In the November 20, 2006 Issue:

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 Council on Competitiveness Releases Competitiveness Index
The U.S. has stimulated export-led growth around the world while continuing to attract the largest share of foreign direct investment, according to a new Council on Competitiveness report, Competitiveness Index: Where America Stands. The total stock of foreign direct investment in the U.S. is now $1.6 trillion, about twice that of the next largest recipient and more than six times as much as China. Between 1986 and 2004, the U.S. received more annual flows of foreign direct investment than any other country in the world.

However, this expansion has been funded primarily through rapidly increasing foreign debt, coupled with high consumption and a return to federal budget deficits, the report cautions. Such imbalances should raise warning flags for the future of American competitiveness and global economic stability, which the study discusses in depth.

The report benchmarks two decades of U.S. economic data against emerging global economies. It confirms the U.S. has among the highest levels of productivity and standard of living, making it the most globally competitive among the world’s large economies.

With the tremendous economic growth the country has generated over the past two decades, nearly doubling gross domestic product since 1986, the U.S. remains the world’s largest economy. The U.S. had a 3.1 percent growth rate between 1986 and 2005, the report indicates. This growth rate outpaced that of other major economies, such as the European Union (2.4 percent) and Japan (2.1 percent).

Standard of living in the U.S. also remains the highest among major nations, the report states. Disposable incomes are up 37 percent and average household wealth is up 61 percent since 1986.

While the Competitiveness Index makes no specific recommendations, it highlights several key issues critical for America’s future competitiveness. Adequately educating the workforce is identified as a serious area of concern.

The report notes that 21st Century American prosperity depends on improved education as globalization alters the criteria for competitiveness. It cites data that show people with higher levels of education in the U.S. have seen rapid increases in income and wealth. Households headed by people with less than a college degree have seen their incomes fall on average over the past two decades.

Unlike in past decades, higher-order thinking and knowledge will trump industrial-age efficiency as traditional skills are becoming less relevant, the report concludes. The future also will require workers to be more adaptable because of the dynamic churn of jobs, companies and entire industries.

The Council on Competitiveness is a nonprofit, nonpartisan policy action group focusing on U.S. competitiveness and economic leadership. Competitiveness Index: Where America Stands is available for purchase at http://www.compete.org.

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New Mexico Governor Proposes Education, Research and Energy Initiatives for 2007
New Mexico Gov. Bill Richardson recently announced a series of budget requests for the 2007 legislature intended to increase access to public universities and to support research and investment in emerging technologies. Together, the requests call for more than $120 million in state investment in higher education quality and affordability, supercomputing and stem cell research, and new energy initiatives.

Higher Education
Much of this funding would provide scholarships for students through the state's College Affordability Fund. The fund was created last year to support traditional and nontraditional college students, with up to $1,000 per semester in need-based funding. Gov. Richardson recommends the state invest $50 million, on top of the initial $49 million invested last year, to expand the program. The governor also is proposing a state tax credit equal to 25 percent of the federal Hope and Lifetime Learning Tax Credits to assist with tuition and fees.

Earlier this year, New Mexico received an 'F' in college affordability and a 'D' in student completion from the National Center for Public Policy and Higher Education. Gov. Richardson stated in a press release that New Mexico universities have fallen short in ensuring that minority and low-income students move successfully between their first and second years of college. The governor proposes to address this problem by linking state university funding to the rate of successful promotion for these students.

The budget requests also include $10 million in endowments for professorships at the state's two- and four-year institutions. Recipient institutions would be required to provide one-to-one matching for state funds. The investments would target college and university departments that foster growth in priority fields, including film, aerospace, education and energy.

Research
Gov. Richardson hopes to support two other fields, stem cell research and supercomputing, through state investment in new research facilities. His plan dedicates $10 million to stem cell research at the University of New Mexico Health Sciences center, including:

New Mexico also may seek to reclaim its role as a leader in supercomputing. The most recent survey of world supercomputers revealed that Los Alamos' Q machine, which was dubbed the world's second-fastest supercomputer two years ago, had dropped to 18th place. In September, IBM announced that it would help complete a new machine at Los Alamos that would be four times faster than the current record-holder at California's Lawrence Livermore National Laboratory. Gov. Richardson has requested $25 million to support the development of separate supercomputer through a statewide consortium, involving Intel, the state's universities, and its national laboratories. The funds would also be used to create a New Mexico Computational Applications Center in Albuquerque, which would apply the newly available processing power to biomedical, energy and water research.

Renewable Energy
The governor has also proposed a package of state investments in energy efficiency, alternative fuels and clean technology commercialization totaling more than $25 million. The package includes a 4 percent increase in funding for public buildings to ensure greater energy efficiency and a tax credit to promote environmentally sound homes and offices. A proposed $10 million investment would be used to create a state Energy Innovation Fund. The fund would provide financial support for applied research and commercialization of clean energy technologies.

For more information on these announcements, visit Gov. Richardson's site at http://www.governor.state.nm.us.

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Bahrain Seeks to Become Research Leader with $1B Science and Technology Park
The Economic Development Board of Bahrain and Kuwait Finance House have begun planning a $1 billion (US) Science and Technology Park in Bahrain. The park will be modeled on the Sophia Antipolis Technology Park in France, which is the largest of its kind in Europe and the second-largest technology park in the world, according to the European Commission’s PAXIS innovation program. The Kuwait Finance House has appointed Philippe Mariani, former director of the French park to oversee the new project.
 
Bahrain Science and Technology Park has already announced several partnerships with Middle Eastern and European universities to attract research in clean technology, renewable energy, environmental technology, IT, and communications. The two million square meter campus will host small, medium and large companies in these and other emerging industries.
 
The project will be executed in three phases, though a final timeline has not yet been announced. The first phase will concentrate on the initial infrastructure for the park, while the later stages will introduce additional laboratories, university partnerships, and quality of life improvements. Project leaders believe that the park will attract international companies and build up the local knowledge base, and establish Bahrain as the science and technology hub of the region.

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Utah's Centers of Excellence: A 20-year Review
Since the creation of its Centers of Excellence (COE) program 20 years ago, the state of Utah has invested in aggregate $49.4 million, resulting in the development of 185 spin-off companies throughout the years, according to a recent review of the COE program, authored by the Bureau of Economic and Business Research at the University of Utah.

The COE program, established by the state legislature in 1986 with an initial budget of $3.4 million, provides funds to university-based research centers that are chosen on the basis of technical merit, the potential for job creation, and a secured level of matching funds from private and federal sources. Each center annually receives $100,000 to $200,000. Currently, there are 66 spin-off companies created from these centers which are still active, employing between 1,500 and 1,800 people.

The document tracks the COE program over time, noting that the rate of new firm creation has decreased in recent years. During the first decade of the program, an average of 14 companies was created each year, compared to four companies per year during the second decade. The authors contend that this decrease in spin-off activity is most correlated to falling levels of state funding for the program. In both real and inflation-adjusted dollars, the amount of funding each year from the Utah legislature has been less than the initial $3.4 million budget provided 20 years ago.

They also report total matching funds for the program from private and federal sources to be $407.2 million, producing an 8.7-to-1 ratio of outside funding to state funding. The technologies developed from the program have produced 170 patents and 204 licensing agreements.

The review of the Centers of Excellence Program, which includes the review's methodology and choice of metrics, can be found in the July/August 2006 issue of the Utah Economic and Business Review:
http://www-new.business.utah.edu/humis/docs/organization_936_1161186461.pdf

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Depot Redistributes Life Sciences Equipment to Michigan Companies
The Michigan Innovation Equipment Depot has distributed its first round of life science research equipment to start-ups around the state. The Depot program, developed by Pfizer, Ann Arbor SPARK, MichBio and Michigan's SmartZones, redistributes previously used life science laboratory equipment to new Michigan companies. More than $655,000 and 131 items were awarded in the inaugural round to 18 applicants. The value of this equipment ranged from $25 to $125,000 -- an average of $4,404 per item.

The program is designed to accelerate life science commercialization by reducing the overhead equipment costs of new startups. In order to participate, companies must apply through their local SmartZone representatives and demonstrate a critical need for the equipment, as well as a positive economic impact for the state.

Find out more about the program at: http://www.automationalley.com/autoalley/Tech+Center/Services+and+Resources/MichiganInnovationEquipmentDepot.htm

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Open Science Grid Consortium Receives $30M
The National Science Foundation and the U.S. Department of Energy Office of Science have announced a five-year, $30 million award to the Open Science Grid Consortium. The Grid is a computing environment used to share and analyze massive sets of data by harnessing the processing power for distributed computing resources from of than 50 international sites. Fifteen institutions, including 11 U.S. universities and four federal laboratories, participate in the Consortium, which will use the federal funds to make the Grid's computing power available to scientists and researchers across the country.

Since 2005, when the Grid came online, the system has had a significant impact in bioinformatics, computer science, nanotechnology, nuclear science and particle physics. The Grid has proved particularly beneficial to the University of Wisconsin at Madison, which is home to the project's lead investigators. The Wisconsin team has leveraged an additional $1.2 million in federal dollars to administer the program and has made the system's computing power easily available to local scientists.

Learn more about the Open Science Grid at http://www.opensciencegrid.org.

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Useful Stats
USDA Awards More Than $25.8M to Distance Learning and Telemedicine Projects
USDA Rural Development recently awarded 103 Distance Learning and Telemedicine (DLT) grants to provide improved educational and medical services to rural residents in 38 states. The DLT grants, totaling more than $25.8 million, are designed to connect communities to medical services and educational opportunities they would not otherwise have, according to Agriculture Under Secretary for Rural Development Thomas Dorr.

Of the 103 DLT grants awarded, 57 will provide enhanced medical services and 46 will fund projects to improve access to educational opportunities. The DLT program was created to bring electronic educational resources to rural schools and improve health care delivery in rural America. Since its inception, the DLT program has funded 534 projects in 44 states and four U.S. territories totaling $171 million. The recipients of the 103 DLT grants can be found at http://www.usda.gov/rus/telecom/index.htm

SSTI has prepared a table presenting the number of DLT awards and dollar amount per state from 2002-2006. Of the 397 grants awarded over the five-year period, Texas received the most number of grants at 25 (totaling $9.97 million), followed by Alaska (21), Oklahoma (20), New York (19) and Maine (18).

SSTI’s table is available at: http://www.ssti.org/Digest/Tables/112006t.htm

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