additional specific initiatives:

Accomplishing these initiatives, the report states, may lead to a host of desired outcomes by 2010. Such outcomes would include doubling federal, state and industry R&D dollars; doubling the number of Small Business Innovation Research (SBIR) and Small Business Technology Transfer Research (STTR) awards; doubling the amount of venture capital per $1,000 per GSP; and, increasing the rate of U.S. patents per 10,000 businesses by 50 percent.

The full report will be presented to the governor and to the Legislature before the end of this year, as required by statute. OCKED also will present its findings to Gov.-elect Ted Kulongoski and leaders of the 2003 Legislature to encourage legislative support for its recommendations.

OCKED was established by the Legislature in the 2001 regular session to identify economic development opportunities and advise public officials and various state agencies in the promotion knowledge-based economic development in Oregon. The council's report is available at: http://www.ous.edu/cpa/OCKED/

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Massachusetts' High Tech Sector Hit Hard by Recession, Report Shows
Massachusetts' high tech economy was hammered by the economic equivalent of a nor’easter throughout much of 2002, according to a report released by the Massachusetts Technology Collaborative (MTC). The Index of the Massachusetts Innovation Economy tracks nine industry clusters and 30 economic indicators and documents the declines experienced in the Massachusetts Innovation Economy, which is responsible for one quarter of all jobs in the state.

The data show that compared to last year unemployment is up, the state’s consumer confidence index is down having dropped more than 14 percent, and Massachusetts had only one initial public offering in 2002. Venture capital investments in Massachusetts also fell 36 percent in the first six months of 2002 compared to the first six months of 2001, dropping from $2.2 billion to $1.4 billion.

"For the first time in the six year history of our analysis, nearly all of the current economic indicators point to either unchanged or weakened performance in the Massachusetts economy," said Collaborative Executive Director Mitchell Adams. "However, we are much better prepared to weather this storm than we were in the early 1990s, and the fundamental strengths of the more diverse Massachusetts economy will help us get through this national cycle."

The Innovation Index benchmarks the local economy against other leading technology states such as California, Colorado, Connecticut, Minnesota, New Jersey and New York. While the Massachusetts economy outperformed these states in some of the key industry clusters, several chronic problems still require attention, according to the index. Areas of concern include:

The 2002 Index does identify significant basis of underlying long-term strength in the Massachusetts Innovation Economy. Compared to its competitor states, Massachusetts has the highest percentage (0.91 percent) of Ph.D. scientists and engineers in its workforce. Corporate R&D spending by Massachusetts companies increased approximately 25 percent from 2000 to 2001.

Another indicator of underlying strength in the 2002 index is contained in a special analysis of the life sciences sector. The report indicates the emerging life sciences area stands out as a bright spot on the economic horizon at a time when most industry clusters are struggling. Job growth, federal R&D investment and venture capital investments, as well as life-saving new products and procedures, are emanating from the life sciences sector in Massachusetts.

MTC is the state’s development agency for renewable energy and the innovation economy. The Innovation Index is available at: http://www.mtpc.org/InnovationEconomy/the_index.htm

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Strategic Plan Puts Harford County on 'Road Map' to Tech-based ED
A strategy to make Maryland's Harford County a competitive jurisdiction for attracting and expanding technology ventures has been unveiled by the Northeastern Maryland Technology Council (NMTC). Offering an analysis of the county's technology resources and assets, the Harford County Strategic Plan is expected to serve as a "road map" to help guide policy efforts for the next 5-15 years.

The plan is a culmination of a year-long effort of coordination with public and private sectors and the Harford County Economic Development Advisory Board's Technology Subcommittee. More than 80 interviews were held with area educators, business leaders and organizations, and the findings of these interviews were compared with industry data in Harford County. The effort resulted in eight categories under which 83 specific actions were named for positioning the county as a center for technology growth and development.

Harford County and its eight target-industry sectors can contribute significantly to the county's economy, the report suggests. Development of these industries – advanced and engineered materials; advanced manufacturing technologies; automotive design and testing; information technology; materials testing; technical services; biotechnology scale-up; and environmental services – could mean "substantial economic gains in terms of economic output and job creation."

The key for Harford County, the plan states, will be modeling other examples of Central Maryland jurisdictions with developing technology sectors and implementing the actions set forth in the strategic plan. Harford County already is home to numerous established technology firms and as the above objectives are accomplished, positive economic returns may be seen over a short period of time, including rapid growth in the county's employment base, diversification of the industry base, and growth of complementary industry sectors.

NMTC serves to create a collaborative environment among business, education and government for promoting technology in Harford and Cecil Counties. The Harford County Strategic Plan is available under "Technology" at: http://www.co.ha.md.us/economic_development/

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Reports Address Distressed Communities and the Digital Divide
The Digital Divide may be an oft-discussed topic in today’s economic development world, but questions still remain on how to reduce the phenomenon. Two recently released reports offer possible solutions as to how distressed communities might overcome the Digital Divide.

The first report, America’s Inner Cities Wired to Compete: A Report on Inner City Broadband Readiness and E-Business Technology Adoption, analyzes the availability of broadband services to inner-city businesses and considers the adoption of e-business technologies.

Released in November 2002 by the Initiative for a Competitive Inner City (ICIC), in partnership with the Boston Consulting Group (BCG), the report offers two major findings:

These findings present three opportunities, the authors say. First, economic development officials can use the extensive accessibility of broadband in their marketing and development strategies. Second, technology providers can advance their efforts to inform small and mid-sized companies on e-business. And third, policy makers, business associations, academic institutions and development agencies can aid in accelerating e-business technology implementation.

America’s Inner Cities Wired to Compete is available at: http://www.icic.org/research/pdf/Wired%20to%20Compete.pdf

Identifying Technology Infrastructure Needs in America’s Distressed Communities, prepared by the Office of Economic Development at the University of North Carolina and funded by the Economic Development Administration (EDA), analyzes the role that information and communication technology (ICT) can play in helping distressed communities bridge the Digital Divide.

The research strives to answer how ICT, specifically, can help distressed communities advance economically. A qualitative analysis of 13 case study communities, all of which fell under EDA's definition of "distressed," and the effect of ICT-related initiatives in these communities, was performed. The communities varied geographically and included rural and urban locations.

The report provides 12 lessons learned, including the following:

The report offers several recommendations. Affordable high-speed broadband networks, knowledge institutions to help people understand how hard infrastructure can be used to solve problems, and networks of leaders are the types of infrastructure that is needed in distressed communities, the report contends. It further outlines major constraints in rural areas such as a lack of knowledge of current infrastructure, technology plans not integrally connected with overall economic development plans, lack of critical mass of population or business, and a deficient local tax base or political will necessary for proper investment.

EDA should synchronize its investments with local and state planning efforts to avoid duplication and leverage local effort and resources, the report suggests. EDA also should emphasize the importance of partnerships among government, industry, education and nonprofits, it says. The report concludes EDA should require applicants to demonstrate their investment in physical ICT infrastructure is connected with the long-term economic development strategy of the region.

Identifying Technology Infrastructure Needs can be downloaded at: http://www.osec.doc.gov/eda/pdf/UNC-Luger_Complete.pdf

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S&T Positions Available at U.S. DoC and Columbus Tech Council
Complete job descriptions for both S&T positions listed below are available at http://www.ssti.org/posting.htm.

CTC Looking to Recruit President
The Columbus Technology Council (CTC), the leading technology membership and advocacy organization in central Ohio, is recruiting its first President. The Council seeks a president who will create strong and enduring relationships with key leaders in the Columbus business, institutional, and governmental communities. Desired qualifications include prior leadership in public/private initiatives, demonstrated successful leadership record in a technology-based company or related organization, and experience with technology-based economic development and membership organizations. Applications are due by Dec. 24, 2002.

U.S. DoC Technology Administration Seeks Director, Technology Competitiveness
The U.S. Department of Commerce (DoC) Technology Administration, the principal civilian technology agency working with industry to improve U.S. industrial competitiveness, is seeking someone to become Director, Technology Competitiveness. The incumbent is responsible for working closely with industry to identify critical issues, conducting and disseminating leading-edge research and analysis, and serving as an advocate for innovation in policy making at all levels of government. Eligibility for this position will be based upon a clear showing that the applicant has had experience of the scope and quality sufficient to effectively carry out the duties and assignments of the position. All applications must be postmarked no later than the closing date of the vacancy announcement and received no later than five workdays after the closing date, which is Dec. 23, 2002.

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People

Kevin Dorn has been named secretary of the Vermont Agency of Commerce and Community Development by Gov.-elect Jim Douglas.

Kevin Harter is leaving his position as president of the Central Pennsylvania Technology Council to become senior vice president of the new Life Sciences Greenhouse of Central Pennsylvania.

Doug Rothwell, President and CEO of Michigan Economic Development Corp. until the end of Gov. Engler's administration in January, has accepted the position of executive director for worldwide real estate at General Motors Corp.

Pennsylvania Governor Mark Schweiker has been named President and CEO of the Greater Philadelphia Chamber of Commerce. The Governor will assume his new position on Feb. 1.

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