In the April 10, 2006 Issue:

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New Report Identifies States' Investments for Biosciences
States and regions across the U.S. are continuing to make significant investments and implement policies to capitalize on the growing biosciences sector. However, a challenge they face in coming years is a leveling off of federal bioscience R&D dollars, concludes a recent report prepared by Battelle, SSTI and PMP Consulting.

The report, Growing the Nation's Bioscience Sector: State Bioscience Initiatives in 2006, is a follow-up to the 2004 report Laboratories of Innovation: State Bioscience Initiatives 2004, prepared for the Biotechnology Industry Organization (see the June 7, 2004 issue of the Digest). The authors developed data to measure the size, composition and geographic distribution of the biosciences across the country. Since that report, new bioscience discoveries have continued to fuel the growth of the bioscience sector, and states and regions have responded with an increased commitment to building an infrastructure that encourages innovation and applications of bioscience research discoveries in multiple industries, the report states.

In an effort to understand how and where the bioscience sector is growing and how public policy is supporting this growth, the 2006 report presents updated data, examines trends, and identifies metropolitan areas with the largest and most concentrated employment in each of the biosciences subsectors. These include agricultural feedstock and chemicals; drugs and pharmaceuticals; medical devices and equipment; and research, testing and medical laboratories.

As a growing and vibrant sector of the U.S. economy, the biosciences industry employs 1.2 million people across the U.S. and Puerto Rico, the report finds. Two-thirds of this employment is found in the medical devices and equipment and the research, testing and medical laboratories subsectors. Comparatively, employment in the biosciences increased just over 1 percent since 2001, while total U.S. employment declined by 0.7 percent during the same period. Some key employment findings include:

Additionally, the report identifies current key trends in state and regional initiatives to support the biosciences. Not all states have the same bioscience assets, and it is only by focusing on each state's or region's strengths that they will succeed in capturing the economic benefits of bioscience discoveries, the report states. The second section of the report identifies state initiatives, including examples of specific programs and policies. Some key findings include:

The authors foresee in the near future a challenge in responding to the national mandate to advance translational research, as few states have developed strategies to link basic and clinical research. Also, competition for funding is likely to increase, making state investments more important.

Growing the Nation's Bioscience Sector: State Bioscience Initiatives in 2006 is available at: http://www.bio.org/local/battelle2006/

Links to this paper and nearly 4,000 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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Recent Research
GAO Looks at State Tobacco Settlement Distributions
Despite all the press generated each time a state commits multimillion portions of its tobacco settlement distribution toward R&D and technology-based economic development (TBED), readers may be surprised to learn economic development activities captured only 4 percent of the total payments in 2005, according to a new report from the Government Accountability Office (GAO). Unfortunately, the report reflects one of the agonizing realities of how poorly federal agencies understand what states are doing to support the nation's innovation system: Much of what is generally accepted by the field as investments to encourage or support the knowledge-based economy is buried in several other categories of the report, including health related, education and even general purposes.

Released today, Tobacco Settlement: States' Allocations of Fiscal Year 2005 and Expected Fiscal Year 2006 Payments presents the state-by-state breakdown of how 46 states have used monies paid by the major tobacco firms as a result of the Master Settlement Agreement (MSA). The report is based on an annual survey of state budget offices, who self-classify expenditures. The definitions provided in the GAO survey instrument, though, lead to information that does not present a complete picture of the settlement's impact on tech-based economic development.

In FY 2005, states received $5.8 billion, down significantly from the $9.3 billion average for the first five years of the agreement because of a sharp drop in securitized proceeds from the sales of bonds backed by future MSA payments. Since the agreement was signed, 15 states have securitized all or part of their payments, many to deal with large budget shortfalls.

While states may apply MSA payments toward any purpose, health-related expenses continued to capture the largest share of the funding at 32 percent in 2005. Debt service on securitized proceeds took another 24 percent of the total in 2005 but is expected to grow to 29 percent in 2006.

The GAO report identifies economic development expenditures in only six states, including:

The GAO's definition of health related expenses captures many states' biomedical research investments, which expands the number of states with TBED-related activities supported by the MSA. Unfortunately, the report does not break out the health-related activities by use, not allowing the reader to know, for example, what portion of Arkansas's $30,235,237 2005 MSA payment went for biomedical research. Other states with biomedical research listed in the description of health-related expenses include Connecticut, Georgia, Hawaii (biomedical research center construction), Kentucky, Michigan, Nebraska, New Mexico, Ohio and Pennsylvania.

Other TBED activities listed in different categories in the report could easily fall within a TBED portfolio or the health research category above. In Education for instance, one will find Illinois' $13.8 million for centers of academic excellence in medical research. Illinois' technology centers and technology marketing efforts, however, are buried within the state's general purpose item with administrative fees, audit expenses and Court of Claims awards. Scholarship programs to encourage high school students to earn college degrees in-state also fall under this category.

The report is available at: http://www.gao.gov/new.items/d06502.pdf

Links to these papers and nearly 4,000 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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USPTO Releases List of Top 13 Universities Receiving Most Patents in 2005
For the 12th consecutive year, the University of California tops all universities for the most patents for inventions, according to a list recently released by the U.S Patent and Trademark Office. The preliminary list reveals the top 13 U.S. universities receiving the most utility patents during calendar year 2005. All campuses are included in each school's total.

While the University of California's 390 patents in 2005 earned it top honors again, the figure reflects an 8 percent decline from the institution's 424 total in 2004 and 11 percent less than 2003. The California Institute of Technology experienced an even greater drop in patent activity between 2004 and 2005, slipping 25 percent to third overall with 101 patents. Massachusetts Institute of Technology moved into second with 136, a 3 percent increase over 2004.

[Editor's Note: The 2005 figures for U.C. and CalTech are the lowest for both schools since before 2001 (earliest year available), generating some interesting questions regarding possible causes (dot-com bubble, depth of the recession locally, relocation of star researchers, etc.) and if there are any policy concerns as a result. Since much of the research on university spillovers is based on patents, does the drop in patent activity in the two California systems reflect changes at the institutions that could impact the schools' contributions to the regional knowledge-based economy? Are trends in university patent activity an effective measure of regional innovation potential or the institution's research contribution?]

The University of Florida showed the most marked improvement with 64 patents in 2004, an increase of 56 percent for the number of patents awarded. All other institutions on the list posted increases as well:

Declines in 2005  patent activity among the top schools occurred at the University of Texas with 90 patents (11 percent decrease from 2004) and Johns Hopkins University with 71 (24 percent decrease from 2004). The University of Illinois fell off the list from 2004, posting 58 patents in 2004 but apparently less than 41 in 2005 - the lowest figure on the Patent Office list for 2005.

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Dual Enrollment Has Little Effect on Postsecondary Matriculation in Kentucky, Study Finds
Increasingly states are making it easier for high school students to participate in college courses while still attending high school. The goal of dual enrollment is to encourage more students to attend college, giving them a leg up on a degree. A new report by the Kentucky Council on Postsecondary Education suggests the efforts are not working in Kentucky. Encouraging dual enrollment programs to provide academic rather than technical coursework may increase the matriculation rates of dually enrolled students, though.

Dual enrollment has doubled in Kentucky over the last five years. However, findings of a recent study examining dual enrollment data between 2001-02 and 2004-05 indicate that dual credit programs do not appear to enhance overall college matriculation rates.

According to the study, these rates vary among those students taking academic courses and those taking occupational courses. While students who took academic courses did matriculate at slightly higher rates than the overall high school population, the majority of students who took technical and occupational courses matriculated at low rates. Other findings include:

The study also looked at the impact of dual enrollment on postsecondary GPA and retention. These variables were examined with the effect of the students' ACT composite scores factored out statistically. According to the findings, "Independent of differences in ACT scores, dual enrollment has a modest, positive effect on GPA at the end of the sophomore year, increasing students' GPA by about one-third of a letter grade." However, dual enrollment is found to have no independent effect on retention, the study finds.

On a national level, the National Center for Educational Statistics (NCES) found that during the 2002-03 school year, about 813,000 or roughly 5 percent of high school students across the U.S. participated in dual enrollment. Of the schools that offered courses for dual credit on a high school campus or on the campus of a postsecondary institution, 92 percent indicated that the courses had an academic focus, and 51 percent reported that the courses had a technical or vocational focus. The study did not measure matriculation.

The Dual Enrollment of High School Students in Postsecondary Education in Kentucky, 2001-02 to 2004-05 is available at: http://cpe.ky.gov/NR/rdonlyres/702585EF-B63B-4D77-9E44-C4CE5C5FF21B/0/DualEnrollmentinKentucky306.pdf

The NCES report, Dual Enrollment of High School Students at Postsecondary Institutions: 2002-03, is available at: http://nces.ed.gov/pubs2005/2005008.pdf

Links to these papers and nearly 4,000 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
State Business Churning Statistics, 2004
Using data from the Small Business Administration’s Office of Advocacy, SSTI has prepared a table presenting business churning statistics and rankings for all 50 states and the District of Columbia for 2004. Business churning, a measure of new firm births and existing firm deaths as a share of total firms (small businesses with employees), is seen as a major driver of innovation and growth. Churning increases as the number of new start-ups and existing business failures per year increase.

There were an estimated 899,688 new business start-ups and 930,452 business terminations throughout the U.S. in 2004, resulting in a national business churning average of 26.10 percent - up 6.3 percent from 2003. Washington saw the largest churning rate at 40.57 percent, followed by Nevada (39.62 percent), Utah (38.89 percent), New Jersey (33.99 percent) and Idaho (31.92 percent).

South Dakota, on the other hand, experienced the national low in churning at 17.17 percent. Louisiana (20.85 percent), Kansas (20.85 percent), Iowa (19.73 percent) and Ohio (19.38 percent) round off the final five.

SSTI’s table is available at: http://www.ssti.org/Digest/Tables/041006t.htm

Additional SSTI tables are available at:

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People & Organizations

South Dakota Gov. Mike Rounds selected Richard Benda as the new Secretary for the Department of Tourism and State Development.

Bob Dayton was named president of the Delaware BioScience Association.

Effective in May, Ken Janoski will be the president and CEO of BioGenerator, a nonprofit in St. Louis that helps scientists commercialize their discoveries.

Medical Alley and MNBIO, two organizations that merged in 2005 to promote medical sciences in Minnesota, have changed their name LifeScience Alley.

The Maryland Department of Business and Economic Development appointed Christine Plater as its new director of small business programs.

The South Dakota Biotech Industry Association, a new resource for biotech companies in the state, has formed.

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