In the March 26, 2008 Issue:

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 SBIR Reauthorization
Improving the Impact of FAST: An Editorial
Last week, SSTI reported the draft SBIR Reauthorization bill circulated by the House Small Business Committee in mid-March included language that would reauthorize the Federal & State Technology Partnership (FAST) for two years at its current $10 million level. FAST was created with the 2000 SBIR reauthorization and received appropriations through the Small Business Administration (SBA) for three of the next four years.
 
In its first iteration between 2000-2004, FAST received mixed reviews. It could be made better through the present reauthorization process. Before that, however, an important and often overlooked point must be made: there is little to no criticism with the underlying concept or mission of FAST to provide financial support to state and local efforts to promote the federal SBIR program and improve the quality of small business participation in SBIR across the country.
 
That lack of criticism can easily be attributed to the fact that promotion of the opportunities afforded small tech firms through SBIR and the provision of high-quality proposal development assistance does make a difference in the number of competitive proposals received from the geographic area served by the outreach and assistance efforts. In its assessment of the SBIR program, the National Academy of Sciences concluded that despite the small dollar amounts of the FAST awards, the short-lived program did appear to make a difference.
 
FAST did develop a sizable collection of critics, however, including many grantees. The situation after the first three funding cycles was so dire, in fact, that there was little fight for appropriations in fiscal year 2005 when the Administration did not request more funding. FAST has remained on the books as an unfunded Small Business Administration (SBA) program ever since.
 
The conclusion: good idea, poorly executed.
 
In February 2008, SSTI convened conference calls with its core state members to develop suggestions regarding how FAST could be improved. Past criticisms essentially could be divided into two groups: 1.) variable quality of FAST grantee service delivery and performance; and 2.) administrative/oversight issues at SBA. There are easy and affordable ways to address each set of concerns.
 
In this issue of the Digest, we highlight some recommendations addressing the first group of concerns dealing with grantee quality, including:

In next week’s Digest, we will consider effective ways to address criticism of FAST administrative issues at SBA.

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$267M USDA Loan to Expand Broadband across 17 States
On March 25, U.S. Department of Agriculture (USDA) Rural Development Under Secretary Thomas Dorr announced that Open Range Communications, headquartered in Denver, Colo., will receive a $267 million loan from USDA Rural Development to provide broadband service to 518 rural communities in 17 states. The commitment represents one of the largest public-private investments for broadband service by the federal government, the USDA reports. It is also the first USDA Rural Development investment to support Wi-Max technology.
 
The Open Range project is intended to cover more than six million people and serve more than 447,000 households within five years. In addition, the services are expected to help create jobs and business opportunities in the project's 17 states, including: Alabama, Arkansas, California, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Nebraska, Nevada, New Jersey, New York, Ohio, Pennsylvania, South Carolina and Wisconsin.
 
The partnership will help address the need to deploy wireless, portable broadband connectivity to improve service in considerable portions of rural America. The set of services will provide Wi-Max technology that transmits wireless data in areas not serviced by cable or DSL technologies. Open Range plans to offer affordable, wireless high-speed broadband service to underserved and unserved areas.
 
In addition to broadband, Open Range will offer satellite services to provide rural residents with portable connectivity virtually nationwide. Improved service with portability features will improve communications and responses for emergency first responders, such as law enforcement and rescue providers, and healthcare providers.
 
Open Range is leveraging the $267 million government loan with an investment of more than $100 million from the private sector. The loan is contingent upon Open Range meeting the conditions of the loan agreement.
 
The Rural Development Broadband Loan and Loan Guarantee Program is making the loan. Since its inception, the program has awarded $1.6 billion in loans for projects to provide rural broadband services. The Rural Development Broadband program has financed a variety of technologies, including wireless, fiber, hybrid fiber/coax, DSL and broadband over power lines.
 
Further information on rural programs is available at a local USDA Rural Development office or by visiting USDA's website at http://www.rurdev.usda.gov.

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Virginia Lawmakers Pass Budget, Delay Action on $1.65B University R&D Bond
Adjourning from the 2008 legislative session on March 13, Virginia legislators passed the fiscal year 2008-10 biennial budget but immediately called for a special session to resolve differences in the proposed capital outlay plan that supports university R&D and commercialization efforts. 
 
Gov. Tim Kaine unveiled the bond package in December, which includes funding to upgrade university research buildings and laboratories and purchase new research equipment. The bond package also targets construction projects focused on developing a skilled workforce (see the Dec. 19, 2007 issue of the Digest). Lawmakers will reconvene April 23 to act on the bond package and to consider the governor’s amendments and vetoes to the state budget.
 
Faced with a projected budget shortfall of $339 million for the remaining fiscal year and more than $1 billion in FY09-10, Gov. Kaine announced last month a revised budget revenue proposal to his original recommendations unveiled late last year.
 
To address the shortfall, Gov. Kaine called for reductions across executive budget branch agencies, targeted cuts to many of his own proposals and withdrawing funds from the Revenue Stabilization Fund. Specifically, the plan trims $1.8 million over the biennium for the Virginia Community College System and $7.7 million from the Commonwealth Technology Research Fund for the biennium. The governor’s original proposal provided $10.5 million over the biennium for the fund.
 
An amendment in the conference report for the FY08-10 biennial budget splits the appropriation for the Governor’s Development Opportunity Fund between the two years of the biennium to help address cash flow needs in FY09. The biennial appropriation is unchanged and totals $15.1 million, $7.6 million of which would be available in the first year.
 
The conference report includes $17.4 million each fiscal year for the Virginia Economic Development Partnership – $100,000 above the governor’s recommendation. Another $50,000 in FY09 is included to support physical and programmatic activities of the Virginia Biotechnology Research Partnership Authority.
 
The Innovative Technology Authority - the governing body of the Center for Innovative Technology - is slated to receive $5.8 million each fiscal year with $500,000 over the biennium earmarked for the Virginia Electronic Commerce Technology Center. The conference report does not include the governor’s recommendation of $500,000 each year for a new initiative within the Department of Housing and Community Development to develop a higher education center and fund rural broadband.
 
Lawmakers reduced by $10 million the governor’s recommendation for the Education Research Initiative. Research grants under the initiative are intended to encourage university collaboration, benefit economically distressed regions and attract industry-sponsored R&D. Lawmakers approved $1.9 million in FY09 and $9.2 million in FY10 for the initiative.
 
HB 1312, a bill to transfer responsibility for the management of the state’s workforce development program to the Virginia Community College System, also was passed during the legislative session. The bill calls for developing a strategic plan for workforce development and training programs to coordinate with the state’s economic development strategic plan.
 
The conference report for the FY 2008-10 biennial budget is available at: http://leg2.state.va.us/MoneyWeb.NSF/Bud2008

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Partial Funding Restored for TBED Initiatives in Idaho Budget
Idaho’s entrepreneurial support centers managed to survive the legislative session with half of their annual appropriation intact in the fiscal year 2009 state budget, despite being zeroed out in Gov. Butch Otter’s budget recommendation earlier this year.
 
Lawmakers allocated $150,000 for the TechConnect Centers within the Department of Commerce – down $150,000 from the previous two years. The legislation requires TechConnect to report to the Joint Finance Appropriations Committee at the interim spring meeting on all activity dating back to FY06, including detailed information on all interactions with businesses, the amount of time and money invested, and the outcome of the investments.
 
The Department of Commerce will receive $33.9 million, down from the estimated $54.9 million in FY08 expenditures. This includes $600,000 for the Business and Jobs Development Fund, $100,000 for the Rural Initiative Program and $100,000 for Small Business Assistance Grants. No funding was included for the Entrepreneurial Fund.
 
The total funds appropriation for colleges and universities in FY09 is $422.8 million, down from $445.1 million in FY08. Lawmakers also restored funding of $1.6 million for the Center for Advanced Energy Studies at University Place in Idaho Falls. The State Board of Education requested $3.8 million to operate a 50,000-square-foot facility expected to serve as headquarters for the program, which was zeroed out by the governor, according to the Post Register.
 
The approved budget also includes $1.4 million for program goals of the Higher Education Research Council and a one-time appropriation of $1.6 million for competitive research grants. Another $1.5 million is earmarked for instructional projects within the State Board of Education specifically designed to foster innovative learning approaches using technology and to promote the Idaho Electronic Campus.
 
Community colleges would receive a slight increase in funding for a total of $30 million, including $5 million in ongoing funding for the new College of Western Idaho.
 
The corresponding budget bills are HB 610, SB 1489 and SB 1494.

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Federal Agencies Identify R&D Priorities for Critical U.S. Manufacturing Areas
Three of the major thrusts for the research investments of many states –  hydrogen energy technologies, nanomanufacturing, and intelligent and integrated manufacturing – are the focus of a new report by a federal Interagency Working Group on Manufacturing R&D. Manufacturing the Future: Federal Priorities for Manufacturing R&D describes the significance of each of the three critical manufacturing R&D areas, details the challenges essential for progress, discusses existing interagency collaborations and provides recommendations for future research.
 
The report provides academic and state policymakers the opportunity to compare how well their research investments in the critical sectors match the needs identified by the federal agencies. As the Interagency Working Group was comprised of 15 departments, agencies and organizations in the federal government, future federal research funding opportunities could be influenced by the report. The group worked under the auspices of the National Science and Technology Council’s Committee on Technology.
 
Further down the commercialization stream, companies with technologies or processes that address or overcome the challenges identified for each manufacturing area most likely will be better positioned competitively, providing a possible focus area for targeted later-stage state and private TBED investments.
 
For example, for hydrogen energy technologies, the report identifies more than two dozen specific research challenges distributed across hydrogen production, hydrogen storage and fuel cell system manufacturing.
 
R&D priorities for nanomanufacturing are divided into three focus areas: infrastructure development and partnerships; integrated product and process design tools and systems; and workforce needs, societal impacts, environmental impact and human health & safety.
 
Intelligent and integrated manufacturing challenges requiring attention and investment were identified across four technical areas:

Technical staff members from the National Institute of Standards and Technology served as chair and executive secretary of the Interagency Working Group and oversaw the drafting of the final report.
 
Manufacturing the Future: Federal Priorities for Manufacturing R&D is available at: http://www.manufacturing.gov/pdf/NSTCIWGMFGRD_March2008_Report.pdf

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Useful Stats I
Searchable Database of Academic Earmarks: 2008
By now, you've probably seen many of the articles covering the record number of earmarks academic institutions secured in the federal FY 2008 budget. The Chronicle of Higher Education identified more than 2,300 individual projects distributed across 920 institutions - mostly for research. The figure is 25 percent higher than the previous record and totals at least $2.25 billion. The wealth, though, is also more distributed this year than previously. The Chronicle released a table of the top 843 institutions at: http://chronicle.com/free/v54/i29/4529nonshared_earmarks.htm

As a service to the public, the esteemed publication has made available a free searchable database of all of the earmarks it identified. Records, searchable by state and agency, include the institution's name, the federal agency involved, the specific dollar amount of the noncompetitive award, a description of the project, and the congressional sponsors.

The database is available at http://chronicle.com/stats/pork/.

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Useful Stats II
2006 AUTM Survey Results by State
Every year, the Association of University Technology Managers (AUTM) releases its U.S. Licensing Activity Survey. The most recent version provides information on fiscal year 2006 (see the Dec. 5, 2007 issue of the Digest) and contains data for 189 universities, hospitals and research institutions. SSTI has prepared a table sorting the survey respondents by state and aggregating a number of key metrics such as the number of full-time employees in licensing staffs; research expenditures; number of patents or options executed; cumulative active licenses; startup companies; U.S. patents issued; new patent applications; and, licensing income.
 
Eight of this year's survey respondents were not identified by name, so SSTI was not able to align the data for these institutions with their respective states. As a result, while the table illustrates the relative amount of licensing activity in each state, it may not reflect the exact totals as self-reported by the responding institutions.
 
In terms of start-up companies emerging from survey respondents, California universities led the U.S. with 69 new companies in FY 2006. This is followed by institutions in Massachusetts (55), New York (38), Illinois (32), Utah (26) and Ohio (23). Overall, in the U.S., 553 start-ups were launched through the efforts of university technology transfer offices.
 
California institutions also rank first for the number of U.S. patents issued, joined by Massachusetts, New York, Texas, Florida and Pennsylvania. Survey respondents’ totals for the year came out to 3,255 patents issued. In terms of FY06 licensing income, Massachusetts led the pack, followed by California, New York, Minnesota, Pennsylvania and North Carolina.
 
SSTI's table is available at http://www.ssti.org/Digest/Tables/032608t.htm.
 
To view AUTM’s report, U.S. Licensing Activity Survey FY 2006, please visit
http://autm.net/events/file/AUTM_06_US%20LSS_FNL.pdf. Detailed data is available to AUTM members. For more information on joining AUTM, visit http://autm.net/.

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