September 5, 2003 -- SSTI Weekly Digest

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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President Wants Point Person on Manufacturing
President Bush announced on Monday that he has told Commerce Secretary Don Evans that he wants him to appoint an assistant secretary “to focus on the needs of manufacturers, to make sure our manufacturing job base is strong and vibrant.” The President made the announcement saying, “I understand for a full recovery, to make sure people can find work, that manufacturing must do better...We’ve lost thousands of jobs in manufacturing, some of it because of productivity gains...but some of it because production moved overseas.”

No additional details were provided on the responsibilities of the position, but according to a Commerce press release, the new Assistant Secretary for Manufacturing and Services "will help address the competitive challenges and opportunities facing the U.S. manufacturing sector."

The announcement comes on the heels of severe job losses in manufacturing since early 2001. Of the 2.7 million jobs the U.S. economy has lost during that period, 2.4 million were in manufacturing with the downturn eliminating more than one in 10 of the nation's factory jobs, according to ABC News.

These manufacturing jobs may never be recovered due to a permanent change in the make up of the economy, according to economists at the Federal Reserve Bank of New York. They hypothesize that structural changes in the economy (i.e., permanent shifts in the distribution of workers throughout the economy) explain why the economist-declared recovery from the most recent recession has brought no growth in jobs.

The Fed economists report, “We find evidence of structural change in two features of the 2001 recession: the predominance of permanent job losses over temporary layoffs and the relocation of jobs from one industry to another. The data suggest that most of the jobs added during the recovery have been new positions in different firms and industries, not rehires. In our view, this shift to new jobs largely explains why the payroll numbers have been so slow to rise: Creating jobs takes longer than recalling workers to their old positions and is riskier in the current uncertain environment.”

Senate Committee Restores Funding for MEP
On Thursday, the Senate Appropriations Committee approved $106.6 million for the Manufacturing Extension Partnership (MEP) for FY 2004, according to the Modernization Forum. The Bush Administration had proposed funding MEP at $12.6 million, effectively eliminating the national program.

The Committee action would maintain funding at the FY 2003 level provided by the 108th Congress earlier this year. The House appropriations bill passed in July would provide only $39.6 million for MEP. Earlier in the year, 246 House members sent letters to House CJS Appropriations Subcommittees leaders supporting $110 million for MEP in FY 2004.

MEP is a nationwide network of independent, nonprofit centers assisting America's 360,000 smaller manufacturers. The centers provide technical assistance, products, services and business best practices to help firms increase productivity, increase profits and enhance their global competitiveness.

In a study by the U.S. Census Bureau, researchers found MEP clients experience productivity gains more than four times greater than comparable firms. MEP clients report strong bottom-line impacts including over $636 million in new sales, $680 million in new investment, and 25,500 retained or new jobs during FY 2001.

Sneak Peek at SSTI's Annual Conference
The Future of U.S. Manufacturing and What We Do About It
Manufacturers continue to shed thousands of American jobs — at a rate of 80,000 per month over the past three years, according to the New York Times. The realities of globalization are settling in as small and mid-sized manufacturers are hit hard with competition from around the world.

Local communities in every state in every region across the country are feeling the impact of plant closures, mass layoffs and downsizing. The economic indicators point toward recovery while unemployment lines grow. Economists are now suggesting the U.S. is losing high-paying, skilled jobs that will never return.

What is manufacturing's future in America, and how do states, regions and communities prepare for it?

One of the breakout sessions at SSTI's annual conference will allow state and local tech-based economic developers to share and debate ideas on what policymakers and practitioners are, can and should be doing. The roundtable discussion will be facilitated by Dr. Ken Poole, CEO of Center for Regional Economic Competitiveness and one of the nation's leading experts on federal, state and local policies and programs supporting manufacturers.

This is just one of 24 intensive breakout sessions offered at Building Tech-based Economies: From Policy to Practice, to be held in Seattle on Oct. 21-22. Details, including registration information, are available at: http://www.ssti.org/conference03.htm [expired]

States Cut $2.3B in Aid to Cities, NLC Says
States cut aid to cities and towns by a total of $2.3 billion in the current fiscal year, according to a new report from the National League of Cities (NLC). Comparing 2004 to 2003 figures, the $2.3 billion in state cuts represents a 9.2 percent decline in state revenues for cities.

NLC released its report, Fiscal Crisis Trickles Down as States Cut Aid to Cities, at a roundtable held on Tuesday at the National Press Club in Washington, D.C. City leaders believe shifts in federal policy are weakening the federal role in the nation’s inter-governmental system, NLC states. They also are concerned that the fundamental changes in the federal-state-local partnership will hurt state and local governments and, ultimately, the people they serve. NLC offers these findings in its analysis:

Among those states making the most severe cuts in state aid was California, which cut about $1.1 billion in aid to cities. California's decline represents a 59.7 percent decrease over its FY 2003 total and nearly 52 percent of the nation's total cuts in FY 2004. Massachusetts, Florida and Minnesota also experienced significant declines.

The new NLC report expands upon an earlier survey in which respondents said they expect revenues traditionally returned to cities and towns by states to decline by an average of 2.1 percent during 2003 (see the May 30, 2003 issue of the Digest). In that survey, cities already were said to be facing a 4 percent gap between revenue and spending — the highest in more than a decade. NLC argues the decline in state revenues in 2004 not only goes against fiscal and historical trends but presents a trend that "threatens to undermine government's ability to deliver the good and services Americans need."

To lessen the effect of the current fiscal crisis, NLC suggests the federal government should provide counter-cyclical relief to cities and remove barriers to state and local fiscal capacity. States, for their part, should allow cities to exercise greater fiscal authority, and cities should use the funds they receive to upgrade infrastructure and personnel.

NLC serves as a resource and advocate for 18,000 cities, towns and villages that collectively serve 225 million people. Fiscal Crisis Trickles Down as States Cut Aid to Cities includes a state-by-state table showing the percent change in state revenues for cities between FY 2003 and FY 2004. To access the report, visit NLC at http://www.nlc.org.

New Hampshire to Furnish 7th-grade Classrooms with Laptops
In a move to integrate technology and traditional learning, New Hampshire Governor Craig Benson introduced on Tuesday a four-year pilot program to bring laptop computers into classrooms. The program, Technology Promoting Student Excellence, is intended to provide wireless connectivity to all 7th-grade students and teachers from selected schools.

Numerous corporate donors have contributed nearly half of the $1.2 million estimated cost to implement the program, according to the Associated Press. Up to five schools will be selected from a pool of 19 school districts being asked to submit proposals. Installation of the wireless network will begin in November 2003, following an announcement of winning schools.

Maine, which adopted a similar model in 2001 (see the June 29, 2001 issue of the Digest), has seen a drop in absences, tardiness and disciplinary cases since implementing its program. Learning achievements also have increased, and the program has received high approval ratings from teachers, students, parents and administrators, Maine supporters say.

Also, in July 2003, the Michigan Legislature approved $39 million for a program meant to give its state's 132,000 sixth-graders access to laptop computers. The overarching program, Freedom to Learn, was conceived in 2002 (see the August 8, 2003 issue of the Digest).

De-privatization?
Reno-area Tech Council Affiliates with Nevada ED Office
Citing the goals of expanding its impact and stabilizing funding, the member-based TechAlliance has given up its political independence to become a nonprofit agency under the auspices of the Nevada Commission on Economic Development. With the change comes a new name for the 4-year-old entity, which had served the Reno area from its Carson City offices — the Nevada Center for Entrepreneurship and Technology (CET).

Alison Estee, retaining the title of executive director, will gain a new boss as she now reports to the director of the state’s lead economic development agency. The Commission also will appoint a statewide advisory board for the new center.

The economy has taken its toll on a number of technology councils around the country, forcing some to lay off paid staff, merge with other councils, broaden their focus beyond a single technology sector, or cease operations altogether. Maintaining a regional council during the persistent economic downturn with only a young and emerging technology sector to draw from presents formidable challenges, as the TechAlliance discovered.

The Reno Gazette-Journal has reported finances were a key motivation for the council’s decision to switch from private nonprofit to public nonprofit. Estee was quoted, “It was clear to me the model of asking the corporate world for financing wasn’t a long-term strategy. As the economy tightened, I wasn’t sure I could show people a clear return on investment on their money.”

Activities of the TechAlliance had been conducted mostly through volunteer-driven teams dedicated to business recruitment, higher education, member services and organization-building. Activities will expand once CET and the state have finalized organizational details, but business recruitment will continue to be a priority.

Encouraging Grads to Pursue Biotech Careers
Biotechnology is one of the few tech-sectors in which jobs still seem to be in strong demand despite the weak economy, according to local news reports from around the country. As a result, many states, communities and universities have directed a portion of their economic development efforts toward encouraging life sciences research and biotech commercialization. Two of the more recent initiatives launched in Michigan and Maryland have the similar goal of encouraging recent and future college graduates to pursue careers locally in the growing fields.

Michigan
MiCareer, a new e-newsletter from the MichBio BioConnections Program, is intended to help college students in Illinois, Indiana, Michigan and Ohio in their career search process. BioConnections is a collaborative effort between industry partners for life sciences recruiting, business and workforce development in Michigan, and the Michigan Economic Development Corporation (MEDC). With the first issue planned for early this month, MiCareer will serve as a one-stop-shop for 17,000 juniors and seniors in the Midwest once it is up and running. Students subscribing to the e-newsletter figure to benefit from tips in job hunting, resume writing and networking. The Washtenaw Development Council (WDC), which also administers the BioConnections Internship Program, is developing life sciences career content for this year's issues of MiCareer.

In addition to MEDC and WDC, BioConnections partners include STATPROBE, a full-service staffing firm, Search Masters International (SMI), a scientific and executive retained search firm, and BioSpace, a web resource for jobs, news and information for the life sciences market. BioConnections is funded by a three-year, $1.6 million grant from the Michigan Life Sciences Corridor and is administered by MichBio, the state association for life sciences companies.

Maryland
In Baltimore, a hands-on, student-industry partnership has grown rapidly to include more than 600 members since its founding in January 2003. The Hopkins Biotech Network (HBN), a nonprofit organization at Johns Hopkins University (JHU), is designed to be a primary source of education, networking and career development for all individuals within JHU interested in the development and business of biotechnology.

HBN received seed money from the JHU Graduate Representative Organization last April and has also received support through a generous contribution from an anonymous alumnus of the biotechnology program. Since then, it has given members the chance to participate in many network-sponsored seminars and lectures, encouraging interaction with alumni, faculty and industry professionals. HBN's most recent meeting included a presentation on how to start a biotech firm and work with venture capitalists.

Like the MichBio Bioconnections Program, HBN provides biotechnology news via e-mail, and membership in the network is free of charge. In the daily HBN Journal, members can obtain information addressing venture capital firms, law firms and area biotech companies, as well as access to career information and job postings. Members also can find information through the network's online message board, which serves as a forum for students from different JHU campuses.

Useful Stats: SBIR Awards, Proposals by State for FY 2002
During the course of each year, SSTI collects Small Business Innovation Research (SBIR) award and proposal data as it becomes publicly available. For FY 2002, SSTI has aggregated Phase I award, proposal and award-to-proposal conversion percentages for all 50 states and the District of Columbia for eight of the 10 participating agencies. (The Department of Education and the Environmental Protection Agency were unable to provide proposal statistics.)

The Phase I award-to-proposal percentages vary greatly across the eight agencies reporting complete information:

While most of the information was obtained directly from the federal agencies, data for the National Institutes of Health was provided courtesy of the Idaho SBIR Competition News, Number 2003-17, Aug. 15, 2003.

The Connecticut Technology Council has named Matthew Nemerson as its new President and CEO, replacing Michael Theodore.

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Percentage	Federal Agency
28.1	National Institutes of Health
23.6	Dept. of Energy
19.2	Dept. of Agriculture
19.1	National Science Foundation
16.8	Dept. of Defense
15.3	Dept. of Commerce
12.1	NASA
6.4	Dept. of Transportation