August 15, 2005 -- SSTI Weekly Digest

In the August 15, 2005 Issue:

Finding Solutions to Cracks in the Basement

Survey Reveals Graduate Student Enrollment Up in S&E, but Declines for Foreign Students

Czech Republic, Singapore to Double R&D Investments

Recent Research: The Economic Compass Points Back to the Core

People

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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Finding Solutions to Cracks in the Basement
If the innovation powerhouse that represents the U.S. economy for the past century were a cinder block foundation of a house, then China and India would present two of the more significant cracks. These two great nations may grab the headlines, but the improved innovation and research capacities of any country provide new challenges for continued U.S. domination of the world's economy. As this week's article on the Czech Republic and Singapore reveals, these are just two more blocks in the U.S. wall to show stress fractures.
"Now, hold on SSTI," you may be saying to yourself. "You want me to lose sleep over the smaller economies, too?" Worry and lose sleep? No. But we do want more people to wake up to what's going on in the basement.

As this week's article on the latest National Science Foundation Issue Brief points out, the continuing decline in foreign students pursing graduate science and engineering degrees may give cause for concern. The U.S. has always been dependent on immigrant talent for science and innovation, but that is likely to become a less reliable strategy as opportunities grow at home for foreign nationals to engage in R&D.

And opportunity is growing abroad, as the Digest has tried to present a few samples from around the world during the past year:

U.S. Universities Partner with India for Satellite Engineering Education Program, Aug. 8, 2005

France Doubles Funding for R&D and Industrial Innovation, July 11, 2005

Ship Out to Shape Up: Pakistan Sending 15,000 Students Abroad, May 30, 2005

China's Goal: Quadruple GDP by 2020, May 30, 2005

European Commission Commits $5.4B (US) toward Innovation, May 2, 2005

Australia takes on [Broadband access] issue nationally, Mar. 21, 2005

New TBED Efforts to Make Ontario Leader In Innovation, Feb. 21, 2005

From Armenia to Zambia, Most of World Embracing Innovation, Dec. 6, 2004

Funding Scheme to Support R&D for Large Companies in Scotland, Sept. 27, 2004

In response to the growing recognition that more needs to be done on the federal level, many of the country's most respected CEOs and organizations have issued papers, plans, strategies and calls to action for an improved national innovation policy. The Digest also has covered many of these during the past nine months, including last week's article on Tapping America's Potential: The Education for Innovation Initiative. In our crumbling foundation analogy, these are the brick masons, concrete experts and foundation restoration specialists telling us what to do: We have to change.

Unfortunately, while most of the focus of these plans is national, the real work of implementing most of a better innovation strategy falls on states and communities across the country. We need to broaden participation in science and entrepreneurship to underrepresented demographic groups such as women and minorities. We need to integrate workforce programs and TBED strategies more closely to prepare a larger knowledge-based talent pool. We need to encourage university-based research and innovation. We need to facilitate private investment for commercializing promising technologies. We need to create a greater sense of regionalism and collaboration to reflect the win-win potential of tech-based economic development (TBED).

Fortunately, most of the Digest readership is up to the task -- or you wouldn't subscribe to this newsletter!

SSTI's conference, to be held Oct. 19-21 in Atlanta, provides the perfect opportunity to learn about what state and local TBED practitioners are doing to take advantage of the opportunities presented by globalization. A quick snapshot of the exciting breakout sessions offered this year is highlighted below. Session times, speaker names and backgrounds are available on SSTI's conference website: http://www.ssti.org/Conf05/schedule.htm

Even Angels Get the Blues: Maintaining Momentum for Investor Groups. Creating an angel investor group is an important first step for increasing seed capital in your region. What do you do after the group forms and the initial wave of enthusiasm wanes? Most angels handle only a limited number of investments at once, so how do you maintain momentum to keep the group active and attract new investors? In what should be a lively discussion, we'll hear from individuals who have handled this challenge with great success. An Advanced Session.

Fostering Cooperation for Regional Growth: A Roundtable Discussion. The realities facing America demand that traditional battle lines for economic development be erased and forgotten. To be competitive in a knowledge-based, global economy that is increasingly level at all stages of innovation and production will require a coming together of communities, institutions, organizations and people unseen since World War II. In this session, using work in Tennessee as a model, we'll discuss how to foster regional cooperation that will change mindsets and rejuvenate entire organizations to sustain economic growth.

Moving Broadband Beyond the Muni v. Telco Debate. "Free Wireless for All" or "Unfair Competition"? While the battle for municipal broadband options may be decided in state legislatures and courts, information and communication technologies (ICT) will remain the structural backbone of the global economy. Access = Economic Survival. In this important session, we'll move beyond the public broadband discussion to explore ICT challenges and impacts for your region. We'll also examine a resourceful template for guiding effective community ICT decision-making.

The Changing State-University Relationship: Trends and Implications. Universities will play a critical role in our continued ability to compete globally, both as an innovation source and a producer of talent. In recent years, though, there’s been a changing relationship in some states between universities and state government, including privatization of public universities and the addition of economic development as a fundamental mission. In this session, we'll examine what the trends are in these relationships and the implications not only to the universities, but also to the country's economic standing. An Advanced Session.

Encouraging Women Entrepreneurship. Sustaining U.S. dominance in innovation and entrepreneurship will require greater involvement by a larger percentage of our population. The paucity of women in science, technology and entrepreneurship represents an enormous opportunity for improvement. In this session, we'll consider unique issues for encouraging entrepreneurship among women and examine promising approaches being taken.

Keeping TBED Relevant: A Roundtable Discussion. To be effective, TBED programs must change with the times - and, have the times been changing! Venture capitalists are investing later and in larger amounts. Regions are emphasizing the life sciences, but those companies take longer to bring products to market and achieve success. And we haven't even mentioned China and India. In this roundtable discussion, we'll consider the changes TBED programs are making (or should be making) to stay relevant. An Advanced Session.

Developing a Workforce Strategy that Works. Ensuring a supply of skilled workers is a crucial element in building a tech-based economy, and a shortage of capable workers is one of the most common complaints from tech companies. Having a rational workforce strategy is an important first step. In this session, we'll consider how to: analyze your economy to determine which occupations are most needed for the future; build a workforce strategy around that analysis; and, take advantage of the significant changes in workforce training programs at the U.S. Department of Labor.

Higher Ed as the Basis for Economic Growth: The Georgia Story. Over the last 15 years, no state has been more focused on investing in higher education to encourage sustainable economic prosperity than Georgia, including creating one of the world's most widely emulated TBED models: the Georgia Research Alliance. In this session, we'll examine Georgia's full-spectrum strategy for encouraging university-oriented TBED through workforce preparedness, research funding, infrastructure development, technology commercialization, and regional branding.

VC Isn't Everything: Raising Capital for the Balance of Your Portfolio. Venture capital is a widely sought resource by TBED practitioners, but in reality, relatively few companies ever receive VC investment. For most regions, particularly rural areas, focusing on tech firms that are solid performers but never likely to be VC targets can be a smart strategy for economic development. In this session, we'll examine the successful approach of one TBED organization and explore other financing options available to these companies.

New Commercialization Strategies for University Research. The topic of commercializing university research is a perennial favorite at SSTI conferences for good reason: Each year we hear lessons learned from some of the nation's best programs. In recent years, several new approaches have been launched to address gaps in technology transfer systems at public and private universities. So, for 2005, we've asked the cream of this new crop – representing different strategies for different situations – to join us for an engaging session that will offer applications for any institution. An Advanced Session.

Creating Successful Workforce/TBED Partnerships. Historically, there has been a wide disconnect between workforce programs and TBED. That's all changing, thanks to the increased importance of science & tech education and recent modifications to federal workforce programs. Key to successful integration, though, is understanding the workforce system, including the culture of the workforce boards, how they measure success, and the language that they use. We'll explore all of these in a session focused on creating successful partnerships with the workforce system.

Rethinking Regional Innovation and Change. Our understanding of why innovation occurs where it does has been aided greatly by the policy analysis of academicians around the world. Translating that research into effective TBED policies and programs takes time and thought, though -- particularly when major changes are needed in how communities approach economic growth. In this session, two internationally-recognized researchers will discuss new ideas about TBED and reconsider current ones, with the aim of getting the latest research findings into practitioners' hands as quickly as possible. An Advanced Session.

Embedding Entrepreneurship in Universities: New Approaches. Most thriving regions have universities that are actively engaged in their local economy, including assisting entrepreneurs and encouraging entrepreneurship among faculty and students. In recent years, some exciting initiatives have been started to integrate entrepreneurship into all aspects of a university and to create an entrepreneurial climate within academia. In this session, we'll examine two of the most promising approaches being undertaken.

New Tools for Web-based TBED. Significant advances and economies in information technology led to great productivity growth, the dot-com phenomenon, and the flattening of the world, to borrow a phrase. It took awhile, but the field of TBED is finally seeing powerful web applications to expand regional innovation capacity. In this session, we'll explore how two organizations developed and deployed different web tools to foster success within their communities of researchers and entrepreneurs.

Realizing Results from S&T Planning: The Lessons of Implementation. A fundamental rule of TBED is to start with a strategic plan. You probably can glance at your office bookcase to see one or more of your own plans gathering dust. Imagine how different things might be, though, if your community or state had actually implemented your plan. In this thought-provoking session, we'll take brave looks backward and forward, several years after two plans were developed and implemented to see what worked - and what didn't.

Sound Strategies for Encouraging Regional Entrepreneurship. Delivering innovative and effective assistance to entrepreneurs is possible, whether your area has less than 100,000 residents or more than a million. The proof, though, is in the strength of the companies created, not the size of your program. We'll take an in-depth look at the approaches deployed in Grand Forks, N.D., and Rochester, N.Y. - considering initiatives they selected and why, the success they've had, and lessons they've learned that can be applied to practically any area of the country.

Alternative Energy and TBED: A Powerful Opportunity. State biotech and nanotech investments may be grabbing all the headlines, but one of the most pressing issues for U.S. competitiveness is developing a 21st century energy system. Leadership for energy innovation is falling increasingly on the many states and regions making important investments toward the development of alternative and renewable energies. We'll take a look at exactly what alternative energy is, its market potential, and what two states are doing to build the industry in their economies.

Globalizing Your TBED Strategy: Developing International Partnerships. We all know that we’re competing in a global economy. What exactly does that mean, though? Increasingly, smart TBED organizations see globalization as an opportunity rather than a threat. In this session, we'll examine the experience of two organizations in creating exciting partnerships with other countries, their motivations in doing so, the benefits accrued, and lessons learned. With relationships in countries as varied as China and France, the presenters have experience that spans the globe.

Building Effective University-Industry Partnerships. A key to having a tech-based economy is developing effective partnerships between universities and companies. But that’s easier said than done and, if you've been in the field long, you know academia and industry often talk past each other and have different expectations of a relationship. Obviously though, based on the success of two of the nation's longest-running programs, these differences can be overcome. This session will consider exactly how they've done it. An Advanced Session

Join your colleagues from across the country as we gather in Atlanta to Invest in a Brighter Future: Building Tech-Based Economies. Early registration ends Sept 17. Online registration is available at: https://www.ssti.org/Conf05/registration.htm

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Survey Reveals Graduate Student Enrollment Up in S&E, but Declines for Foreign Students
A comprehensive survey of 12,000 departments within 591 institutions of higher education in the U.S. reveals that, in 2003, graduate student enrollment in S&E programs increased by 4 percent over the previous year and 9 percent over the past decade. Foreign student enrollment, however, decreased 8 percent in 2003 after falling 6 percent the year before.

The National Science Foundation InfoBrief reports similar findings to a survey conducted last year by the Council of Graduate Students (CGS) (see the Nov. 8 issue of the Digest). According to the CGS study, which surveyed 450 institutions of higher education, international graduate student applications declined across all major fields of study with the largest drop in engineering, where applications declined 36 percent from 2003 to 2004. In terms of enrollment, engineering also saw the largest decrease 24 percent from the previous year.

Overall declines in first-time, full-time enrollment of foreign students did not occur in all S&E fields, according to the NSF InfoBrief. Declines were seen in agricultural sciences, computer sciences, earth, atmospheric and ocean sciences, and engineering. However, foreign enrollment increased in biological sciences, mathematical sciences, physical sciences, and psychology, the report states.

Other promising findings reveal that overall graduate enrollment grew in all S&E fields and in all subfields except computer sciences, which dropped 3 percent over the previous year. The proportion of women among S&E graduates grew from 36 percent in 1993 to 42 percent a decade later in 2003. The number of male graduate students increased by 4 percent over the previous year. Enrollment of minority students in graduate S&E programs also has grown over the past 10 years.

The NSF InfoBrief, Graduate Enrollment in Science and Engineering Programs Up in 2003, But Declines for First-Time Foreign Students, is available at: http://www.nsf.gov/statistics/infbrief/nsf05317/

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Czech Republic, Singapore to Double R&D Investments
While the U.S. commitment to science is threatened by flattening federal R&D investments, two more countries demonstrate their shared belief that the way to economic prosperity is through science and innovation.

Czech Republic
The Czech Republic has outlined a five-year economic development plan that calls for doubling R&D's share of the gross domestic product by 2010. To achieve that goal requires increasing government spending for science and innovation by 20-25 percent annually, according to Martin Jahn, deputy prime minister for the economy.

The country of 10.2 million people (2005 est.) currently only spends 0.6 percent of its gross domestic product (GDP) on science. The goal is to raise that to 1.3 percent by 2010, still well below the European average of 1.9 percent but ambitious nonetheless for a former Soviet block nation. Government spending will have to increase by at least 2-4 billion Czech korunas (approx. $84.3 million to $168.6 million US) each year for the next five years to meet the goal. [Note to states: This is real money, not borrowed through long-term revenue bonds.] For 2006, Czech scientists are slated to receive 18.2 billion Czech korunas ($767 million US).

To help encourage innovation, the country also is working to host the World Women Entrepreneurs Congress in 2007, increasing public investment capital availability by 200 million Czech korunas in 2006, and adjusting immigration policy with an "aim to keep young scientists in the Czech Republic," Jahn said.

Singapore
While the Czech Republic is motivated by raising its per capita GDP to the European average, the argument for doubling R&D expenditures in Singapore sounds very similar to those raised by many in the U.S.: the rise of China and India. The Ministerial Committee on Research and Development (MCRD), chaired by Deputy Prime Minister Tony Tan, has outlined a strategy to raise R&D's share of the country's GDP to 3 percent within the next five years.

The plan calls for public investment of $12 billion Singapore ($7.22 billion US) during the next five years in selected technologies areas such as current focus areas of electronics, chemicals and marine engineering, and biomedical sciences. In addition, new focus should be given to environmental and water technologies, and interactive digital media.

Public research investments would be more balanced under the new plan, Tan said, between investigator-led and mission-oriented research. Both academic and industry research sectors would receive increased funding from the national government. The academic research fund will nearly double from $550 million Singapore for fiscal years 2001-2005 to $1.05 billion Singapore for the five-year 2006-2010 planning period.

The final recommendation calls for reorganizing the country's research structure using the models of the Innovation Platform in the Netherlands and the Science and Technology Policy Council of Finland. Singapore's new entity would be called the Research, Innovation and Enterprise Council (REIC). In addition to advising the Cabinet on policy issues, REIC would oversee the establishment of a new $5 billion Singapore National Research Foundation.

In sum, total public sector support for research and innovation in Singapore, a country of 4.4 million people, would rise from $5 billion in FY 2001-2005 to $12 billion during FY 2006-2010 under the plan. MCRD's recommendations are being considered as the national government develops final five-year budget figures, Tan said.

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Recent Research
The Economic Compass Points Back to the Core
Should policymakers focus on urban core centers as keys to economic growth or seek greater economic equity in the less developed periphery? A new study on regional policy and economic geography suggest policies should be directed toward core growth.

In New Economic Geography, Empirics, and Regional Policy, the authors examine historic development patterns in Europe and test a new geographic model with time series data. Authors Steven Brakman, Harry Garretsen, Joeri Gorter, Albert van der Horst, and Marc Schramm conclude that economic activity quickly balances in favor of existing central clusters regardless of policies. In fact, policies focused on building regional infrastructure, as a way to pull commerce into less developed regions, often results in drawing activity back to core areas over time.

The study highlights the following policy-related conclusions:

Greater economic concentrations within a core cluster enhance overall productivity of a region; however, the core experiences disproportionately more growth than the outlying regions.

Core clusters account for a disproportionate amount of innovation, as measured by patents.

Cores have a better chance of holding on to economic activity, particularly in an increasingly mobile market.

Large infrastructure projects do not always disperse economic activity. At a certain point, greater access to peripheral regions pulls economic activity back to the core.

Policy makers addressing regional wage disparity should target workers in outlying regions, given the general immobility of labor.

The authors also examine industries and found that once established, these industries tend to remain in existing centers over long stretches of time. The data also indicate that the overall concentration of industries in Europe has fallen in relation to services.

Policymakers must navigate between their concerns about equity and their desire for growth. The authors note that efforts to boost competitiveness of lagging regions usually fail to counter the circular, magnetic pull of core clusters. If you favor growth. steer your policies towards existing urban cores.

New Economic Geography, Empirics, and Regional Policy is available at: http://d.repec.org/n?u=RePEc:cpb:spcial:56&r=all

Links to this paper and more than 1,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at http://www.tbedresourcecenter.org/.

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People
Arizona State University professor James Collins is the new assistant director for biological sciences at the National Science Foundation.

Larry Cox is the new director of the Ball State University Entrepreneurship Program, effective Aug. 22.

Louisiana Department of Economic Development announced Robert Fudickar will be the technology industry director for the state agency.

Russel Hancock is the new president and CEO of Joint Venture: Silicon Valley.

The U.S. Department of Commerce is promoting Chris Israel to serve as coordinator for international intellectual property enforcement. The new position will coordinate interagency protection efforts to combat international IP piracy.

William "Bill" Mahoney is the new president and CEO of the South Carolina Research Authority.

Joan Myers, president and CEO of Raleigh-based N.C. Technology Association, is the 2005-2007 president for the Council of Regional Information Technology Associations (CRITA).

Alaska Gov. Frank Murkowski appointed Bill Noll as commissioner of the Department of Commerce, Community, and Economic Development. Noll has been serving as the governor's communications director.

Jack Pfunder is the new executive director of the Manufacturers Resource Center in Bethlehem, Pa.

Pat Snider, the first CEO for BioGenerator in St. Louis, announced her departure from the two-year-old organization by the end of the year.

The new director of the Burton D. Morgan Center for Entrepreneurship at Purdue University will be Jerry Woodall.

President Bush is nominating John Young Jr. to serve as director of Defense Research & Engineering. Young is currently Assistant Secretary of the Navy for Research, Development and Acquisition.

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