In the October 3, 2003 Issue:

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USDA Awards $53.7M for Rural Tech-based Economic Development
Within the last week, the U.S. Department of Agriculture (USDA) announced a slew of awards – 128 in all – for rural tech-based economic development initiatives. Collectively, the awards total $53.7 million, including:

USDA Rural Development's mission is to deliver programs in a way that will support increasing economic opportunity and improve the quality of life of rural residents. Individual listings of the awards detailed above are available at http://www.rurdev.usda.gov.

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New Jersey to Stimulate Biotech Business, Job Growth with $50M VC Fund
New Jersey is launching a new program to stimulate new investment, business growth and job creation in the biotechnology and life sciences industries through a special fund to be established through the Business Employment Incentive Program (BEIP).

The $10 million Biotech/Life Sciences Venture Fund, to be administered by the New Jersey Economic Development Authority (EDA), will be created out of proceeds generated from an estimated $50 million BEIP bond issue. The state plans to issue the remaining $40 million in November. EDA already manages the $10 million New Jersey Technology Council Venture Fund, which also supports start-up technology companies.

Under BEIP, program recipients receive a grant award for up to 80 percent of the income tax payments paid to the state on behalf of the eligible new jobs. The remaining 20-plus percent is considered the "residual" benefit to the state and will be leveraged to create special funds, the first one being the Biotech/Life Sciences Venture Fund.

New Jersey State Treasurer John McCormac said that state grants and loans provided through the fund will likely be matched by triple the level of investment from private sources.

Debbie Hart, president of the Biotechnology Council of New Jersey, called the $10 million program "an excellent start."

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NIH Announces Strategy to Accelerate Medical Research Progress
To transform the nation’s medical research capabilities and speed the movement of research discoveries from the bench to the bedside, the National Institutes of Health (NIH) laid out on Monday a series of initiatives collectively known as the NIH Roadmap for Medical Research.

Developed with input from more than 300 leaders in academia, industry, government and the public, the NIH Roadmap provides a framework of the strategic investments NIH needs to make to optimize its research portfolio. The NIH Roadmap builds on the progress in medical research achieved, in part, through the recent doubling of the NIH budget.

In setting forth a vision for a more efficient and productive system of medical research, the NIH Roadmap focuses on opportunities in three main areas — new pathways to discovery, research teams of the future and re-engineering the clinical research enterprise. The three areas are comprised of 28 initiatives to be carried out by nine implementation groups:

NIH states that it wants to stimulate new ways of combining skills and disciplines in the physical and biological sciences. One of the 28 initiatives it will undertake is a new funding mechanism billed as the NIH Director’s Innovator Award. The idea behind the award is to encourage investigators to take on creative, unexplored avenues of research that carry a relatively high potential for failure, but also possess a greater chance for groundbreaking discoveries.

Additionally, the NIH Roadmap will establish a central point of contact called the Director’s Liaison for Public-Private Partnerships. To expand such collaborations, the liaison will serve as a resource to NIH staff on such partnerships, share best practices across NIH and chair an internal Public-Private Partnerships Coordinating Committee.

To be part of the NIH Roadmap, the 28 initiatives had to be deemed of high potential impact, enhance the disease and mission-specific activities of NIH’s 27 institutes and centers, and respond to the needs and concerns of the public. Some initiatives that build upon existing research efforts are expected to achieve their goals rapidly, while other newer or more complex endeavors are expected to take several years to come to fruition.

NIH, an agency of the Department of Health and Human Services, will begin to implement all of the initiatives in fiscal year 2004. For more details on the NIH Roadmap, visit http://nihroadmap.nih.gov/.

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Hawaii's HTDC Announces Statewide Incubation Services Program
Secures State as Pilot Site for FastTrac™
Coming soon to an island near you — business development services. That could be the sales pitch for a new development within the High Technology Development Corporation (HTDC), Hawaii's lead tech-based economic development agency.

HTDC launched last week a statewide incubation services program designed to give incubation tenants and non-tenants access to business development services, strategic partnerships, networking and marketing opportunities, shared support services, and business mentoring. Prior to launching its new program, HTDC's incubation services were limited to tenants at its Manoa Innovation Center on Oahu and its Maui Research & Technology Center on Maui. The expanded program brings services to technology start-ups on the Big Island and Kauai.

External groups such as the University of Hawaii-Hilo are expected to partner with HTDC to strengthen the new program. UH-Hilo has signed on with a $3 million commitment, the Honolulu Advertiser reported last week. Additional funding will be derived from state and federal sources.

As part of its business development services initiative, HTDC will now offer two additional programs — the Manufacturing Extension Partnership (MEP) Program and FastTrac. MEP was created in 1988 as part of the Department of Commerce's National Institute of Standards and Technology to help small and midsize companies succeed. The Hawaii MEP program will be administered by HTDC, operating under the name of Innovative Solutions. Previously, Innovative Solutions was the only Hawaii-based organization that supported the state's manufacturers.

FastTrac, a program of the Ewing Marion Kauffman Foundation, provides entrepreneurs with business insights, leadership skills and professional networking connections so they are prepared to create a new business or expand an existing enterprise. Considered one of America's leading entrepreneurial training resources, FastTrac has assisted more than 60,000 people across the country start or grow a business. FastTrac programs are currently provided in 150 cities in 38 states.

In addition, HTDC announced it has secured Hawaii as a pilot site for a new technology-focused entrepreneurship development program called FastTrac Technology, a part of the national FastTrac program. Hawaii will serve as one of a few designated pilot sites that will offer the program this fall to local high-tech entrepreneurs before it is launched nationwide in Spring 2004. The nine-week program will be administered by HTDC and will take place on Oahu, from Oct. 13 to Dec. 8.

The HTDC Board of Directors appointed Dr. Philip Bossert as executive director and chief executive officer of HTDC in conjunction with its new incubation services program. Bossert is charged with implementing the agency's island-wide incubation program, as well as expanding existing services within HTDC.

A full announcement regarding the above initiatives is available at http://www.hitechhawaii.com.

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Kansas Governor's Revitalization Plan Favors TBED
Gov. Kathleen Sebelius made public on Wednesday the details of a statewide economic revitalization plan designed to stimulate and strengthen the Kansas economy. Included in the plan are several items that could help boost tech-based economic development (TBED) in the state:

Other proposals in Gov. Sebelius's plan include developing a balanced renewable energy plan for Kansas, a one-stop web portal for information on agencies offering assistance to new businesses, and regional angel networks. The governor would promote using local options for sales tax collection and usage, with proceeds funding capital for start-up or early-stage ventures.

For the life sciences, Gov. Sebelius recommends developing an enhancement program to include Kansas Research & Development (R&D) Tax Increment Financing, net operating loss carryover for Kansas R&D, Kansas R&D Vouchers, Kansas Emerging Strategic Technology Acquisition Program, and an entrepreneurial mentorship program.

Seven regional economic development plans constitute the governor's revitalization plan. The regional chairs from the seven regions are part of the Governor's Economic Policy Council, which will help manage the process of implementing the plan. For more information, visit: http://www.kansascommerce.com/summit

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Cluster Stage Critical To Policy, Paper Shows
Policy measures aimed at the development of clusters must take into account which development stage the cluster is currently in. One of the central processes involved in cluster development is that of firm foundings, states Co-Development of Firm Foundings and Regional Clusters, a working paper written by Dirk Fornahl and Max-Peter Menzel. Firm foundings and regional clusters generally have received much attention, but little work has been done to analyze the relationship between these two processes until now. Fornahl and Menzel's paper focuses on the growth of firm foundings and the development of clusters simultaneously within the different stages and the impact they have on regional development.

Four stages in the cluster development progression are outlined by Fornahl and Menzel. Each of these stages reveals a different relationship between cluster development and firm foundings. The first stage is that of emerging clusters, which may have few effects on firm foundings because the necessary infrastructure may not yet be in place. However, the firm foundings can have a significant impact on the development of a cluster, the authors state.

The second phase is growing clusters. During this stage, a tremendous growth of existing firms, as well as an increase in the number of spin-offs and attraction of external firm foundings, may take place. Firm foundings within the cluster simply increase the number of firms in the cluster, which creates more awareness of the cluster and augments the cluster’s ability to participate in collective action on its behalf.

Sustaining clusters is the third phase of development, a level that ensures the cluster’s ability to continually renew necessary institutions. Firm foundings during this stage help to maintain the cluster to a level necessary for collective action on its behalf. They also help to maintain the adaptability of the cluster rather than contributing to its growth.

The final phase is a stagnating cluster. In this stage, fewer firms are founded and the cluster has become very focused with a specialized knowledge base that tends to restrict market entry.

Fornahl and Menzel argue that policy must consider what stage a cluster is presently in. For instance, when moving between emerging and growing clusters, foundings must be focused around a few technological opportunities. Policy can be influential through the creation of focused incubators or supporting the formation of necessary infrastructure. The authors suggest it is very difficult to change the course of a declining cluster, even through policy intervention. Instead of supporting the declining cluster, policymakers should focus on the formation of a new one that could build upon the assets of the old. Additional policy recommendations at other stages of cluster development are uncovered as well.

Co-Development of Firm Foundings and Regional Clusters can be downloaded at:
http://www.wiwi.uni-hannover.de/fbwiwi/forschung/diskussionspapiere/dp-284.pdf

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Useful Stats: State Rankings for Academic R&D Expenditures Per Student
The Chronicle of Higher Education annually provides in its Almanac an accessible state-by-state snapshot of a variety of statistics useful in measuring the magnitude and health of higher education. The 2002-2003 Almanac of Higher Education, released recently in print and online, is no exception. For example, figures are provided for college enrollment trends, demographics, faculty pay, tuition and fees, state appropriations, expenditures, R&D, state spending on student aid, and federal funds for academic research.

For more meaningful comparisons across large and small states, data is often standardized using other selected statistics such as population or gross state product. Previous Useful Stats articles in the SSTI Weekly Digest have, for example, presented academic R&D expenditures on a per capita basis (see the April 18, 2003 issue of the Digest). To tie university research activity to a perhaps more relevant measure, SSTI has prepared a table drawing from the past two Chronicle almanacs that standardizes academic R&D expenditures by total enrollment (undergraduate, graduate and professional). The table reveals Maryland led the nation in both 1999 and 2000 for research spending per student. Alaska, Massachusetts, the District of Columbia, and Connecticut rounded out the top five for 2000.

In the table, the states are presented in rank order based on the percent change between the two years. At 31.26 percent, Mississippi posted the greatest percentage increase from 1999 to 2000 in research spending per student, followed by Maine at 28.52 percent. New Hampshire, Montana and Nevada finish the top five slots.

The SSTI table is available at: http://www.ssti.org/Digest/Tables/100303t.htm

More information for purchasing the 2002-2003 Almanac of Higher Education is available through http://www.chronicle.com.

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SSTI Conference Update
And Then There Were 10...
Yes, only 10 open seats remain for SSTI’s 7th Annual Conference, Building Tech-based Economies: From Policy to Practice. With nearly three weeks remaining before the October 21-22 event in Seattle, SSTI anticipates it will have to close registration in the coming days based on the phenomenal response to this year’s great slate of 24 breakout sessions, great plenary sessions and wonderful location. If you are planning to attend, we encourage you to register as soon as possible.

SSTI won’t take much of the credit for the rapid sell out, however. As returning SSTI conferees know, it’s the dynamic exchange SSTI’s conference enables among peers from across the country and several continents that makes each conference such a rewarding experience. This year promises to be no different as 300 leaders of state, local and university tech-based economic development registrants will be participating from at least 44 states. With several sessions dedicated to roundtable discussions, ample time for questions in nearly every session, long networking breaks, and a great hosted reception, conferees can’t help but walk away with practical real world advice from their colleagues on what works (and what doesn’t) — the kind of information you can only get by being there.

If you want one of those last 10 seats, register online – soon – at: https: https://www.ssti.org/Conf03/registration.htm [expired]

More information on SSTI’s 7th Annual Conference is available at: http://www.ssti.org/conference03.htm [expired]

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