In the March 20, 2006 Issue:

Copyright State Science & Technology Institute 2006. 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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Recent Research
Public College Support Per Student Sinks to 25-year Low
At the same time civic and corporate leaders around the country are calling for more high school students to pursue a college education, and specifically science, technology and math degrees, the student's share of the cost for higher education is climbing to record highs. Despite an appropriations increase of 3.5 percent in fiscal year 2005, constant dollar per student state and local funding for public colleges and universities was at the lowest point in 25 years, according to State Higher Education Finance FY 2005, the annual study conducted by the association of State Higher Education Executive Officers (SHEEO). State and local support per full-time-equivalent student in public institutions was $5,833 in FY 05; the high point since 1980 was in fiscal 2001, when per student support was $7,121 in constant 2005 dollars.

Support per student decreased dramatically from 2001 to 2005 because enrollment grew by 14.3 percent and inflation grew by 14.2 percent, without corresponding increases in public funding. State and local support, essentially flat from 2001 to 2004, grew by 3.5 percent in 2005, but this increase was exceeded by the combined effects of continuing growth in enrollment (2.1 percent) and inflation (3.4 percent). Consequently, constant dollar state and local government support per student decreased 1.9 percent in 2005.

Between 2004 and 2005, average per student increases of 7.7 percent in net tuition offset the continuing slide in public funding. Total educational revenues (state and local support plus net tuition) grew by 0.2 percent, the first increase since 2001. Total educational funding, now at $9,212, is near the long-term average over the past 35 years, approximately the level of spending in 1991, but below peak funding ($10,100) achieved in the period, 1999 to 2001. Net tuition, however, now accounts for 36.7 percent of educational revenues, a new high. The student share of total revenues was 26.1 percent in 1991. State support for student assistance grew by 7.5 percent in 2005.

According to SHEEO President Paul Lingenfelter, "Projected increases in the college age population, the increasing economic importance of higher education, and survey data on student aspirations all suggest the demand for higher education will continue to increase. But an increasing share of the cost has been shifted to students and their families. If this trend continues both the American tradition of affordable higher education and student participation could well be threatened."

Total educational spending per student in public institutions (state and local revenues plus net tuition in constant 2005 dollars) fell 8.8 percent between 2001 and 2005, from $10,100 to $9,212. In the early 1990s, total spending was close to $9,200; it then grew to and remained at $10,100 from 1999 to 2001 before the subsequent decreases. ("Total educational spending" excludes research, agricultural extension services, and medical education, which together accounted for 13.5 percent of all state and local higher education spending in fiscal year 2005 and 14.2 percent in 2001.)

The decline in state support per student between 2001 and 2005 extends an historical pattern -- in recessions state revenues have fallen, higher education enrollments have grown and, for a variety of reasons, states often have cut funding for higher education more than funding for other activities. Current indicators suggest the historical pattern of recovery is recurring, although the ultimate extent of the recovery is far from certain in view of projections for additional enrollment growth and tight state budgets.

The full report, State Higher Education Finance FY 2005, is available at www.sheeo.org.

Links to this paper and more than 3,000 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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Senate Restores, Expands SBA '07 Budget Resolution
SBDCs slated for $23 Million Increase; FAST Restored
While the federal budget process is a long way from completed for the fiscal year beginning Oct. 1, last Thursday was a good day for beneficiaries of many programs run through the Small Business Administration (SBA). The U.S. Senate passed an amendment to the budget resolution that will add $130 million to the President's 2007 Budget Request for SBA, bringing the agency to a total of $754 million for next year and including funding for several programs recommended for elimination. Senate Amendment No. 3134 was introduced by Senators Olympia Snowe (R-Maine) and John Kerry (D-Mass.), Chair and Ranking Member of the Committee on Small Business and Entrepreneurship.

The items shown below are among those approved in the Kerry-Snowe amendment for the Fiscal Year 2007 SBA budget. Items the president proposed for elimination are noted in parentheses:

Co-sponsors included Senators Mary Landrieu (D-La.), Joe Lieberman (D-Conn.), Carl Levin (D-Mich.), David Vitter (R-La.), and Norm Coleman (R-Minn.). More information regarding the Senate version of he Budget Resolution is available through: http://thomas.loc.gov

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SSTI Commentary
What Constitutes A Gift? TBED and Philanthropy
Probably everyone involved in tech-based economic development (TBED) can name at least one research building, innovation center or tech park named after a significant contributor to the project. And has become commonplace individual components of the structure have been named for individual donors: a wing, the auditorium, the foyer, the artwork, the chairs in the board room. The difference between naming rights, endorsements and sponsorships of business marketing, particularly evident in sports, and "patron recognition" in the arts, education and now, TBED, is increasingly blurred.

As that great English bard reminded us, what's in a name?  Naming rights can be a relatively free thing to give away for an organization or institution short of resources to advance its mission. Does it really matter, other than changing the website and stationary, if the Center for Whatever is now the John Q. Public Center for Whatever?

But what about other restrictions, expectations or requirements large money donors try to attach to their contributions? At what point does the fine print in the memo field of the donor's check come to resemble too closely a contract for services? It's also possible for the demands attached to a contribution to steer the organization too far from its mission. It's up to the grantee, then, to say "no thank you," a right all organizations possess.

Interestingly, there seem to be an increasing number of public examples of organizations saying "no", or at least "maybe not", particularly when it comes to university research. A case in point: A university faculty researcher who was able to cash in very well on technology developed at a Florida university donates $10 million to $15 million back to the institution toward a new chemistry building. The catch, he wants the majority of the building's research facility dedicated to his specific field of chemical study. The school says no; he wants his "donation" back. That one's in court.

A more complex example that potentially involves up to a dozen of the top research institutions in the country was the subject of the cover story in the March 17 edition of the Chronicle of Higher Education. Written by Goldie Blumenstyk, "Universities Forgo Millions Over Strings Attached to a Foundation's Grants" provides an excellent report on the potential abuses on philanthropy in the name of TBED. At issue are the terms and conditions that the Alfred E. Mann Foundation for Biomedical Engineering reportedly wants in exchange for establishing institutes near selected universities endowed with Mann Foundation funds ranging between $100 million and $200 million. The institutes would be separate nonprofit institutions neither controlled by nor affiliated with the university. The Chronicle has kindly provided free access to the article through its website: http://chronicle.com/free/2006/03/2006031001n.htm

According to the Chronicle article, one of the terms in the agreement the Mann Foundation offered the University of North Carolina at Chapel Hill and North Carolina State University would require the schools to license to the newly created Mann Institute "all university intellectual property for which the institute requests a licence in the life sciences and biomedical areas" that was not already obligated. The Alfred Mann Institutes would use the proceeds from the endowments to commercialize university research and return a portion of the royalties to the schools. It appears that in the Mann model of technology transfer, no other funds flow to the university for the opportunity of hosting a Mann Institute.

In fact, a March 20 article in the Triangle Business Journal on the Mann deal in North Carolina states that, in addition to the privilege of giving the Mann Institute all of their biotech IP, the universities are expected to secure $25 million in state funding to build a local headquarters for the new entity. The Journal article says the measure will be considered by the University of North Carolina Board of Governors in May. UNC officials are on record as saying the deal as proposed by the Mann Institute currently is not acceptable. Negotiations continue.

The foundation's methods of wooing top level university officials with the promise of significant funding for research and riches from commercializing university research has been repeated at several institutions around the country, the Chronicle reports. Several schools already have said no thanks to the offer, after the fine print is exposed late in the negotiations.

While the saying goes, "Don't look a gift horse in the mouth," it's becoming increasingly clear that all gifts need to be examined -- particularly to understand whether they truly are gifts. Those of us on the outside will wait with great interest to see how these deals evolve (or don't) -- a new model for university technology transfer or an example of a business deal under the guise of philanthropy.

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NSF Partnerships for Innovation Offers Unique Funding for TBED Efforts
Universities play a central role in supporting regional technology-based economic development and only one small federal grant program focuses each funding cycle toward new models for improving university-centered collaborative innovation strategies. The Partnership for Innovations (PFI) Program within the National Science Foundation (NSF) opened a new round of competition last week, offering funding of up to $600,000 for 10-15 successful proposals.

Created in 2000, the PFI program "seeks to stimulate and capitalize on innovation by catalyzing partnerships among colleges and universities, the private sector, and federal, state and local governments." While each PFI grant must be awarded to a lead university, the role of collaborations and partnerships extending outside the recipient institution is an important component of the program.

Partnerships - both domestic and global - are increasingly critical to accelerating the development and growth of knowledge-based economies. This is perhaps most true when it comes to the academic institution's role in innovation. It takes private companies - whether university spin-offs or existing firms - to commercialize university-generated research. To contribute most significantly to an innovation economy, students of higher education have to become graduates and then active members of the workforce. NSF strives to support all of these relationships and improve the quality of innovative activities through the PFI program.

Throughout the history of the program, a broad range of innovative projects have been selected for funding. These partnerships are designed to speed the transformation of new knowledge into products, create new jobs, and establish the infrastructure to enable innovation. Examples of past projects funded by PFI include formation of an associate's degree to train the workforce in nanotechnology, biology and medicine for the biomedical industry; creation of gene encyclopedias and bioinformatic infrastructure to identify diversity of potential value to bio-based industries; creation of a series of technology entrepreneurship education modules to be integrated into science, math and engineering subjects; launching start-up companies based on intellectual property derived from agricultural research programs; and the creation of new knowledge in the area of broadband wireless communications, development and commercialization.

Last year, NSF funded 12 projects under the PFI program, including a technology incubator at the University of Louisiana and a biotechnology career center at the University of Florida. A list of projects that have been funded can be found at http://www.nsf.gov/home/crssprgm/pfi/

Proposals for fiscal year 2006 must be submitted by U.S. academic institutions. Partners may include other academic institutions, nonprofit organizations, private sector organizations, entrepreneurs, venture capitalists, state and local government entities, trade and professional associations, and federal laboratories. International collaborations also are encouraged. Optional letters of intent are due June 28, 2006, and full proposals are due Aug. 30, 2006. More information is available at: http://www.nsf.gov/publications/pub_summ.jsp?ods_key=nsf06550

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Useful Stats
Manufacturing Employment & Pay by State, 2001-2004
In SSTI's second look at the Geographic Area Statistics: 2004 from the U.S. Census Bureau’s Annual Survey of Manufactures, SSTI highlights more of the report's key findings, including data on employment, payroll, and average pay per employee. (The first look at 2004 statistics was in the March 6 issue of the Digest.)

All but two states experienced a decline in manufacturing employment between 2001-2004. Only Nevada and New Mexico saw increases of 8.95 percent and 0.66 percent, respectively, in manufacturing employment for the period. Interestingly, despite the declining numbers of paychecks issued across the country, the size of the checks apparently was increasing in many instances. The survey indicates that, in addition to the expected growth for payroll figures in the two manufacturing-growth states of Nevada and New Mexico, 19 states with employment reductions also experienced increases in payrolls over the four years. The phenomenon is not explained in the report. Nevada, New Mexico, Hawaii, Wyoming and Delaware showed the largest payroll increases of more than 10 percent.

Nationally, U.S. manufacturing employment and payroll decreased by 15.73 and 4.02 percent, respectively. However, an increase in average pay per employee was enjoyed by all 50 states from 2001-2004. Twenty-seven states experienced an increase larger than the national average of 13.90 percent, with Montana at the top at 26.40 percent. Virginia (21.87 percent), Hawaii (19.63 percent), Wyoming (19.63 percent) and Oklahoma (19.50 percent) round off the top five.

SSTI's table is available at: http://www.ssti.org/Digest/Tables/032006t.htm

State rankings of ASM statistics from 1997-2000 can be found at: http://www.ssti.org/Digest/Tables/032202t.htm

The Annual Survey of Manufactures, Geographic Area Statistics: 2004 is available at: http://www.census.gov/prod/ec02/am0431as1.pdf

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SSTI Celebrates Hundredth Affiliate Joining
In December, SSTI invited those involved in and interested in tech-based economic development to consider becoming a member of SSTI. Membership is growing so fast  that we are proud to announce already reaching the 100th member milestone for our Affiliates and Supporters! Special Recognition goes to our 99th member Northwestern University, Office of the President; 100th member Asheville-Buncombe Technical Community College, BioBusiness Center; and our 101st member CincyTechUSA.

Thank you to all our members who have made this milestone possible, and may it be a speedy trip to 1,000 from here! There has never been a better time to join SSTI.

As we announced in January, the SSTI Funding Supplement is now available only to members. Since that started on January 9, SSTI has alerted our Supplement subscribers to more than 350 unique funding opportunities for research and tech-based economic development (TBED).

 We are thrilled that so many organizations within the TBED community have taken advantage of the opportunity to receive the Funding Supplement each week and to support SSTI. Member benefits don't stop there, however. Affiliate benefits include:

Becoming a member is easy. Register online at https://www.ssti.org/membership.htm or call Noelle Sheets, SSTI's director of membership services, at 614-901-1690 for more information.

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People

Rob Atkinson resigned from the Progressive Policy Institute to become president of the Information Technology and Innovation Foundation, a new think tank.

Richard Bendis, an SSTI Board member, is leaving his position as president and CEO of Innovation Philadelphia to become president and CEO of True Product ID, Inc..

The Pennsylvania NanoMaterials Commercialization Center selected Alan Brown as its executive director.

Anne Conroy was named president of the Dutchess County Economic Development Corp., a nonprofit agency in New York.

Kansas Technology Enterprise Corp. named Trish Costello as its newest Entrepreneur in Residence.

The U.S. Senate confirmed Robert Cresanti as the Department of Commerce's undersecretary for technology, succeeding Phil Bond as head of the Technology Administration.

Krisztina Holly was named executive director of the University of Southern California's Mark and Mary Stevens Institute for Technology Entrepreneurship and Commercialization.

President Bush selected Idaho Gov. Dirk Kempthorne to replace Gale Norton as secretary of the Department of Interior.

Thad LeVar was appointed deputy director of the Utah Department of Commerce. LeVar replaces Jason Perry, who was named director of the Utah Governor's Office of Economic Development (GOED). Richard Bradford, the former director of GOED, retired from state government after 13 years of service.

Georgia Gov. Sonny Perdue appointed Debra Lyons to lead the newly created Office of Workforce Development.

Anthony Martoccia was appointed associate deputy administrator for the U.S. Small Business Administration's Office of Government Contracting and Business Development.

Sally Stroup, assistant secretary for postsecondary education for the U.S. Department of Education, is stepping down to pursue other interests.

The Ohio Business Alliance for Higher Education and the Economy named Reginald Wilkinson to serve as its executive director.

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