In the April 3, 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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U.S. First on 'Networked Readiness Index'
The on/off binary fundamental of information and communication technology (ICT) could just as well describe the U.S. position in the field. For the third time in five years, the U.S. leads all nations on the Networked Readiness Index (NRI) contained in the World Economic Forum's Global Information Technology Report 2005-2006.

Expanded to track 115 economies worldwide in its fifth edition, the new Global Information Technology Report assesses the impact of ICT on the development process and the competitiveness of nations. The NRI measures the propensity for countries to leverage the opportunities offered by ICT for development and increased competitiveness. It also establishes a broad international framework mapping out the enabling factors of such capacity.

The U.S. regained the top position in the rankings after falling to fifth place a year ago. According to the index, America's 2005-06 surge in the ranking reflects impressive performance in the areas of ICT physical infrastructure, a broadly supportive market environment, and high levels of business and government usage of the latest technologies.

Factors contributing to America's strong showing include "excellent" higher education institutions and extensive levels of cooperation between its research bodies and businesses. The U.S. also stands out for the ready availability of venture capital - key for start-ups to develop and prosper in what can be a risky sector - and the prominent role assumed by the private sector in R&D and cooperation with the public sector in innovation and ICT penetration.

Singapore, in second place overall, achieved a top-three ranking for the fourth consecutive year. The Nordic countries of Denmark, Iceland, Finland and Sweden placed third, fourth, fifth and eighth, respectively. Asia and the Pacific also did well, with Taiwan, Hong Kong, Korea, Australia and Japan occupying ranks 7, 11, 14, 15 and 16, respectively.

The Global Information Technology Report 2005-2006 includes essays written by practitioners, scholars and experts with knowledge and experience in the ICT area. An update of the NRI is followed by chapters on issues related to networked readiness, productivity-related topics and reports on the state of ICT development in Chile, Israel, Korea, Mexico and Taiwan. Detailed profiles of the 115 countries assessed and data tables with country rankings for each variable used in calculating the index also are included.

To download the report's executive summary, index rankings and other materials, visit http://www.weforum.org/. The report also is available for purchase through the above link.

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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Interest Not Problem for Underrepresented Groups in S&T
African-American and Hispanic students begin college interested in majoring in science, technology, engineering and math (STEM) fields at rates similar to those of white and Asian-American students and persist in these fields through their third year of study, but do not earn their bachelor’s degrees at the same rate as their peers, according to a new analysis conducted by the American Council on Education (ACE).

Increasing the Success of Minority Students in Science and Technology also finds that the majority of the African-American and Hispanic students majoring in STEM fields who persisted beyond the third year did not drop out, but were still enrolled and working toward a degree after six years.

The report relies on data from a longitudinal study conducted by the U.S. Department of Education’s National Center for Education Statistics, which tracked 12,000 undergraduates who entered college in the fall of 1995.

ACE's analysis found that in the 1995-96 academic year 18.6 percent of African-American students and 22.7 percent of Hispanic students began college interested in majoring in STEM fields, compared with 18 percent of white students and 26.4 percent of Asian-American students. By the spring of 1998, students in each racial/ethnic group continued to study STEM fields at nearly the same rates (56 percent of African-Americans and Hispanics, 57 percent of whites and Asian-Americans). By the spring of 2001, 62.5 percent of African-Americans and Hispanics majoring in STEM fields attained a bachelor’s degree, compared with 94.8 percent of Asian-Americans and 86.7 percent of whites.

Although persistence rates of African-American and Hispanic students majoring in STEM fields were below the overall persistence rates for these students in all fields, a statistical analysis showed that majoring in STEM fields did not affect student persistence. Instead, the variables strongly related to persistence for all students, regardless of major or race/ethnicity, were full-time attendance, hours worked while enrolled and rigor of high school curriculum.

The ACE analysis identified a number of key differences between students who earned a bachelor’s degree by spring 2001 in a STEM field and those who did not:

Increasing the Success of Minority Students in Science and Technology is available for $22 (plus shipping and handling) at: http://www.acenet.edu

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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Connecting the Dots: Creating a Southern Nanotechnology Network
The advances being made in nanotechnology-based research are likely to impact most industry sectors eventually as more commercial applications are identified. As a result, the National Nanotechnology Initiative has been a research priority for the federal government for many years. Nanotech research is occurring around the world, but, at this point, the majority of effort is concentrated in several leading universities and private companies. A new report by the Southern Growth Policies Board (Southern) reveals the South, while performing about 20 percent of all nanotechnology research activity in the U.S., would benefit greatly through a formalized regional nanotechnology network.

Connecting the Dots: Creating a Southern Nanotechnology Network maps the South's assets in nanotechnology and provides recommendations for establishing the South as a leader in the emerging industry. Drawing from data for all of the Southern member states (Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Virginia, West Virginia and the Commonwealth of Puerto Rico), the report outlines the region's strengths and weaknesses in nanotechnology in five key areas - human capital, knowledge generation, patents, funding and commercialization.

The report reveals Tennessee, Georgia, North Carolina and Virginia have the most highly concentrated activity, yet every Southern state is participating the nanotechnology industry. The Southern region also is home to four of the top 25 nanotechnology research institutions - Georgia Institute of Technology, the University of North Carolina, Oak Ridge National Laboratory and North Carolina State University - and nearly 20 percent of all highly cited nanotechnology researchers in the U.S.

Regional weaknesses were identified for nanotechnology patents and funding. The South lags the nation in nanotechnology patents with only 14.8 patents per million in population in comparison with 40.9 for the nation, and while it represents 20 percent of the nation's economic activity, it attracts only 9 percent of the total U.S. venture capital in all sectors. Lack of venture funding affects the technology commercialization process and the region's ability to attract and grow new nanotechnology companies, the report states.

While Southern research institutions boast strong linkages to international researchers, they lack connections to critical U.S. nanotechnology centers, such as those in California and the Northeast, the report concludes. Southern universities and research centers also lack strong connections among institutions in the region.

"Our research suggests that the South can significantly increase its competitive advantage in nanotechnology through regional collaboration among research institutions and with the private sector," Scott Doron, director of the Southern Technology Council, explained. "No Southern institution or locale has the critical mass of nanotechnology assets to go it alone and achieve global leadership."

Doron added, "We need a Southern Nanotechnology Network to connect the region's assets and increase research, funding and new business creation."

Connecting the Dots offers a framework for the creation of a Southern Nanotechnology Network that includes identifying state policy advocates to incorporate nanotechnology in primary economic development plans. The report recommendations also call for the creation of a Southern Nanotechnology Institute to create research coalitions and develop guidelines for nanotechnology education in pre K-20. Other recommendations focus on increasing funding opportunities for Southern institutions, the need for affordable research tools, and the need for further research to identify the South's market niches.

Other areas of the country also can realize the benefits of establishing a network to coordinate and strengthen a region's nanotechnology research and commercialization capacity, as outlined in Connecting the Dots. An executive summary is available at: http://www.southern.org/pubs/ConnectDots/ConnectExecSumm.pdf The full 80-page report is available for $20 through Southern Growth Policies Board: http://www.southern.org/pubs/puborderform.pdf

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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Idaho Legislature Rejects Governor's Request for Tech Programs in FY07 Budget
Gov. Dirk Kempthorne recently received some good news about his future when President Bush nominated him to serve as Secretary of the U.S. Department of Interior. The news was not as rosy on the home front for Idaho's economic future, however, as the state legislature in late March rejected the governor's plans for Idaho to take a more proactive role toward building a tech-based economy.

Funding for key science and technology programs included in Gov. Dirk Kempthorne's fiscal year 2007 budget request was rejected by the legislature last month as lawmakers considered how to disburse a $214 million surplus. The governor announced during his state-of-the-state address he would recommend the full request of the Science and Technology Advisory Council for the state's TechConnect program and increased funding for university research and technology transfer.

For the second year in a row, the legislature denied the governor's request of $300,000 to supplement the state's TechConnect centers. The three centers assist entrepreneurs and technology businesses in their regions and connect entrepreneurs with capital, legal assistance, financial planning, and various other resources. According to the governor's press office, the funding would have been used to open a fourth office in Twin Falls and provide operational funding for all four offices, as well as a statewide TechConnect organization.

In 2005, TechConnect received national recognition by the Small Business Administration's Office of Advocacy for excellence in promoting high technology entrepreneurship. Additional funding sources for the program are derived from federal and private entities.

The legislature also did not provide funding for the governor's science and technology initiative, which included $1 million for the State Board of Education to create two technology-focused programs - a research matching grant program and a statewide patenting and technology transfer office.

The legislature did approve $100,000 for the Small Business Assistance Fund to help businesses in the development of SBIR proposals. Unfortunately, the office that manages the Idaho SBIR Program, would receive just $50,000.

The legislature was kinder to rural economic development efforts as well, approving Gov. Kempthorne's $800,000 request for his Rural Initiative Program and directing $5 million to help offset the cost of extending broadband service into the more rural regions of the state. In the governor's budget request, $500,000 of the funding is to be targeted toward providing grants for science and technology-related projects in rural Idaho. The balance of the request would support general rural community development block grants and a rural economic development specialist position.

H .805 and S.1444 are available through the Idaho Legislature at: http://www.legislature.idaho.gov/index.htm

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Recent Research
Growth & Entrepreneurship: An Empirical Assessment
Just as bread won't rise without yeast, the key knowledge-building ingredients for many state tech-based economic development strategies - increasing investments in university-based research, emphasizing workforce development and science and math education, and identifying clusters of co-located firms in related industry sectors - won't lead to the spillovers of knowledge critical to sustaining growth without an active reagent. The new discussion paper from the London-based Centre for Economic Policy Research, Growth & Entrepreneurship: An Empirical Assessment, by authors Zoltan Acs, David Audretsch, Pontus Braunerhjelm and Bo Carlsson concludes that technology-based entrepreneurship serves as that reagent.

Using a time-series panel of entrepreneurship data for 18 countries in their model, Acs, et al. found that changes in entrepreneurship rates have a positive impact on changes in economic growth, regardless of time (1980s or 1990s). Changes in R&D expenditures as a percentage of gross domestic product, however, were found to have a positive impact on changes in economic growth only during the 1990s, not the entire period. This second result, the authors point out, is not meant to challenge "the importance, or even primacy, of knowledge investments in generating economic growth." It merely demonstrates that those investments, alone, are not sufficient to sustain growth. The presence or addition of tech-based entrepreneurship would appear to be a critical ingredient to transforming knowledge investments into economic growth.

It is important to note that in building the econometric model, the authors distinguished technology entrepreneurship - specifically, the creation of start-up firms to commercialize new technology - from university technology transfer and technology adoption by existing firms. This is noteworthy because there seemingly is a growing concern within the tech-based economic development community that increased emphasis on tech entrepreneurship is causing some practitioners and policymakers to overlook the contribution that can be made by incumbent firms becoming more innovative or commercializing tech.

The model presented in Growth & Entrepreneurship, however, suggests that it is new firm creation that sustains entrepreneurship and economic growth over the long term. Future research, the authors suggest, may identify other mechanisms that could stimulate spillovers in addition to or instead of tech entrepreneurship.

So what are the policy implications of the research for state and local tech-based economic developers?  The paper suggests the need to adopt policies "that not only promote R&D investments" (R&D tax credits and subsidies being provided as examples) but also strive to exploit the spillover role of tech entrepreneurship.

An increasing number of states are investing hundreds of millions of dollars into their university research enterprise - the physical infrastructure, the human capital and the research itself. The case has been made in many state legislatures for the need to support research as a means toward economic growth. Questions members of the tech-based economic development community may ask themselves could include: What are the policy needs of our technology entrepreneurs? Are those needs being met by the private market, and, if not, by our TBED infrastructure? Is the state of our regional innovation system sufficiently robust to nurture and sustain technology start-ups? Are these knowledge-building investments being made in balance with the other needs of our innovation and entrepreneurship support structure?

Growth & Entrepreneurship: An Empirical Assessment is available for purchase ($5 for the PDF) at: http://ssrn.com/abstract=893068

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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Useful Stats
Industrial R&D Intensity by State: 2003
Using statistics from the National Science Foundation’s report Science & Engineering Indicators 2006, SSTI has prepared a table presenting 2003 state rankings for industrial R&D intensity - the ratio of industry R&D to gross state product (GSP).

The national average in industrial R&D intensity for 2003 was 1.81 percent. Among the fourteen states that placed above the national average, Michigan held the highest rank at 4.24 percent followed by Washington (3.76 percent), Massachusetts (3.73 percent), Connecticut (3.35 percent) and California (3.28 percent).

Conversely, Alaska ranked the lowest in the nation at 0.11 percent, with South Dakota (0.27 percent), Montana (0.25 percent), Louisiana (0.20 percent), and Wyoming (0.17 percent) rounding off the final five.

The table is available at: http://www.ssti.org/Digest/Tables/040306t.htm

Science and Engineering Indicators 2006 is available at: http://www.nsf.gov/statistics/seind06/

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Job Corner
Innovation Philadelphia Seeks Manager of Marketing and Communications
Innovation Philadelphia, a nonprofit public-private partnership dedicated to growing the wealth and the workforce of the Greater Philadelphia Region, is seeking a full-time manager of marketing and communications to start immediately. Some of the responsibilities include coordinating a multi-faceted marketing department, publishing a weekly electronic newsletter, vendor management for all marketing programs, marketing management of internal departments programs, and website management. Among other skills, the successful candidate will have an undergraduate degree from an accredited university, at least three or more years of experience in a marketing-related field, and an understanding of the Greater Philadelphia Region. A more complete description of this position opening is available through the SSTI Job Corner: http://www.ssti.org/posting.htm

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People

Dr. Donald Daniel is the new CEO of the University of Tennessee Space Institute.

William Harris is the new president and CEO of Science Foundation Arizona, a recently formed nonprofit organization.

Matt Kramer stepped down from the Minnesota Department of Employment and Economic Development (DEED) to become vice president of sales and marketing with a Plymouth health care provider. Kramer served three years with DEED.

Rensselaer Polytechnic Institute named Nag Patibandla as director of the Center for Future Energy Systems, a New York State Center for Advanced Technology.

The State of Maryland has created a new Small Business Programs unit as part of the Governor's Office of Business Advocacy and Small Business Assistance.

Team NEO appointed Thomas Waltermire as CEO of the organization, a private sector-led economic development organization that helps to grow companies in Northeast Ohio.

Janice Whitehouse was named president of CyberMichigan, an institute within the nonprofit Altarum.

The University of Texas at El Paso hired Tony Woo as the assistant vice provost for research and technology transfer.

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