In the July 19, 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.

SSTI Weekly Digest Turns 400
There are less than 100 of our readers - now approaching a total of 100,000 - that may be able to look into their electronic mailboxes and even eight-year-old paper files to see that this issue of the SSTI Weekly Digest is our 400th. What began in March 1996 as a two-page weekly fax to key science and technology leaders in most states has evolved into the one of the most widely read e-news sources for the tech-based economic development community in the U.S. The addition of the funding supplement to the Digest in January 2001 made the publication a powerful and popular tool for encouraging research, innovation and entrepreneurship by increasing local access to and awareness of federal and foundation research and economic development grant opportunities.

The explosive growth of readers can be explained in part by the phenomenal growth of the field over the past eight years as more and more cities, universities, regions, states and countries recognize the important role investment in science and technology can and will play in creating higher wage jobs, economic prosperity and sustainable growth.

The theme of SSTI's annual conference this year, Building Tech-based Economies: Preparing for Tomorrow's Challenges, plays well into a mini-theme of our 400th issue: the global race for scientific supremacy. Even the popular press in the past two weeks has covered the challenges to U.S. dominance of patent production. While much of that attention is focused on the rapid percentage growth of Asia patent activity, the Digest looks this week at bold, big-dollar initiatives unveiled in two of the world's strongest research players -- Britain and France. We also record the recent activities of one province in our northern neighbor Canada, itself an increasingly important player for the world innovation markets. (As an aside related to the Austrian academic paper covered in this issue, Canada, with its ISRN project, also is funding some of the most impressive long-term research into understanding the composition, unique ch aracteristics and underlying policy elements of regional innovation systems, but we'll cover that in more detail in an upcoming issue of the Digest.)

We aren't political cartoonists, but we wonder if one might not draw a picture of Uncle Sam dressed in a Roman toga with a fiddle while looking out a window at kindling and logs being piled up around the base of a research lab. Someone might be asking Uncle Sam if he's going to play the violin, and he replies, "No. I'm still tuning."

That, perhaps, may mirror real life too closely, however. Below are the first two paragraphs from a July 15 story by David Hatch that ran in the PM edition of the National Journal's Tech Daily:

"The chief science adviser to President Bush is closely eyeing the establishment of research centers in foreign countries as part of the larger trend of U.S. companies moving jobs and facilities overseas.

'I don't think it's necessarily a bad thing,' John Marburger, director of the White House Office of Science and Technology Policy, told the Congressional Economic Leadership Institute on Thursday. Nevertheless, he said it is a trend worth watching."

The story's headline was "White House Notes Movement Of Research Centers Overseas."

Coming back to possible explanations for the impressive growth in Digest readership, we can thank all of our subscribers who forward the publication or post articles (with appropriate citation) when seeing a story or issue that they think others may appreciate or be able to use. Perhaps this issue may elicit a similar wave of e-mail to Washington policymakers. If the arms race of the cold war has been replaced with an international race for global supremacy in scientific research and innovation, then we'd like to see the U.S. maintain its dominant position.

On a closing note as we mark our 400th issue, SSTI would like to extend a very public and very special appreciation for the organizations that have become SSTI sponsors and affiliates. Without the financial support of these leaders in state and local science & technology policy, the SSTI Weekly Digest would not be celebrating such a milestone. To join this list of illustrious leaders for the field of technology-based economic development and help to ensure the Digest remains freely accessible to all interested parties, please visit http://www.ssti.org/sponsors.htm.

return to the top of the page

Ontario Commits $63M to Commercialization Strategy
If you consider North America's public investment to encourage economic growth through science and technology at the state or provincial government level, Ontario should be in your top 10. And the recent injection of $63 million for technology commercialization might have bumped the province of 12 million residents up a place or two.

Late last month, the Ontario provincial government outlined a four-year commercialization plan to link public research institutions with companies that can move the research out of the lab and into the market. Universities, colleges and hospitals will receive $27 million to help them identify promising research and make them investor-ready; and institutions will receive an additional $36 million to establish pools of seed capital to commercialize the best ideas. The goal is to create more spin-off companies and accelerate the growth of small- and medium-sized enterprises and leading-edge jobs.

To further support Ontario’s focus on commercialization, the McGuinty government will:

The strategy will help build capacity in university and college technology transfer offices and help increase their networks. The government also is placing a greater focus on commercialization in all its science and technology programs, including the four Ontario Centres of Excellence.

The province has invested approximately $2.6 billion into public research during the last decade, yet, according to Statistics Canada, less than 10 percent of companies are tapping into the research capacity within Ontario's public research institutions.

More information on Ontario's portfolio of tech-based economic development initiatives is available at: http://www.ontario-canada.com/ontcan/en/home.jsp

return to the top of the page

British Launches 10-year Science & Innovation Investment Plan
Science Spending to Rise £1B Over Next 3 Years Alone

"..because we want Britain to be the most attractive location in the world for science and innovation, we are setting a new and ambitious target of increasing UK R&D investment as a proportion of national income from its current level of 1.9 percent to 2.5 percent by 2014 over the next decade."

The quote is from the first page of the United Kingdom's new Science & Innovation Investment Framework: 2004-2014, which lays out a specific and ambitious commitment to strengthening the nation's position as both a center for knowledge creation and as a world leader in technology commercialization.

Toward these goals, the government's spending for science and research will increase annually at a real, average rate of 5.7 percent during the next three years to more than £5.3 billion. In addition, the framework outlines steps to increase business investment in research from its current level equal to 1.25 percent of Gross Domestic Product to 1.7 percent by the end of the decade. Total UK-based research currently approximates £22.5 billion.

Achieving the target 2.5 percent of GDP will require government, business and foundation research investment to maintain the 5.8 percent annual growth rate throughout the 10-year plan. That steady rise stands in direct contrast to the three-year slide for the same statistic in the U.S., according to a graph prepared by the American Association for the Advancement of Science (AAAS). National R&D investments in 2003 were approximately 2.6 of the U.S. GDP, AAAS reports.

There is no equivalent science or innovation strategy for the U.S. federal government. Several other countries, however, have prepared national plans in place to increase either research spending or public investment toward technology commercialization and innovation or some combination of both.

Another fascinating element of the British report without an American equivalent is the recommendation-by-recommendation government response to a critical, yet constructive, high-level report on university-business linkages in the United Kingdom that was published last winter. (see "Lambert Review Suggests Ways for Businesses, Universities to Boost UK Economy" in the March 19, 2004 issue of the SSTI Weekly Digest.)

In addition, the strategy lays out the economic case for investment in science and research in the first annex or appendix, citing several reports, studies and statistics documenting the impact of public science and technology spending.

The nearly 200-page framework outlines a comprehensive plan to instill science and innovation into all levels of education, to increase university research, technology transfer and commercialization. Specific goals, milestones to mark progress, and rationales for each are provided as well. The full framework is available at: http://www.hm-treasury.gov.uk/spending_review/spend_sr04/associated_documents/spending_sr04_science.cfm

return to the top of the page

France Creating NSF-like Agency
One Goal would see Science Share of GDP Surpassing US before 2010.

Not to be outdone by its European neighbor across the Channel (see story above), the French government announced at the end of June it will create a national research agency modelled after the National Science Foundation, according to The Scientist, the European Commission and several French news reports. While the budget for the new government agency will not be released until November, the press reports indicate an additional $1.23 billion (US) could be available for research grants in 2005.

While recent public expenditures have been below average for the European Union, France has set a goal to raise the percentage of the Gross Domestic Product (GDP) that is spent on science to 3.0 percent by 2010. In 2002, science spending represented 2.2 percent of the French GDP. Science in the U.S., for comparison, has seen its share of the GDP decline in each of the past three years to approximately 2.6 percent.

To achieve its goal, French research spending will need to average an annual real growth rate of 10 percent, according to a July 2 article in The Scientist. The new national research agency could play a major role in managing that growth, as it is expected to serve as a merit-review-based grant making organization, similar to the National Science Foundation in the U.S.

return to the top of the page

Austrian Paper Recommends Differentiated Approach for Innovation Policy
Innovation policy approaches need to address specific challenges, problems and opportunities found in different types of regions, according to a new research paper from the Vienna University of Economics and Business Administration. The paper, One Size Fits All? Towards a Differentiated Policy Approach With Respect to Regional Innovation Systems, was presented at the recent German Institute of Economic Research conference. In it, the authors stress there is no ideal model for innovation policy in tech-based economic development, instead making a case for more differentiated policies.

Various types of regions are analyzed, based on their preconditions for innovation, networking, and innovation barriers. The authors highlight the regional innovation system (RIS) approach, which is said to provide a useful framework for a differentiated approach.

Regions characterized by low levels of clustering, a lack of interaction and networks, and old dominant industries do not fit previous models upon which innovation polices were shaped, the authors argue. For example, best practice models of interactive innovation derived from high-tech, well-performing regions that focus on research and development (R&D) and technology diffusion cannot be fairly applied across all regions as they have in the past.

Three types of problem areas and their RIS deficiencies are outlined in the paper, including the main factors behind the regions' weak innovation and learning capabilities and how the problems could be handled. The following are discussed:

More recently, a new policy model based on such elements as high-tech, knowledge-based creative industries, building up research excellence, attraction of global companies and stimulation of spin-offs has emerged. Approaches based upon the new model stem from the latest concepts of the new growth theory, the cluster approach, the knowledge economy, and literature on knowledge spillovers. According to the authors, the problem is they are often used in an undifferentiated manner for different types of regions, not considering strengths and weaknesses of regions in terms of their industries, knowledge institutions and innovation potential.

Recommendations provided for addressing the three types of regions should be used as a guideline, the authors conclude. However, regions must further develop the strategies to fit their own circumstances. In order to formulate and implement actions successfully, the authors also call upon policymakers to possess knowledge of RIS specificities and the factors undermining the system's dynamics.

One Size Fits All? is available through the conference website at: http://www.diw.de/deutsch/produkte/veranstaltungen/Regionalization_Innovation-Policy_Conf2004/program.html

return to the top of the page

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

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