In the March 14, 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.

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Wyoming Creates Staggering $500M Higher Ed Endowment Fund
The scenario: You are a state legislator and have learned high oil and gas prices will provide the state coffers with at least enough surplus revenue over the next five years to have approximately $1,000 per resident. What do you do with the money?

Elected officials in Wyoming have chosen to invest $500 million into the state's future through academic scholarships and endowed chairs at the state's universities and community colleges.

Once the new endowment fund is fully capitalized, Wyoming high school graduates will receive a scholarship equal to tuition and fees at the University of Wyoming (UW) or any state community college. Signed into law by Gov. Dave Freudenthal on March 3, the bill also authorizes $105 million to be used for endowed chairs and faculty positions.

The first part of the act authorizes $400 million for the Hathaway Student Scholarship Endowment Account, which is named after former Gov. Stan Hathaway to recognize his contributions to education in Wyoming. Funding will come from the Budget Reserve Account and it will take at least five years to build the trust to $400 million, according to the Wyoming Education Association (WEA).

Based on Louisiana's Taylor Plan, scholarships will be available to Wyoming students having a 2.5 GPA or higher, a minimum score of 19 on the ACT test, and some advanced classes in their core curriculum. Details will be worked out over the coming months, according to WEA.

The second part of the act authorizes $105 million to attract and retain highly respected and qualified educators for endowed chairs and faculty for research and instruction at UW and the state's community colleges. The act leaves the academic institutions great latitude in deciding the disciplines and uses for the funding. Community colleges will receive one-third of the funding, while two-thirds will be allocated to UW.

The Higher Education Endowments Act (SF122) may be viewed the Wyoming legislature at: http://legisweb.state.wy.us/2005/Engross/sf0122.pdf

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Montana Gov. Wants More Than $20M Endowment for Economic Development
With a state legislature that only meets for 90 days every two years, opportunity for positive change in Montana's public-supported efforts to build a tech-based economy is limited. For the proposed $20 million Big Sky Economic Development Trust Fund - one of new Gov. Brian Schweitzer's largest economic development initiatives - the 90th day, April 26, is fast approaching.

Interest earned on the fund is estimated to total $3 million for the 2006-2007 biennium and to increase in outyears. For the next 20 years, interest would be used to provide grants and loans to local governments and certified regional economic development corporations for projects resulting in new job creation in the state. While rules for the program would be developed by the Montana Department of Commerce, the bill limits allocations to $5,000 per each created job. Language requiring a minimum of five jobs per project has been eliminated in the House Business and Labor Committee, greatly enhancing the fund's potential appeal for assisting start-up firms. Projects not yielding the promised number of jobs would automatically become repayable loans.

The only other legislated restriction on the Economic Development Trust funds would prohibit support of projects involving relocation of companies already within Montana.

If the legislation passes, an initial $20 million deposit to launch the Big Sky Economic Development Fund fund would be made from one-quarter of the coal severance tax bond fund.

House Bill 249 passed the Business and Labor Committee of the Montana House unanimously and the second full reading overwhelmingly, 74-24, on Feb. 9. In favor of the bill were 16 of 20 members of the House Appropriations Committee, including House leadership. Still, the bill has been idle since Feb. 16.

Passage at the third full House reading is required before the bill can be transferred to the Senate for consideration.

More information on H.B. 249 is available at: http://leg.state.mt.us

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Arkansas House Passes Bill to Allocate 12-Year Funding Base for R&D, Seed Capital
The perennial or biennial efforts to secure funding from state legislatures to support tech-based economic development (TBED) programs can create significant limitations on the design and execution of programs targeting research or early-stage, seed capital investments. Fixed endowments such as the one created by Wyoming and the Permanent Big Sky Economic Development Fund proposed in Montana (see both stories above) are ideal, but getting the initial payment approved by a legislature can be difficult.

The Arkansas House of Representatives unanimously passed a measure last week taking an alternate approach that may be a useful model for other states to consider: redirecting bond payments, once the bonds are paid in full, to specific TBED uses. In Arkansas's case, annual funding of $500,000 previously used to pay off bonds made for construction of convention or tourist facilities, would support research and seed capital investment programs in the Arkansas Science and Technology Authority (ASTA) through the year 2017.

Through House Bill 2462, the funding would be split evenly between the Arkansas Research Matching Fund and the Seed Capital Investment Program. The Arkansas Research Matching Fund provides state funds to Arkansas colleges and universities to match federal awards for research and research equipment. The Seed Capital Investment Program provides working capital of up to $500,000 to help support the initial capitalization or expansion of tech-based companies located in Arkansas. The program is supported by a $4 million revolving loan fund, initially capitalized by the state with $1.8 million in 1985. No subsequent injections of state money have been appropriated; however, the proposed funding would increase the cash available for new deals. According to ASTA's FY 2004 annual report, three-fourths of the fund already was tied up in portfolio firms.

HB 2462 was referred on March 9 to the Joint Budget Committee for consideration. The brief bill is available at: http://www.arkleg.state.ar.us/

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Minnesota Establishes New State SBIR/STTR Office
For 20 years, small tech firms and researchers in Minnesota called on Minnesota Project Innovation (MPI) for assistance in developing competitive proposals for the federal Small Business Innovation Research or Small Business Technology Transfer (SBIR/STTR) programs. On Feb. 28, the MPI Board of Directors voted to officially transfer program operations to the state Department of Employment and Economic Development (DEED).

Betsy Lulfs, who joined DEED in early February, will coordinate and expand the SBIR/STTR programs, according to DEED. The program will tap into DEED’s statewide network of Small Business Development Centers, regional business development representatives and business service specialists – as well as through partnerships with organizations such as Medical Alley/MNBIO, the University of Minnesota and Minnesota State Colleges and Universities. Lulfs formerly worked with a similar program in Ohio.

Since its creation in 1984, MPI helped its client Minnesota firms to identify funding opportunities and obtain high-risk capital for start-up, early-stage and existing companies to commercialize technologies into new products and services. The organization helped Minnesotans receive more than $250 million in SBIR/STTR funding over the time period, spurring the creation and growth of several publicly traded businesses as well as numerous privately held companies.

During the past two years of tight state revenues and budget cuts to many Minnesota economic development initiatives, the state has not provided any funding to MPI. When MPI was created in 1984, Minnesota ranked 35th among all states in the number of SBIR/STTR grants. By the end of fiscal year 2002, the state’s national ranking had risen to 14th, with more than 100 Minnesota companies pursuing and winning approximately $30 million in SBIR/STTR funding for research and development efforts.

In her new capacity as coordinator of DEED’s SBIR/SSTI assistance program, Lulfs said she expects those numbers to continue to rise.

“We’re taking what was essentially a one-person shop and expanding its operations across DEED’s entire statewide network,” she said. “By broadening our efforts in this way, our goal is to offer Minnesota companies vastly increased exposure to these federal funding opportunities.”

Former MPI director Pat Dillon is the new facilitator for the Defense Alliance of Minnesota (DAM). Dillon worked on SBIR/STTR assistance for nearly 13 years and continues to provide consulting and training services on securing federal R&D. DAM, formed in July 2004, serves to nurture and expand Minnesota's defense industry job base.

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Florida County R&D Authority Awards Tech Commercialization Grants
Many communities around the country have established authorities to oversee the real estate, infrastructure and management issues of their technology parks. Few of those authorities, however, provide direct grants to support industry-university R&D or commercialization projects. This more proactive approach to growing future tenants is the thinking behind a pilot program created last year for the Leon County Research and Development Authority (LCRDA) in Tallahassee.

Last month, the Innovation Park Technology Commercialization Grant Program awarded its first two $15,000 grants to be used for product development, business and commercialization services, or to secure matching funds. Grant recipients also will receive marketing support and strategic planning assistance.

Designed to promote technology commercialization, the grants are awarded on a competitive basis and are available to entrepreneurs, local business owners, universities and research labs.

"We're looking for technology-related products and services in various fields that have the potential to create jobs and stimulate the local economy," said Linda Nicholsen, executive director for Innovation Park.

LCRDA oversees the development and management of a 208-acre research park established in 1978. The authority is jointly governed by Leon County, the city of Tallahassee, Florida State University, Florida A&M University, Tallahassee Community College and local business representatives.

In addition to the grant program, LCRDA supports other programs to encourage entrepreneurship and tech transfer, including an internship program with a local high school to enable students to explore technology-related careers. The authority also offers workshops and seminars related to technology topics such as patents and establishing grant programs.

More information on the Innovation Park Technology Commercialization Grant is available at: http://www.innovation-park.com/park_news.cfm

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Forum Calls Upon Business, Higher Ed To Advance Math & Science Education
If the U.S. is to sustain its international competitiveness, national security and the quality of life for its citizens, then it must make significant improvements in the participation of all students in mathematics and science, says a new report from the Business-Higher Education Forum (BHEF).

The report, A Commitment to America's Future: Responding to the Crisis in Mathematics and Science Education, points to the lack of holistic, system-wide solutions in the U.S. as one source of inefficiency in math and science education and recommends cohesive, long-term strategies to alleviate pressing systematic problems. It also challenges business, education and policy leaders to commit to new collaborative roles to advance the development of state education systems extending from pre-kindergarten to higher education and into the workforce.

Lagging other countries in science and technology has a direct impact on the economic security of individuals, the international leadership of U.S. companies, and the national security of the country, the report states. According to the most recent data, the number of science and engineering degrees awarded to U.S. citizens is decreasing, while job growth in these fields is increasing, the report indicates. Also, performance trends of American students on comparative international assessments in science and math are declining from near-top in elementary school to near-bottom by the end of high school.

The report outlines recommendations via four action steps: 1.) establish a P-16 Education Council in each state; 2.) simultaneously address and align the five P-16 system components; 3.) engage business and higher education in more effective P-16 reform roles; and 4.) implement coordinated national and state public information programs.

In addition to the report, BHEF published a companion handbook to guide business, higher education, and policy leaders in implementing the proposed action steps. Both the report and handbook are available at: http://www.bhef.com/

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Useful Stats
Industrial R&D Performance by State, 1998-2001
The National Science Foundation (NSF) recently released a report detailing a full range of statistics yielded by its 2001 Survey of Industrial Research and Development. Data show 31 states experienced a 10 percent or greater increase in their industrial R&D performance over a four-year period, 1998 to 2001. Twelve states experienced declines during the same period.

Using NSF data, SSTI has prepared a table ranking states by the percent change in their R&D performance for the 1998-2001 period. North Dakota leads all states in the measure, followed by Vermont and South Dakota. The R&D performed by North Dakota industry in 2001 ($347 million) was six-and-a-half times that of its 1998 output ($46 million). Vermont and South Dakota posted increases of 197 percent and 118 percent, respectively. EPSCoR states captured the seven of the top 10 three spots on the table, while the U.S. as a whole saw industry-performed R&D go up 17.3 percent.

Beginning with 2001, the NSF report notes, statistics for total and federally funded industrial R&D exclude data for Federally Funded Research and Development Centers, which explains the decline in several states. Data collected on federal support of R&D activities are shown in several tables in the report. Statistics on industrial funding of R&D undertaken by colleges and universities are covered in NSF's annual academic R&D survey and are excluded from the current report.

The NSF report is available at: http://www.nsf.gov/statistics/nsf05305/

The SSTI table is available at: http://www.ssti.org/Digest/Tables/031405t.htm

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People

Kentucky Gov. Ernie Fletcher appointed Denise Bentley to serve as liason to the Louisville Metro and Lexington-Fayette Urban County Government councils under the Governor’s Office for Local Development. The position is newly created.

Eric Davis, president of the Greater Owensboro Chamber of Commerce and Economic Development Corp, resigned last week.

The Purdue Research Foundation appointed Kathy DeGuilio-Fox to serve as interim executive director of the Purdue Technology Center of Northwest Indiana.

Jack Faris is the new president of the Washington Biotechnology & Biomedical Association.

On Friday, President Bush announced his intention to nominate Michael D. Griffin, of Virginia, to be administrator of the National Aeronautics and Space Administration. Dr. Griffin currently serves as Space Department Head at Johns Hopkins University Applied Physics Laboratory. Prior to that, he was president and chief operating officer of In-Q-Tel, Inc.

George "Mick" Stadler is the new CEO for the incubator at the Rochester Institute of Technology.

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