In the October 4, 2004 Issue:

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SSTI In Philadelphia Next Week, Are You?
The Weekly Digest and Funding Supplement Return Oct. 25

Next week, the production team for the SSTI Weekly Digest and Funding Supplement will be joining 360 of the nation's top tech-based economic development professionals in Philadelphia for the nation's premiere TBED professional development experience: SSTI's 8th annual conference. The event has drawn participation from 45 states, Canada and New Zealand -- promising a stimulating and diverse exchange of new ideas, lessons learned, and just plain fun for everyone involved.

Conferees will be talking about this one for years -- and, more importantly, immediately transforming the knowledge gained into action to strengthen their regional or state economies. With 30 great breakout sessions and ample networking time, the event promises something great for everyone attending.

Want to avoid fumbling for a good excuse as to why you weren't in Philly for 2004 when you hear others talk about the conference? Already feel the beginning of a deep, almost cavernous regret or even remorse that you missed this incredible learning opportunity? Well, there is still a small window to join us at Building Tech-based Economies: Preparing for Tomorrow's Challenges. Simply register online today at: https://www.ssti.org/Conf04/registration.htm [expired]

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EDA Reauthorization Clears Congress
Senate Bill 1134, the reauthorization bill for the federal Economic Development Administration (EDA), only awaits the President's signature following Thursday's passage by the U.S. House of Representatives. SB 1134 was passed by the U.S. Senate just a day earlier.

Highlights of the Economic Development Reauthorization Act of 2003, as passed by Congress, include:

EDA’s prior reauthorization was passed in 1998 and expired on Sept. 30, 2003. Since its inception in 1965, the agency has worked closely with Congress, the private sector, economic development organizations, and state and local governments to help create jobs across the U.S. Next year marks the EDA's 40th anniversary.

The full text of SB 1134 is available through Thomas Locator at http://thomas.loc.gov/.

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SBA Names FY 2004 FAST, ROP Winners
Earlier this week, 22 states and Puerto Rico were named recipients of more than $2.2 million in combined fiscal year 2004 Federal and State Technology Partnership (FAST) and Rural Outreach Program (ROP) awards. All but one of the 21 FAST awards distributed by the Small Business Administration (SBA) were worth $95,000 -- they totaled nearly $1.98 million. Five ROP awards of $49,470 also were made by SBA.

FAST, included in December 2000 legislation reauthorizing the Small Business Innovation Research (SBIR) Program, provides matching funds to enable states to augment or expand their tech business assistance and SBIR outreach efforts. FAST winners include:

ROP awards help foster programs that enable small high tech businesses to increase their participation and success in the SBIR and Small Business Technology Transfer programs. This is accomplished through training, counseling and outreach. The five FY 2004 SBIR ROP winners are:

The FY 2005 budget for both FAST and ROP remain in question. The Administration's 2005 budget request for SBA did not include funds for either program and the House concurred. The Senate Appropriations Committee, however, has approved continuation levels of $2 million for FAST and $250,000 for ROP. No further action on the federal budget is expected until mid-November.

For more information on the programs or to view success stories of past award winners, visit: http://www.sba.gov/sbir/indexfast.html

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Fiscal Recession in Cities Expected to Continue into 2005
Ongoing economic struggles, along with rising health care and pension costs, have contributed to the bleak conditions of city budgets around the nation. The majority of America’s cities are still suffering from the recession and city financial officers are pessimistic on the financial outlook for the near future, according to an annual survey from the National League of Cities.

The survey, which consists of 18 factors affecting city budgets, was presented to city finance officers for the report, City Fiscal Conditions in 2004. Respondents were asked whether each of the factors had increased or decreased between 2003-2004 and whether the change had a positive or negative influence on the overall financial picture. For the first time in 10 years, more than half of the respondents reported their cities would be less able to meet their financial needs in 2005 than in the current year.

Health care and increased employee wages topped the list of factors that increased over the previous year. Following closely behind were infrastructure needs, employee pensions and city tax base. In response to the effects of the factors, 91 percent of respondents cited rising costs of employee health benefits as having a negative effect, and 89 percent cited employee wage increases as having a negative effect.

The amount of state aid to cities was cited as a negative factor by 55 percent of respondents, while the health of the economy was cited as negative by only 30 percent. At the same time, 74 percent of respondents said the local tax base had a positive effect on their ability to meet their cities’ overall needs, suggesting the continued strength of the real estate and property markets provided a lifeline for city finances. Other highlights from the report include:

As for city revenue actions, the report indicates that over the past 17 years, the most common action to boost city revenues has been to increase fees and charges for city services. More than half of all cities, 54 percent, took this route of action in 2004 while 25 percent opted for increasing property taxes, up from 17 percent in 2003. Only 7 percent of cities reported decreases in property taxes.

City budgets are also being squeezed with added expenditures, according to the report. Public safety expenditures, the data show, have increased by 4.8 percent per year between 2002-2004. Seven out of 10 city finance officers reported increased public safety spending in 2004, 43 percent reported increased infrastructure spending and 35 percent reported an increased growth rate in their operating budgets. Most of the mentioned actions were increases in productivity and in inter-local agreements and reductions in municipal employment and operating spending.

City Fiscal Conditions in 2004 is available from the National League of Cities at: http://www.nlc.org/nlc_org/site/

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Private Interests Not Far from the Minds of State Legislators, Center Suggests
New data released by the Center for Public Integrity affirm the notion state representatives are often uniquely positioned to influence their personal financial fortunes or those of their employers while in office.

Our Private Legislatures, a study aimed at providing the public with detailed information on the private financial interests of more than 7,400 lawmakers, finds more than 28 percent of reporting state legislators sat on a committee with authority over at least one of their personal interests in 2001. Another 18 percent disclosed ties to organizations registered to lobby state government, and 10 percent were employed by other government agencies, including public schools and universities.

Although state legislators frequently have jurisdiction over areas in which they hold personal interests, many states have weak mechanisms for disclosing those ties, a companion Center report notes. In fact, 24 states received failing scores on making basic information about the outside interests of their legislators available to the public.

The two analyses update previous reports by the Center on outside influences that can affect the crucial policy decisions state legislators make.

The Center has been studying the financial disclosure statements filed by 6,516 legislators during 2002, which covered legislators' financial interests in 2001, in the 47 states that require disclosure. Lawmakers in Idaho, Michigan and Vermont do not file such reports. The study considers four categories of personal interests: employers, business interests, stock holdings and directorships.

The 5.4 percent of legislators in the 47 states with mandatory financial disclosure who did not file statements were excluded when the Center calculated percentages of legislators with each type of connection.

Not surprisingly, reports the Center, the most commonly listed occupations were law, education and retirement. More than 12 percent of legislators said they were employed by a law firm, and an overlapping group of 9.6 percent had a business interest in one. More than 10 percent of legislators said they were retired and 7.5 percent reported employment in the education field, including public schools.

Our Private Legislatures, funded by the Joyce Foundation and the Ford Foundation, is searchable by name, zip code, outside tie or industry to determine what interests lawmakers hold and the potential conflicts those special interests present. The study also ranks states using a survey based on filing requirements, content, access and enforcement and is available at http://www.publici.org/oi/default.aspx.

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Southern Region Progressing in TBED, But Lags in Private Investment
Southern states may have a justifiable reason to be proud of their progress in technology and innovation, but their leaders should be concerned with the lack of investment in venture capital and industrial research and development (R&D), suggests a report released last month by Southern Growth Policies Board and the Southern Technology Council (STC).

Measuring the progress of innovation, entrepreneurship and technology-based economic progress in the South, Not Invested Here: The 2004 Southern Innovation Index provides data on 50 benchmarks and offers 10-year targets for each of the Southern Growth member states. As the fourth in a series of reports on innovation in the South and an update to the previous index released in 2002, the report includes updated indicators and analysis of the differences between the updated indicators and their 2002 report counterparts.

Southern Growth members - Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Virginia and West Virginia - have made significant and sustained progress in the core technology indicators measured, according to the report. In fact, the South showed an average 16 percent improvement in this category while the U.S. as a whole showed only a 9 percent increase. The core technology indicators measured include: students per internet-connected computer, percent of zip codes with broadband access, patents per 10,000 businesses, and percent of Bachelor’s degrees in science and technology, among others.

Another positive indicator for the southern states, the region has attained about 70 percent of its target goals and about 80 percent of its critical technology indicators since the states set their targets two years prior, according to the report. The categories of investment measured were federal R&D, university R&D, industrial R&D, and venture capital (VC). Federally performed R&D increased by about 6 percent and university performed R&D decreased only slightly from 19 percent to 18.8 percent of the U.S. total. However, the report indicates that the South lags the nation as a whole in investment from nearly every major source, both public and private.

The most distressing indicator, according to the report, is the decrease in industrial R&D and lack of VC. Industrial R&D, which delivers a more immediate economic boost, decreased by almost 5 percent more than the U.S. as a whole, the report indicates, representing a $1 billion loss in R&D activity for the region.

Over the last 20 years, the region’s share of the nation’s VC increased by only about 4.5 percentage points, far less than the region’s growth in population and economic activity. The VC indicator is crucial, according to the report, because new companies and industries must be financed to bolster the South’s traditional industries such agriculture, textiles, furniture and apparel. The South needs to grow its VC at a faster rate than the rest of the country because it historically has had a disproportionately small share of the nation’s VC and needs the capital infusions to help reduce declining industries.

In response to the report findings, STC will release results of a national R&D survey later this fall to determine the location factors for R&D investment. STC also has announced it will establish a task force on southern venture capital in order to improve the amount and quality of VC in the region. Not Invested Here: The 2004 Southern Innovation Index is available at http://www.southern.org/.

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Report Offers Guidelines For Sustaining Diversity Efforts in S&T
Prompted by confusion over the dual rulings in the University of Michigan affirmative action cases last year, the American Association for the Advancement of Science (AAAS) and the National Action Council for Minorities in Engineering have released a new report to clarify the legalities and offer options for implementing and sustaining diversity programs within science, technology, engineering and mathematics (STEM) fields.

The U.S. Supreme Court rulings on Grutter v. University of Michigan and Gratz v. Bollinger, which upheld the Law School’s admission policy but struck down the undergraduate admission policy, triggered confusion among academic, nonprofit and federal institutions, according to AAAS. Standing Our Ground: A Guidebook for STEM Educators in the Post-Michigan Era proposes eight principles for increasing the participation of minorities in STEM and urges leaders to specify diversity goals within their institutional missions. In formulating the principles, AAAS utilized a discussion from a panel of diversity program architects during a conference held earlier in the year.

The report also offers examples of existing federal programs that encourage diversity by inclusive, rather than exclusive, approaches. Within STEM fields, the National Science Foundation’s ADVANCE program, which supports innovative approaches by institutions to increase the number of women entering and advancing within the professoriate, and the Research in Disabilities Education program are given as prime examples.

According to AAAS, the U.S. federal government typically has provided legal interpretations to help institutions in situations of legal confusion. However, AAAS states, it has been a year after the ruling and guidance has yet to be made available. In response, the guidebook features a legal primer to help institutions navigate the rulings. Standing Our Ground: A Guidebook for STEM Educators in the Post-Michigan Era is available at: http://www.aaas.org/standingourground/

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People

Peter Bianco has been named executive director of University Enterprise Laboratories, a nonprofit entity created by the University of Minnesota that provides incubator laboratory space for bioscience start-up companies.

Former Massachusetts House Majority Leader Salvatore DiMasi has replaced Thomas Finneran as Speaker of the House. Finneran recently resigned to run the Massachusetts Biotechnology Council.

Eugene Huang will replace Virginia Secretary of Technology George Newstrom, who is resigning after two years in the position.

Jesse Jones is the new CEO of Ohio's IT Alliance. Jones formerly was chief technology officer of the City of Columbus.

Fred Kocher has been elected president of the New Hampshire High Technology Council, which advocates technology-based businesses in New Hampshire.

Laurie Lachance recently was named the next president of the Maine Development Foundation, Maine's economic development policy organization. Lachance is a former economist for the Maine State Planning Office.

Kenneth Lynn has been appointed president of KCCatalyst. Lynn formerly was a consultant to biotechnology companies assisting in technology acquisition, strategic planning, and commercial development.

Tino Mantella has been appointed president of the Technology Association of Georgia, a nonprofit organization that focuses on promotion and economic advancement of the state's technology industry.

Secretary Aris Melisssaratos of the Maryland Department of Business and Economic Development recently announced two new appointments. Leslie Sipes-Pachol will serve in the position of executive director for the Maryland Economic Development Commission, and Paul Mauritz has been promoted to become Assistant Secretary for Technology Strategy and Business Development.

Louisiana Gov. Kathleen Blanco appointed state bond commisssion director Sharon Perez to serve as undersecretary for the Louisiana Department of Economic Development, and Secretary Michael Olivier named Dane Revette director of the agency's energy cluster.

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