In the April 17, 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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Walkin' the Tech Talkin' Gov Walk
Over the past six years, SSTI has dedicated a portion of the Digest to coverage on the legislative priorities of governors across the nation through the Tech Talkin' Govs series. As they say, talk is cheap. So this year, we are extending that coverage to track how the Governors' proposals fared in the respective legislative sessions. In the coming months, as many sessions come to an end, SSTI will take a look back on the governors' state-of-the-state, budget, and inaugural addresses and report the good, the bad and the ugly of the 2006 legislative decisions.

Georgia
During his State-of-the State Address (see the Jan. 16, 2006 issue of the Digest), Gov. Sonny Perdue proposed several key initiatives to support tech-based economic development. The legislature approved several of the governor's requests for funding, including:

In addition, the legislature approved $19 million in bond projects for the Department of Economic Development. H.B.1027 is available through the Georgia General Assembly.

Maryland
The legislature approved and Gov. Robert Erlich signed into law the Maryland Stem Cell Research Act of 2006, which authorizes $15 million for research in fiscal year 2007. Funding will be allocated by an independent commission through the Maryland Technology Development Corporation. The commission will administer grants to universities and private sector researchers. According to the governor's press office, the governor proposed in his budget $20 million for stem cell research (see the Jan. 30, 2006 issue of the Digest) and $13.5 million to help construct a new Center for Regenerative Research at the University of Maryland. However, the legislature eliminated all funding for the research facility and cut $5 million from research.

New Mexico
Lawmakers approved $1.4 million for the New Mexico Economic Development Partnership, which focuses on incentives for six industries, including aerospace, agribusiness, distilling and brewing, manufacturing, renewable energy, and technology. Additionally, the legislature provided $500,000 for the business incubator development program, which is contingent on a match of 40 percent from rural communities and 50 percent from urban communities.

The proposed Advanced Energy Products Manufacturer's Tax Credit (see the Jan. 23, 2006 issue of the Digest) was rolled into the omnibus bill, H.B. 82, and was still in conference committee when the session ended. The bill would have provided a 5 percent credit of the value of manufacturing equipment purchased for manufacturing facilities making the components or systems for renewable energy vehicles, fuel cells, clean coal technology, or renewable energy systems.

The General Appropriations Act of 2006 is available through the New Mexico Legislature.

South Dakota
The legislature approved $3.4 million for the Governor's Office of Economic Development, the full request of Gov. Mike Rounds. The Division of Research and Commerce will receive $4 million, slightly less than the governor's recommended $4.8 million. The legislature also approved $13.2 million for the South Dakota School of Mines and Technology and $974,204 for South Dakota Opportunity Scholarships. S.B. 209 is available through the South Dakota Legislature.

Another victory for Gov. Rounds is the passage of legislation to establish a higher education campus in northwest Sioux Falls. During his State-of-the State Address, the governor stated that he would introduce legislation to meet the challenge of creating a more highly educated workforce and bring the higher paying jobs of the knowledge economy to South Dakota. H.B.1238 allows the Board of Regents to use a $5.8 million grant to purchase 263 acres of land currently owned by the state Transportation Department to build a campus. A second bill, H.B. 1244, provides $8 million to construct a classroom building to be shared by all six public universities.

The legislature did not fully fund the governor's $13 million request to implement a statewide laptop program over a three-year period (see the Jan. 16, 2006 issue of the Digest). According to the Associated School Boards of South Dakota, a compromise was reached to allow up to 10,000 students to receive laptops this fall. The Department of Education is accepting applications, and approximately 40-50 schools will be allowed to participate.

Utah
The legislature passed a bill to establish and issue bonds for one of Gov. Jon Hunstman Jr.'s major economic development priorities, Utah Science Technology and Research Initiative (USTAR) (see the Dec. 12, 2005 issue of the Digest). S.B. 75 establishes a process for the USTAR initiative and authorizes the issuance of general obligation bonds for constructing research buildings at Utah State University and the University of Utah. The bill also appropriates $50 million in FY07 to the USTAR governing authority for construction, administration and operations.

Wyoming
Gov. Dave Freudenthal announced during his State-of-the-State Address (see the Feb. 20, 2006 issue of the Digest) that he would introduce legislation to jump-start and fully fund by the end of the biennium the endowed shares of the Hathaway Student Scholarship Fund (see the March 14, 2005 issue of the Digest). The legislature approved and the governor signed on March 15 the "emergency rules" in order to provide for the immediate implementation of the program.

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Washington Releases Global Competitiveness Recommendations
It could be frustration at the lack of action by the federal government, displeasure with the direction of national policy or a sense of urgency and need, but states are increasingly taking matters into their own hands when it comes to many major issues. Examples abound, including states taking the lead on dealing with global warming, energy policy, health care, food quality assurance, stem cell research, broadband coverage and even foreign trade. Washington Gov. Christine Gregoire may have summed up this emerging Neo/post-federalism movement late last month when she said, "Washington is its own small nation in this new world economy."

The governor's comments accompanied the release of the 110-page report from the Global Competitiveness Council Gov. Gregoire established a year ago. Rising to the Challenge of Global Competition summarizes the findings, observations and recommendations from the council comprised of 46 industry, utility, political, research, educational and civic leaders for the state. Rising to the Challenge draws its urgency from the writings of Thomas Friedman and Richard Florida and global statistics on competitiveness from many sources, such as the World Trade Organization and the National Academy of Science's Rising Above the Gathering Storm.

The council's five committees - infrastructure; skills; research and innovation; marketing; and political environment - identify 27 recommendations for strengthening Washington's position in the global economy. Suggestions ranged, however, from very specific - "add an additional year of math as a high school graduation requirement" - to rather vague, "ensure confidence in the state's ability to move goods to and from ports for international trade."

The level of detail varies by committee, but the report also identifies metrics/measures for completion and responsible parties or sectors of the state's economy for many recommendations. Specific financial requirements and other resources required for success, however, are not presented for nearly all of the recommendations. With that critical element missing, how the report will guide the governor's future budget requests and the initiatives and activities of her administration remains to be seen.

Rising to the Challenge of Global Competition is available at: http://www.governor.wa.gov/news/global_competition.pdf

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Recent Research
Dimensions of an Individual Global Mindset
Successful companies are forced to change business strategies as market realities shift. It happens all of the time. Browse the business section of your local bookstore and you'll see dozens of titles preaching the need for companies to adopt, adapt and innovate. The continuing restructuring of the U.S. durable manufacturing sector, as alluded to in the Useful Stats piece below, is a vivid example of the importance of abandoning old mindsets for industry: change or die.

Play a quick word association game ending with the word "bureaucracy," and it's pretty likely you didn't associate the word with flexibility, adaptability, innovative or any synonyms for these. Changing philosophies within government is a slow, arduous task. It typically takes a catastrophic event - such as a deep recession, natural disaster or change of political leadership in the legislative and executive branches of government - before many real changes have a chance of being enacted. The final report of Washington's Global Competitiveness Council (see article above) is intended, in part, to help change the individual mindsets of the state's change makers -- industry leaders, politicians, educators and the general public. Whether or not it worked remains to be seen.

A fundamental element of most technology-based economic development is to encourage people in businesses, government and universities to change the status quo in their thinking. How one affects a change in mindset for most contributing members of a community is a challenge - one that, quite frankly, few regions have truly achieved. Add the complexities of a global economy to the mix and the task moves from a mere challenge to downright daunting.

For years, elements of the environmental movement have carried a slogan of "Think Globally, Act Locally" on bumper stickers, books and magazine tag lines. As globalization issues move increasingly to center stage, the struggle of defining what an individual global mindset actually comprises and how it plays out in a person's decisions and actions becomes more important.

A new working paper from the Netherlands, Dimensions of an Individual Global Mindset, attempts to describe or define how globalization can be enveloped or embraced within the individual mindset of a person. In this case, it is the individual global mindsets of 15 global leaders of three multinational companies under the microscope.

One of the challenges globalization presents to the U.S. political structure is the declining importance or ties of economies to specific places or political jurisdictions. Multinational corporations, a phrase that not too long ago seemed reserved for the world's largest firms, can apply equally these days to most large businesses and many mid-sized manufacturers as well. As the flow of money, human capital and knowledge is increasingly more fluid across borders, companies take on a global character, transnational mentality or global mindset. Successful corporate leaders do as well, according to Dimensions authors Wim dn Dekker, Paul G.W. Jensen, and Claartje J. Vinkenburg. "Individuals must develop this cross-border and cross-cultural ways of thinking in order to simultaneously integrate global efficiency and local responsiveness to their own work," they say.

The majority of the paper discusses the evolution of academic thinking on the global leader, the essential qualities of a global leader and important differences between a global leader and an expatriate leader. A fundamental characteristic of the individual global mindset, the authors contend, is a positive attitude or outlook on the effects of globalization on the world and local markets. Balancing between global markets and local responsibilities was identified as one of the more significant problems to confront global leaders, the survey found.

In addition, there was "unanimity among respondents on inspiring and motivating employees with many different cultural backgrounds being the most important new cultural element" of their jobs. That cultural awareness also plays into the global leaders perceiving themselves as having an "openness to the world," as perceiving the "world as a global village."  These individuals also perceive themselves as cosmopolitan. They "appreciate their own cultural roots or country" but love to live and work abroad, like to travel and "put work and life experience into a broader framework."

The authors also asked questions to discern how an individual global mindset affects desired outcomes of these corporate leaders. All respondents said they have an intention of staying in their global role; roughly half plan to move abroad. "A major constraint for global leaders to pursue their career abroad is their family situation." Demographic factors, then, will likely play a role in developing an individual global mindset.

While the authors caution drawing too many conclusions from such a limited sample (15 interviews), the importance of developing an understanding of the unique attributes of the individual as well as corporate global mindset should not be lost on state and regional technology-based economic developers as they revise their TBED strategies to reflect a global economy.

Dimensions of an Individual Global Mindset is available at: http://ideas.repec.org/p/dgr/vuarem/2005-14.html

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Useful Stats
Change in Per Capita Income by State, 2000-2005
The U.S. Bureau of Economic Analysis (BEA) recently published its 2005 estimates of state personal income. According to the release, growth in U.S. per capita income slowed in 2005 increasing 4.6 percent in 2005, down from 5 percent growth in 2004. Regionally, the most significant increases in per capita income accompanied faster population growth, occurring in the Southwest states of Arizona, New Mexico, and Texas and the Rocky Mountain states of Idaho, Montana, Utah and Wyoming. Florida, Nevada and Virginia round out the top 10 states for percent change in per capita income.

Using BEA data, SSTI has compiled a 50-state table presenting percent change in per capita income from 2000-2005 and ranking the states using constant 2000 dollars. The District of Columbia ranked the highest with a 19.88 percent change over the five-year period, followed by Wyoming (13.98 percent), Montana (13.04 percent), North Dakota (10.29 percent) and New Mexico (10.16 percent). The BEA reports Wyoming’s strong performance is accredited to the mining industry, which contributed more than two percentage points to earnings growth in 2005.

Conversely, Georgia, Illinois, Michigan, North Carolina, Washington and Louisiana experienced a decrease in per capita income from 2000-2005 as measured by constant 2000 dollars. Louisiana’s large decrease over the five year period, 5.15 percent, is directly attributed to the 9.1 percent decline last year, due to Hurricanes Katrina and Rita, according to the BEA.

The BEA does not provide possible explanations for the poor performance of some states, does provide some analysis by region. The overall weakness of the Great Lakes region reflects the ongoing changes within the durable manufacturing sectors, especially motor vehicles and parts, according to the BEA. While the Great Lakes states struggle, the BEA attributes much of the growth in the Southwest to its durable manufacturing (particularly machinery and computers) and mining sectors.

SSTI’s 2005 table is available at: http://www.ssti.org/Digest/Tables/041706t.htm

BEA’s State Personal Income 2005 news release is available at: http://www.bea.gov/bea/newsrel/SPINewsRelease.htm

SSTI’s 1999-2004 table is available at: http://www.ssti.org/Digest/Tables/040405t.htm

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Useless Stats?
Approval Ratings for the 50 Governors
We're not sure how useful these stats really are, but given the political proclivity of so many of our readers and the upcoming gubernatorial elections this fall in 36 states, we thought we'd share a link from SurveyUSA.com presenting the current approval ratings for all 50 governors. The survey results, sponsored by many media sources, are presented in "net job approval" order, which is determined by subtracting a governor's disapproval rating from the percentage of respondents who approve of the governor's performance. While the unweighted average net job approval score is 11 percent, governors in 14 states have negative net approval scores. Nine of these same states occupy rankings in the bottom 16 spots on SSTI's five-year change in per capita income table mentioned above. SurveyUSA's table is available at: http://www.surveyusa.com/50State2006/50StateGovernor060412Net.htm

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