In the June 27, 2003 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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House Approves 63% Increase for Homeland Security R&D
The U.S. Department of Homeland Security (DHS) could have more money to spend on science and tech initiatives in fiscal year (FY) 2004, thanks to a 63.1 percent increase in R&D funding approved Tuesday by the U.S. House of Representatives. Approximately $900.4 million – or $348.4 million more than the previous year – will go toward DHS's Science and Technology (S&T) budget in FY04. The Bush Administration had requested $803.4 million for the department's S&T budget.

In an accompanying report to the FY04 DHS Appropriations Bill, the House appropriations committee states DHS should work to develop new technologies and capabilities that protect U.S. soil. Excerpts of the committee's testimony on four R&D program areas are provided below:

H.R. 2555, approved overwhelmingly in the House with a vote of 425-2, is now with the Senate Committee on Appropriations for its consideration.

SSTI extends its gratitude to The American Institute of Physics Bulletin of Science Policy News for providing us the lead on this story. The bill and committee report, H. Report 108-169, are available at http://thomas.loc.gov/home/approp/app04.html

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SC Commits $30M To University R&D...
South Carolina's three major research universities were awarded a total of $30 million this week to establish the state's first six centers of excellence, according to The State, a Columbia, S.C.-based newspaper.

Created by the state General Assembly during the 2002 legislative session, the Centers of Excellence program annually will endow professorships in research areas that will eventually lead to enhanced economic opportunities for the state. The program is to serve as an incentive for Clemson University, the University of South Carolina (USC) and the Medical University of South Carolina (MUSC) to raise capital from the private sector to support the recruitment and maintenance of leading scientists and engineers whose work will ultimately promote the growth and expansion of knowledge-based industries and the creation of more and better paying employment opportunities for the people of South Carolina.

The six centers, selected competitively by the 12-member Centers of Excellence Review Board from the 27 proposals received, include:

Annual funding for the program comes from the South Carolina lottery proceeds. The three universities are required to match the funds on a one-to-one basis within 18 months. During the first year of an award, matching funds for endowed professorships must be raised from the private sector and may not include state or federal monies.

More information on the Centers of Excellence program is available from the South Carolina Commission on Higher Education, which administers the program: http://www.che400.state.sc.us/

...while Texas Gov. Cuts $54.5M for Academic Research
As many states are striving to increase their academic research capacity in areas that will strengthen long-term economic competitiveness, the governor of the Lone Star State is pursuing an alternate course that closely resembles traditional business recruitment and retention models.

Using his line-item veto power, Texas Governor Rick Perry signed on June 22 a state budget that eliminates $54.5 million for programs designed to encourage university research. Texas' state budget now is void of the $22.5 million that was appropriated for each of the Texas Excellence Fund (TEF) and University Research Fund (URF) and the $9.5 million allocated for the state's Advanced Research Program (ARP).

Remaining in the budget is the $295 million Texas Enterprise Fund the Governor requested for use as a discretionary incentive/inducement fund to help attract and retain employers and jobs in Texas.

Both TEF and URF were created in 2001 by the Texas Legislature to improve research capacity at universities other than those in the large University of Texas (UT) and Texas A&M systems. TEF funding would have come from the earnings of the state's Permanent Higher Education Fund, but appropriations for the URF would have come directly from general revenue and still allowed more than $76.2 million in savings over fiscal years 2004-05.

ARP and the state's Advanced Technology Program (ATP) were created by the Texas Legislature in 1987 as competitive, peer-reviewed grant programs to fund scientific and engineering research projects of faculty members at Texas higher education institutions. ARP and ATP had been funded at about $20 million and $40 million, respectively, per biennium. Combined, the sister programs span 17 different research areas. ATP will continue as scheduled, but its 2004-05 budget has been sliced roughly in half to $19.4 million.

In a win for larger public universities, the Texas state budget does allow schools to retain 100 percent of their Indirect Cost Recovery for research purposes. In the past, a portion of indirect costs recovered through federal grants had to be returned to the state coffers. The impact, the Austin American-Statesman reports, means Texas universities will be able to keep $86.4 million in grants funds. The University of Texas (UT) is the biggest winner in the deal, retaining an estimated $40 million over the next two years. Additionally, while larger schools such as Prairie View A&M, Texas A&M and UT will continue to receive special research funding through the Permanent University Fund, most Texas colleges do not share in the fund.

The 2004-05 budget will take effect at the beginning of the new biennium on Sept. 1, 2003. More information, including a line-item veto statement, is available at: http://www.governor.state.tx.us/

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Biotech Start-ups in St. Louis Aided by New Initiatives
The St. Louis BioBelt announced this week it is well along in launching four new initiatives designed to position the region as a "location of choice" for start-up and evolving plant and life science companies.

Two research and commercialization projects are in the planning and development stages, one located in a 1,000-acre area of midtown-St. Louis called Technopolis and the other located in the City of Creve Coeur in St. Louis County. When finished, these two areas will provide multi-tenant wet lab and related life sciences infrastructure.

Technopolis is a unique collaboration of key research institutions including Washington University, Saint Louis University, the University of Missouri-St. Louis, the Missouri Botanical Garden and the BJC Health Care System. Each of these institutions and the Center for Emerging Technologies – a 100,000-square-foot life sciences business incubator – plan to jointly capitalize on each other's research in what will be an urban advanced technology research district.

A second joint effort, between the Donald Danforth Plant Science Center and The DESCO Group, includes development of up to 180,000 sq. ft. of wet lab space on eight acres of land adjacent to the Danforth Center in suburban St. Louis County. Similar to the urban effort, this new commercial research and development space will benefit from its proximity to the Danforth Center, the Monsanto Company world headquarters and the region's other life sciences business incubator, the Nidus Center for Scientific Enterprise.

The third initiative, the formation of a nonprofit Commercialization and Tech Transfer Center, will provide more than $5 million in proof-of-concept funding and entrepreneurial and pre-seed capital support to help create new life sciences companies.

The Commercialization Center was supported by feasibility funding from the St. Louis Regional Chamber and Growth Association and is being implemented by funding from the Danforth and McDonnell Foundations, the Monsanto Fund, and Bunge North America. The Center represents a collaboration among the technology transfer enterprises at Washington University and Saint Louis University, as well as the region's two advanced technology business incubators, the Center for Emerging Technologies and Nidus Center for Scientific Enterprise. The proof-of-concept funds will help insure a steady flow of new technology-based companies, providing deal flow for venture capitalists and companies to locate in the research districts.

In addition to $280 million raised in recent months via four locally-managed venture capital funds, the St. Louis BioBelt also has raised $12.5 million for a new pre-seed venture capital fund to invest in St. Louis-based early-stage life sciences companies, in conjunction with the Commercialization Center. Investors in this new fund include the Danforth and McDonnell Foundations and Washington University.

Fourth and finally, the St. Louis region is completing a feasibility assessment and plans to establish a $100 million, later-stage life sciences "Fund of Funds" that will also attract new institutional investors and venture capitalists to the St. Louis market. The proposed Fund of Funds will complement the early-stage funds already established in the St. Louis region.

More information on the St. Louis BioBelt is available at http://www.biobelt.org.

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TEDCO Study Challenges Maryland to Maximize R&D Assets
The Maryland Technology Development Corporation (TEDCO) has issued a new study showing Maryland continues to underperform in some key areas of innovation while leading competitor states in other areas.

The Maryland Innovation and Technology Index 2003 is a detailed assessment of the state's technology assets and the degree to which they are reflected in economic performance. Building on its earlier editions in 1999 and 2001, the Index considers Maryland's competitiveness in three broad categories of innovation:

The 2003 Index improves upon its earlier versions, measuring Maryland's performance in 50 statistical indicators — four more than the 2001 edition and 12 more than the 1999 Index. The new Index ranks Maryland against five competitor states, including Massachusetts, New Jersey, North Carolina, Pennsylvania and Virginia.

Maryland leads its competitors in several areas of research and development (R&D) resources, according to the new Index. Federal labs, universities and companies in the state received $8.7 billion in federal R&D obligations in 2000. This includes 34.7 percent of all Department of Commerce R&D funding, 21.1 percent of all Department of Health and Human Health Services R&D funding, and 18.5 percent of all NASA R&D funding. University invention disclosures, new patent filings and university license revenue also have increased, the study finds, and Maryland ranks first in two performance areas, fast-growing young firms and new companies per 1,000 workers.

However, Maryland has failed to improve in three areas of R&D resources in which it was ranked sixth in 2001 — industry-performed R&D, percent of state's total R&D funded by the federal government, and the number of science and engineering graduate students.

"Compared to its competitors, Maryland excels in technology resources (and) is improving in the intermediate steps needed to make technologies economically viable, but is at best halfway home with a long way to go in technology-based economic performance," Marsha Schachtel, principal author of the study, stated in the Foreword. Schachtel is a senior fellow at the Johns Hopkins Institute for Policy Studies.

Phillip Singerman, executive director of TEDCO, said in a press statement, "As the author of the study notes, even when Maryland's performance is improving, it is not enough to surpass our competitors and increase our rankings because our competitors, even with their own severely constrained budgets, are sustaining their investments in technology-based economic development. Pennsylvania, for example, regularly invests $26 million from general funds in its Ben Franklin Partnership program."

TEDCO's study recommends greater investment by federal laboratories and universities in technology transfer offices, enlightened intellectual property negotiations, access to pre-seed funding from angels and state programs, help in competing for federal SBIR awards, and intensive incubation services. The Index also is expected to help the Maryland Commission on Development of Advanced Technology Business develop a strategic plan for the state.

Soon to be added to Maryland's tech resources are two new university-affiliated research centers in Baltimore and College Park. On June 18, the Maryland Legislative Policy Committee approved $9 million for the centers, including $4 million for a health sciences research park at the University of Maryland-Baltimore and $5 million to help pay for a technology research center at UM-College Park. The funding comes from the state's Sunny Day fund, which promotes job growth and expansion.

The Maryland Innovation and Technology Index 2003 is available at http://www.MarylandTEDCO.org/.

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Commerce Report Examines IT Education, Training Landscape in 21st Century
A new 225-page report released by the U.S. Department of Commerce examines employer demand for information technology (IT) workers, the IT education and training landscape, and the role of employers and workers in IT education and training. Education and Training for the Information Technology Workforce, mandated by the American Competitiveness in the 21st Century Act of 2000, highlights five broad findings:

The report was prepared following a review to identify and analyze the education and training programs through which Americans prepare for IT jobs and maintain the skills needed in a digital technology environment. The Commerce Department’s Technology Administration conducted a broad outreach effort to solicit the perspectives of employers, IT workers and education and training providers.

Specifically, the Technology Administration conducted eight roundtables across the country; provided an Internet-based qualitative survey mechanism through which representatives of each stakeholder group were able to provide their perspectives on a variety of IT education and training-related questions; and met with a variety of employer, education and training provider, and worker representatives. Six of the roundtables convened employer representatives and education and training providers, and two convened IT workers, gathering insights from a total of 145 individuals. The Internet-based survey attracted nearly 300 respondents, more than two-thirds of which were IT workers.

Education and Training for the Information Technology Workforce is available for download at http://www.technology.gov/reports.

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People

Rosellen Kraus has announced she will be leaving the Central Florida Technology Partnership at the end of the summer.

The Virginia Institute for Defense and Homeland Security has named Hugh Montgomery, Jr. as the consortium's first director, effective July 1.

Neil Shpritz, executive director of the BWI Business Partnership in Maryland, is retiring in October.

Fred Tompkins, professor and interim dean of the University of Tennessee (UT) College of Engineering, has been named interim executive director of the UT Research Foundation.

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SSTI Accepting Bids for Site of 2004 Annual Conference
With preparations for SSTI's 7th Annual Conference on October 20-22 well underway, we have received many questions from local, regional and state organizations wanting to host the premier event for the tech-based economic development profession in 2004. Because of the increased interest, SSTI has bumped up its schedule for selecting the 2004 site. We are accepting nominations of host organizations and locations for SSTI's 8th Annual Conference until July 11, 2003.

Held in late September or October each year, SSTI’s annual two-and-a-half day event attracts approximately 300 participants from more than 40 states and several countries. The conference is especially designed for those engaged in tech-based economic development on the local, regional, state or national level.

To be the host organization or location for SSTI's conference is to showcase nationally and internationally the success of your state, region or community tech-based economic development efforts. Specific benefits include:

Nominations may be from collaborations of several organizations, with a lead organization designated as host. The lead organization for the 2004 conference must be an SSTI Sponsor or Affiliate in good standing for all of 2004. (More information on sponsor or affiliate membership is available at http://www.ssti.org/sponsors.htm.) The host organization also must be willing to provide funding that helps SSTI keep conference costs affordable to all attendees. This funding can be obtained in part from collaborative partners in the bid. Recent hosts also have provided in-kind support such as on-site conference staffing assistance, audio and visual equipment, printing capability, storage and other services.

SSTI is very excited to hold the 2003 conference at the beautiful Bell Harbor International Conference Center in Seattle. Examples of previous locations include the Ritz-Carlton, Dearborn in Dearborn, Mich. (2002), the Omni William Penn in Pittsburgh (2001), the Regal Knickerbocker Hotel in Chicago (2000), and the Hyatt Regency in Indianapolis (1999).

Interested organizations are encouraged to e-mail SSTI by July 11, 2003, indicating they would like to submit an application. By July 18, SSTI will narrow the list of candidate cities and provide them a full application package. All inquiries may be addressed to Becky Blatt, SSTI's development director, at blatt@ssti.org.

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Digest Breaks for Holiday
SSTI is declaring its independence from publishing an issue of the SSTI Weekly Digest on July 4. The Digest will resume on July 11.

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