In the June 28, 2004 Issue:

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Report Credits Improved Economy for Boosting State Tax Revenues
Growth in personal income tax has led to a revival of state tax revenues, the same source that led to the previous decline, according to a report released by the Nelson A. Rockefeller Institute of Government. The report indicates sustained growth in states' economies over the past three quarters, with increases in revenue from personal, sales and corporate taxes, creating optimism for the future of state budgets.

State tax revenue grew by 8.1 percent in the January-March quarter compared to the same period in 2003, a continuous growth since the last period of decline in July 2001 through June 2002, according to State Tax Revenue Recovery Gathering Steam. Legislated tax increases enacted in several of the states over the last three years have contributed to the revenue growth, the report indicates, although the January-March quarter growth was still strong after tax hikes were factored out.

Three underlying forces account for the trends in growth, the author notes, including differences in state economies, how these differences affect each state’s tax system, and recently legislated tax changes. Other highlights from the report include:

Pointing to growth in gross domestic product for the first quarter of 2004 and the steady improvement of the unemployment rate, the report states the national economy also is experiencing sustained growth with some areas of continued weakness. The report notes, however, that employment growth has been moderate and has not spread across all regions. For example, employment in the Southeast during the January-March 2004 quarter showed 1 percent growth, while the New England and Great Lakes states experienced overall declines in employment rates.

State Tax Revenue Recovery Gathering Steam is available from the Rockefeller Institute of Government at: http://ww.rockinst.org/

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Vermont Prepares for Wi-Fi with New Broadband Initiative
The city of Montpelier, Vt., will soon join the ranks of other high-tech cities as it prepares to implement its first Wi-Fi “hotzone” in the central downtown area. With support from Senator Patrick Leahy (D-Vt), city officials and local businesses, the Vermont Broadband Council recently launched MontpelierNet, a high-speed Internet network that will bring wireless broadband Internet access to the city.

The network is designed to expand and improve high-speed telecommunications services, reduce costs for the city, and provide faster transmission at a lower cost to businesses in the area. MontpelierNet is comprised of three phases, which include:

Wi-Fi zones, or “hotspots,” enable anyone with a laptop or handheld device access to wireless Internet, a feature that city officials hope will make Montpelier more attractive to new businesses. States having the most hotspots include California, New York, Texas and Washington.

According to an Associated Press story, the monthly cost for subscribing to the service will be between $40 to $50. Wireless technology has lagged in Vermont's rural areas, the article contends, with services for Internet and cell phones varying from town to town.

Sen. Leahy said this plan is a good example of how a city can achieve great outcomes when public and private sectors join forces for the community. Leahy also is credited with securing $375,000 in federal funding for the Vermont Broadband Council to launch the initiative.

Broadband Internet access has been an important issue for the entire state in recent months. In March, Gov. Jim Douglas issued the Vermont Telecommunications Plan for public review and comment, saying deployment of services such as broadband are critical to the economy and a central component of his jobs creations agenda. The initiative would guarantee 100 percent wireless coverage to major transportation arteries and 90 percent coverage to homes and businesses within the next four years. A final draft of the plan was issued earlier this month by the Vermont Department of Public Service.

For more information on MontpelierNet, visit the Vermont Broadband Council at: http://www.vtbroadband.org/
The Vermont Telecommunications Plan is available from ThinkVermont at: http://www.thinkvermont.com/telecommunications/index.cfm

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Louisiana Tech Fund Gets $2.3M for Startups
Two years following its creation, the Louisiana Technology Fund has $2.3 million to help the early-stage technology companies for which it was intended, the Baton Rouge-based Advocate reported earlier this month. The fund stems from 2002 legislation that revived Louisiana's Certified Capital Companies (CAPCOs) program.

With the initial pool of money, the fund could support up to 12 Louisiana technology startup companies. The money is derived from the state's CAPCOs, which are required to invest 10 percent of their earnings into such startups. The state's four research parks, located in Baton Rouge, Lafayette, New Orleans and Shreveport, will oversee the fund, according to the Advocate.

The Louisiana CAPCO program was created in 1983 to encourage private sector investment. Since 2002, the program has generated $80 million. Only one of Louisiana's participating capital companies chose not to deposit its required amount into the new fund.

More information on the Louisiana Technology Fund is available by contacting Louisiana Technology Park at http://www.latechpark.com.

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Senate Passes Legislation to Protect Research Collaborations
A bill designed to encourage collaborative research among universities and between universities and industry passed the Senate last Friday. The Cooperative Research and Technology Enhancement (CREATE) Act of 2004 will allow researchers and inventors who work for different organizations to share information without losing the ability to file a patent.

Passage of the bill has been supported by the Association of American Universities (AAU), the American Council on Education and the National Association of State Universities and Land-Grant Colleges. These proponents argue the need for the amendment to federal patent and trademark law stems from a 1997 court decision (OddzOn Products Inc. v. Just Toys) that deemed information shared among collaborators may be deemed a prior art, which could invalidate a patent unless there is a single owner of the invention.

The CREATE Act, AAU contends, solves the problem by treating inventions as if they have a single owner as long as a formal, written joint research agreement in place between collaborators before the invention is made. The bill adds language that treats inventions of a common owner similarly to inventions made by a single person, if:

(1) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made;
(2) the claimed invention was made as a result of activities undertaken within the scope of the agreement; and,
(3) the application for patent for the claimed invention discloses, or is amended to disclose, the names of the parties to the agreement.

S. 2192, sponsored by Sen. Orrin Hatch of Utah, is virtually identical to H.R. 2391, which the House passed at the end of April. The full text of S. 2192, CREATE, is available at: http://thomas.loc.gov/cgi-bin/bdquery/z?d108:s.02192:

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Wyoming Project Engages Community Support for Entrepreneurship
A pilot program meant to spur entrepreneurship with community involvement is set to begin in Torrington, Wy., in the next two months. A joint venture between the Goshen County School District, Eastern Wyoming College, and Goshen County Economic Development, the project, Planned Approach to Community Entrepreneurship (PACE), is designed to facilitate small businesses and help them achieve higher success rates.

The Torrington economy is largely driven by entrepreneurship; however, the county has the fifth highest business failure rate after one year of operation and second highest after three years, according to a recent article in the Torrington Telegram. Starting and maintaining a business in the city has been a major source of frustration for local business owners, and community leaders are hoping PACE will help alleviate some of the frustration by actively involving residents in the project.

As part of the project, a coalition consisting of about 30-40 people will be formed to represent different sectors of the community and serve as facilitators for challenges and barriers facing small businesses, said Debbie Popp, Associate State Director of Small Business Development Centers. Small businesses face everyday issues such as zoning restrictions and lack of retail space that the coalition could help them with, Popp said.

The model being used for PACE is based largely on that of Ernesto Sirolli’s model for building economies, which he writes about in his book, Ripples From the Zambezi. Sirolli’s strategy teaches communities to form a committed volunteer local board and hire an enterprise facilitator. The facilitator and the board help form teams to advance their ideas. Such a strategy is often seen in big corporations, but rarely in small business, and Sirolli explains that this bottom-up, person-centered model works best and is well understood in communities.

The PACE group is trying to do what Sirolli suggests, Popp said. The state of Wyoming is too big for such an effort, however, and they are focusing specifically on the city of Torrington to intensify their efforts.

To begin, three economic development professionals will be brought in to serve on the committee and go through a three-day training program. Once training is completed, the board will work with coalition members on brainstorming and problem-solving techniques. The City of Torrington has provided $4,000 for the PACE team to help with lodging, food, training and orientation.

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WGA Takes Aim at Clean, Diversified Energy for the West
Led by Govs. Bill Richardson and Arnold Schwarzenegger, the Western Governors' Association (WGA) announced last week it would support opportunities to develop a clean, secure and diversified energy system for the West and to capitalize on the region's energy resources. The New Mexico and California governors, respectively, are among those represented by the nonprofit WGA.

Western Governors adopted a resolution that builds upon recommendations the governors received from the nearly 700 participants at the North American Energy Summit, held by WGA in April. Among the major goals of the resolution is reaching 30,000 megawatts of clean energy by 2015 and a 20 percent improvement in energy efficiency by 2020.

A new working group will be formed to determine how to reach the above goal while ensuring the region has the necessary generation and transmission capacity. The group will have balanced representation, including state, local and Native American leaders; environmental organizations; state and tribal air quality agencies; the private sector; federal agencies; and representatives from Mexico and Canada. WGA intends to develop a charter and budget and secure funding for the working group by November 2004.

"This region has a unique opportunity to develop clean energy to fuel our growing economy," said Gov. Richardson, WGA Chairman. "We have an enormous potential to improve the efficiency of energy use. The West also has the highest quality solar, wind, and geothermal resources in the nation, and this clean-energy initiative will determine the steps needed to take advantage of this unique opportunity."

The initiative will build on traditional energy resources, while advancing the development of clean energy in the West. It also will stress incentive-based, non-mandatory approaches that will help states achieve their clean and diversified energy goals and will consider federal programs that could assist in the effort.

"California has historically been very aggressive in promoting renewable energy and the highest efficiency energy standards," Gov. Schwarzenegger said. "We have proven that cost-effective efficiency programs can help reduce overall energy use, protect our environment and save consumers in the long run."

In New Mexico, plans to develop a commercial solar power plant are underway, according to the Albuquerque Journal. The state released last week a request for proposals to obtain a consulting firm that could receive up to $190,000 from the state's Energy, Minerals and Natural Resources Department. The firm would consider possible technology, financing and operating arrangements and tax incentives to make solar power more competitive with fossil fuel-generated electricity. Solar power producers in New Mexico already are eligible for a 1 cent per kilowatt-hour state tax incentive, the Journal reports.

Gov. Dave Freudenthal of Wyoming will serve as lead governor for energy policy, along with Richardson and Schwarzenegger, as part of the WGA initiative. A copy of the organization's resolution is available at http://www.westgov.org.

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Maryland, NSA Join Forces
A new agreement between the State of Maryland and the National Security Agency (NSA) is expected to lead to new technologies for both. The two formalized a partnership earlier this month, signing a memorandum of understanding at the Maryland State House.

The partnership joins NSA with Maryland's Department of Business and Economic Development (DBED). Present for the signing were Maryland Gov. Robert Ehrlich, DBED Secretary Aris Melissaratos, and Michael Hayden and Dr. Eric Haseltine of NSA.

Hayden, who doubles as director of NSA and as a lieutenant general for the U.S. Air Force, said the agreement will enhance the agency's "transformation efforts to provide quality intelligence to the national leadership while promoting economic prosperity in Maryland."

NSA's research division is responsible for developing new technologies for information purposes and signaling intelligence missions. Interacting with Maryland industry concerning new trends, theories, techniques and problems in research would further industry's understanding of the NSA's research needs.

The defense industry in Maryland is estimated at $15 billion, Baltimore's Daily Record reported last week in conjunction with a related story involving The Johns Hopkins University. Enrollment in the university's new homeland security certificate program and biodefense concentration will be open to graduate students beginning this fall, the Daily Record states. Thousands of jobs are anticipated over the next couple of years, with NSA alone expecting 1,500 new hires for each of the next five years.

A story in the Baltimore Sun recently stated NSA intends "to spend at least several million dollars in the short term to invest in and buy from local startups that develop high technology useful to its code-making, code-breaking and eavesdropping mission."

Press statements concerning the DBED and NSA partnership are available at each agency's website, respectively, at www.choosemaryland.org and www.nsa.gov.

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An SSTI Editorial
TBED's Role in a Free Market Economy
As the U.S. approaches the July Fourth weekend, during which time we celebrate all the good that is America, columnists and politicians across the country will sing the praises of free-market capitalism. And with our material abundance and relative wealth compared to the vast majority of the world's population, examples of success for our chosen economic system are numerous.

Readers of the SSTI Weekly Digest -- and there are thousands of you -- may recall, however, that most economic development policy is intended to address the failures of our market system. Or at least to prod it along to certain conclusions that it may not reach if left entirely to its own devices. For example:

The press advisories, newsletters, and annual reports of the nation's local, regional and state level technology-based economic development (TBED) initiatives testify hundreds of times over to the positive impact this form of public intervention in the free-market economic system can have. For the TBED programs and policies that work best, the industrial, business and financial communities are strong collaborative leaders.

Yes, we will be celebrating our independence, our democracy, and our free market capitalist system this weekend. But public-private partnerships to encourage technology-based economic development are increasing opportunities for innovation, entrepreneurship, wealth generation and economic prosperity across all regions of the U.S. That's worthy of celebration and recognition as well this weekend.

Kudos to all of you and enjoy the Fourth of July.

NOTE: With the coming holiday weekend, the next issue of the SSTI Weekly Digest and Funding Supplement will be published on Monday, July 12.

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Missouri Enterprise Seeks President and CEO
Missouri Enterprise Business Assistance Center, a Rolla-based, multi-office nonprofit organization that provides business and technical assistance to manufacturers, agricultural producers and startups, is seeking candidates for the position of President and Chief Executive Officer. The full description and application instructions can be found at http://www.missourienterprise.org/Ceo.asp

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