In the August 29, 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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California Budget Eliminates Funding for Lead S&T Agency
In signing his state's fiscal year 2003-04 budget on August 2, California Governor Gray Davis shaved General Fund expenditures by $7 billion in an effort to address a $38.2 billion budget shortfall. Among those cuts was funding for the California Technology, Trade and Commerce Agency (TTCA), the state's principal catalyst for innovation, investment and economic opportunity.

Gov. Davis stated in a press release that "neither party would embrace" his original budget request, which included funding for TTCA. The approved $71.1 billion spending plan is minus $17 million to $18 million per year for the agency, to be phased out by January 1, 2004. Some of the work performed by TTCA will be carried on by the Business, Transportation and Housing Agency, including management of the Small Business Loan Guarantee and Manufacturing Technology Programs.

The elimination of TTCA means California will be without its lead technology-based economic development organization, the Division of Science, Technology and Innovation. Since 1999, TTCA has awarded 246 grants totaling more than $72 million through programs such as the California Technology Investment Partnership (CALTIP). The total number of jobs estimated to have been created and maintained by the agency equals about 18,900.

The cuts to California's General Fund expenditures over 2002-2003 marks the fourth time in 50 years that such spending has been reduced as compared to the previous year. More information on TTCA is available at: http://commerce.ca.gov/state/ttca/ttca_homepage.jsp

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West Virginia Development Office Plans $47.5M for TBED Awards
In its second attempt to distribute $225 million across the state to local economic development projects, after a lawsuit successfully challenged the initial selection process, the West Virginia Development office is poised to award nearly $47.5 million to directly benefit several technology-specific initiatives.

A grant committee of the West Virginia Development Office announced the awards among the sum of those made — $225.86 million to 48 projects in 27 counties. Technology-related awards include:

The West Virginia Economic Development Grant Committee was created in 2002 to authorize bonds for qualified economic development, infrastructure and capital improvement projects such as those above.

West Virginia newspapers report another legal challenge is expected from the same party, this time questioning the constitutionality of using video lottery proceeds to pay back the bonds. As a result, actual bond issuance and project awards may be delayed until early winter.

More information on the West Virginia Economic Development Grant Committee is available at: http://www.wvdo.org/wvedgc.htm

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North Carolina Renews Commitment to Statewide Connectivity
North Carolina took another step toward improving technology-based economic opportunity for its citizens when Gov. Michael Easley signed into law House Bill 1194 earlier this month. The bill creates the e-NC Authority, which will continue the work of the existing Rural Internet Access Authority for three more years, beginning January 2004.

Since 2001, the current authority has led efforts to connect North Carolina, especially rural areas, to the Internet. The Rural Internet Access Authority estimates 2002 – a year when the authority helped drive a 20 percent increase in computer ownership – marked the biggest deployment year the state has ever had. High-speed Internet access was available to 75 percent of North Carolina households by the end of 2002, the authority states.

The e-NC Authority will be a unique hybrid organization that is funded through private and federal dollars and operated out of a private nonprofit. The newly created state authority will build off the existing authority's work, safeguard its financial and programmatic investments across the state, provide continued leadership for technology-based economic development, and expand the role of this central planning body for the state’s Internet access policy.

Key differences between the old and new authorities are the inclusion of distressed urban areas and the use of the Federal Communications Commission definition of high-speed going forward. The FCC currently defines high-speed as the ability to receive 200 kilobits of data or more per second.

More information on e-NC Authority is available at http://www.e-nc.org/.

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KTEC Unveils New Seed Fund for Technology Companies
The Kansas Technology Enterprise Corporation (KTEC), the state's lead corporation to promote advanced technology economic development, has developed a new investment program to help early-stage technology companies get the capital boost they need.

KTEC's Technology Commercialization Seed Fund (TCSF) is intended for companies that have developed technology products or processes and are preparing for a venture investment. Established July 1, the new fund emphasizes technology commercialization and complements KTEC’s existing Applied Research Matching Fund, which is intended for companies still in the product development phase.

“TCSF allows us to help companies that are farther along than companies we’ve invested in in the past,” said Michael Peck, KTEC vice president of investments and portfolio management. “Companies that are eligible for a TCSF investment will have other investors ready to co-invest with KTEC.”

By investing in early-stage Kansas technology companies in need of capital, KTEC helps to grow businesses that will contribute to the state’s tax base and create higher-paying jobs for Kansans. TCSF investments are limited to $250,000. To be eligible for a TSCF investment, a company should be a C-corp or a limited liability corporation and must match the investment at 150 percent.

To learn more about TCSF and other KTEC investment programs, visit http://www.ktec.com/investment/investment.htm.

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Michigan Governor: States Urged to Address Manufacturing Crisis
Michigan Governor Jennifer Granholm has vowed to enlist her fellow governors in the fight to maintain the nation’s vital manufacturing industry. At a recent meeting of automotive industry executives and experts in Traverse City, Mich., Granholm used her keynote speech to call for actions that will stave off the loss of manufacturing jobs in the U.S.

Granholm offered a three-step plan for elevating the national discourse on maintaining manufacturing jobs:

While the governor began her address by reviewing the good news coming out of Michigan this year, she also cited grave statistics to reinforce the immediacy of manufacturing’s problems. After a decade of steady losses, U.S. manufacturing took a precipitous nosedive with the loss of more than two million jobs in 2001-2002. Michigan lost more than 100,000 manufacturing jobs in the same two-year period.

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Southwest Virginia Receives $4.76M for Broadband Infrastructure
Seven grants totaling nearly $4.76 million will help Southwest Virginia achieve greater high-speed bandwidth access by enabling deployment of fiber optic cable throughout much of the region. The Tobacco Indemnification and Community Revitalization Commission awarded the grants, including $2.03 million via five grants to Bristol Virginia Utilities (BVU). The balance of the funds was distributed between the Cumberland Plateau and Lenowisco planning district commissions.

The 31-member Virginia Tobacco Commission was created by the 1999 General Assembly to make payments to farmers to compensate for the decline of tobacco quotas and to promote economic growth and development in tobacco-dependent communities.

BVU, a communications services provider, and the two planning district commissions will use their grants to extend broadband further through Washington County, into Russell, Tazewell, Smyth and Wythe Counties, and eventually Grayson County. Broadband loops also will be extended or completed in Buchanan, Dickenson, Lee, Scott and Wise Counties, and the City of Norton.

Officials are hopeful the proposed infrastructure will lead to a variety of benefits, including: increased business-to-business contracting, more technology-based jobs and electronic commerce opportunities, remote teaching, coordination of inter-governmental activities, telemedicine applications, greater capabilities for new and existing firms to transmit large volume data traffic, and other uses of information technologies.

In addition, the availability of broadband infrastructure is expected to enhance the region's ability to attract high-tech industry and lessen the Digital Divide. Telecommunications services also may become more affordable.

A technology committee that was established to address the critical need for high-speed Internet access throughout rural Virginia reviewed and recommended the proposals for funding. More information on the Virginia Tobacco Commission and the grants awarded is available at http://www.vatobaccocommission.org/.

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Next Wave in TBED Tools: Wireless Neighborhoods
While rural regions strive to establish basic high-speed Internet connections, larger cities such as St. Louis, Oklahoma City and Roanoke, Va., are looking to establish free, wireless Internet access across several blocks to encourage economic development. Recent reports show efforts are underway to speed the technology's deployment in each of the metro areas.

In St. Louis, O2Connect is looking to build possibly the largest, free, wireless Internet network in the nation. USA Today recently reported that the city and O2Connect have agreed to offer the service in a 42-square-block area. O2Connect provides wireless high-speed Internet access and data transport to corporate clients using 2.4/5.8 GHz and 900 MHz technologies to deliver 802.11 radio signals. For St. Louis, the small, 3-year-old company already has installed the first of six antennae to transmit the invisible signals and has donated $25,000 worth of equipment.

The Oklahoma City-based 4D Networks, Inc. plans to install portable wireless systems, as well as fixed and mobile ones, throughout Oklahoma and abroad in the near future. The broadband Wireless Internet Service Provider has created individual wireless hotspots at such places as Java Dave's, a coffee house in Oklahoma City, but would like to see fire, police and utilities equipped with mobile wireless access, according to an Associated Press story last month. Twenty fixed wireless systems have been established so far, each creating a "digital footprint" of 9- to 15-square-miles.

And, in Roanoke, local government, technology and economic development officials are pondering what a free wireless Internet network would mean for their city. The city's Market Square, which is marked by three streets, is the main area in question for service, a Roanoke Times story held. The New Century Technology Council, a nonprofit corporation that serves tech-based businesses in a 12-county region of Virginia, has begun accepting proposals for the project and is considering a pilot program of up to a year for evaluation. The public would only have to purchase a wireless card to connect to the network.

Blatant SSTI Conference Plug
Wanting to keep up with the latest trends in tech-based economic development? Want to know the implications and costs of who's doing what where? SSTI's 7th Annual Conference, to be held in Seattle on October 21-22, offers 24 packed sessions exploring where the field is headed. What works, what doesn't and what's next. Between the speakers and other registrants, you're sure to learn more than a few tricks to improve your local, regional or state efforts toward building a tech-based economy. More information is available at: http://www.ssti.org/conference03.htm [expired]

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Useful Stats: States' Shares of 2001 Federal R&D, by Agency
California, with a 13.4 percent share of the U.S. total, led the nation in receiving federal obligations for science and engineering (S&E) to colleges and universities in FY 2001, according to a new National Science Foundation (NSF) report. More than $22 billion was provided to all institutions in FY 2001, with the Department of Health and Human Services leading the way at almost $13 billion and NSF second at $3.3 billion.

SSTI has prepared two state-by-state tables offering a breakdown of the above data found in NSF's report, Survey of Federal Science and Engineering Support to Universities, Colleges, and Nonprofit Institutions. The first table <http://www.ssti.org/Digest/Tables/082903t.htm> presents the percent of each agency’s total obligations by state and the state's share of the total federal obligations. The second table <http://www.ssti.org/Digest/Tables/082903t2.htm> presents the percent each federal agency represents of each state’s total R&D. The actual dollar amounts from which both tables are developed are contained in Table B-9 of the NSF report.

The data presented in these tables cover all categories of direct federal support for S&E activities to institutions of higher education in the U.S. The agencies listed in these tables provide nearly all of the federal funding for S&E research and development at U.S. colleges and universities.

Ten federal agencies are listed in SSTI’s tables. The category "Other" encompasses eight agencies: the Departments of Housing and Urban Development, Labor, and Transportation; the Agency for International Development; the Appalachian Regional Commission; the Nuclear Regulatory Commission; the Office of Justice Programs; and the Social Security Administration.

Survey of Federal Science and Engineering Support to Universities, Colleges, and Nonprofit Institutions is available at: http://www.nsf.gov/pubsys/ods/getpub.cfm?nsf03326

Last week, NSF also published online Federal Funds for Research and Development, Detailed Historical Tables: Fiscal Years 1951-2002, which includes several tables presenting the geographic distribution of federal R&D funding for the period 1970-2000. The report is available at: http://www.nsf.gov/pubsys/ods/getpub.cfm?nsf03325

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People

Michael Gallagher recently was nominated to lead the National Telecommunications and Information Administration. Gallagher succeeds Nancy Victory as assistant secretary of Commerce for communications and information.

Jeff Morris has been named Director of the Northwest Energy Technology Collaborative.

John Tesoriero has left the New Jersey Commission on Science & Technology to become Associate Director of the Center for Advanced Information Processing at Rutgers University. David Eater is Acting Executive Director for the Commission as a search is conducted for a permanent replacement.

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