In the February 7, 2005 Issue:

Copyright State Science & Technology Institute 2005. 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.

Tech Talkin' Govs 2005, Part Five
The first four installments of SSTI's annual look at how TBED will play in the 2005 legislative priorities of the governors can be found in the Digest archives on our website: http://www.ssti.org/Digest/digest.htm

Kentucky
Gov. Ernie Fletcher, State of the Commonwealth Address, Feb. 1, 2005
"The tax plan I offer tonight includes incentives to help promote education and economic growth...I'm proposing a tuition tax credit of up to 500 dollars for each student going to Kentucky colleges and universities.

"...Additionally, several other incentives are included: a Kentucky enterprise initiative to give tax credits for hard construction and research and development costs...I’ve also proposed Brownfield credits, clean coal technology credits, environmental stewardship credits and alternative fuel credits. This plan promotes economic development while being environmentally responsible."

Illinois
Gov. Rod Blagojevich, State-of-the-State Address, Feb. 3, 2005
"We are creating a division within the Department of Commerce and Economic Opportunity whose sole purpose is to encourage companies that make homeland security products to either come to Illinois or expand in Illinois. We're going to take existing tax credits and programs, and use them in new ways to give companies that make homeland security products the financial incentives they need to make their products here.

"I’m asking our universities to work with us to develop a curriculum that trains our students to work in the homeland security industry. The better our workforce understands their industry, the more likely companies are to locate here."

Oklahoma
Gov. Brad Henry, State-of-the-State Address, Feb. 7, 2005
"...No longer can we abide overcrowded facilities, crumbling classrooms, obsolete equipment or deteriorating research labs. I urge this Legislature to join me in passing a $500-million capital bond issue for higher education – and to do it quickly while interest rates are low.

"Under my proposal, whenever the Rainy Day Fund is full, half of any excess funds will be returned to those who most deserve it, the taxpayers of Oklahoma...The other half of the excess funds should be invested in our future. These funds would help build the $1-billion EDGE research endowment to truly transform Oklahoma into the “Research Capital of the Plains."

"This proposal...was a key recommendation of our EDGE initiative. As we have seen from the incredible successes of OCAST, dollars invested in research and technology are dollars invested in job growth and prosperity. In fact, for every dollar we invest in research, we get 12 dollars in return. That’s a 1,200 percent return on our investment."

Tennessee
Gov. Phil Bredesen, State-of-the-State Address, Jan. 31, 2005
"I want to start focusing some extra attention on our flagship university, the University of Tennessee. I want UT to grow in stature as a first-rate teaching and research university...Top of the line universities do so much for their states. They power the economy, they build reputation, they keep the best and the brightest students at home...Don't stay #42, but also don't just dump in money in an unfocused way. This is a place for partnerships, and with institutions like Oak ridge National Laborary right in our backyard, we have a unique opportunity to begin this transformation at the University of Tennessee.

"I have recommended funds in the budget to be matched by the national lab to begin to attract more nationally-recognized faculty members. I also recommend some capital funds that are being augmented by substantial private investment to start providing infrastructure. There is an opportunity today for the University of Tennessee to rapidly become world class in some areas like supercomputers, materials science, and nanotechnology, and we need to grab it..."

"I've asked in this budget for a substantial commitment of money - $20 million this year - to improve our [economic development] efforts through incentives, through help with infrastructure, through job training."

return to the top of the page

Washington Gov. Proposes $350M Life Science Fund
Gov. Christine Gregoire announced the first stages of her economic development program last Wednesday, highlighted by a proposal to inject $35 million annually starting in 2008 for the next 10 years into life sciences research at the state's universities. Gov. Gregoire also requested legislation be introduced this week that would facilitate the transfer of technology from research institutions to the private sector.

Gov. Gregoire said the payoff of the proposed Life Sciences Discovery Fund would be twofold, with a strengthening of the state's reputation as a bioscience center and the creation of as many as 20,000 new jobs in the next 10-15 years.

The state legislature and the administration of former Gov. Gary Locke had grappled with increasing the state's biotech investment for the past two years, yet no final funding package ever emerged from the legislature. Gov. Gregoire and the state's private and academic life sciences research community is hopeful the new version of the proposal will be more palatable.

Washington currently is one of the top five states in the nation in drawing research grants, but with deficit pressures on the federal budget likely to reduce the availability of federal research funds at the same time other states are increasing their life science investments, that could change, she noted.

But Gov. Gregoire said creating the Discovery Fund was only the first step in stimulating the growth of this state’s bioscience industries. She said the state needs to target the convergence of life sciences and information technology in the form of competitive grants to build research capacity, support research with clinical and commercial promise, recruit top scientific talent, and encourage collaboration between industry and Washington's research institutions.

Senate Bill 5581 and House Bill 1623, introduced this week at her request, would:

Gov. Gregoire said that over 10 years, she expects the $350 million the state contributes to be matched at least two-to-one by federal and private grants, taking the total potential investment to well over $1 billion.

In the same announcement, the new governor recommended two other economic development proposals designed to help small businesses succeed. The first would double the business and occupation tax credit for small businesses to help these businesses prosper when they are just getting started and may have no profits, yet still owe B&O taxes on their gross revenues. Gov. Gregoire proposed doubling the maximum credit to $70 a month to provide partial or full B&O tax relief to 25,000 small businesses.

The other proposal would double to $100 million the program cap for the Washington Link Deposit Program, which encourages banks to make loans to certified minority and women-owned businesses at below-market rates. She also is proposing eliminating the scheduled sunset of this program in 2008.

The Labor, Commerce, Research & Development Committee of the Washington State Senate is scheduled to hold a public hearing on SB 5581 on Feb. 8. The House Technology, Energy & Communications Committee will hold its first hearing on HB 1623 on Feb. 10.

More information on both bills is available at: http://www.leg.wa.gov/wsladm/billinfo1/bills.cfm

return to the top of the page

NIH Changes Ground Rules for Biotech
The nation's most significant source of funding for life science research, the National Institutes of Health, announced two sweeping changes last week that could dramatically alter biotechnology commercialization. The first policy change addresses known and potential conflicts of interest by NIH employees, while the second encourages all NIH-funded research to be released publicly within 12 months of final publication.

Issues of Ethics
Over the past year, NIH has been addressing the ethics issues raised by the outside consulting activities of several of its employees. Under the new rules, all NIH employees are prohibited from engaging in certain outside employment with: 1) substantially affected organizations, including pharmaceutical and biotechnology companies; 2) supported research institutions, including NIH grantees; 3) health care providers and insurers; and 4) related trade, professional or similar associations. Investments in organizations substantially affected by NIH, such as the biotechnology and pharmaceutical industries, also are not allowed for those employees who are required to file public and confidential financial disclosure reports and are restricted for other staff.

Effective immediately, this interim final regulation remains in effect unless changed by subsequent regulations. The Department of Health & Human Services (HHS) intends to evaluate certain provisions in the rule, including those regarding outside activities and financial holdings, within the next year.

During this period, HHS also will complete a review of existing outside activities that is presently ongoing, develop and test more effective oversight systems, overhaul its administrative capabilities for the management of its ethics program, implement improved training and evaluate the impact of this regulation. NIH scientists will continue to be able to conduct academic activities such as teaching courses at universities, writing general textbooks, performing scientific journal reviews, participating in scientific meetings and providing general lectures to physicians and scientists at continuing professional education and similar events, as well as practicing medicine as appropriate, provided that the activities are otherwise in accordance with existing law and adhere strictly to the conditions specified in the new rules.

For further information, see NIH Conflict of Interest Information and Resources: http://www.nih.gov/about/ethics_COI.htm

Public Release of Research Results
A Feb. 1 policy change from NIH is to accelerate the public's access to published articles resulting from NIH-funded research. The policy calls on scientists to release to the public manuscripts from research supported by NIH as soon as possible, and within 12 months of final publication.

These peer-reviewed, NIH-funded research publications will be available in a Web-based archive to be managed by the National Library of Medicine (NLM), a component of NIH. The online archive will increase the public's access to health-related publications at a time when demand for such information is on a steady rise.

"While this new policy is voluntary, we are strongly encouraging all NIH-supported researchers to release their published manuscripts as soon as possible for the benefit of the public," said NIH Director Elias  Zerhouni, M.D. "Scientists have a right to see the results of their work disseminated as quickly and broadly as possible, and NIH is committed to helping our scientists exercise this right. We urge publishers to work closely with authors in implementing this policy."

Zerhouni added, "NIH recognizes the importance of preserving quality peer review and the viability of a diversity of publishing models. Nevertheless, we expect that only in limited cases will authors deem it necessary to select the longest delay period."

Beginning May 2, 2005, the policy requests that NIH-funded scientists submit an electronic version of the author's final manuscript, upon acceptance for publication, resulting from research supported in whole or in part by NIH. The author's final manuscript is defined as the final version accepted for journal publication, and includes all modifications from the publishing peer review process.

The policy gives authors the flexibility to designate a specific time frame for public release ­ ranging from immediate public access after final publication to a 12 month delay ­ when they submit their manuscripts to NIH.

Additional information on the new policy and related documents, including a "Questions and Answers" fact sheet, is available at: http://www.nih.gov/about/publicaccess/index.htm

return to the top of the page

Latest TBED Policy Research
The latest email from the Reseau Innovation Network's Innovation Newsletter out of Canada and the D.C.-based Public Forum Institute's National Dialogue on Entrepreneurship called to SSTI's attention two websites with online access to more than 60 academic research papers of potential interest and importance to those interested in encouraging economic growth through innovation, technology commercialization, entrepreneurship and public policy.

SSTI will highlight selected papers in Digest articles over the coming weeks, but links to all of the works and brief introductions to the sites are provided below.

Danish Research Unit for Industrial Dynamics (DRUID) 2005 Winter Conference
Link to papers: http://www.druid.dk/ocs/papers.php?first_letter=all&cf=2
DRUID's latest meeting in January once again meets expectations as one of Europe's leading conferences for advancing the latest thinking on tech-based economic development issues. The link above provides access to abstracts and full PDFs for the 54 papers presented this year. Selected titles include:

Conference on Institutionalizing Entrepreneurship Education by Linking It to University Technology/Knowledge Transfer
Link to papers: http://entrepreneurship.eller.arizona.edu/events/2005/knowledge_transfer_papers.aspx
The Karl Eller Center at the University of Arizona partnered with the Kauffman Foundation to hold this January event. Several of the authors of the 10 commissioned papers may be familiar to Digest readers: David Audretsch, David Mowery, Donald Siegel, and Jerry and Marie Thursby.

return to the top of the page

TBED Mergers, IPOs and Foreclosures

In January, Rhode Island's Tech Collective announced the creation of BioGroup, a subsidiary to focus on the needs of the state's life science industry. The new organization will serve as the state affiliate to the Biotechnology Industry Organization (BIO).

The San Diego Regional Technology Alliance has become a component of CONNECT at the University of California-San Diego. Under the new name, RTA@CONNECT, the Alliance will focus on delivering training and entrepreneurial assistance services.

The Tucson area's economic development efforts were centralized with the creation of the Regional Economic Development Corp. in late January. Staff are expected to be shifted to the new group from the Tucson Office of Economic Development, which is closing, and from Pima County. The Tucson Citizen reported the merger "virtually" closes the Greater Tucson Economic Council by eliminating public support of $710,000 for the council activities. The Regional Economic Development Corp will have a combined budget from the city and county of $5 million for its first year.

The Kansas City Star reported mid-January that the board of the four-year-old KCCatalystvoted to cease operations as soon as possible for financial reasons.

New Mexico Gov. Bill Richardson announced the state is seeding the creation of the New Mexico Micro and Nano Technology Partnership, one of several cluster-based economic development collaboratives proposed for the state. Founding partners include universities, private businesses and the federal labs within New Mexico.

The Keiretsu Forum announced the creation of a Los Angeles Chapter in mid-January. Founded in San Francisco in 2000, the angel investor network now boasts more than 300 members nationwide.

return to the top of the page

Two Digests This Week?
Special Issue to Focus on TBED View of 2006 Federal Budget Request

By the end of the week, SSTI will be sending Digest subscribers our ninth annual review of the president's federal budget proposal. We will highlight dozens of science and technology programs and initiatives of interest to our readers. Early indications are the 2006 request, released this afternoon, if enacted would result in significant changes for nearly every program of importance for the tech-based economic development (TBED) community. A few leaked headlines over the past few days set an ominous tone: CDBG and Treasury programs merged with the Economic Development Administration and cut by $13 billion; and the Manufacturing Extension Partnership slashed 57 percent.

Grappling with record deficits and a pledge to cut the deficit in half over four years, the Administration's budget proposal, as always, will reveal its priorities for strengthening the country's position as the leader of the global knowledge economy.

The special Federal Budget Issue of the Digest takes the place of the Feb. 14, 2005, issue.

No Funding Supplement Next Week
The Digest's Funding Supplement will be issued this evening. No supplement will be issued next week, however, given the time required to prepare the special budget issue.

return to the top of the page

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

© 2005 State Science and Technology Institute. All rights reserved.