In the April 16, 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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Maryland Budget Includes 66% Increase for Stem Cell Research
As the 2007 legislative session in Maryland came to a close last week, Gov. Martin O'Malley celebrated an important victory for the future of life sciences with a $10 million increase for stem cell research and the creation of a life sciences advisory board. Gov. O'Malley requested the 66 percent increase during his Jan. 31 State of the State Address (see the Feb. 19, 2007 issue of the Digest).

The General Assembly approved the fiscal year 2008 budget last week, designating $30.5 million to the Maryland Technology Development Corporation (TEDCO). Included in this amount is $25 million for the Maryland Stem Cell Research Fund, a $10 million increase over FY 2007. Earlier this year, the Maryland Stem Cell Commission reported that an increase of this amount was imperative in order to fund two proposals released under the Maryland Stem Cell Research Act of 2006 (see the Jan. 29, 2007 issue of the Digest). The balance of funds in the TEDCO budget is mainly for the organization's investment programs - including the Maryland Technology Transfer program, the University Technology Development Fund and Incubator Support - according to budget documents.

Another success for Gov. O'Malley was the passage of SB 104 last month, establishing the Maryland Life Sciences Advisory Board. The 15-member board is charged with developing a comprehensive strategic plan for the state's life sciences industry. Board members are expected to make recommendations to address critical needs in the life sciences and promote collaboration and coordination among state higher education research institutions. Under the act, the board must include the Secretary of Business and Economic Development, a representative of TEDCO, and 13 others representing higher education, business leaders from the biotechnology industry and a member of the general public. The act provides no additional funding for the board, instead relying on existing budgeted resources.

Budget information is available from the Maryland Department of Business and Economic Development at: http://www.choosemaryland.org/index.html
 
For more information on the Maryland Life Sciences Advisory Board, visit the the governor's press office at: http://www.gov.state.md.us/pressreleases/070403.html

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Patents, Graduates Key to Fighting Kentucky's Persistent Poverty?
It’s no secret that research and education are important to a state’s economy, but for many poorer states, they may be even more vital than previously believed. A few recent studies suggest that increasing the number of patents and the education level of residents in a state could be a valuable first step in overcoming persistent poverty.

In a May 2006 working paper, Paul Bauer and Mark Schweitzer of the Federal Bank of Cleveland and Scott Shane of Case Western University argue that a state's stocks of knowledge, as measured by its patents and its high school and university graduation rates, are the most important determinants of state per capita income. The authors conclude that policymakers in states with lower incomes should focus their efforts on boosting these stocks of knowledge in order to build in-state wealth.
 
Economic development leaders in Kentucky also have been examining the Commonwealth’s consistent low ranking for personal wealth, and it would appear to be a prime candidate for such an approach. Kentucky is the sixth-poorest state in per capita income -- the same rank the state held 27 years ago. It also has struggled with low levels of educational attainment. In 2004, the state ranked 49th in the percent of adults with high school degrees and 44th in college graduates.
 
Researchers at the University of Kentucky's Center for Business and Economic Research (CBER) recently examined the impact of patents and educational attainment on the state’s economy in a report for the Kentucky Economic Development Partnership. CBER Director Kenneth Troske and researcher Kenneth Sanford collected data on Kentucky and its neighboring states over the past 35 years to find out why the Commonwealth has suffered from persistently low incomes and one of the slowest growth rates in the nation. The study reaffirmed the findings of the Bauer, Schweitzer and Shane study, concluding that although many factors have a significant impact on per capita income, stocks of knowledge – including patent capital per capita and percent of high school and college graduates – appear to be the most influential.
 
Sanford and Troske believe that, by building stocks of knowledge, Kentucky may finally be able to improve the incomes of more of its citizens. Their study reports that in 2004 the state earned only 85 percent of the U.S. average for per capita gross state product (GSP), a reflection of its low income levels. The authors’ model, however, estimates that if the state had possessed the U.S. average for patents and educational attainment, its per capita GSP might have been 96 percent of the U.S. average. Other variables, such as business climate, infrastructure, and state industrial structure, also correlated with income growth, but were less significant.
 
Future statewide economic development initiatives, Troske and Sanford conclude, should place a high priority on increasing the state's number of college-educated workers and encouraging innovative research. Kentucky currently offers several programs to encourage university and private R&D, such as the Kentucky Enterprise Fund and the Research Challenge Trust Fund. These programs have helped the state make progress in generating profitable intellectual property and introducing new technologies to the marketplace. Education levels, however, have long been a problem for Kentucky, and, according to another study, show little signs of improvement.
 
Tuition, Enrollment & the State Economy
A report from State Auditor Crit Luallen indicates that rising tuitions may be one factor to blame for the slow growth of the number of Kentucky's college graduates. In 1997, the state established a long-term goal for its efforts to improve higher education. The Kentucky Postsecondary Education Improvement Act declared that by 2020, the state would double its number of residents with a bachelor's degree. In a recent update on Kentucky's progress, however, Luallen predicts the state will not be able to reach that goal if current trends continue. In fact, the number of full-time undergraduate students enrolled at two- and four-year institutions had decreased by 900 since 2003. Though some growth has occurred at four-year colleges and universities, 45 percent of that increase was due to nonresident students, who frequently leave the state following graduation.
 
Luallen reports that high tuition may be discouraging many Kentucky residents from pursuing an undergraduate education. Since 2001, resident tuition at the state's four-year universities have risen more than 80 percent, compared with just 35 percent for the U.S. as a whole. During the same period, full-time undergraduate resident enrollment has significantly slowed. Much of the growth that has occurred has favored nonresident students who often find that even with the recent tuition hikes, Kentucky universities remain an affordable option among universities in the region. The report recommends restructuring the state's tuition levels to help residents enroll in the state's universities and to eventually improve the state's overall education level.
 
The Kentucky Long-Term Policy Research Center confirms Sanford and Troske's claim that improving the education level of the state's workforce could have substantial benefits for the economy. The group estimates that reaching the U.S. average in educational attainment by 2020 could result in a $71 billion increase in personal income and a $5.3 billion increase in state revenue. Luallen's findings suggest that adjusting tuition levels may help the state finally start generating that kind of growth.
 
Read "Why is Kentucky So Poor?: A Look at the Factors Affecting Cross-State Differences in Income," at: http://gatton.uky.edu/CBER/Downloads/Annrpt07.pdf
 
Read the Kentucky State Auditor report on Tuition at: http://www.auditor.ky.gov/Public/Audit_Reports/Archive/2007TuitionBriefing-Performance.pdf

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Blueprint Recommends New Approach to Cluster Strategy for Tucson Region
While the Tucson area is growing rapidly, surpassing one million residents last fall, regional economic development officials are concerned about personal income levels keeping pace with the growth. They argue that a highly-skilled and educated workforce within existing and emerging clusters is imperative to raise per capita personal income and to improve the region’s economic growth along with its burgeoning population.
 
Tucson Regional Economic Opportunities (TREO) recently released an Economic Blueprint that identifies five major focus areas and outlines an action plan utilizing a cluster development strategy for sustained growth and a competitive state economy. These areas include:

According to the analysis, accelerated workforce training is essential in preparing workers for existing high-quality jobs in the short-term. However, raising educational attainment rates is the long-term solution for positioning the region as a knowledge job center.
 
Some of the region’s strengths include higher education resources, quality of life, and defense-related facilities. Challenges are identified as public K-12 education, private sector leadership, and the ability to attract and retain a talented workforce.
 
Interestingly, the report recommends a cluster development approach -- this not a new concept to the region, as Southern Arizona was a pioneer in implementing the strategy back in the 1980s. The authors recommend new emphasis on strategies that apply business and leadership investment. The plan is comprised of three elements, including existing business retention and expansion, new business recruitment, and entrepreneurial start-up assistance.
 
All five clusters identified by the study are said to be favorable for future development in the Tucson area. These include three established clusters - Aerospace and Defense, Analytical Instruments, and Medical Devices - and two emerging clusters, Bio-Pharma and Environmental Technologies.
 
The authors emphasize that state leaders need to ensure that advanced education in the appropriate fields is available within the region. This will be important to the region’s future success in growing both established and emerging clusters, they say.
 
Gov. Janet Napolitano echoes the same call for investment in education and research. During her State of the State address, Gov. Napolitano called for an increased investment of $383 million for K-12 education and a $115 million contribution to postsecondary institutions under the One Arizona Plan. The governor’s budget proposal also includes $25 million to expand the biomedical education and research programs of the Arizona university system (see the Jan. 8, 2007 issue of the Digest).
 
Earlier this year, Science Foundation Arizona (SFAz) - a public-private partnership that invests in education and strategic research opportunities within the state - released an investment plan for fiscal year 2006-07, which includes grants to support K-12 STEM education (see the Nov. 27, 2006 issue of the Digest).
 
TREO plan authors see the Economic Blueprint serving as a foundation to set in motion the ideas advanced by the Gov. Napolitano and SFAz for the Tucson Region.
 
Securing Our Future Now: An Economic Blueprint for the Tucson Region, is available at: http://www.treoaz.org/About-TREO-Economic-Blueprint.aspx

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Recent Research
Does Localizing University Tech Transfer Come at a Price?
It’s a question that many policymakers and researchers across the world are attempting to answer. A recent paper by Sharon Belenzon and Mark Schankerman, Harnessing Success: Determinants of University Technology Licensing Performance, adds to the growing body of knowledge on the topic, exploring how the differences between universities may impact the income generated by licensing technology. Universities with a strong commitment to local development objectives compared to other objectives, such as revenue generation, for example, produced on average 30 percent less income per license, the authors found. Additionally, on average, 30 to 40 percent more income per license was generated for universities that provided performance incentives for their efforts.
 
Universities with strong local development commitments, however, are more likely to license to local firms. Belenzon and Schankerman conclude, “Stronger government constraints are ‘costly’ in terms of foregone license income and start-up activity.” But, it appears these same constraints localize the impact of university research – the very reason the constraints or objectives even exist.
 
As a result, SSTI sees the paper’s findings raising questions for policymakers and university officials to consider:

By combining their original survey data with data provided by the Association of University Technology Managers (AUTM), the authors further explored how additional factors, such as the technology composition of the faculty, the density of regional high-tech industry, and the existence of constraints by state government affected the licensing productivity of universities. The variable measuring the “constraints by state government” was assessed by asking universities if researchers were able to choose licensees, if provisions existed regarding confidentiality, and if license contract terms were adaptable, among others. The size of performance incentives was not used by the authors as a variable, but instead only if universities offered bonuses and merit pay.
 
Universities that incorporated performance incentives were more likely to be private institutions than public universities, were less likely to have constraints by state government, and were less likely to mention local economic development as their most important performance strategy. In addition to reviewing the income generation by licenses, Belenzon and Schankerman explored if all of these variables contributed to the total number of licenses. The possibly of a university being private, the university’s usage of incentives, and the measured existence of government constraints all had no effect on the number of licenses granted, they found.
 
Once controlled for the existence of incentive payments, whether a university is a private or public institution had no effect on the university’s licensing performance. Thus, the overriding factor on examining the productivity of licensing has less to do with the type of university and more to do with each university’s incorporation of incentives for its researchers.
 
Harnessing Success: Determinants of University Technology Licensing Performance is available at: http://cep.lse.ac.uk/pubs/download/dp0779.pdf

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Planning Well Underway for SSTI's 11th Annual Conference
Please plan on joining us in Baltimore on October 18-19. You can learn firsthand how the Maryland Stem Cell Research Fund successfully secured the increase in funding and how the initiatives are progressing, all while enjoying the view of the gorgeous Inner Harbor (see related story in this Digest).

In a few weeks, we'll be asking our members to evaluate ideas for conference sessions. These ratings determine the topics we focus on and the sessions being offered. While all interested parties can submit ideas, only members receive the exclusive opportunity to finalize the conference agenda by voting on session topics. You are invited to participate in the process by becoming a member today by visiting http://www.ssti.org/benefits.htm

"The SSTI National Conference gives me and my team the opportunity to discuss and network with people who understand 'technology and innovation ideas and strategies' that no other group in the country understands", said Tom Persons, president and chief executive officer of the South Carolina Technology Alliance. "It is always a shot of adrenaline, you just want the conference to go on another few days each year, and I consider the annual conference as my annual educational experience." 

You can become involved in the annual conference by submitting session ideas, becoming a conference sponsor or attending the event. Don't let your organization miss out on any opportunities. Contact Noelle Sheets, director of membership services, at 614.901.1690 for more information.

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What to Do with Your Tax Refund, NIST Has Advice
The average tax refund this year is expected to be around $2,300 per filer. If yours isn’t already spent and a new or second or third flat panel display (FPD) television is on your list of “must haves,” then the following link may be useful or abuse-full. The link leads to a National Institute for Standards and Technology (NIST) site with guidelines for purchasing an FPD. The presentation walks visitors through the subtleties and glaring differences among FPDs, the influence of lighting, room setting, picture viewed, etc. NIST warns it may leave you completely dissatisfied with your current TV.
 
Here’s the link: http://www.fpdl.nist.gov/Tips.pdf

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People

Lyne Bouchard is the president and CEO of TechnoMontréal, a new umbrella organization for the city's information and communications technology cluster.

Rich Cook has joined the West Michigan Science and Technology Initiative as venture center director.

Jeffrey Corcoran has been named director of the new SUNY Fredonia High Technology Incubator in Dunkirk, N.Y.

Anna Ehnmark was appointed executive director of the Technology Alliance Group for Northwest Washington.

John Gee was named president and CEO of the Information Technology Association of Wisconsin.

Donna Kent resigned as president and CEO of the Arizona Technology Council to accept a position with Televerde, a marketing service solutions provider based in Tempe.

Lisa Kuuttila is the first CEO of Michigan State University Technologies, a business organization to train MSU students in the commercialization of science and technology.

Enterprise Florida selected Louis Laubscher to replace Howard Haug as its new senior vice president and COO.

Connecticut Innovations has named John Mengacci interim president while it conducts a broad search to fill the position permanently.

Richard Nelson has been appointed chairman and CEO of the Council of Regional Information Technology Associations.

Gov. Eliot Spitzer has named Avi Schick and David Emil, respectively, as chairman and president of the Lower Manhattan Development Corporation.

Gov. Chet Culver has appointed Mike Tramontina as director of the Iowa Department of Economic Development.

John Wasilisin was named deputy executive director of the Maryland Technology Development Corporation.

Steve Zylstra stepped down as CEO of the Pittsburgh Technology Council.

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