In the September 25, 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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 OCAST Allocates its $10M Budget Increase
The Oklahoma Center for the Advancement of Science and Technology has announced a trio of new programs. Last month, the OCAST governing board approved a business plan for 2007 that committed $10 million of recently appropriated revenue for high-tech development. OCAST is devoting much of this funding to a new seed capital program, awards for plant science research, and a program to encourage the use of nanotechnology in manufacturing.

The OCAST Seed Capital Fund is a $5 million program to provide an accessible source of seed capital to technology entrepreneurs. Firms may apply for equity and other investments, with the stipulation that they receive additional co-investment from private or other non-state capital sources. OCAST's board and an appointed Investment Committee will oversee the program's operations. The Fund will issue its first RFPs in January 2007.

Funding for basic and applied research in the plant sciences will be available through the Oklahoma Plant Science Research (OPSR) program. OPSR will improve the competitiveness of Oklahoma plant researchers for federal grants by co-investing in research, and providing data on the state's activities in the plant science field. The competitive awards will be made through reimbursement contracts, applicable for 1-3 years. Awards will not cover indirect costs, and require one-to-one matching with outside funding for all applied research. Applicants for the first round of awards must report their intent to submit by Feb. 7, 2007.

Finally, the Oklahoma Nanotechnology Applications Project (ONAP) is a new strategy to bring the state's nanotech research to market. In addition to the funding available for nanotech research through the existing Oklahoma Applied Research Support program, OCAST will now assist the consumers of the latest micro science advances. The Oklahoma Nanotechnology Applications Service (ONAS) will provide funding and technical assistance to firms attempting to incorporate nanotech innovations into their manufacturing and business processes. ONAP will also provide information and education about nanotech research and maintain the Oklahoma Nanoscience Initiative, which promotes nanotechnology across the state.

The announcement is available in the September issue of OCAST's monthly Innovations newsletter, which can be found at: http://www.ocast.state.ok.us/Default.aspx?tabid=188#SEPTEMBER2006ONE

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From Concept to Commercialization: The Oklahoma Strategy
With the recent program additions described above, Oklahoma's TBED investments provide one of the nation's most complete portfolios to transform ideas into innovations. SSTI's annual conference will feature an in-depth look at the strategy, led by OCAST Executive Director Michael Carolina. Register and learn more about the conference at http://www.ssti.org/conference06.htm.

U.S. Toppled in Global Competitiveness Report
Falls from First to Sixth in Updated Index from World Economic Forum
Switzerland, Finland and Sweden are the world's most competitive economies, according to The Global Competitiveness Report 2006-2007 released Tuesday by the World Economic Forum. Denmark, Singapore, the U.S., Japan, Germany, the Netherlands and the United Kingdom complete the top 10 list, but the U.S. shows the most pronounced drop, falling from first to sixth.

"The top rankings of Switzerland and the Nordic countries show that good institutions and competent macroeconomic management, coupled with world-class educational attainment and a focus on technology and innovation, are a successful strategy for boosting competitiveness in an increasingly complex global economy," said Augusto Lopez-Claros, chief economist and director of the World Economic Forum's Global Competitiveness Network.

According to the Forum's press release, "The United States, previously in first place, continues to enjoy an excellent business environment, efficient markets and is a global center for technology development. However, its overall competitiveness is threatened by large macroeconomic imbalances, particularly rising levels of public indebtedness associated with repeated fiscal deficits. Its relative ranking remains vulnerable to a possible disorderly adjustment of such imbalances, including historically high trade deficits."

Lopez-Claros elaborated on his explanation of the U.S. decline in the rankings:

"The United States will remain, for the foreseeable future, one of the most competitive economies in the world, reflecting the existence of a long pipeline of innovation, nurtured by a first class system of higher education. However, two areas are of some concern and if unattended could allow other countries in a highly competitive global economy to challenge the US's privileged position. First, with potentially open-ended expenditure commitments linked to defense and homeland security, ongoing plans to lower taxes further, as well as other longer-term potential claims on the budget, the prospects for sustained fiscal adjustment seem not too bright. With a low savings rate, record-high current account deficits and a worsening of the US's net debtor position, there is a non-negligible risk to both the country's overall competitiveness and, given the relative size of the US economy, the future of the global economy. Second, while the US has, in general, an excellent institutional framework, the quality of the country's public institutions falls somewhat short of the levels of transparency and efficiency seen in other OECD members."

The rankings are drawn from a combination of publicly available data and the results of the Executive Opinion Survey, a comprehensive annual survey conducted by the Forum. This year, more than 11,000 business leaders were polled in a record 125 economies worldwide. The survey questionnaire is designed to capture a broad range of factors affecting an economy's business climate that are critical determinants of sustained economic growth. The Forum annually delivers a comprehensive overview of the main strengths and weaknesses in a large number of countries, making it possible to identify key areas for policy formulation and reform.

The Global Competitiveness Report 2006-2007 is available at: http://www.weforum.org/en/index.htm

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Only 13 More Days to Secure a Discounted Registration for SSTI's 10th Annual Conference!
The registration form, program and additional conference information are available at http://www.ssti.org/conference06.htm.

Tennessee Innovation Strategy Targets High-Tech Research Jobs
Gov. Phil Bredesen has released a comprehensive job creation strategy with a particular focus on producing high-quality research jobs by supporting statewide innovation. Announced earlier this month, "Next Steps: Job Creation" is a four-point plan intended to attract and foster new businesses.

The strategy addresses the state's need to develop a more skilled workforce, invest in broadband and utility infrastructure, encourage local economic development leadership, and provide incentives to high-tech entrepreneurs. Bredesen, who has unveiled the plan with less than two months remaining in his bid for re-election, believes that the plan will help spur the state's job market by creating a more appealing business climate. One part of the plan, the new Innovation Tennessee initiative, will directly assist entrepreneurs and researchers in bringing their ideas to market.

Innovation Tennessee is an economic development initiative hosted by Nashville nonprofit Tennessee Tomorrow Inc., which would receive $5 million in funds from the state's Department of Economic and Community Development to provide seed funding to firms commercializing new technologies. The program will help move discoveries made at Tennessee universities and at Oak Ridge National Laboratory to the high-tech marketplace. Additional funds are being contributed by groups such as the Tennessee Technology Development Corporation, which already has approved $100,000 for the fund.

"My personal philosophy is to let the private sector do what it does best by driving efficiency and new ideas, but these are some smart, sensible ways we can help," the governor said in a press release announcing the new plan.

Other measures in the governor's strategy also focus on fostering a stronger high-tech economy. The plan calls for an upgrade of the state's broadband capabilities, both to attract new businesses and to support in-state research. A new fiber-optic network, costing an estimated $3 million, would provide improved communication between the state's nonprofit and government research institutes, such as Oak Ridge, the University of Tennessee, and the Tennessee Valley Authority. A new grant fund for communities would assist local economic development leaders in building a suitable high-tech infrastructure for technology businesses by expanding their broadband services. Further support for local economic development officials would be available through the Tennessee Leadership Center, which provides training for community leaders trying to grow and attract new businesses.

Find out more about the "Next Steps: Job Creation" strategy on Governor Bredesen's website at: http://www.tennesseeanytime.org/governor/viewArticleContent.do?id=865&page=0

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Angelos Angelou, Howard Bremer, Ned Hill and 42 More Insightful Speakers from 20 States & Provinces Continue SSTI's Conference Tradition of Breadth and Depth
Program information and speaker bios are available at http://www.ssti.org/conference06.htm.

Milken Finds California, U.S. Lead Biotech Transfer
Separate MERIT Study of European Tech Transfer Contradicts Some Conclusions
A new study from the Milken Institute confirms the success of California universities in commercializing life science research and reaffirms the international leadership of the U.S. in transfer of biotechnology from universities. Using some of the same data, however, a recent paper from the Netherlands found European tech transfer rates have been generally underestimated and intercontinental comparisons not as easy as one might assume.

Milkens Findings
Mind to Market: A Global Analysis of University Biotechnology Transfer and Commercialization, the 320-page Milken report released last week, ranks publication, patenting, and commercialization activity in biotech at 683 research universities around the world. Californias universities are consistently ranked in the top tiers of each category, most notably the University of California-San Francisco, which played a major role in launching the biotech industry 30 years ago. The study also provides 28 country profiles of national biotech activity and an assessment of university technology transfer of biotech research.

California not only leads in university technology transfer, but also in biotech venture capital funding. In 2004, the state enjoyed 87 percent ($2.36 billion) of the country's biotechnology venture capital funding. Massachusetts, in second place, received $976.9 million in funding. According to the report, the California biotech industry has thrived due to the presence of strong clusters in San Francisco, San Diego, Oakland, Los Angeles, Orange County, and San Jose, which received 15 percent of total U.S. biotech venture capital.

Massachusetts's Harvard University, however, tops the list of most successful universities in publishing new biotech research. The list ranks universities by absolute number of published articles, concentration of biotech research compared to all university published output, and number of citations to faculty work. The authors find that universities that produce a larger number of high quality articles earn more from licensing revenues than their less productive counterparts do.

Massachusetts also takes the top spot in the success of its overall university technology pipeline. This ranking, led by MIT, takes patents, licenses, licensing income, and number of start-ups into account and gives a sense of the university's ability to commercialize its discoveries.

One of the report's most interesting findings is that technology transfer offices can have a remarkable rate of return for universities. The authors suggest that for every dollar invested in offices of tech transfer, universities receive more than $6 in licensing income. After running rate-of-return simulations, they conclude that the average university would earn only 21 percent less of that income without its tech transfer office. This finding could, however, be influenced heavily by a handful of universities that have been extremely successful commercializing one or more discoveries, since the report says that most university tech transfer offices are "small, young operations, and few are profitable."

The report also concludes that the U.S. is leading the world in the commercialization of biotech research. Though the University of Tokyo and the University of London came in second and third respectively in published output and European universities establish three times as many firms (relative to research expenditures) as their counterparts in the U.S. and Canada, U.S. institutions dominate in invention disclosures, patents filed and granted, licenses executed, and licensing income. Currently, about 70 percent of global medical R&D occurs in the U.S. Milken suggests that the U.S. advantage in biotechnology stems from linkages between global firms and the country's research universities.

United Nations University-MERIT Findings
A recent study from the United Nations University-MERIT in The Netherlands takes issue with the idea that European universities cannot keep pace with their North American counterparts. Using the same 2004 survey of tech transfer activity at European universities that Milken used, the MERIT paper finds that these research institutes executed 20 percent more licenses and earned only 10 percent less license revenue in 2004 than U.S. institutions. The study, prepared by Anthony Arundel and Catalina Bordoy, contradicts some of the commercialization data presented in the Milken report. According to Arundel and Bordoy, European institutions outperform American universities in most indicators of strength in commercialization.

While Milkens Mind to Market concedes that Europe has been very successful in creating university spin-offs, it also says that the U.S. executes 25 percent more licenses and produces more than twice as much licensing income. The UNU-MERIT paper argues that internationally comparable commercialization indicators are necessary to ameliorate this kind of data discrepancy. Until such indicators are available, the authors contend, international comparisons should be made with caution.

The Milken study was sponsored in part by Inflect Technologies, a commercialization fund with offices in London and New York. Mind to Market: A Global Analysis of University Biotechnology Transfer and Commercialization is available online at: http://www.milkeninstitute.org/pdf/mind2mrkt_2006.pdf

"Developing internationally comparable indicators for the commercialization of publicly-funded research," is being presented at the Blue Sky II Conference, which concludes today in Ottawa. Abstracts for this and other papers being presented are available at: http://www.statcan.ca/english/conferences/sciencetech2005/abstracts.htm

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Need a Break?
Bricktown - Oklahoma City's exciting hotspot for great dining, music, sports and arts - is a must-see for urban economic redevelopment and an easy three-minute walk from SSTI's 10th Annual Conference. For more information, visit http://www.ssti.org/Conf06/amenities.htm.

Whither U.S. Industry?
The stock market is flirting with record highs. Venture capital coffers are overflowing. Most states and national tax revenues are greater than projected. The bad boys of Enron and Worldcom are in jail. Everythings right in the corporate world, right?

Perhaps. But the generalized character of the U.S. industrial sector emerging in the 21st century seems to be one quite different than the past according to three new papers and tech-based economic development efforts will see the impact if several trends in particular continue to develop along their current lines.

Industrial R&D expenditures are growing, but not at U.S. academic institutions. The sharp decline over 2001-2004 (most recent statistical years available) initially paralleled the impact of the last recession on industrial profits and research investment, but the 2004 survey findings by the National Science Foundation reveals overall industrial R&D expenditures increased while spending by the sector at U.S. academic research institutions continued to decline. The trend holds across both public and private institutions.

Additionally, Where has the Money Gone? Declining Industrial Support of Academic R&D, the latest Issue Brief from the National Science Foundations Science Resources Statistics division, reveals those declining industrial R&D investments are becoming more concentrated in the top 100 research institutions. That is potentially troubling news for the regions striving to improve their economic well-being based on the proximity to a smaller or mid-sized research institution.

University-industry collaboration is one of the fundamental elements of many tech-based economic development strategies. The Issue Brief, though, points toward two more discouraging trends that tech-based economic developers may want to note:

The data raise questions for the field regarding what may be behind the trends. Is the research activity of American research institutions less relevant to the commercial interests of the U.S. industrial sector or are companies abandoning U.S. academia for emerging markets?

It would not be the only area of concern over perceived abandonment, according to a new paper from the Brookings Institution. Corporate Citizenship and Urban Problem Solving: The Changing Civic Role of Business Leaders in American Cities describes a phenomenon that SSTI has heard increasingly around the country. Shifting economic forces of mergers and acquisitions, relocation to suburban/exurban locations, consolidation of manufacturing and production chains, and deregulation of the banking, communication and utility industries have reduced the number of home-grown CEOS, with their personal commitment to their hometown."

CEOs become regional vice presidents, losing much of their autonomy or incentive to invest time and resources into civic and regional economic development and charitable activities. The pool of funds and amount of time available to these leaders for civic engagement is increasingly controlled at headquarters - if it is made available at all because of the travel and time demands required for their positions.

Corporate Citizenship looks into the health and landscape of business civic organizations in 19 U.S. metropolitan areas and concludes:

Technology-based economic development, on the regional and state level, is built on a tripartite of universities, government and industry. While it seems two of those partners are increasing their investments to encourage growth, these two papers suggest the third and most critical for sustaining and improving our standard of living is increasingly occupied elsewhere.

Where has the Money Gone? Declining Industrial Support of Academic R&D is available at: http://nsf.gov/statistics/infbrief/nsf06328/

Corporate Citizenship and Urban Problem Solving: The Changing Civic Role of Business Leaders in American Cities is available at: http://www.brookings.edu/metro/mei/20060901_corpcitizenship.htm

Links to these papers and more than 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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How Should TBED Adjust to the Changing Face of U.S. Industry?
Join your peers and colleagues from around the country at SSTI's annual conference to discuss the trends described in "Whither U.S. Industry" (see story above) and other critical issues. More information is available at http://www.ssti.org/conference06.htm.

Job Corner
EMTEC Seeks Candidates for Three Positions
The Edison Materials Technology Center (EMTEC), a collaborative technology development organization based in Ohio, has position openings for a Small Business Development Center (SBDC) program lead center director/business counselor and two Procurement Technical Assistance Center (PTAC) program positions. The SBDC position is responsible for directing a nine-county SBDC program in the Dayton region. The two PTAC positions, respectively, are responsible for directing a 33-county PTAC program in the Dayton, Cincinnati and Columbus regions and for providing counseling efforts to the PTAC office in the Columbus region. More information on these opportunities is available through the SSTI Job Corner at http://www.ssti.org/posting.htm.

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