In the November 21, 2003 Issue:

Copyright State Science & Technology Institute 2003. 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.

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Congress Slashes Manufacturing Assistance
The Modernization Forum reported on Thursday that Congressional appropriators have agreed to gut the Manufacturing Extension Partnership (MEP), the main federal program serving America’s small manufacturers. The move came Wednesday night, despite the pleas of more than 300 members of Congress who supported $110 million in letters to the CJS Subcommittee. The U.S. has lost 2.5 million manufacturing jobs since the beginning of 2001.

Congress will provide only $39.6 million for MEP this year, a 63 percent cut from the current funding level. Last year, Congress provided MEP with $106.6 million. The cut to MEP came during last-minute wrangling over a final Omnibus Appropriations bill that would provide about $700 billion for up to 12 federal departments. As of press time, the Omnibus bill had not been approved by Congress. Funding levels were unknown for the Advanced Technology Program, Economic Development Administration, and other programs of interest to the tech-based economic development community.

MEP assists small manufacturers and helps boost their productivity, sales, employment and investment in modernization. As a federal-state-private partnership, MEP supports a national network of more than 60 centers with 400 locations across the country and Puerto Rico. These nonprofit centers employ more than 1,800 professionals who work with manufacturers to help them adopt and use the latest and most efficient technologies, processes and business practices.

In a September 2003 review, the National Academy of Public Administration said MEP is "the only federal program designed specifically to help small manufacturers, and positioned to help create an infrastructure for providing support to these firms as the U.S. economy moves through enormous economic transition.”

More information on MEP is available at: http://www.mep.nist.gov/

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Economic Recovery Looms but States Still Stressed, CFED Says
Despite more than a year of economic recovery, the economies of well-performing states are still stressed by higher unemployment, lower wage jobs, slower pay growth and declining employer-provided health coverage, reports the Corporation for Enterprise Development (CFED). In its seventeenth annual Development Report Card for the States, the nonprofit, nonpartisan think tank observes many American families also are still struggling financially.

CFED uses 68 measures to provide a relative, state-by-state assessment of economic development in three main areas — performance, business vitality and development capacity. Massachusetts, Minnesota and Virginia were the top performers in 2003, all earning straight A's. Five other states – Colorado, Connecticut, New Jersey, Pennsylvania and Utah – joined them on an honor roll with all A's and B's. Eleven states got an F in at least one of the three categories.

One of the longest-running barometers of state economic development policies and their impacts, the CFED study asserts that, while overall American productivity is growing, some experts have rushed to proclaim economic good times and ignored the fact that unit labor costs have fallen by more than 3 percent. The fall in unit labor costs means American businesses are producing more goods and services, but with fewer well paid workers, CFED states. Six guidelines are provided to help state policymakers and economic developers in making decisions that will counter this trend:

The 2003 CFED report card reflects some changes over the 2002 edition. Three measures were eliminated due to changes in industrial codes, from the Standard Industrial Classification system to the North American Industry Classification System. The eliminated measures include the change in traded sector strength, competitiveness index and dynamic diversity. Additionally, 11 measures were renamed "because they either draw from new data sources, or the traditional data sources have changed their methodology."

The 2003 Development Report Card for the States, as well as past editions of the report, is available at http://drc.cfed.org.

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Arizona-Sonora Region Gets Graded in Annual Report Card
The University of Arizona Office of Economic Development (UA OED) has released its annual report card on economic growth and development in the Arizona-Sonora region. Funded by the Arizona-Mexico Commission and the Arizona Department of Commerce, Regional Economic Indicators: Arizona-Sonora 2003 monitors economic changes in the Arizona-Sonora region via 33 indicators across four broad areas:

Almost half of the 32 indicators are covered in the report's Leading Sectors section, which includes manufacturing, agribusiness, mining and transportation. The Arizona-Sonora region's share of border states' and U.S.-Mexico production levels is measured in each sector by looking at the sector's contribution to GSP. How Arizona and Sonora performed individually also are considered.

In conducting the Arizona-Sonora region report, UA OED researchers relied on data from such sources as the U.S. Census Bureau, U.S. International Trade Commission and the Bureau of Economics Analysis. Exports are reported using data based on the North American Industry Classification System, rather than the Standard Industrial Classification system.

The purpose of Regional Economic Indicators is to support policies that promote economic transformation, investment and entrepreneurship, but not necessarily to make policy recommendations. The report is available at http://oed.arizona.edu/.

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NSB Sees Urgency in Addressing Future U.S. S&E Labor Demands
New figures on the proportion of foreign-born workers in science and technology occupations suggest the federal government must "act now" to meet future needs in science, engineering and technology fields, a new National Science Board (NSB) report argues. A sampling from 2000 census figures indicates a larger than previously known percentage of degree-holding, foreign-born professionals working in the U.S. in science and engineering (S&E) occupations, states NSB, the governing board for the National Science Foundation (NSF). Meanwhile, the number of H1-B visas issued to foreign-born workers in science and technology has declined.

According to NSF's figures, derived from the 1990 census, estimates of foreign-born workers in 1999 holding bachelor's degrees represented 11 percent of the total population in S&E-classified occupations. Foreign-born individuals with master's degrees held 19 percent of the S&E occupations held by master's recipients overall. Foreign-born Ph.D.s represented 29 percent of those positions.

The 2000 census figures, however, allowed for the first time a sampling that takes into account foreign workers holding degrees obtained in countries outside the U.S. When factored in, the estimated proportions of foreign-born workers in S&E occupations in 1999 rose between six and 10 percentage points per category. Foreign-born workers with bachelor's degrees actually represented 17 percent of the total in S&E positions held by people with bachelor's degrees. The foreign-born proportion went up to 29 percent among those with master's degrees, and 38 percent among doctorate holders.

During the 1990s, a large influx of foreign-born scientists and engineers took place across most fields, NSB observes. Also, from 2001 to 2002, H-1B visas for foreign workers in science, engineering and technology-related fields declined sharply from about 166,000 to around 74,000.

NSB began its review of the workforce in October 2000, recognizing then that global competition for S&E talent was intensifying while the number of native-born graduates entering the S&E workforce was declining, a trend likely to continue, it said. The newest figures confirm the need for national-level action to ensure the nation's capacity in these critical fields in the face of an increasingly competitive global market, NSB contends.

Among its key recommendations, NSB suggests the government should provide undergraduate students and institutions with substantial new support in scholarships, financial assistance and incentives to assure success in S&E study by American students. Similarly, more federal support is needed for graduate and postdoctoral research programs through improved stipends, benefits and interdisciplinary opportunities. Pre-college teachers of mathematics, science and technology also need better compensation, in-service training and support as an integral part of the scientific and engineering professions.

NSB also recommends a national effort to build a base of knowledge on international S&E workforce dynamics. In addition, it says the government must address how to best balance the needs of security while supporting policies that attract foreign-born talent and allow U.S. students to fully participate in much-desired research and education collaboration opportunities overseas.

The NSB report, The Science and Engineering Workforce – Realizing America's Potential, and other backgrounders are available at: http://www.nsf.gov/od/lpa/news/03/pr03127.htm

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GAO Examines Conflicts of Interest in Federally Supported Academic R&D
Unless federal agencies do more to safeguard against financial conflicts of interest in universities, the government may not be able to properly regulate the flow of federally funded research, suggests a new report published by the U.S. General Accounting Office (GAO). Conflicts of interest, as an issue, is of growing significance for the academic community.

Of eight federal agencies surveyed, only the National Institutes of Health (NIH) and the National Science Foundation (NSF) have policies in place for identifying and managing fiscal conflicts for the research they fund, GAO states. The other six agencies – the Departments of Agriculture, Defense, Education and Energy; the Environmental Protection Agency; and the National Aeronautics and Space Administration – are said not to have financial conflict of interest standards for university research grants. These agencies and 200 of the nation's leading research universities were reviewed by GAO via a Web-based survey.

GAO sought to answer two questions in conducting its survey, including whether universities implement the above standards. Of the 171 responding universities, 148 said their federally funded research is overseen by financial conflict of interest policies similar to those of NIH and NSF. Seventeen, however, said they do not recognize either agency's requirements when considering grants from other federal agencies.

The second question examined by GAO, namely whether the results of federally funded research grants are made public, perhaps yielded more positive results. Five of the surveyed agencies post such information on their websites, GAO reports, while all agencies "explicitly encourage funding recipients to make results public." NIH and NSF said they do not post research results on their websites due to several risks involved.

Per GAO's recommendation, the Department of Education has agreed to publish its research results to its website. Also, the Office of Science and Technology Policy (OSTP) said it would develop a federal requirement for identifying and resolving financial conflicts of interest in federally funded research.

It is important to note the eight agencies surveyed by GAO provided 97 percent of the $19 billion obligated by federal agencies in fiscal year 2001 for university research. NIH and NSF alone are said to have accounted for $14.2 billion in FY 2001. Overall, federal agencies provided 60 percent of all university research funding that year, GAO states.

In its introduction, GAO notes the payoff of federal investment in university research is huge, with thousands of inventions leading to new technologies and, ultimately, new jobs each year. Moreover, the Bayh-Dole Act of 1980 has enabled greater commercialization of university technology, GAO adds. The particular meaningfulness of its report is probably most evident in this increased importance that university research plays to technological innovation — that as partnerships between universities and businesses have grown, so too have the "concerns that financial conflicts of interest might restrict the dissemination of research results or bias the conduct or results of federally funded research."

The GAO report (GAO-04-31) is available for download at: http://www.gao.gov/new.items/d0431.pdf

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Energy Update

DOE Releases 20-Year Strategic Plan
Last week, U.S. Department of Energy (DOE) Secretary Spencer Abraham outlined the Office of Science's 20-year science facility plan, a roadmap or "wish list" for future scientific facilities to support the department’s basic science and research missions. The plan prioritizes new, major scientific facilities and upgrades to current facilities.

The 28 big-ticket facilities cover the range of science supported by the DOE’s Office of Science, including fusion energy, materials science, biological and environmental science, high energy physics, nuclear physics and advanced scientific computation.

Twelve facilities earn recognition as near-term priorities. Priority one is ITER, an international collaboration to build the first fusion science experiment capable of producing a self-sustaining fusion reaction, called a “burning plasma.” Priority two is an UltraScale Scientific Computing Capability, to be located at multiple sites, that would increase by a factor of 100 the computing capability available to support open scientific research.

Four facilities tied for Priority three:  the Joint Dark Energy Mission, a space-based probe, being considered in partnership with NASA, designed to understand “dark energy” which makes up more than 70 percent of the universe; the Linac Coherent Light Source that would provide laser-like radiation 10 billion times greater in power and brightness than any existing x-ray light source; a Protein Production and Tags Facility that would mass produce and characterize tens of thousands of proteins per year; and the Rare Isotope Accelerator that would be the world’s most powerful research facility dedicated to producing and exploring new rare isotopes not found naturally on earth.

Many facilities would be located at DOE national laboratories because they are upgrades to existing machines. The locations of the remaining facilities would be determined through site selections open to laboratories and universities.

The American Institute of Physics reports, "It is expected that the first funding ramifications of this plan will be evidenced in the FY 2006 budget request, which will be sent to Congress in fourteen months."

More information is available at: http://www.sc.doe.gov/Sub/Facilities_for_future/facilities_future.htm

Industry-led Energy Efficiency Projects Receive $115M from DOE
Thirty-two new projects and a total of $115 million will go toward improving energy efficiency in U.S. industry over the next three years, DOE also recently announced. Of the total, DOE's share is $61 million, and industrial partners will cover $54 million through cost-sharing agreements.

Two dozen of the 32 projects will pursue collaborative research, development and demonstration (RD&D) of new, energy-efficiency technologies; eight will identify opportunities to boost energy efficiency and productivity in industrial plants. The projects involve cooperation among more than 150 private companies plus universities, research institutions and DOE national laboratories. All of the projects underwent an open, competitive solicitation process.

Of the RD&D projects, seven target technologies for the glass or metal casting industries. Another 17 focus on technologies that can be applied throughout industry, including advanced industrial materials, sensors and automation. A complete listing of the DOE awards is available at: http://www.oit.doe.gov/cfm/fullarticle.cfm/id=782

Small Businesses Capture Record Share of DOE Funding in 2003
In spite of flat funding for DOE, small businesses saw 37 percent more of DOE's funds go toward their bottom lines in FY 2003 than they did the previous year. Deputy Secretary of Energy Kyle McSlarrow announced yesterday that during FY 2003, the department awarded more than $783 million in prime contracts to small businesses. The FY 2002 figure was $573 million.

To help ensure small businesses remain on the radar for the agency's research and procurement opportunities, DOE has instituted a policy that requires all program managers to be held accountable for their small business activities by including them in each of their performance reviews. In addition, the Office of Small and Disadvantaged Business Utilization will continue outreach to small businesses by participating in trade fairs, conducting small business workshops and holding its annual DOE small business procurement conference in June.

More information is available at: http://www.energy.gov/engine/content.do?BT_CODE=PRESSROOM

DOE Gets $1.2 Billion Increase For FY04
Seven weeks into the fiscal year and DOE emerges as one of only a small handful to have its appropriations bill clear Congress. The conference report reveals DOE will receive $1.2 billion more than the agency received last year. In a tight finding year, the $22 billion total is $141 million less than the President's request, however.

DOE science programs received $3.45 billion, an increase of $140 million over the request and $156 million above FY 2003. High energy physics is funded at $738 million and nuclear physics at $391 million, the latter $2.5 million over the request level. Biological and environmental research is funded at $592 million, $92.5 million over the request level. Funding for basic energy sciences is $1 billion, $8 million above the request, and the Advanced Scientific Computing Research initiative is funded at $203.5 million, $30 million above the request. Fusion energy research is funded at $268.1 million, $10.8 million over the request.

The conference report is available at: http://thomas.loc.gov/home/approp/app04.html

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Useful Stats: Top 100 Cities for NIH FY 2002 Funding
The National Institutes of Health (NIH) recently released a table presenting the top 100 cities for NIH awards in FY 2002. Boston and New York City are the only two cities to receive more than $1 billion in NIH funding. Boston’s lead shrank from $140 million in FY 2001 to $14 million in 2002.

There are additional changes in ranking among other top cities, but longer-term data is needed to determine how much real movement there is in the distribution of NIH funding. For FY 2002, Philadelphia ranks third at $730 million. Baltimore, San Diego, Seattle, Los Angeles, Houston, Cambridge (Mass.) and San Francisco round out the top 10. Forty-six cities garnered more than $100 million of NIH awards in FY 2002, compared to only 38 in both 2001 and 2000.

This is the third annual report NIH has prepared on a local level, providing a useful measure for tech-based economic developers interested in their region’s performance in NIH research. The FY 2002 table presents the distribution of NIH awards across research grants, training grants, fellowships, R&D contracts, and other.

The tables for FY 2002, 2001 and 2000 data, respectively, are available at:
http://grants1.nih.gov/grants/award/trends/top100fy02.htm
http://grants1.nih.gov/grants/award/trends/citytop100fy01.htm
http://grants1.nih.gov/grants/award/trends/top100fy2000.txt

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2004 S&T Calendar Filling Up
240 events already posted on SSTI's web calendar

Although only a few events remain for 2003, SSTI's web calendar of science and technology (S&T) items has brief descriptions and contact links for 240 regional or national conferences, meetings and workshops planned for 2004.

The first and foremost one to put on your schedule will be SSTI's 8th annual conference, which will be held Oct. 13-15, 2004, in Philadelphia.

Other items on SSTI's calendar range from venture capital forums and workshops on how to secure federal technology funding for programs such as the Small Business Innovation Research program to professional development opportunities for tech-based economic developers. Annual meetings for many associations involved with tech-based economic development also are included, as are several research and policy symposia on issues encouraging regional innovation and entrepreneurship.

The calendar is available at http://www.ssti.org/calendar.htm.

Suggestions for additional events for inclusion should be directed to calendar@ssti.org. Note: events should be intended for a regional (multi-state), national and/or international audience. Events also should be of sufficient length to warrant longer travel (for instance, SSTI does not post "brown-bag" lunch workshops.)

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People

The American Association of University Professors has appointed Roger Bowen to succeed Mary Burgan as the association's next general secretary.

Virginia's Institute for Defense and Homeland Security recently named Henry Connors Jr. as its business development director.

The National League of Cities has hired Marilyn Mohrman-Gillis as director of policy and federal relations.

George Herrera, president and chief executive officer of the United States Hispanic Chamber of Commerce, recently announced his resignation, effective Jan. 20, 2004.

LaMoyne Hyde, director of the Idaho Department of Commerce, also announced he will resign his position by the end of the year.

Karl Koehler is returning to the Indiana 21st Century Research and Technology Fund to serve as its director.

Jerry Lonergan is Kansas Inc.'s new president.

Dr. Doros Platika is the new chief executive officer of the Pittsburgh Life Sciences Greenhouse.

Minnesota Technology Inc. has hired Wayne Pletcher as its new president.

Larry Walther has replaced Jim Pickens as director of the Arkansas Department of Economic Development. Pickens retired earlier this month.

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