In the May 24, 2004 Issue:

Copyright State Science & Technology Institute 2004. 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.

Subscription to the SSTI Weekly Digest is free. If you are reading a forwarded copy of this issue and would like to receive your own copy each week directly, please subscribe at http://www.ssti.org/Digest/digform.htm. Requests to unsubscribe also may be completed at http://www.ssti.org/Digest/digform.htm.

Industrial R&D Posts Largest Decline Yet in 2002, NSF Finds
Industrial research expenditures in the U.S. had a record single-year decline in 2002, according to the latest National Science Foundation (NSF) Survey of Industrial Research and Development. An inflation-adjusted decline of $8.6 billion was the largest-ever reported since the survey began in 1953. The 2002 tally, when measured in current dollars, also wins the ignoble distinction of reflecting the largest single-year absolute and percentage reduction at $7.7 billion and 3.9 percent, respectively.

A 4 percent constant dollar increase in research spending by nonmanufacturing industries moderated the 11.7 percent drop posted by the manufacturing sectors.

The dismal 2002 results follow record-high expenditures set as recently as 2000.

The NSF Issue Brief presenting the first look at the survey results is available at: http://www.nsf.gov/sbe/srs/infbrief/nsf04320/start.htm

return to the top of this page

States Looking at Higher Ed to Foster Economic Growth
One of the most critical elements needed for a tech-based economy is a strong higher education system that supplies a source of research ideas, new technologies and a skilled workforce. Studies have shown that individuals with college degrees earn more money, obtain better jobs, pay more taxes, and are more apt to perform volunteer work. Given higher education's important role, several states have been re-examining how higher education can play a larger role in their economy. SSTI highlights some of those efforts below.

Colorado
Colorado enacted a higher education initiative earlier this month, becoming the first state to offer college vouchers. Gov. Bill Owens signed Senate Bill 189 into law, which provides individual vouchers of $2,400 per year for Colorado students to attend public colleges and universities beginning in the fall of 2005. The bill also offers up to $1,200 for low-income students to attend one of three non-public institutions in the state.

Recent reports from the Associated Press, however, indicate that budget restraints may force the amount to be cut to from $2,400 to $1,600 per year unless the state comes up with another plan. State lawmakers have said voters must either ease fiscal restraints in the state constitution or agree to use settlement funds from the tobacco industry in order to avoid the cuts.

SB 189 is available through the Colorado State Legislature at: http://www.leg.state.co.us/Clics2004a/csl.nsf/BillFoldersSenate?openFrameset

Maine
Recognizing the need to improve access to a college education, Gov. John Baldacci recently charged the Maine Compact for Higher Education, a joint venture of the Maine Development Foundation and the Maine Community Foundation, with creating a plan to retain more college graduates. Only 37 percent of Maine's working adults hold college degrees, and only about half of the state's high school graduates seek higher education.

The Compact released the College for ME Action Plan last month in response to the governor's request. Five action strategies are detailed in the plan, with the goal of creating 40,000 new college graduates over the next 15 years and raising the graduation rate from 55 percent to 70 percent by the end of the decade. The plan stresses partnering between existing businesses, government, education leaders and community organizations in order to accomplish the goal.

The total program cost is approximately $44 million, $34 million of which would go directly to a scholarship program that provides full tuition to eligible students in order to eliminate student loans and funding gaps. No state funding has been committed to the plan, although the governor plans to include a down payment in his next budget proposal.

The College for ME Action Plan is available at: http://www.collegeforme.com/

Montana
A working group comprised of staff within various state agencies and organizations have presented Montana's Board of Regents with a detailed blueprint to help spur economic growth via the state's universities.

The blueprint, Shared Leadership for a Stronger Montana Economy, outlines six goals and 24 initiatives. Proposed actions are accompanied by an explanation for their need, background to current problems, proposed solutions, estimated cost, and probable return for the state on its investment. Increasing technology transfer and improving worker training and access to two -and four-year institutions are included among the plan's recommendations.

The Associated Press reports the Regents and the Postsecondary Education Policy and Budget committee have endorsed the plan, although final approval will have to be given in the fall after soliciting support from lawmakers, businesses and labor leaders.

Shared Leadership for a Stronger Montana Economy is available at: http://www.montana.edu/wwwbor/SharedLeadInfo.htm

Texas
Elected officials and business leaders in Texas are joining efforts to turn state universities into top-tier research labs in order to jump-start the economy as more federal funding for research becomes available, reports the Fort Worth Star Telegram. The University of Texas (UT) System paid the Washington Advisory Group $1.7 million to study research prospects of the Texas campuses and offer recommendations in order to bring them to a tier-1 level.

Some of the recommendations include working on projects funded by the National Institutes of Health, creating research collaboration between Texas universities, broadening the profile of programs offered, and increasing faculty and student body. The Arlington, Dallas, San Antonio and El Paso campuses would need annual expenditures of $100 million each to be a major force for economic development, according to the Fort Worth Star Telegram. Suggestions on where the funding would come were not offered.

The Washington Advisory Group report, released earlier this month, is available at: http://www.utsystem.edu/news/WAG/homepage.htm

Other States
Florida and Ohio also released reports in the past month calling for more college graduates through increased enrollment. Neither paper contains specific actions or funding recommendations at the level evident in the works of the states described above; however, Building on Knowledge, Investing In People: Higher Education and the Future of Ohio’s Economy calls for creation of a business advisory group to advocate for stronger industry-academic collaboration. The Ohio report is available at: http://www.chee.ohio.gov/index.asp?p=0&text=0

With funding from the National Center for Public Policy and Higher Education, West Virginia is wrapping up several public forums this week in the initial stages of its long-term strategic planning for improving state state's higher education system. The final product of the process is anticipated to clarify state goals, examine current laws and practices, and identify new measures for West Virginia's universities. More information on West Virginia's planning effort is available at: http://www.hepc.wvnet.edu/

return to the top of this page

HHS Seeks Input to Encourage Medical Technology Innovation
To encourage innovation in health care and speed the development of new medical technologies, the Department of Health and Human Services (HHS) announced last week it is forming an internal task force to weigh new ideas and promote new solutions.

The task force will involve HHS’ Centers for Disease Control and Prevention, Centers for Medicare & Medicaid Services, Food and Drug Administration and National Institutes of Health. Department Secretary Tommy Thompson has charged the task force with developing steps to speed the availability of new medical technologies such as drug and biological products and medical devices.

“This task force will look for opportunities across the department to promote speedier access to new innovative medical technologies that can improve people’s health and save lives,” Secretary Thompson said. “Often, a new technology must clear several hurdles in different parts of HHS before it can reach consumers. By better coordinating this process across HHS, we can streamline the way we do business and make safe, effective medical technologies more quickly and readily available to Americans who could benefit from them.”

To assist the task force’s efforts, HHS is seeking comments from the public on how to stimulate innovation in medical technologies. A notice explaining the comment filing process and period, which extends until Aug. 23, is to be published in today's Federal Register. Electronic comments will be accepted at http://www.fda.gov/dockets/ecomments.

return to the top of this page

Kentucky Strives to Increase Rural Broadband Access
Advocates for deregulating Kentucky's broadband industry argued doing so would result in increased rural access to high speed Internet services. They'll have the chance to prove it with Gov. Ernie Fletcher's signature this week on deregulation legislation, HB 627.

The governor has promoted the rural broadband initiative since taking office in December. According to the Progressive Policy Institute, Kentucky currently ranks 41st in the nation in broadband deployment.

Improving broadband access also has been a priority of connectKentucky, a three-year-old public-private policy partnership between the Kentucky Office of the New Economy, private industry, Kentucky's universities, and the Center for Information Technology Enterprise. Along with the bill signing, BellSouth Corp., whose president serves as co-chair of connectKentucky, announced it was expanding DSL Internet service to 59 more Kentucky communities between now and the end of the year.

"Broadband is essential to building a more competitive local economy," Gov. Fletcher said. "In this bipartisan effort to encourage broadband expansion, we are giving rural communities greater opportunity for economic development."

return to the top of this page

Mentoring, Financing Linked for Pittsburgh Biotech Firms
Financial success for any start-up tech firm more often depends on adequate financing and proper management than the specific technology, experts say. Two tech-based economic development organizations in Pittsburgh have formed a new alliance to offer entrepreneurial life science firms with an eye toward greater sustainability and profitability.

The Pittsburgh Life Sciences Greenhouse (PLSG), a partnership to put the region's life sciences industry on a fast track for growth, and Idea Foundry, a nonprofit organization that helps entrepreneurs transform their ideas into sustainable businesses, entered into a joint funding agreement for early stage medical device companies.

Under the agreement, PLSG will participate in Idea Foundry's transformation fellowship application process to jointly determine if start-up company applicants are viable business ideas for the partnership. Upon approval, PLSG and the Idea Foundry will jointly fund and provide complimentary development assistance.

The Greenhouse will provide its funding through its affiliate, the Pittsburgh Biomedical Development Corporation. Administration of the funding and delivery of the business development and mentoring services will be managed through Idea Foundry's TechMentor Program. The Idea Foundry will release funds to the company based upon a detailed budget that aligns with overall company development milestones and respective accomplishments.

medSage Technologies, LLC, the first beneficiary of the new partnership, received a $200,000 pre-seed investment to help improve its operations over the next year. medSage will look to expand its market presence, bring additional patient and pharmacy applications to the market and build out the company infrastructure to support growth. In addition, as part of the Idea Foundry investment offering, medSage will receive business development and mentoring support services.

return to the top of this page

State Legislatures Warming to Ag Biotech, Analysis Finds
Concerns for wheat and organic markets remain, however
While state governments across the country are overwhelmingly in favor of health-related biotechnology, agricultural biotechnology has received a somewhat less enthusiastic reception. That may be changing - however slowly - according to new information released last week by the Pew Initiative on Food and Biotechnology.

The group finds state legislatures in 2003 considered significantly more legislation in support of ag biotech than in the entire 2001-2002 legislative session. This increase appears to mark a shift away from efforts to curb violent destruction of field crops and test sites – the topic that dominated the last legislative session.

At the same time, the Pew Initiative analysis finds resistance to ag biotech in the Northern Plains States (including Montana, North Dakota and South Dakota) where some growers are concerned that wheat markets may be negatively impacted by the introduction of genetically modified (GM) wheat. In the Northeast (including Maine, Massachusetts and Vermont), state legislators have sought to protect local agricultural markets, many of which are organic, the Pew Initiative adds.

Conversely, the Iowa legislature was very active, introducing 16 bills and passing four. The legislation introduced in Iowa decidedly favored biotechnology, supporting ag biotech as an important tool that can help Iowa maintain its position as an agricultural powerhouse.

At least 130 pieces of agricultural biotechnology legislation were introduced in 32 states in 2003, the Pew Initiative notes. This reflects a slight increase over the 121 pieces of legislation introduced in 31 states during the first year of the 2001-2002 legislative session. Only 20 percent of the 130 bills considered in 2003 passed, while 30 percent passed in in 2001.

The 2003 legislation fell into six major categories: supporting biotech; implementing or changing state regulatory systems for GM crops and animals; developing standards for labeling foods which may have GM ingredients; addressing liability issues raised by ag biotech or developing standards for agricultural contracts; commissioning long-term studies to look at specific issues related to ag biotech; and banning certain GM crops or animals.

During the 2001-2002 legislative session, only 5 percent of the total legislation introduced nationwide (or eight pieces of legislation) comprised the “support biotechnology” category. In contrast, 36 percent of the legislation introduced in 2003 (47 bills and three resolutions) supported biotech – often as part of general economic development initiatives – by proposing to:

The fact sheet, entitled “2003 Legislative Activity Related to Agricultural Biotechnology” chronicles and catalogues state legislative activity relating to agricultural biotechnology in the first year of the 2003-2004 legislative session. When appropriate, comparisons are made to a similar analysis of the 2001-2002 legislative session released by the Pew Initiative in June 2003. The fact sheet is accompanied by LegislationTracker, a database that archives state legislation as well as some federal legislation, ballot initiatives, and town hall resolutions introduced since early 2001.

More information is available at: http://pewagbiotech.org/newsroom/releases/051704.php3

return to the top of this page

Useful Stats: More SBIR Award Data

Defense 2003 SBIR Phase II Awards
The Department of Defense (DoD) distributed $766.9 million in awards under fiscal year 2003 Phase II Small Business Innovation Research (SBIR) Program competition. A total of 1,080 awards averaging more than $710,000 were made.

California led all states, landing 235 awards worth $166.8 million. As a share of the nation's total, California captured 21.7 percent of all FY 2003 Phase II SBIR funding issued by DoD. Massachusetts secured $114.1 million through 153 awards, or 14.9 percent of the U.S. total. Only one other state, Virginia, had $50 million or more in awards.

West Virginia, with five awards totaling $6.2 million, had the highest average award at $1.24 million. Hawaii's two awards also were above the $1 million average award mark.

SSTI has made available a listing of FY 2003 Phase II DoD SBIR awards at http://www.ssti.org/Digest/Tables/052404t.htm. For each state and the District of Columbia, the number of awards, award total, average award size and ranking are shown. SSTI thanks Christine Villa of BRTRC for supplying the data found in the above table.

USDA SBIR Phase I Proposal, Award Statistics
The May 21, 2004 edition of the Idaho SBIR Competition News (no. 2004-11) included the proposal and award figures for the U.S. Department of Agriculture 2003 SBIR Phase I solicitation. The agency made 99 Phase I awards, totaling $7.65 million (USDA Phase I awards may not exceed $80,000). Funding was distributed among 39 states as can be seen in the following table: http://www.ssti.org/Digest/Tables/052404t2.htm

The Idaho EPSCoR Program also provides a PDF link for a list of awardees: http://www.webs.uidaho.edu/sbir/docs/USDA_FY_2004_SBIR_Phase_1_Awards.pdf

The Idaho SBIR Competition News is published bi-weekly as part of the SBIR outreach activity conducted by the National Science Foundation (NSF)-Idaho EPSCoR Project under the direction of Dr. Jean'ne Shreeve, Idaho EPSCoR/IDeA Project Director. SSTI thanks Dr. Chris Busch, consultant to the University of Idaho EPSCoR Program, for permission to reuse the USDA information. Dr. Busch received the information originally from Dr. Charles Cleland, director of the USDA SBIR Program.

return to the top of this page

State Science & Technology Institute
5015 Pine Creek Drive
Westerville, OH  43081
Phone: (614) 901-1690
Fax: (614) 901-1696
Email: ssti@ssti.org

© 2004 State Science and Technology Institute. All rights reserved.