In the March 28, 2005 Issue:

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Recent Research
Will Nanotech Be the Next Seed of Technology Growth?
Nearly every university and community seeks to cultivate a niche in new technologies ­ nurturing venture capital, technology transfer and knowledge networks. Many policies have focused on biotechnology as the kernel of future economic development. Meanwhile, budding nanotechnology has started to show its first blooms in the commercial sector.

Will nanotech be the next technology revolution? How can a community tell whether its scientists are tilling nanotech for new materials? How can one create a fertile place for nanotechnology to germinate, thrive and bear commercial fruit? The authors of a working paper published this month by the National Bureau of Economic Research (NBER) attempt to answer these questions.

In Socio-economic Impact of Nanoscale Science: Initial Results and NanoBank, Dr. Lynne Zucker and Dr. Michael Darby of University of California, Los Angeles contend, "We are witnessing a new technology revolution in nanotech with implications for both society and the economy." They note that nanotech ­ the use of novel properties and functions that occur at the nanoscale ­ shares breakthrough characteristics with biotech by emerging from basic science after a key instrument innovation.

Based on preliminary results from their work with NanoBank, a public data resource they have compiled, Zucker and Darby observe:

Ten regions account for more than half (54 percent) of all nanotech-related articles with at least one U.S. author. New York Metro, the California Bay Area and Greater Los Angeles hold the top three regional positions, with the three combined claiming more than one-quarter of all nanotech research articles. The next seven regions, accounting for another 25 percent, are in descending order: Boston Route 128, Washington-Baltimore, Chicago Metro, Champaign-Urbana, Detroit-Ann Arbor Metro, North Carolina Research Triangle, and Philadelphia-Wilmington-Atlantic City. Notably, these regions all have academic institutions with strong nano- science and technology, but would not be predicted based on size, economy or overall science base.

The U.S. continues to dominate the field, especially in highly cited articles. Nonetheless, Zucker and Darby note the American share of these quality articles has declined in recent years, as other nations build their expertise in nanotech. [Note: The FY 2006 budget request for the National Nanotechnology Initiative is 2 percent less than the FY 2005 appropriation, marking what could be the program's first cut since receiving its first appropriation as a coordinated federal activity in 2001.]

Leaping the divide between nanotech materials created in the lab and the application of these materials in the commercial sector may be difficult, since the best knowledge comes from working directly with the primary scientists or their students. Based on a subset of data from California, the authors found the number of highly cited articles and average wages determined when and where firms entered the nanotech market. Zucker and Darby temper these results by noting the small sample size and the limits of their current data set.

The NanoBank relates myriad public information, including published articles, patents, public funding grants, private financing arrangements, and commercial innovation and production. Academics, scientists and government officials will be able to use the web-deployed digital library, once online, to identify nano-scale research, where it occurs, who is involved, and related social and economic issues. According to Zucker and Darby, Nanobank “will trace the individuals and organizations creating and using nano-science and technology across a number of fields.”

Socio-economic Impact of Nanoscale Science: Initial Results and NanoBank is available for $5 from NBER at: http://www.nber.org/papers/w11181

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Hawaii Lawmakers Pass Two Bills to Encourage VC Investment
To encourage investment in high tech companies, the Hawaii Senate recently passed Senate Bill 1695, authorizing $120 million for the State Private Investment Fund (SPIF) and Senate Bill 1696 to allow fiduciaries to make equity investments.

Under the SPIF program, the state could use transferable tax credits in order to guarantee commercial bank loans to professional venture capital (VC) firms. These firms, in turn, would use the loans to invest in local high-tech companies.

SPIF was created by the Legislature in 2004, although no funds were directed to it at the time. The fund is designed to function as a financing tool to provide a consistent source of capital to meet the demands of Hawaii's high tech industries, according to the Senate Majority Caucus.

Following the lead of other states, the House Economic Development & Business Concerns committee also passed SB 1696 to encourage institutional investors, such as the Employees' Retirement System, to invest a small portion of assets in local high tech companies. Under the bill, fiduciaries could invest up to 2.5 percent of their funds, but no more than 10 percent of their capital.

Both bills are available through the Hawaii Legislature at: http://www.capitol.hawaii.gov/

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Changing Mindset Critical for Arizona Bioscience Success, Study Advises
Arizona must begin viewing medical and educational institutions as a major economic driver of the state economy in order to become a leader in the biosciences industry, according to a new report from the Arizona Board of Regents.

Instead of Arizona pouring millions of dollars into university research institutions as the only way to boost its bioscience sector, the report recommends the state first think differently about the "Meds and Eds" institutions and their impact on the economy. Arizona has held a narrow interpretation of these institutions in the past, and - rather than seeing them as separate entities - the state needs to view its institutions as collective assets that will help it advance, the author argues.

The report, Meds and Eds: The Key to Arizona Leapfrogging Ahead in the 21st Century, probes the realities of Arizona becoming a leader in biosciences and calls upon the state to take action through five steps. Arizona faces two major challenges, the report observes. The state faces kinks in its Meds and Eds base, including talent shortages, research weakness and a lack of medical schools, and is behind the curve in these areas. Simply playing catch-up, the report notes, will not work.

The author suggests Arizona follow the lead of younger regions such as Austin and San Diego, which have leapfrogged the competition in science and technology by creating new assets and combining them with existing ones in a new way. These two regions should act as a playbook for Arizona as it moves forward because both have demonstrated the power of knowledge assets, talent, proximity, collaboration and bold moves, the report states.

To encourage state leaders to think strategically about its goals, the report has developed a strategic framework that reveals opportunity by merging health research and health care. Working in its favor is the state's strong foundation, according to the report. Arizona already has taken important steps through actions such as the Biosciences Roadmap (see the Dec. 6, 2002 issue of the Digest), the creation of TGen, and Proposition 301, a sales tax increase to support research at the state's universities.

Although the state will not lead in medical discoveries unless its universities and research centers are loaded with top talent and research dollars, perhaps most important to Arizona's success in leapfrogging ahead is its ability to link these institution's agendas together, the report concludes. In synchronizing their resources and priorities with local technology enterprises, they can form the interconnections that foster knowledge transform, collaboration, and support that cannot easily be replicated by other regions.

Meds and Eds: The Key to Arizona Leapfrogging Ahead in the 21st Century is available from the Arizona Board of Regents at: http://www.abor.asu.edu/

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SW Virginia Study Identifies Challenges to Growth for Small Metros
While some regional assessments attempt to benchmark economic indicators of smaller regions to those of notable accomplishment such as Silicon Valley or Research Triangle Park, a new study from the Center for Regional Strategies at Virginia Tech compares regions with similar economic and demographic characteristics, a potentially more useful model for other metro areas.

Researchers at Virginia Tech's Center for Regional Strategies identified six regions similar to the New Century Region (NCR), which encompasses 12 counties and the cities of Roanoke, Covington, Radford and Salem, and tracked various economic indicators from 1990 to 2000. Benchmark regions for comparison included Colorado Springs and Ft. Collins, Colo.; Athens, Ga.; Asheville, N.C.; Knoxville, Tenn.; and Lexington, Ky. Eleven fundamental categories of regional life with which to compare to NCR were identified as employment, income, housing, education, health, environment, public safety, arts and culture, infrastructure, and social capital.

According to the study, four of the most troubling gaps found in NCR are interrelated. The region's mean earnings were the lowest of the benchmark areas, and it had the fewest knowledge-based jobs, the highest rate of those lacking a high school diploma, and the lowest rate of those with a bachelor's degree or higher. Researchers concluded that having more of its population earn a college degree would lead to a more skilled workforce, in turn attracting higher-paying jobs, which would raise the mean earnings.

Per capita income for NCR in 1990 was $12,384 and grew only to $19,272 over the 10-year period, while the average national per capital income in 2000 was $21,587. The report compares this figure to Ft. Collins, which had a similar per capita income in 1990 of $12,883. However, per capita income for this region grew to $21,709 by 2000. In measuring employment, the study found that total employment growth for NCR was the lowest among the benchmark regions, but the region's unemployment rate also was the lowest. Average income and earnings, however, were less than those of the benchmark regions.

With the differences between NCR and the benchmark regions identified, the next steps are to research the causes, according to the report. Based on findings from the study, researchers recommended six issues be included in future research:

[Editor's Note: While the studies of the New Century region are ongoing and policy recommendations have yet to be implemented, SSTI cautions other areas to consider that efforts to increase the number of college graduates - without a strong support system to encourage locally based entrepreneurship and innovation - could result in a brain drain as new grads seek higher-wage opportunities in other metro areas. Virginia Tech and the Greater Roanoke area have a number of recognized tech-based economic development initiatives that should serve integral components for strengthening the NCR regional innovation system.]

The study, Benchmark Analysis for the New Century Region: Lessons from Benchmark Regions, is available at: http://www.regionalstrategies.org

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Useful Stats
S&E Grad Students & Post-Docs by State, 2002
The National Science Foundation (NSF) has released Graduate Students and Postdoctorates in Science and Engineering: Fall 2002, a collection of 54 statistical tables presenting the distribution of graduate students in science and engineering (S&E) across population segments, fields of science or engineering, and by college and state. Overall long-term trends for S&E graduate students from 1975 to 2002 and short-term trends from 1995 to 2002 by detailed fields are presented as well.

Using this report and NSF data regarding 2002 federal R&D obligations to academic institutions, SSTI has prepared a table presenting the average federal R&D obligation by state standardized by S&E graduate student. While federal R&D obligations to colleges and universities are not a function of the number of students enrolled at the institutions, the measure of federal R&D obligations per student seems potentially more relevant for comparison among states than a measure of federal R&D obligations to academic institutions based on population or "per capita."

A case could be argued that S&E students attending R&D-intensive institutions (i.e. with higher federal R&D obligations per student) may be more engaged in research-related activities while attending school. Thus, they may be more likely to pursue research-related occupations after graduation and/or may be more involved in research leading to innovation and commercialization (i.e. technology entrepreneurship) than students in institutions with lower-than-average R&D obligations. [NOTE: SSTI invites any of the academic researchers and econometrically-minded policy wonks among the Digest readership to add a few appropriate variables and do the regression for us.]

The measure may not be as explanatory as hoped, however. For instance, federal R&D obligations per S&E student for Maryland and Vermont are, respectively, $127,590 and $123,940. These figures are nearly triple the national average and are $30,000 higher than third-ranked Washington at $95,800.

In Maryland's case, R&D expenditures at Johns Hopkins University represent 87.6 percent of the state total, yet the institution's science and engineering student base is only 19.8 percent of the total. This may be due in large part by the presence of Applied Physics Laboratory at Johns Hopkins University. The Lab does not have an academic mission but falls within the school's R&D total, making JHU the top institution for federal S&E obligations each year by more than doubling the total for second-place University of Washington. JHU alone captures 16.7 percent of all defense S&E obligations to universities.

While technically different from the Applied Physics Lab, the very similar Federally-Funded R&D Centers (FFRDCs) are excluded from the NSF data, leaving JHU's figures as a significant outlier from the rest of the institutions and skewing Maryland's results.

In the case of Vermont, the high figure results in part from the small population of 601 S&E grad students in the denominator. More rigorous statistical analysis involving academic-related entrepreneurial activities would be required to see if these students and tech entrepreneurship in Vermont are benefiting from the apparently research-intensive surroundings.

The table presenting all 50 states, Puerto Rico and the District of Columbia is available at: http://www.ssti.org/Digest/Tables/032805t.htm

Graduate Students and Postdoctorates in Science and Engineering: Fall 2002 is available at: http://www.nsf.gov/statistics/nsf05310/htmstart.htm

Comments on the measure and outcome of the regression may be sent to skinner@ssti.org.

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TBED Organizations & People Update

Organizations
The influential 5,600-member American Association for Higher Education announced last Thursday that it would close by the end of the year due to financial difficulties stemming in part from a sharp decline in membership.

Two Southern Arizona tech councils, theInformation Technology Association of Southern Arizona and the Southern Arizona Industry and Aerospace Alliance, decided to merge to have the combined financial resources for a full-time executive director, according to the March 23 edition of the Tucson Citizen.

To reduce administrative costs by up to $500,000 and to improve operational efficiencies, the Slater Fund Board of Directors has approved plans to consolidate Rhode Island's four Slater Centers into a single entity, the Slater Technology Fund, Inc. The fund will retain its four technology thrusts of biomedical technology, interactive technologies, design and manufacturing, and marine and environmental technologies.

The Iowa Entrepreneurs Coalition has been formed to help advance an innovation- and entrepreneur-friendly agenda in the Iowa legislature.

People
The Georgia Department of Economic Development announced William Boone is the first director for the new Agricultural Center of Innovation.

Dyan Brasington, former president of the Technology Council of Maryland, is the new director of economic and workforce development at Towson University.

Massachusetts Gov. Mitt Romney promoted Renee Fry to serve as director of the Department of Business and Technology, the state agency tasked with retaining and attracting jobs and steering economic policy throughout the Commonwealth.

Sylvia Goldman has resigned as director of the Louisiana Department of Economic Development, effective at the end of March.

Wade Lange, president and CEO of the Indiana Health Industry Forum, announced he will be leaving the organization this summer to return to the private sector.

Greater Baltimore Technology Council executive director Penny Lewandowski is leaving at the end of May to join the Edward Lowe Foundation in Detroit. Assistant director Steve Kovak has been named her successor.

Jerry Lonergan, president of Kansas, Inc., is resigning effective April 1. A bill to dissolve the state's policy and planning organization passed the Kansas Senate last week.

Robert Rosner, chief scientist for the Argonne National Laboratory, will be the lab's new director.

Craig Watters is serving as interim director of the Falcone Center for Entrepreneurship at Syracuse University. Past director Nola Miyasaki has relocated to Hawaii to join a biotech company.

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