In the October 3, 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.

2006 Budget CR Puts Hold on Most Federal Grant Opportunities
Keeping with most years in recent memory, the new federal fiscal year began Oct. 1 without Congress approving a budget for nearly all of the national government. With Hurricane Katrina relief and aftermath putting unprecedented demands on the Treasury and Congress, legislators quickly passed a Continuing Resolution last Thursday and Friday to keep the government open through Nov. 18.

Only the legislative and Interior-Environment budgets have been enacted and the Homeland Security appropriations bill has moved out of conference. The Continuing Resolution, H.J. Res. 68, will fund programs covered by the bill at the lowest of three levels: fiscal year 2005 funding, the fiscal year 2006 level approved by the House, or the FY 2006 level approved by the Senate.  Media reports state exceptions will be granted for certain agencies and programs, including NASA, the State Department, Medicare, and the wars in Iraq and Afghanistan.

Budgets for the National Institutes of Health, the National Science Foundation (NSF), and the Department of Energy Office of Science would be frozen at FY05 levels, since the House and Senate versions of the bills appropriates more funds for the three agencies in FY06. An exception for NSF is made in Sec. 126 of the resolution, which authorizes NSF to fund Arctic and Antarctic icebreaking activities, reflecting the transfer of this activity from the Coast Guard to NSF.

The resolution also includes language prohibiting affected agencies from initiating or resuming programs or procurements not funded in FY 2005 or from awarding new grants and certain other forms of assistance during the period.

The Association of American Universities states House Appropriations Committee Chairman Jerry Lewis (R-CA) has said that funding programs at the lowest level was intended to keep pressure on the Senate to approve its regular FY06 appropriations bills and to encourage both chambers to reach conference agreements on the funding bills.

Continuing Resolutions, however, have been extended repeatedly in some years, dragging the appropriations process well into winter. More information is available at: http://appropriations.house.gov/

return to the top of the page

Amid Criticism, Industry Canada Transforms Focus of Technologies Program
To support innovation and technology with increased accessibility for small-and medium-sized firms, Canada's Minister of Industry, David Emerson, announced a new program that will replace Technology Partnerships Canada (TPC).

Minister Emerson said in a press release that the new program will be accessible to more industries, tightly focused on transformative technologies, and more transparent to taxpayers. The goal of TPC is to ensure leading-edge industrial research continues in Canada and that Canadian firms remain competitive in the global economy.

Created in 1996, TPC has been an operating agency of Industry Canada, providing financial support for strategic R&D and demonstration projects including Environmental Technologies, Aerospace and Defense, and Enabling Technologies. However, since its inception, the program has been riddled with criticism. Critics have accused the program of abysmal repayment rates on its investments, lack of clarity on eligibility, and favoritism toward large Liberal party-supporting corporations, according to an article in The Globe and Mail. In addition, a recent scandal has surfaced over investment money being used by clients to pay illegal commissions to lobbyists, the article reports.

Minister Emerson, who has acknowledged accountability issues with the program, recently unveiled a status report on audits into the compliance of some recipient companies. A routine audit by Industry Canada uncovered evidence of company non-compliance with its agreement, and a subsequent forensic audit found four companies to be in violation of their agreements with the government, according to a press release. Minister Emerson reiterated that the new program will seek outside advice to ensure its pledge of "performance at the highest standard of governance and due diligence."

Under the Transformative Technologies Program, the federal government will share with Canadian industry the costs of innovation and technology adoption projects. Rather than targeting selected technology sectors as TPC did, the new program will be open to all Canadian businesses. Specific strategies to support the aerospace and defense strategies, however, will proceed at their current funding levels. Details for the new program are expected in the coming year.

More information is available at: http://tpc-ptc.ic.gc.ca/epic/internet/intpc-ptc.nsf/en/Home

return to the top of the page

Kauffman Foundation Unveils iBridge to Facilitate University Technology Transfer
Designed to ease the transaction burden on university technology transfer offices and encourage more open and efficient access to research, the Kauffman Foundation recently unveiled iBridge, a web-based platform under the Kauffman Innovation Network.

The flexible nature of the iBridge platform allows universities to adapt it to best complement their existing processes for collaboration and technology transfer, according to a press release from the Kauffman Foundation. The application may be used by universities to license and distribute a variety of information including software, research tools, databases, teaching materials, surveys, and reference materials. To safeguard a university's interest in its intellectual property, posting a discovery on the website formally discloses that discovery and starts a record-keeping file.

The program also aims to expand the number and scope of collaborative relationships by increasing awareness of existing research across the country. According to the Kauffman Foundation, these relationships are a critical component in advancing new discoveries and may lead to more ideas and inventions. Research from the Kauffman Foundation also indicates there is growing evidence that innovations residing in universities remain dormant far too long. While hundreds of universities now have tech-transfer offices, few can afford to staff them optimally for all the work of evaluating and managing research, a key obstacle in unlocking innovations, said the Kauffman Foundation.

Seven universities throughout the U.S. are piloting the application in the coming months. To date, Washington University in St. Louis, University of North Carolina at Chapel Hill, Wisconsin Alumni Research Foundation, Cornell University, and the University of Kansas have signed on. Other universities are encouraged to join. More information about iBridge is available at: http://www.innovationbridge.org

return to the top of the page

Recent Research
Value and Effectiveness of Research Tax Credit Should be Reexamined, says GAO
Representing a substantial federal commitment, the number of tax credits, deductions and exemptions - collectively referred to as "tax expenditures" - has more than doubled since 1974 and needs to be re-examined to evaluate efficiency, effectiveness, and equitability, according to the Government Accountability Office (GAO).

A recent GAO report describes how tax expenditures have changed over the past three decades and the amount of progress made since the 1994 recommendations to improve scrutiny of tax expenditures. Measurements include change in number, size, and in comparison to federal revenue, spending, and the economy.

The federal income tax has long been used as a tool for accomplishing social and economic objectives, while the general objective of tax expenditures are to encourage particular types of activities including funding for research and development, the report states. In determining effectiveness of tax credits, some are enacted on a temporary basis to provide opportunity for evaluation. Such is the case for the research tax credit. Established on a temporary basis in 1981, the research tax credit has been extended 11 times as of 2004.

Studies on the research tax credit in 1996 provided mixed evidence on the amount of spending stimulated and used publicly available data that were not suitable proxy for the tax return data, according the report (see the June 21, 1996 issue of the Digest). To fully assess the value to society from the tax credit, the report states that researchers instead need to look at more than just spending stimulated per dollar of revenue costs. Comparisons should include (1) the total benefits gained by society from research stimulated by the credit and (2) the estimated costs to society resulting from the collection of taxes required to fund the credit.

Social benefits of research conducted by individual companies include any new products, productivity increases, or cost reductions that benefit other companies and consumers throughout the economy, the report notes. However, the effect of the research on other companies and consumers can be difficult to measure.

Tax Expenditures Represent a Substantial Federal Commitment and Need to Be Reexamined is available from GAO at: http://www.gao.gov/new.items/d05690.pdf

return to the top of the page

Great Speakers, Great Topics, Great Discussions
Drawing expertise from 53 speakers and panelists from 19 states, SSTI's 9th annual conference - to be held Oct. 19-21 in Atlanta - promises to provide its attendees unparalleled opportunity to learn about the latest and best thinking to encourage state and regional growth through tech-based economic development. Want proof? SSTI has published brief speaker bios on our conference website: http://www.ssti.org/Conf05/bios.htm

Each of the 20 breakout sessions are designed to encourage engaging discussion and give-and-take among conferees. In addition, the long breaks between sessions and the hosted reception allow conversations started in one session to spill into the halls as participants are able to network with the more than 300 fellow attendees from 46 states, the District of Columbia, Puerto Rico and four countries.

Don't miss out. There is still time to register for the field's premier professional development opportunity and networking event of the year: https://www.ssti.org/Conf05/registration.htm

return to the top of the page

People

Linda Fettig was named director of the Nebraska Rural Development Commission.

Kathie Olsen, nominated by the president and confirmed by the Senate, is the new deputy director of the National Science Foundation.

The San Antonio Technology Accelerator Initiative (SATAI) announced that James Poage is SATAI's new president and CEO. Poage replaces Randy Goldsmith, who continues as a director.

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.