In the January 29, 2007 Issue:

Copyright State Science & Technology Institute 2007. 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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Democrats '07 Budget Increases Research Funding
Less than one week before President Bush releases the Administration's budget request for fiscal year 2008, congressional Democratic leadership released its solution to the FY 2007 fiasco. The need to remain within spending caps approved last year and the need to focus on FY08 spending meant the FY07 fix would be simple, but slightly painful for agencies used to above-inflation-rate increases each year. Sixty programs reportedly will see cuts from their FY06 funding levels.
               
As expected, earmarks have been stripped from the Joint Resolution covering $463 billion in spending, which covers most of the federal government as 11 FY07 funding bills remained unfinished when Republicans handed over control of both chambers of Congress. Earmarks had become a common funding mechanism for many university research programs and economic development related activities, so the full impact of the move to restore some competitiveness to funding decisions remains to be seen on the TBED community.
 
On the positive side, the House Appropriations Committee says the joint resolution holds increases for:

The Association of American Universities reports, “Although the House is expected to consider the FY07 CR tomorrow under a closed rule that would allow no amendments, such restrictions do not apply in the Senate. It should be expected that Senators may offer amendments to redirect some of the research and education increases to other priorities."
 
Congressional leadership wants to resolve the FY07 budget before the current Continuing Resolution expires on Feb. 15.
 
More information is available at: http://appropriations.house.gov/pdf/CRSummary.pdf

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Québec Commits $1B+ for Innovation & Research Strategy
The provincial government of Québec committed to infusing $888 million (Canadian) into its science and technology community over the next three years, as a result of the innovation and research strategy released earlier this month. The new investment is in addition to $278 million committed this year alone for research infrastructure and the Québec Aeronautical Industry Development Strategy.
 
To help put the magnitude of the nearly $1.2 billion total Canadian three-year investment into perspective for most Digest readers (approximately $1.01 billion US), Québec’s 2006 population of nearly 7.7 million people would make it the 12th-largest state, between New Jersey and Virginia. 
 
An Innovative and Prosperous Québec outlines the province’s mechanisms to increase the development of knowledge and technology transfer, with specific and aggressive goals by 2010 of increasing:

The report outlines how funds will be spent in the next three years, including:

Some of the more interesting allocations found within Québec’s strategy include $10 million in financial support to private firms who collaborate with the province’s 31 technology transfer centers, $7 million to promote ethics and culture in science and technology, and $6 million to encourage innovative design for products, among others.
 
The English version of An Innovative and Prosperous Québec can be found at:
http://www.mdeie.gouv.qc.ca/publications/pdf/ministere/strategie_innovationEN.pdf. Page 69 of the document provides a more detailed breakdown of Québec’s proposed investments in research and innovation.

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Tech Talkin Govs, Part III

Delaware
Gov. Ruth Minner, State of the State Address, Jan. 18, 2007
"Over the coming year, our Economic Development Office will market a new initiative to promote the Technology-Based Seed Fund, the Emerging Technology Center, and the New Intellectual Property Program—all part of my New Economy Initiative. These programs fit together as a one-stop service for those wishing to start a business.

"We can provide entrepreneurs with ideas for business by offering a patent for new products, we can help fund new start-ups through the Technology-Based Seed Funds; and we can help get new businesses off the ground by providing resources and guidance through the Emerging Technology Center."

Idaho
Gov. Butch Otter, State of the State/Budget Address, Jan. 8, 2007
"Higher education helps stimulate our economy through research. I am recommending a one-time increase of $15 million for the Higher Education Research Council for research projects that facilitate economic development. That includes research being conducted by our three universities at the Center for Advanced Energy Studies, a joint venture between the universities and the Idaho National Laboratory.

"Idaho’s dairy industry has experienced amazing growth. ... However, our primary education and research programs benefiting the dairy industry are in Moscow, while the heart of the industry is in the Magic Valley. That’s why I’m recommending $10.9 million to help support a collaborative effort between the dairy industry and the University of Idaho, along with other state and federal agencies, to establish a dairy and animal research and education facility in the Magic Valley."

Missouri
Gov. Matt Blunt, State of the State Address, Jan. 24, 2007
"If we are to make Missouri families even more prosperous, we must ensure that students are equipped with advanced skills in math and science. Technology helps improve skills and spark student interest in math and science. That is why my budget includes 2.9 million dollars to fund 100 technology classrooms in 100 different schools. ...

"... After school programs provide a safe haven for children and opportunities for students to participate in math and science enrichment activities that the regular school day may not allow. To support these programs my budget includes 1 million dollars to expand quality after school programs in math and science, as well as physical activity and health. ...

"... Missouri college students are learning math and science skills in labs and classrooms that are out of date. ... To address those needs I developed the Lewis and Clark Discovery Initiative, which is a partnership between the Missouri Higher Education Loan Authority and the state. Through this Initiative we can sell loans held by people in other states and bring 335 million dollars home to strengthen our colleges and universities for our students. ...

"... We must promote policies encouraging investment so that we can deliver high speed Internet to more Missourians – whether wealthy or poor, young or old, in our largest cities or on our most remote farms. . . . When government allows businesses to compete, Missourians see lower prices and more choices. So I am asking you to enact legislation that creates competition for all companies that want to provide telecommunications and cable services."

Nevada
Gov. Jim Gibbons, State of the State Address, Jan. 22, 2007
"I have included in the executive budget $10 million in unclaimed property receipts to create a dynamic new economic development program, modeled after the hugely successful program in Georgia. Working with Lieutenant Governor Brian Krolicki, we will launch this new program to work with the best of Nevada’s research facilities in creating new high-tech/biotech and renewable energy types of industries. Funds will be used to hire world-class researchers who will bring their work to Nevada. This will provide high-end jobs for Nevadans and is ideally suited for the current 38,000 millennium scholars graduating in the coming years."

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Stem Cell Research Target of More State Dollars in Iowa, Md., Fla.

In Iowa
Less than two weeks after his inauguration, Iowa Gov. Chet Culver called for the state legislature to lift the state ban on embryonic stem cell research. The ban was first instituted in 2002.

Gov. Culver made the announcement at the University of Iowa's Medical Education and Research Facility. He also announced that when he presents his budget to the legislature, he will include $12.5 million for the construction of Iowa's Center for Regenerative Medicine to be built at the university.

"Simply lifting the ban will not be enough," said Gov. Culver. "We must commit state resources now to finding a cure and ensuring a high quality of life for future generations. Right now, Iowa is at a competitive disadvantage with other states. While surrounding states like Wisconsin, Illinois and Missouri are moving forward to build research facilities, lure away our researchers and pass new legislation allowing embryonic stem cell research, Iowa continues to tie the hands of our best health science professionals with an outdated ban on this lifesaving research."

The original ban was passed by the Republican-controlled state legislature in 2002 and signed by former Gov. Tom Vilsack, a Democrat who has since called for a repeal of the ban. After the 2006 fall elections, Democrats took control the Iowa state legislature as well as retaining the governorship. 

Gov. Culver's press announcement is available at: http://www.governor.iowa.gov/news/2007/01/12_1.php

In Maryland
To satisfy all proposals for funding received in response to the first two requests for applications for the $15 million Maryland Stem Cell Research Fund, the program would need to be more than five times larger, the Maryland Stem Cell Commission reports. To help satisfy the pent-up demand, newly elected Gov. Martin O'Malley proposes providing the research fund an additional $10 million in his 2008 budget request.

The commission received 85 applications for grants ranging in size from $100,000 exploratory research grants to investigator-initiated research grants that could garner state support of $500,000 annually for up to three years.

More information is available at: http://www.marylandtedco.org/_media/pdf/MSCRFApplications1-17-07.pdf

In Florida
A change in leadership in Florida's governorship, but not party, may increase the likelihood that the state may invest $20 million in stem cell research if either version of recently introduced identical bills pass the legislature. Newly elected Republican Gov. Charlie Crist has made it a prominent piece of his first budget request. The concept also is supported by a fellow Republican, Senate President Ken Pruitt, according to The Ledger, a Lakeland, Fla., newspaper publication.

Despite his investing huge public financing for private biotech research during his term, former Gov. Jeb Bush opposed state funding for stem cell research.

The new bills, House Bill 555 and Senate Bill 750, were introduced by Democrats on Jan. 23 and would allow state funding for adult and embryonic stem cell research. Gov. Crist's support is critical for either measure to advance, analysts suspect, as both chambers of the Florida legislature are heavily controlled by Republicans. The Ledger reports House Speaker Marco Rubio is opposed to the idea.

HB 555 is available at http://www.myfloridahouse.gov/Sections/Bills/bills.aspx

The Ledger article from Jan. 23 is available at: http://www.theledger.com/apps/pbcs.dll/article?AID=/20070123/APN/701233486

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Bioscience Sizable Contributor for 25 U.S. Regions
The question of whether or not there is enough opportunity for economic development through public-private investment in biosciences has been answered with a pretty strong “yes,” based on a report released Jan. 29 by Battelle and BIO.
 
Growing The Nation's Biotech Sector: A Regional Perspective reveals that more than half of the nation's 361 metropolitan statistical areas (MSAs) have a specialization (employment concentration that is 20 percent greater than the national average) in at least one of four major bioscience subsectors: drugs and pharmaceuticals; medical devices and equipment; research, testing and medical laboratories; and agricultural feedstocks and chemicals.
 
Many metro areas, including Chicago, Boston, Los Angeles and St. Louis, have a broad employment base in three or even four of the bioscience subsectors. Other metro areas are highly specialized in one or two particular subsectors, such as Minneapolis (medical devices), Washington, D.C. (research, testing, and medical labs), and Pittsburgh (research, testing, and medical labs and medical devices). Only two metro areas, Lincoln, Neb., and Madison, Wisc., have a specialization in all four bioscience subsectors.
 
The report’s identification of the concentration or clusters should help local and state practitioners to tailor TBED policies, programs and recruitment efforts more appropriately.
 
Each of 25 MSAs having more than 10,000 total bioscience jobs, according to the 48-page table-intensive report. The metropolitan area with the most bioscience jobs - more than 110,000 - is the New York City MSA, which includes Northern New Jersey and Long Island.
 
The new report identifies those MSAs that:

In addition to reporting on local areas meeting statistical thresholds, the report profiles seven specific metropolitan regions with significant activities or niches in one or many of the bioscience subsectors. Regional profiles were prepared for Boulder, Colo.; Durham, N.C.; Flagstaff, Ariz.; Kansas City; Madison, Wisc.; Philadelphia; and St. Louis. Such regions are investing to create the research base, talent pool, capital markets, and commercialization capabilities to build a critical mass of bioscience firms.
 
Links to this report and more than 4,500 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/.

Growing The Nation's Biotech Sector: A Regional Perspective is available at: http://www.bio.org/local/battelle2007/

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Recent Research
State Taxes Don’t Matter for Entrepreneurship
Imagine you're going into business for yourself. You will become an entrepreneur. Do you think you would stop to consider if you should relocate to a state with lower or even higher taxes before embarking on this venture?  Probably not.
 
At least that is a way to read the conclusions of a recent research paper published by the Small Business Administration’s Office of Advocacy. The major conclusion of State Tax Policy and Entrepreneurial Activity, prepared by Donald Bruce of the University of Tennessee in Knoxville and John Deskins of Creighton University in Omaha, finds “state tax policy, including both tax rates and the type of taxes in a state’s portfolio, has only a modest effect on aggregate state entrepreneurship rates.”
 
And that effect, albeit modest, is not always what one would expect. For instance, the authors found states with higher sales tax rates tend to have higher entrepreneurship rates. Top marginal tax rates on individual and corporate income do not have statistically significant effects on state entrepreneurship rates, nor does the composition of state tax portfolios (defined as the type of taxes imposed and what share each tax represents of the total state tax burden).
 
Bruce and Deskins use a variety of state-level data for all 50 states over the period 1989-2001, measuring entrepreneurship by the number of Schedule C filers in a state and the share of all non-farm employees who are self-employed.
 
The only variables found to even slightly reduce a state’s share of the national entrepreneurial stock were the higher top tax rates on individual income and the existence of state-level inheritance or gift taxes.
 
The SBA paper concludes state tax policymakers should not attempt to target tax breaks to small businesses but rather “should focus on traditional tax reforms involving lower tax rates, broader tax bases and simpler tax systems that will create a more productive tax environment for small businesses, large businesses and individuals alike."
 
Links to this paper and more than 4,500 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/.
 
State Tax Policy and Entrepreneurial Activity is available at: http://www.sba.gov/advo/research/rs284tot.pdf

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Assessment Finds MTI’s Impact Positive for Maine Economy
A new study of the Maine Technology Institute (MTI) reveals MTI's award programs have been effective in contributing to the success of its awardees and in increasing high-tech employment in the state. The MTI evaluation, conducted by the Center for Business and Economic Research (CBER) at the University of Southern Maine, also found that the success rate of MTI's funded projects improved over the five-year history of the organization. Although the available indicators suggest that MTI is a profitable investment for the state, the CBER report recommends that MTI pursue new methods of tracking its role in high-tech economic development.
 
MTI is a state-supported nonprofit that serves as Maine’s primary vehicle to provide financial support for private sector R&D. Since its first year of activity in 2001, MTI has funded 791 technology development projects throughout the state and committed $32 million through its award programs. These programs include seed grants for early stage companies, development awards for later-stage projects, Accelerated Commercial Fund awards for previous recipients, Phase 0 SBIR awards, and a Cluster Enhancement program to boost targeted industries.
 
The CBER evaluation examines the economic impact of the institute by tracking data from the 440 companies funded by MTI that had completed their projects as of June 30, 2006. CBER found that:

Overall, 75 percent of grantees said they agreed or strongly agreed that their MTI award was important to their commercial success.
 
The report, however, also found room for improvement. A previous independent evaluation in 2004 found that MTI’s Cluster Enhancement Award program was ill-suited to the survey-based tracking used for MTI's other programs. CBER recommended that recipients of the award be asked to design their own sets of milestones and goals to collect data on the award programs effectiveness, as reported in the March 7, 2005, issue of the SSTI Weekly Digest (http://www.ssti.org/Digest/2005/013105.htm#MTI).
 
The same concern is raised in the latest evaluation, which finds that MTI’s role in high-tech cluster development is unclear and cannot be evaluated with the currently available data. CBER also recommends that MTI improve its follow-up data collection with grant recipients in all of its award programs. The statistics presented in the evaluation would seem to be encouraging; however, further steps must be taken to demonstrate the value of MTI investment in the development of strong companies, CBER states.
 
The MTI impact evaluation announcement is available at: http://www.mainetechnology.com/?cat_id=260&press_id=379
 
Links to this report and more than 4,500 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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More than 4,000 People Have Done It So Far. Have You?
In just under 50 days, more than 4,000 people have gone to SSTI's website to read A Resource Guide for Technology-based Economic Development. The guide provides insights into three of the most important elements of transforming regional economies:

Readers of the guide will benefit from the wisdom and experiences of 58 experienced practitioners who have worked on these issues. Each section of the book provides insight into the characteristics and qualities shared among the best TBED policies and practices. Examples of key strategies from across the country are included, as well as special considerations, cautions or tips for each approach.

A Resource Guide for Technology-based Economic Development, produced with support from the U.S. Department of Commerce's Economic Development Administration, is available as a free, downloadable PDF at http://www.ssti.org/Publications/Onlinepubs/resource_guide.pdf or as an inexpensive 90-page bound book (a format still more likely to be perused by most legislators or gubernatorial staff than a pile of printouts). Single print copies are $15 plus shipping. SSTI members receive a 10 percent discount on each order. Orders of 15 or more receive a discounted price of $10. The guide can be ordered by calling SSTI at 614.901.1690 or ordering it online at SSTI's bookstore: http://www.ssti.org/Bookstore/merchant.mvc

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Exciting Opportunities Available on SSTI’s Job Corner
Did your New Year's resolutions involve making a career change? If so and you've yet to fulfill that resolution, visit the SSTI Job Corner at http://www.ssti.org/posting.htm.

In addition to the new opportunities described below, the SSTI Job Corner has openings for these positions:

Or, maybe you're interested in posting a position. SSTI members are entitled to unlimited, free postings, and a brief mention in the SSTI Weekly Digest. The cost for all others is $95 per ad, which will run for 30 days on the SSTI Job Corner. To place a job posting, contact Noelle Sheets at 614.901.1690.

New opportunities include:

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People

Gov. Martin O'Malley has appointed Clarence Bishop to serve as interim secretary of the Maryland Department of Business and Economic Development, replacing Aris Melissaratos.

Mike Blouin has stepped down as director of the Iowa Department of Economic Development to become president of the Greater Dubuque Development Corp..

Tucker Fagan announced he is retiring as CEO of the Wyoming Business Council to join his sons in starting a Wyoming high-tech company.

Gov. Eliot Spitzer has named Daniel Gundersen co-chairman of the Empire State Development Corp. in New York.

Gov. John Baldacci has sworn in John Richardson as the new commissioner of the Maine Department of Economic and Community Development.

Chris Roybal announced he is stepping down as senior economic development advisor of the Utah Governor's Office to become president and chief operating officer of the Northwest Research Corp., effective Feb. 2.

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