In the May 14, 2007 Issue:
- SEMATECH, New York to Invest $600M in Nanoelectronics
- Hawaii Legislature Passes Several Innovation Measures
- States Consider Options in Extending Broadband Access
- Delta Regional Authority Aims to Increase Competitiveness
- Studies Provide Alternative Approaches to Measuring Brain Drain
- Recent Research: Why Do Manufacturing Firms Choose to Collaborate on Innovative Projects?
- Useful Stats: Percent Change in Academic R&D Expenditures by State, 2001-2005
- Exciting Opportunities Available on SSTI's Job Corner
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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SEMATECH, New York to Invest $600 million in Nanoelectronics
Deal’s Impact on Texas Operations Remains Unclear
If you follow college sports, you know all how strong rivalries can be between certain schools. Bragging rights after a football game spill over into competitions over everything. Those that cross neighboring state borders seem to have even more edge sometimes.
Follow the semiconductor industry for long and you will find similar rivalries arising between two states whose capitals are 1,575 miles apart: New York and Texas. Both states’ capitals – Albany and Austin – want to be the global center for nanoelectronics.
The trophy is SEMATECH, the semiconductor industry’s research consortium. The consortium is a research partnership that includes the largest commercial producers and consumers of semiconductors, comprising more than 50 percent of the world's microchip market.
The New York and Texas state governments have demonstrated over the years that they are willing to pay handsomely for that trophy, too.
News last week broke that New York may have pulled a coup – stealing SEMATECH’s headquarters from Austin. The truth appears to be a little less clear at this point.
SEMATECH has reached a preliminary deal with the state of New York to begin a $600 million expansion of the semiconductor development consortium's research presence in Albany. The expanded facilities at the University of Albany's College of Nanoscale Science and Engineering will become the new headquarters for International SEMATECH, a subsidiary arm that specializes in nanoelectronics and advanced microchip manufacturing. New York Gov. Eliot Spitzer announced that the state will contribute $300 million over the next five years to match a $300 million commitment by the consortium.
The state funding will be used to build the advanced infrastructure and equipment needed at the Albany campus and to support five advanced manufacturing research centers at universities around the state.
According to the Austin American-Statesman, last week’s announcement came as a surprise to many in Austin, where SEMATECH began its operations in 1988 after orchestrating a multi-state competition usually reserved for large industrial plants that promise to employ thousands. The Texas bid was reported to be in the neighborhood of $485 million, a recent Albany Times-Union article states.
Over the last 20 years, SEMATECH has played a major role in establishing Austin as a hotspot for semiconductor research and manufacturing. The consortium also is a key partner in a number of the state’s advanced manufacturing partnerships and initiatives, including the Texas Alliance for Nanotechnology and the Texas Technology Initiative.
The first hint of a shift to New York appeared in 2002, when SEMATECH established a research presence in Albany after receiving a $150-200 million incentive package from the state of New York (see July 19, 2002 issue of the Digest).
SEMATECH North became the consortium's first research center outside of Austin, which led to a bidding war between New York and Texas over which state would host the SEMATECH headquarters. In 2003, Texas Gov. Rick Perry managed to entice the consortium into pledging to maintain its headquarters in Austin with a $40 million grant through the state's newly created Enterprise Fund (see “Chip Wars, Part II” in the July 18, 2003 Digest).
According to press releases and media coverage, SEMATECH will maintain its current research presence in Austin, including the consortium's headquarters and existing research subsidiaries; however, the Albany facility is expected to overtake Austin as the largest research location for the consortium and host International SEMATECH’s headquarters, a subsidiary of the original SEMATECH. The Albany Times-Union reports that the operating budget for International SEMATECH will be at least $130 million, more than four times the Austin SEMATECH budget. SEMATECH also plans to increase its number of Albany employees from 250 to 700 over the next three years.
Round three of the battle appears to belong to New York but the long-term impact on the Austin operations and SEMATECH’s research investment with Texas universities remains unsettled.
Read Gov. Eliot Spitzer's announcement about the SEMATECH agreement at: http://www.ny.gov/governor/press/0509074.html
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Hawaii Legislature Passes Several Innovation Measures
While legislators did not agree to all of Gov. Linda Lingle’s Innovation Initiative – including a $100 million innovation fund - some of the governor’s original concepts emerged from several other bills at the close of the 2007 legislative session last week.
The legislature passed a number of measures to promote science, technology, engineering and math (STEM) education, a major priority in the governor’s innovation package. SB 885 establishes the Career and Technical Education program within the state Department of Education and provides $5 million over the biennium for several technical education initiatives. Among those are Gov. Lingle’s proposals for the Hawaii Excellence through Science and Technology (HiEST) Academy Pilot Program and a Fostering Inspiration and Relevance through Science and Technology (FIRST) Pre-Academy Program.
Under HB 1630, Project EAST (environmental and spatial technology via experiential learning) will be maintained in existing schools and expanded to schools statewide. Project EAST incorporates cutting-edge technology into school curriculum in order to prepare students for high technology-based careers. Additional acts that incorporate portions of the governor’s original innovation package include:
- HB 1083 establishes a $5 million R&D follow-on funding program for small businesses that received federal funding in the fields of science and engineering to develop and commercialize defense-related dual-use technology. Funds will be distributed by the Hawaii Strategic Development Corporation.
- SB 907 renames the Office of Space Industry to the Office of Space Development and provides $500,000 to identify and promote opportunities for expanding and diversifying aerospace-related industries in the state.
- HB 1003 creates the Hawaii Natural Energy Institute at the University of Hawaii and a special fund to develop renewable energy and energy efficient technologies.
- HB 226 creates a task force on reduction of greenhouse gas emissions and requires emissions to be cut to 1990 levels by the year 2020.
Gov. Lingle introduced the Innovation Initiative during her State of the State Address earlier this year. Her proposal included the creation of a $100 million fund using money from the State Employees Retirement System (ERS) for several key innovation initiatives (see the Jan. 22 issue of the Digest). SB 1365 originally included the $100 million allocation and funding for the University of Hawaii Office of Tech Transfer and Economic Development. However, the funding portion was dropped from the final bill, and instead, the bill requires the ERS board to develop criteria for future allocation of local innovation investments.
Gov. Lingle introduced similar legislation last session under the Innovation Special Fund, which was tabled by session’s end (See the May 8, 2006 issue of the Digest).
An act passed by the legislature that requires high-technology businesses with investors claiming the High Technology Business Investment Tax Credit to publicly disclose their business name and status is still being considered by Gov. Lingle. The goal of HB 1631 is to measure the effectiveness of the tax credits so lawmakers can better evaluate whether they should remain in place beyond the expiration date of 2010. According to the bill’s language, accurate information with respect to the efficiency of the credit is lacking. The state Department of Taxation would annually report information regarding investment, employment, job creation, wage, revenue and expense to the legislature. Gov. Lingle has until July 10 to sign the measure.
The fiscal year 2007-09 biennial budget includes $4.8 million annually in state funds for the High Technology Development Corporation (HTDC). In addition, SB 896 appropriates $150,000 in FY 2007-08 and $250,000 the following year for HTDC to create commercial wet lab space located within a life sciences research complex near the University of Hawaii Medical Center.
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States Consider Options in Extending Broadband Access
In an era in which many companies maintain a web presence before their first technology hits the market, broadband access has become an essential ingredient for high-tech business and growth. In many states, however, the need for broadband access has widened the high-tech achievement gap between urban and rural areas. Without high-speed connections, many students in rural areas are unable to gain the skills needed by technology-based companies, and many rural businesses find it difficult to compete without access to advanced web-based resources.
Universal access to high-speed broadband access has become something of a holy grail, not yet attained by any state. In order to spread the benefits of high-speed connections, several states have recently launched initiatives to ensure that even businesses in the most remote regions have access to online resources.
Vermont Gov. Jim Douglas believes that universal wireless broadband access could revolutionize telecommunications, education and business in his state. In his inaugural address earlier this year, the governor announced a plan to make Vermont the country’s first “e-state”, in which wireless data transfer and cellular voice coverage are available anywhere in the state (see the Jan. 8, 2007 issue of the Digest).
The state legislature recently approved the first step in the governor’s plan by establishing a Vermont Telecommunications Authority to direct the state’s wireless efforts. The Authority will issue $40 million in grants to municipalities and service providers for projects to extend voice and data coverage to currently underserved areas. The grants will allow the state to provide “border-to-border” access, even in the rural areas not served by conventional broadband.
Several other states also are engaged in the race to become the first state with border-to-border wireless access. Both South Carolina and Rhode Island have launched their own universal wireless strategies. Though the details of these strategies differ, each state hopes that by extending wireless coverage they will be able to offer unmatched opportunities in education and business while bypassing the cost of installing cable access points in underdeveloped areas.
Many states, however, still struggle to offer wired broadband services to a large portion of their citizens. West Virginia ranks 45th in broadband access, according to Kyle Schafer, the state’s chief technology officer. The state has faced a particularly challenging time extending services, due to its mountainous terrain and large rural population.
In April, the state legislature approved a bill that promised to offer broadband access to the entire state by 2010. The Electronic Telecommunication Open Infrastructure Act would have allowed the state to immediately begin work on a survey of current broadband availability, and then to begin extending access to the rest of the state.
That plan was halted late last month, however, when Gov. Joe Manchin vetoed the bill and introduced an alternative approach. The governor said the bill would have interfered with an emerging “strategic alliance” with networking company Cisco Systems. Cisco has begun offering the state free guidance in expanding its broadband network, according to an Associated Press article. Gov. Manchin believes that the alliance will still result in universal access by 2010.
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Delta Regional Authority Aims to Increase Competitiveness
Region Looks to Broadband Access and IT Usage
The Delta Regional Authority (DRA) lacks the access, awareness and affordability of broadband Internet service – a direct bearing on the region’s ability to participate successfully in the national and global economies, a new report from DRA and the Southern Growth Policies Board finds.
DRA and Southern Growth partnered to develop an information technology plan to improve education, enhance entrepreneurship, and improve health care through the use of information technology. The plan was presented to the president and Congress last week.
iDelta: Information Technology in the Delta consists of two volumes. The first provides data for measuring information technology usage and examines the economic factors that lead to technology barriers in the region. For example, more than 15 percent of DRA zip codes do not have a high speed Internet service provider and per capita income for the region is about 20 percent below the U.S. average.
The second volume consists of seven proposed actions and recommendations to improve information technology access and usage. Each recommendation outlines a vision statement, a context that explains the rationale for the vision, and examples of model programs. Highlights include:
- The use of Geographic Information Systems to support regional initiatives in health, transportation, economic and community development, homeland security, and disaster pre-event planning and recovery;
- Access to telehealth, the providing of care, education and improved medical practice via advanced telecommunication networks;
- Distance learning for all schools and trained personnel to manage the operations;
- Access to training in computer literacy and workforce skills; and,
- Internet home pages for all local governments that provide information and services.
Central to the plan is the creation of an iDelta Center to act as an organizing entity and assume responsibility for implementing the initiatives. The center would be based upon successful models of state broadband promotion organizations such as ConnectKentucky and eNC.
The report also calls for the creation of federal interagency agreements and recommends the iDelta Center partner with federal, state and local governments to leverage private sector involvement.
Regional commissions and authorities, including DRA, are dependent on annual federal appropriations, which have decreased over the last few years. The president’s fiscal year 2007 budget recommendation included $5.9 million for DRA, a $6 million decrease from the previous year. This year, funding levels remained steady – $6 million was proposed for DRA in FY08.
The Delta Regional Authority serves 240 counties and parishes in Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri and Tennessee. The two-part report is available from DRA at: http://www.dra.gov/programs/information-technology/
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Studies Provide Alternative Approaches to Measuring Brain Drain
A continuing concern of many TBED organizations is the departure of university graduates from their communities, leaving at various stages of their lives and taking their talent and education with them. The resulting "brain drain" from this exodus leaves many states with the frustration of paying the costs to educate its citizens, but not reaping the benefits of an educated workforce. For example, a survey completed two weeks ago by the Detroit Free Press reported 53 percent of students at Michigan's three largest universities (University of Michigan, Michigan State University, and Wayne State University) were definitely planning to leave the state after graduation. The main reason for leaving, cited by 47 percent of respondents, was to go where good jobs are located. A secondary reason, named by 24 percent of departing graduates, was the desire to see what it is like somewhere else outside of Michigan.
Questions facing policymakers addressing brain drain include: What are the various measurable components of the brain drain problem in my locality, and what can be done to fix it?
A recent report about the retention rate in Vermont concludes that keeping younger people from leaving is "an exercise in futility" and efforts should target bringing back those who have left. Produced by TIP Strategies, Next Generation Consulting, and the Vermont State Data Center, Growing Vermont's Next Generation Workforce combines migration and occupational data with polling research to show who is entering and leaving the state and for what reasons. Engaging nearly 3,000 alumni from various Vermont colleges and universities, 40 percent responded that they have considered moving back to Vermont, with the high cost of living and the perceived lack of job opportunities cited as the primary barriers to relocation. According to the authors, if a marketing campaign addresses these reasons, the campaign would "have a high likelihood of success."
This report also discusses strategies to retain graduates, as more than half of Vermont college students come from outside of the state. One suggestion is to increase the opportunity for students to have internships at local companies, which they find increases the likelihood of students to remain in the state by 75 percent. Encouraging initiatives that anchor people to a place might put a dent in the report's estimate that four out of five Vermont college graduates leave the state one year after graduation.
But alternative research methods are showing that the percentages may be drastically different in other states, with the loss of human capital not as bad in some places as originally feared. For example, a report released last month by the Center for Business and Economic Research at the University of Tennessee finds 84 percent of graduates from Tennessee's higher education institutions remain in the state one year after graduation, either working or continuing their education. This percentage decreases in subsequent years, with 76 percent of graduates remaining in the state after four years and 70 percent after seven years, the authors found. The study considered 207,600 graduates from Tennessee public institutions from 1997 to 2005 and data from the state's unemployment insurance system to reach these conclusions.
Another study was completed for the state of Maine and utilized 1,789 people 5-8 years after graduation as their sample. The authors of the newest version of Maine's College Graduates: Where They Go and Why found that 49 percent of graduates from higher education institutions in Maine remain in the state. Additionally, of those who graduated from universities outside of the state, 55 percent returned to Maine to live and work. The top three reasons people chose to stay included being closer to friends and family, recreational activities, and cultural and social reasons. Those who left Maine cited different reasons for leaving, the most important being better career opportunities, followed by the discovery of a job outside of the state, then better pay and benefits. The report concludes that Maine "is not losing as many of its college educated young people as originally assumed."
Perhaps, a good first step to increase the retention rate of university graduates is to correctly measure both the size of the problem and the reasons of individuals remaining and leaving the state. This collection of studies includes interesting examples of how to approach and analyze the brain drain question.
Published in 2006 by the Center for Education Policy, Applied Research, and Evaluation at the University of Southern Maine, Maine's College Graduates: Where They Go and Why can be downloaded at:
School-to-Work: Do Tennessee's Higher Education Graduates Work in Tennessee? can be found at http://cber.bus.utk.edu/THEC/thec_pt1.pdf
Growing Vermont's Next Generation Workforce contains a summary of other recent reports that have looked at the brain drain question and is available at: http://www.thinkvermont.com/publications/index.cfm
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Why Do Manufacturing Firms Choose to Collaborate on Innovative Projects?
Manufacturing firms come in all shapes and sizes. Little ones. Big ones. Ones that need more labor from their employees to assemble components. Ones that need more R&D from their employees to design products.
And, for a variety of reasons, many manufacturing firms decide to collaborate with other entities in order to develop new and improved products. A recent discussion paper from the Center for European Economic Research sheds new light on the motives of these collaborative firms. In Motives for Co-operation: Evidence from the Canadian Survey of Innovation, Tobias Schmidt develops a typology of these firms, differentiated by their reasons to engage in collaboration.
What’s new about Schmidt’s research is the tool he uses to explore the relationship between these motives (to share costs or to access external knowledge, for example) and the descriptive factors (size, industry type, educational attainment of employees, for example) of these firms. Much of the previous research in the field has used proxy measures to explore the motives of firms. But Schmidt utilized a direct question about firm motives that was included in Canada’s 2005 Survey of Innovation, a question that has not been featured in many past national innovation surveys from around the globe.
Depending on how they answered the specific question concerning motives, firms were placed into one of four categories: those who collaborate to share the cost of developing innovations, those who access external knowledge outside of the firm, those who collaborate to enable the scale-up of production, and those who collaborate to develop commercialization activities. From this mandatory survey of all Canadian manufacturers with 20 or more employees and at least $250,000 in revenues, a random sample of 8,900 firms stratified by type of industry, region of Canada, and firm size were selected for the statistical analysis. A slew of variables, including each firm’s innovative practices, public R&D support, and firm characteristics also were captured by the survey.
The study’s findings? Firms whose motives for collaboration are cost-sharing are very similar to firms whose motives are accessing external knowledge. Schmidt speculated this similarity is because their concerns - finance and knowledge - are both inputs at the development stage of the innovation process. These firms are generally large in size and are more research-oriented than other firms. By typology, they are very different than firms that collaborate to scale up production, operating at the diffusion stage of the innovation process. Firms that collaborate for commercialization purposes have characteristics somewhat between these two extremes. This typology may assist TBED organizations to target certain types of firms for their policies to increase commercialization, or to strengthen collaborations with the intention of lowering costs.
In addition, a key difference exists between the four grouping of firms based on their collaboration motives. The existence of public R&D funding has a strong effect on the likelihood that a firm collaborates to access external knowledge, but not for the other motives.
A copy of Motives for Co-operation: Evidence from the Canadian Survey of Innovation can be downloaded at: ftp://ftp.zew.de/pub/zew-docs/dp/dp07018.pdf
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Percent Change in Academic R&D Expenditures by State, 2001-2005
Last week’s release by the National Science Foundation (NSF) of the results of the 2005 survey of academic R&D expenditures reveals the nation’s investment in research through its universities and colleges rose 5.8 percent in fiscal year 2005. Academic research expenditures for FY 2005 totaled $45.75 billion.
The results permit SSTI to prepare an updated version of its statistical glance at the five-year trends by state. As in past tables, the new rankings for the percent change in a state’s share of the total over the period 2001-2005 confirms it is extremely difficult for states to change their overall ranking on a year-by-year basis.
In fact, during the past five years, only a handful of states have shifted rankings by more than one position either up or down over the five years.
The only three states to show “dramatic” improvements of more than two spots are:
Of course, not all movement could be in the up column. Two states saw declines of more than one or two rankings during the 2001-2005 time span:
- Nebraska, which moved from 35th in 2001 and 2002 to 31st in 2005;
- Tennessee, which climbed steadily from 26th in 2001 to 20th in 2004 and 2005; and,
- Virginia, moving from 17th in 2001 to 14th in 2005.
- New Mexico, which dropped from 31st in 2001 to 34th in 2004 and 2005; and,
- Minnesota, which moved from 22 in 2001 and 2002 to 25th in 2005, an increase from the 2004 ranking of 26th.
Another measure of academic R&D trends that could be useful for TBED policymaking may be the percent change in a state’s total academic R&D expenditures relative to the national average. From 2001 to 2005, U.S. total academic R&D expenditures rose only 25.8 percent. Five states saw lower growth: Iowa, Maine, Minnesota, Utah and Oklahoma. South Dakota and Wyoming bested the list, experiencing 106 percent and 100 increases, respectively, from 2001 to 2005.
The remaining top 10 states in rank order were West Virginia, North Dakota, Tennessee, Montana, Nevada, Ohio, Hawaii and Vermont. Ohio is the only non-EPSCoR designated state among the top gainers.
SSTI’s table is available at: http://www.ssti.org/Digest/Tables/051407t.htm
Academic Research and Development Expenditures: Fiscal Year 2005 is available at: http://www.nsf.gov/statistics/nsf07318/content.cfm?pub_id=3767&id=2
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Exciting Opportunities Available on SSTI's Job Corner
Are you thinking about making a career change? If so, 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.
- Executive Director at the Georgia Medical Center Authority
- Director of the Student Innovation Center with the University of Maine
New opportunities are highlighted below. Each opportunity was announced by TechColumbus, a nonprofit corporation focused on developing local opportunities to impact Central Ohio's tech-based business growth:
- Director of IT Commercialization Services. This position is primarily responsible for recruiting, mentoring, assisting and servicing client companies of TechColumbus Incubation Services tenant and client companies. The position also will collaborate with TechColumbus Marketing resources to promote IT support activities. A Bachelor of Science or MBA IT degree in business or a related field, plus 10 years in a management role in IT, is required.
- Entrepreneur in Residence (EIR). This position is responsible for creating and sustaining high-potential companies that will grow and attract multiple rounds of new, smart and meaningful follow on investment. The EIR also will execute a strategy to effect portfolio company success by providing hands-on coaching and mentoring and providing committed services. A bachelor's degree in engineering, science or business is listed among other requirements.
- Funds Team Manager. This position is responsible for the implementation, administration and strategy of all Entrepreneurial Signature Program (ESP) Funds and other very early-stage investment and grant funds for TechColumbus. He or she will oversee all of the processes associated with the evaluation, due diligence, approvals and disbursement, including contract management. A bachelor's degree, preferably in technology or business with a focus on finance or entrepreneurship, or equivalent education or experience in a relevant field is required.
- Outreach Team Leader. This new position will be responsible for developing marketing and network event programs, research and analysis, promotion and monthly communications to create region-wide awareness and interest in the regions economic development programs. A business or technical degree from an accredited college or university, or equivalent education or experience in a relevant field, is required.
- UST Services Team Start Up Specialist. This position is responsible for the front end of the ESP process, which includes: attracting and harvesting companies and opportunities, coaching and mentoring companies, and sponsorship of companies to ESP funding sources. A Bachelor of Science degree in finance, IT, business, engineering or a related field, plus three years as a consultant to or in a new start-up business or businesses, is required.
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